Illiquidx Limited v Altana Wealth Limited & Ors

Neutral Citation Number: [2025] EWHC 1566 (Ch) IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES CHANCERY DIVISION Case No: IL-2020-000079 Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NL Date: 23 June 2025 Before : MR JUSTICE RAJAH - - - - - - - - - - - - - - - - - - - - - Between : ILLIQUIDX LIMITED - and – (1) ALTANA WEALTH LIMITED (2) LEE ROBINSON (3) STEFFEN KASTNER (4) BREVENT ADVISORY LIMITED - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Claimant Defendants ANDREW GREEN KC and MARK VINALL (instructed by Reynolds Porter Chamberlain LLP) for the Claimant TOM MOODY-STUART KC and BEN LONGSTAFF (instructed by Fieldfisher LLP) for the Defendants Hearing dates: 6 June 2025 - - - - - - - - - - - - - - - - - - - - - APPROVED JUDGMENT Mr Justice Rajah Approved Judgment Mr Justice Rajah : Introduction Illiquidx Ltd v Altana Wealth Ltd & ors 1. On 13 February 2025, I handed down judgment on liability (“the liability judgment”) in an action for breach of confidence, infringement of trade secrets, breach of contract and copyright infringement (Illiquidx Ltd v Altana Wealth Ltd [2025] EWHC 299 (Ch)). The liability judgment concluded that the first defendant (“Altana”) and the fourth defendant (“Brevent”) had breached a non-disclosure agreement and misused the claimant’s (“IX”) confidential information and trade secrets in setting up and operating the Altana Credit Opportunities Fund (“ACOF”). The claim brought by IX for copyright infringement failed, as did its claim to establish the liability of Mr Kastner, the third defendant, for the acts of Altana or Brevent. 2. At a hearing on 6 June 2025, I dealt with various matters consequential on the judgment and reserved my decision on costs. This judgment sets out my decision on costs. CPR Part 44 3. The general rules about costs are set out in CPR Part 44. CPR Part 44.2 provides (so far as is relevant): “(1) The court has discretion as to – (a) whether costs are payable by one party to another; (b) the amount of those costs; and (c) when they are to be paid. (2) If the court decides to make an order about costs – (a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but (b) the court may make a different order. … (4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including – (a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply. (5) The conduct of the parties includes – Page 2 Mr Justice Rajah Approved Judgment Illiquidx Ltd v Altana Wealth Ltd & ors (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol. (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and (d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim. (6) The orders which the court may make under this rule include an order that a party must pay – (a) a proportion of another party’s costs; (b) a stated amount in respect of another party’s costs; (c) costs from or until a certain date only; (d) costs incurred before proceedings have begun; (e) costs relating to particular steps taken in the proceedings; (f) costs relating only to a distinct part of the proceedings; and (g) interest on costs from or until a certain date, including a date before judgment. (7) Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead. (8) Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.” The Issues 4. It is common ground that IX is the overall winner on liability. The starting point pursuant to CPR 44.2(2)(a) is that IX’s costs should be paid by Altana and Brevent (with Mr Robinson accepting liability for Altana’s liabilities; see paragraph 128 of the liability judgment) (“the Paying Parties”). It is also common ground that there should be a deduction from those costs to reflect the costs of the copyright and joint liability claims which IX lost. That is an appropriate concession by IX. These claims were not different routes to the same outcome, but discrete claims for additional relief which overreached and failed. 5. IX says that there should be a deduction of 10% in respect of the copyright and joint liability claims and the Paying Parties should be ordered to pay 90% of its costs on the standard basis with interest on costs at 2% above base and a payment on account of 60% (of 90%). 6. The Paying Parties say firstly that costs should be reserved pending the outcome of any quantum trial. In the alternative they say that the appropriate deduction for the copyright Page 3 Mr Justice Rajah Approved Judgment Illiquidx Ltd v Altana Wealth Ltd & ors and joint liability claims is 14.7%, and that there should be further deductions to take into account the unnecessary costs incurred by both sides due to the way IX has conducted this case giving a total deduction of 61.5% of IX’s assessed costs. They say interest should be at 1% above base, any interim payment should be 50% of the costs ordered and should be reduced to take into account interim costs orders in their favour where no payment on account has been made. 7. Any percentage deduction will translate into a significant sum being deducted. IX says its costs are approximately £6.6 million and point out that those costs are not disproportionate to the Defendants’ costs of approximately £5.5 million. The 10% deduction IX concedes represents some £660,000 of its pre-assessment costs. Should costs be reserved pending determination of quantum? 