BE Studios Ltd. v Smith & Williamson Ltd. [2005] EWHC 2730 (Ch) (02 December 2005)

BE Studios Ltd. v Smith & Williamson Ltd. [2005] EWHC 2730 (Ch) (02 December 2005)

A director who funds and controls litigation by an insolvent company for his own benefit, and is the real party interested in the result, may be ordered to pay the successful party's costs under section 51(3) of the Supreme Court Act 1981, even absent impropriety or bad faith, where the claim is speculative and the company cannot realistically be regarded as the real party.

Citation
[2005] EWHC 2730 (Ch)
Parties
Claimant: B. E. Studios Ltd; Defendant: Smith & Williamson Ltd
Jurisdiction
England and Wales
Judgment Date
02 December 2005
Procedural Posture
Chancery Division Civil Claim / Post Trial Costs Application
Outcome
Application granted
Legal Topics
Non Party Costs Orders, Director Liability for Costs, Litigation Funding, Corporate Insolvency
Civil Procedure Company Law Non Party Costs Orders Director Liability for Costs Litigation Funding Corporate Insolvency

Case Brief

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Parties

B. E. Studios Ltd

Claimant

Smith & Williamson Ltd

Defendant

Procedural Posture

Chancery Division Civil Claim / Post Trial Costs Application

Legal Issues

  1. 1 Whether a director who funded and controlled litigation by an insolvent company should be ordered to pay the defendant's costs under section 51(3) of the Supreme Court Act 1981

Ratio Decidendi

A director who funds and controls litigation by an insolvent company for his own benefit, and is the real party interested in the result, may be ordered to pay the successful party's costs under section 51(3) of the Supreme Court Act 1981, even absent impropriety or bad faith, where the claim is speculative and the company cannot realistically be regarded as the real party.

Court Disposition

Application granted

Orders

  • Mr Dickens is ordered to pay 4/5ths of the defendant's costs of defending the claim, assessed on the standard basis, to the extent not paid by BES.