Apex Frozen Foods Ltd v Ali & Ors [2007] EWHC 469 (Ch) (09 March 2007)

Apex Frozen Foods Ltd v Ali & Ors [2007] EWHC 469 (Ch) (09 March 2007)

Mr Smailes' cross-undertaking covers Foods' costs occasioned by the freezing order, and he is liable to pay those costs on the standard basis. However, a third-party costs order under section 51 is not justified because Mr Smailes acted as a provisional liquidator for the benefit of creditors, was not personally at fault, and the circumstances do not meet the threshold for such an order.

Citation
[2007] EWHC 469 (Ch)
Parties
Claimant: Apex Frozen Foods Ltd (in Liquidation); Defendant: Abdul Ali; Defendant: Foods (London) Ltd; Defendant (on Costs Application): Robert Derek Smailes
Jurisdiction
England and Wales
Judgment Date
09 March 2007
Procedural Posture
Costs Application Following Discharge of Freezing Order / Post Interlocutory, Costs Determination
Outcome
Application granted in part
Legal Topics
Freezing Orders, Cross Undertakings in Damages, Third Party Costs Orders, Section 51 Supreme Court Act 1981, Liquidator Liability
Civil Procedure Insolvency Company Law Freezing Orders Cross Undertakings in Damages Third Party Costs Orders Section 51 Supreme Court Act 1981 Liquidator Liability

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Parties

Apex Frozen Foods Ltd (in Liquidation)

Claimant

Abdul Ali

Defendant

Foods (London) Ltd

Defendant

Robert Derek Smailes

Defendant (on Costs Application)

Procedural Posture

Costs Application Following Discharge of Freezing Order / Post Interlocutory, Costs Determination

Legal Issues

  1. 1 Does the cross-undertaking given by Mr Smailes cover Foods' costs incurred in relation to the freezing order?
  2. 2 Should a third-party costs order be made against Mr Smailes under section 51 Supreme Court Act 1981?

Ratio Decidendi

Mr Smailes' cross-undertaking covers Foods' costs occasioned by the freezing order, and he is liable to pay those costs on the standard basis. However, a third-party costs order under section 51 is not justified because Mr Smailes acted as a provisional liquidator for the benefit of creditors, was not personally at fault, and the circumstances do not meet the threshold for such an order.

Court Disposition

Application granted in part

Orders

  • Mr Smailes is liable under his undertaking to pay Foods' costs of the application, to be assessed on the standard basis if not agreed.
  • No order is made against Mr Smailes under section 51 Supreme Court Act 1981.