8. There is a general rule that the starting point in relation to the costs of a trial or hearing of a discrete issue like liability is that they should follow the outcome of the issue and not await the “event” in the sense of a final resolution of the proceedings. In complex litigation, requiring those who lose to pay costs as and when they lose is good policy; it encourages litigants to be professional in the conduct of litigation and to be selective of the points that they take; Langer v McKeown [2021] EWCA Civ 1792; [2022] 1 WLR 1255 at [37]–[40] and [44]. 9. The Paying Parties say that IX has greatly overstated the value of this claim at £10 million and at the quantum trial the true value of damages will be £100,000 or less. On that metric they say that the costs of these proceedings have been hugely out of proportion to the damages at stake, and the claim has been wildly exaggerated. That is a matter which the court can take into account under CPR 44.2(4)(a) and 44.2(5)(c) and (d). IX disputes that it has exaggerated its claim, but the Paying Parties say that the Court will only be able to assess this argument after the quantum trial and costs should therefore be reserved until then. 10. In my judgment the time for determining the costs of the liability trial should as a matter of good policy be now, and on the material which is available to the court now. The outcome of the quantum trial is not information which is available to the court now. Apart from policy, it is obviously desirable to deal with costs and arguments for issue- based costs orders while the trial and the judgment are fresh in the judge’s mind. 11. It is for each party to make costs protective offers based on what may happen at the liability trial. In some cases that may be done by an offer directed only to the issues in the liability trial, but in many cases, liability is an all or nothing issue. If the claimant succeeds on liability, the claim progresses to quantum, but if the claimant fails on liability the claim comes to an end. In such circumstances a defendant’s only protection against a costs liability if he loses on liability may be to make an offer by reference to quantum. If the Paying Parties wished the exaggeration of the claim to be taken into account at the liability stage it would have been open to them to have made a global Part 36 offer which gave the claim what they say is its fair value. The fact that such an offer had been made is information which the court would have now and would normally, and Page 4 Mr Justice Rajah Approved Judgment Illiquidx Ltd v Altana Wealth Ltd & ors save in exceptional cases, result in an order to reserve costs; see Langer at [46]. Or the Paying Parties could have made some other costs protective offer, such as an open offer, or a privileged offer directed at the liability issues alone (for example to concede liability on breach of confidence and trade secrets if IX conceded on copyright and joint liability). No such offers have been made. 12. Mr Moody-Stuart says that there have been a number of “without prejudice save as to costs” (“WPSATC”) offers and some of these have included in their scope the issue of quantum. As Langer makes clear such a global WPSATC letter is not treated as a Part 36 offer, and if it is not put before the court to consider, it is not an “admissible offer” for the purposes of CPR 44.4(c). The Court can take the existence of such an offer into account but it does not have to, and it does not carry the same normal consequences as a Part 36 offer. In principle, I accept that if there is a realistic global offer which IX may not beat at the quantum trial that may provide a reason to reserve, particularly if there are good reasons why the offer is not made in Part 36 form. However, the Paying Parties are not willing to waive privilege and put the relevant WPSATC correspondence before the Court, even if I recuse myself from hearing the quantum trial. As Deputy High Court Judge Thompsell (as he then was) observed at first instance in Langer, they are not entitled to “have it both ways by withholding admission of the evidence of the offer but still asking the court to take account of it”; para 30 of Judge Thompsell’s judgment quoted at Langer [21]. Having listened carefully to Mr Moody-Stuart’s very careful submissions I am not satisfied that there is a WPSATC offer out there which will be very relevant to the question of the costs of the liability trial, nor am I satisfied that there is a good reason why Part 36 was not appropriate for any offer. 