Goodwood Recoveries Ltd v Breen [2005] EWCA Civ 414 (19 April 2005)

Goodwood Recoveries Ltd v Breen [2005] EWCA Civ 414 (19 April 2005)

A director who is the real party in interest, controls and conducts litigation for his own benefit, and engages in improper conduct, may be made personally liable for the whole of the litigation costs under section 51(3) of the Supreme Court Act 1981, even absent a finding of initial bad faith, where his involvement caused the litigation and the costs incurred.

Citation
[2005] EWCA Civ 414
Parties
Claimant/respondent: Goodwood Recoveries Ltd; Defendant/applicant/respondent: William Peter Breen; Defendant/appellant: Michael Robert Slater
Jurisdiction
England and Wales
Judgment Date
19 April 2005
Procedural Posture
Civil Appeal / Appeal From Costs Order Under Section 51(3) of the Supreme Court Act 1981
Outcome
Appeal dismissed
Legal Topics
Third Party Costs Orders, Directors' Liability for Costs, Abuse of Process, Conditional Fee Arrangements, Disclosure Obligations
Civil Procedure Company Law Third Party Costs Orders Directors' Liability for Costs Abuse of Process Conditional Fee Arrangements Disclosure Obligations

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Parties

Goodwood Recoveries Ltd

Claimant/respondent

William Peter Breen

Defendant/applicant/respondent

Michael Robert Slater

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From Costs Order Under Section 51(3) of the Supreme Court Act 1981

Legal Issues

  1. 1 Whether a director can be made personally liable for the costs of litigation conducted by a company under section 51(3) of the Supreme Court Act 1981
  2. 2 Whether exceptional conduct or impropriety is required to justify such an order
  3. 3 Whether the director's conduct was causative of the costs incurred

Ratio Decidendi

A director who is the real party in interest, controls and conducts litigation for his own benefit, and engages in improper conduct, may be made personally liable for the whole of the litigation costs under section 51(3) of the Supreme Court Act 1981, even absent a finding of initial bad faith, where his involvement caused the litigation and the costs incurred.

Court Disposition

Appeal dismissed

Orders

  • Costs order against Mr Slater for the whole of the litigation on an indemnity basis, including the costs of the section 51(3) application and the adjournment, subject to credit for £6,000 once paid by Butcher Burns.