Systemcare (UK) Ltd v (Services Design Technology Ltd & Anor (Rev 1) [2011] EWCA Civ 546 (11 May 2011)

Systemcare (UK) Ltd v (Services Design Technology Ltd & Anor (Rev 1) [2011] EWCA Civ 546 (11 May 2011)

A non-party costs order against Mr Sharif was justified because he controlled and funded the litigation, was the real party interested, and acted dishonestly and improperly in bringing and supporting a meritless counterclaim; procedural irregularity did not cause injustice, and the judge's exercise of discretion was proper, but the quantification of costs must be subject to detailed assessment.

Citation
[2011] EWCA Civ 546
Parties
Claimant: Systemcare (UK) Limited; First Defendant: Services Design Technology Limited; Second Defendant/appellant: Khaja Azhar Sharif
Jurisdiction
England and Wales
Judgment Date
11 May 2011
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed except as to quantification of costs; cross-appeal dismissed.
Legal Topics
Non Party Costs Orders, Director Liability, Corporate Insolvency, Litigation Funding, Judicial Discretion
Civil Procedure Company Law Non Party Costs Orders Director Liability Corporate Insolvency Litigation Funding Judicial Discretion

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Parties

Systemcare (UK) Limited

Claimant

Services Design Technology Limited

First Defendant

Khaja Azhar Sharif

Second Defendant/appellant

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether a non-party costs order should be made against a director under section 51 of the Senior Courts Act 1981
  2. 2 Whether the director controlled and funded litigation for personal benefit
  3. 3 Whether the proceedings were brought in bad faith or for an ulterior purpose

Ratio Decidendi

A non-party costs order against Mr Sharif was justified because he controlled and funded the litigation, was the real party interested, and acted dishonestly and improperly in bringing and supporting a meritless counterclaim; procedural irregularity did not cause injustice, and the judge's exercise of discretion was proper, but the quantification of costs must be subject to detailed assessment.

Court Disposition

Appeal dismissed except as to quantification of costs; cross-appeal dismissed.

Orders

  • Mr Sharif to pay Systemcare's costs of the action on the standard basis until 20 July 2007 and thereafter on the indemnity basis, subject to detailed assessment if not agreed.
  • Cross-appeal dismissed.