13. Accordingly, I will not reserve costs and will proceed to determine the costs now. IX’s Conduct 14. These proceedings were commenced on 27 July 2020 and have since been bedevilled by IX’s inability or refusal to specify with clarity and precision what its case was as to the confidential information that it says was misused. The Defendants have repeatedly tried to clarify IX’s case with Requests for Further Information, Notices to Admit and correspondence. 15. In December 2020 IX attempted to reformulate its list of confidential information, seeking to position it, instead, in the terms used successfully in a case called CF Partners v Barclays Bank, namely by pleading a “Big Idea” and a set of component elements of the Big Idea, called the Detail. In addition, it sought to significantly extend the information and documents relied upon as comprising the Detail. Deputy Master McQuail (as she then was) rejected the pleaded Big Idea as incoherent and unintelligible. Mr Justice Miles, on appeal, agreed. He did not, however, rule out a further reformulation of the Big Idea, but he was clear this was to be the composite effect of the Detail which he required to be properly particularised (which at that stage it was not). Page 5 Mr Justice Rajah Approved Judgment Illiquidx Ltd v Altana Wealth Ltd & ors 16. Following that hearing, in early 2022, IX presented a new draft Re-Amended Particulars of Claim and a new Re-Amended confidential Annex 1 and 5, which reframed its confidential information as “the Business Opportunity” with the component parts of the Business Opportunity being identified in writing in the Detail. Further attempts at clarification of that case were made by the Defendants in correspondence and in Requests for Further Information, but they eventually gave up trying to get further precision from IX. 17. At the Pre-Trial Review IX applied to expand its case on confidential information from the written Detail to incorporate oral conversations and narrative referred to elsewhere in the pleading. I refused that application rejecting IX’s suggested interpretation of the pleading and IX’s application in the alternative to amend (Illiquidx v Altana Wealth & Others [2024] EWHC 2385 (Ch)). I made harsh comments about IX’s pleadings, and the difficulty in understanding them and IX’s case; see the transcript as quoted in Seadon 4 at [28]. At that stage the case appeared to be that the Business Opportunity stated the composite effect of the component parts which were in the Detail, and IX was continuing to seek to expand its case on what were or should be those component parts. 18. IX’s trial skeleton argument continued the same expansive approach, making extensive reference to the Detail, as well as reliance on matters not in the Detail. It also abandoned a claim for injunctive relief which might have meant that the ACOF had to cease operating, having obtusely refused requests to do so and having resisted an application to strike out that relief a few months earlier. 19. A significant part of the Defendants’ skeleton argument was devoted to trying to make sense of IX’s pleading. Mr Moody-Stuart fairly described the Business Opportunity as pleaded as “hopelessly vague”. Mr Moody-Stuart duly cross examined IX’s witnesses about all the documents in the Detail and addressed the case he thought IX was advancing. It now appears, to use his words, he was fighting yesterday’s war. For in his closing submissions Mr Green dropped substantially all the Detail (without formally abandoning IX’s case on the Detail) and argued that the Business Opportunity was the high-level idea of a sanctions compliant fund, which was evidenced by a few documents in the Detail. In the liability judgment at [83] to [88] I concluded that this change of position was within IX’s vague and expansive pleaded case. Mr Moody-Stuart did not seek to argue otherwise. 20. Against this background Mr Moody-Stuart says that there should be a substantial discount for the costs which have been wasted by IX not running that highly simplified case from the outset. Mr James Seadon of Fieldfisher LLP, the Defendants’ solicitor, has filed a witness statement in which he attempts to make a reasoned calculation of the extent by which each side’s costs have been inflated by the expansive, imprecise and vague way in which this claim has been pleaded. 21. Mr Seadon calculates an appropriate deduction as 61.5% of the costs (including the costs attributable to the failed copyright and joint liability issues). However, this precise figure disguises what is an estimate as to what elevated costs have been incurred by the Defendants, and a guess as to what elevated costs have been incurred by IX. IX, for example, has refused to engage with Mr Seadon’s calculations. Further there are legitimate criticisms of Mr Seadon’s methodology, for example in respect of IX’s costs Page 6 Mr Justice Rajah Approved Judgment Illiquidx Ltd v Altana Wealth Ltd & ors in relation to pleading related applications where the Defendants have already obtained an interim costs order in their favour. No further deduction is required because IX is not able to recover its costs of an interim application where the Court has made an order that it pay the costs of that application. 