In a judgment handed down on 12 January 2023 ([2023] EWHC 28 (Comm)) the Commercial Court held a director of the defendant company personally liable for the successful claimant’s costs. Following a 9 day trial in 2021 the defendant company, RediResi Ltd, had been ordered to pay substantial damages to the claimant, Asprey, together with Asprey’s costs of the action, including a payment on account of £525,000.
The defendant company paid nothing, and subsequently entered into compulsory liquidation. Asprey thereupon applied to join Anuuj Gupta to the proceedings, for the purpose of making a non-party costs order (NPCO) against him pursuant to s.51 of the Senior Courts Act 1981. Mr Gupta had at all material times been a director of RediResi, together with his wife, and was its 100% beneficial owner. He was the only witness to have given evidence on behalf of RediResi at trial and accepted that he had controlled the litigation on its behalf.
The decision is interesting because it represents an application of the recent Court of Appeal decision on this topic in Goknur v Aytacli [2021] EWCA Civ 1037, and discusses the relationship between the two alternative routes to an NPCO which the Court identified in that case, namely that the non-party was the “real party” to the litigation or that the non-party had been guilty of impropriety. It also discusses the relationship between funding and the concept of “real party” and the correct procedural approach to the determination of an application for an NPCO. The Court made an NPCO in this case on the basis that Mr Gupta had been the real party to the proceedings. He had operated RediResi without regard to its separate corporate identity and interests and would have been by far the greatest beneficiary of a successful defence of the claim. That conclusion was reinforced by the fact that Mr Gupta had directed RediResi’s defence in a way that was in significant respects unreasonable.
Daniel Hubbard acted for the successful claimant, instructed by Scott + Scott.
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