Systemcare (UK) Ltd v (Services Design Technology Ltd & Anor (Rev 1)

Systemcare (UK) Ltd v (Services Design Technology Ltd & Anor (Rev 1)

The court held that Mr Sharif, as the controlling director and main beneficiary, was the real party to the litigation, acted dishonestly, and supported a meritless counterclaim with false evidence. These factors justified a non-party costs order against him. However, the quantification of costs was set aside to allow detailed assessment, as Mr Sharif had not had the opportunity to challenge the amount.

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
Civil Appeal / Appeal From County Court Judgment and Non Party Costs Order
Outcome
Appeal dismissed except as to quantification of costs; cross-appeal dismissed.
Legal Topics
Non Party Costs Orders, Director Liability, Costs Assessment, Corporate Veil
Civil Procedure Company Law Non Party Costs Orders Director Liability Costs Assessment Corporate Veil

Case Brief

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Parties

Systemcare (UK) Limited

Claimant

Services Design Technology Limited

First Defendant

Khaja Azhar Sharif

Second Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From County Court Judgment and Non Party Costs Order

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 was the real party to the litigation and acted in bad faith or with impropriety
  3. 3 Whether the quantification of costs against the director was proper

Ratio Decidendi

The court held that Mr Sharif, as the controlling director and main beneficiary, was the real party to the litigation, acted dishonestly, and supported a meritless counterclaim with false evidence. These factors justified a non-party costs order against him. However, the quantification of costs was set aside to allow detailed assessment, as Mr Sharif had not had the opportunity to challenge the amount.

Court Disposition

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

Orders

  • Non-party costs order against Mr Sharif upheld.
  • Order for 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.