22. Nevertheless, there is no doubt in my mind that the costs have been significantly increased by the failure of IX to know clearly where it was going in this case. I think it highly likely that costs have been increased at every turn; in the pleadings; disclosure; evidence; preparation for trial; cross examination and in inter solicitor correspondence. In addition, there have been many interim applications on pleadings and disclosure required and the time required to try the claim has been dragged out such that now nearly 5 years have elapsed since the proceedings were commenced. Disclosure by reference to this imprecise, vague and wide-ranging case appears to have been extremely onerous and would have been unnecessary if the more focussed case had been identified at the outset. The disclosure exercise resulted in millions of documents being harvested and subjected to electronic key word searches, the disclosure to IX of 13,526 documents by the Defendants at a cost of over £1.1 million, of which Mr Seadon calculates that only 452 were referred to at trial. IX’s insistence on wide ranging disclosure smacks of it casting about to find a case. Mr Green says these are matters for detailed assessment, but I do not think they are. If the Court has ordered, or the parties have agreed, extended disclosure by reference to pleaded issues then the Costs Judge calculating which costs of that exercise are reasonably incurred is not going to revisit whether, in hindsight, a different disclosure exercise should have been agreed or ordered. 23. Quite apart from unnecessary costs, there is also a basic injustice in IX failing to identify its case and plead it with particularity and precision. Pleadings are there to mark the parameters of the case and inform the other side of the case they have to meet. Vague and expansive pleadings do not do that, particularly where, as here, the eventually successful case relies on a small subset of the facts alleged. The Defendants facing such vague and expansive pleadings are not being placed on an equal footing with the Claimant. The lack of clarity and precision as to IX’s case will, I am sure, have discouraged settlement. 24. I have considered whether these circumstances are such that the general rule that the loser pays the winner’s costs is displaced. However, the following factors have dissuaded me. Firstly, IX has won on a case which was pleaded, however obscurely, and I do not think that the Defendants can be heard to say that they could not have anticipated a case which is available on the pleadings (and in fairness to Mr Moody- Stuart he did not say that). Secondly, the Defendants’ defence to the claim was unaffected, but unsuccessful. Thirdly, one element of that defence was a claim that the Defendants, or at least Mr Robinson, were well aware of most of the information they were given by IX and had already had the idea of setting up a fund – that was not true, it was a false case. In such circumstances it seems to me to be right that the Paying Parties should pay IX’s costs but subject to a substantial discount. 25. Mr Green also sought to criticise the Defendants’ conduct in only conceding in closing submissions that 11 items of the Detail were Confidential Information within the terms of the NDA. The Defendants’ concession was helpful and to be encouraged. Whether these items were within the definition of Confidential Information was a question of Page 7 Mr Justice Rajah Approved Judgment Illiquidx Ltd v Altana Wealth Ltd & ors construction. I do not see how significant costs could have been saved by that concession being made earlier. Decision 26. I accept Mr Green’s submission that I should approach the question of what proportion of IX’s costs are to be paid in a broad-brush manner. That proportion will reflect a reduction to reflect the Court’s disapproval of the way this claim has been prosecuted which does not comply with the overriding objective, as well as the extra costs which are likely to have been caused by that approach. I will order the Paying Parties to pay 50% of IX’s assessed costs on the standard basis. Interest will be payable on those costs from the date payment was made to IX’s solicitors until the date of judgment at the rate of 2% above base rate. 27. There will be a payment on account of 50% (of 50% of IX’s billed costs and pre-judgment interest). This figure errs on the side of caution, so that it does not exceed the amount that will ultimately be recovered after assessment. It takes into account the very large amounts which have been billed, the fact that most of the hourly rates appear to be considerably more than guideline rates, and the fact that the Defendants have interim costs orders in their favour in respect of which they have been seeking an interim payment of roughly £77,000. Page 8