PI Brief Update

Out of Order: Court of Appeal Sets Aside 'No Order as to Costs' to Make… 'No Order as to Costs' - Georgina Pressdee, Temple Garden Chambers

23/07/26. On 6 July 2026, the Court of Appeal handed down its decision in Carl v Limbani [2026] EWCA Civ 856. The case concerned Mr Limbani’s appeal against the “no order as to costs” made by Mr Simon Gleeson’s (sitting as a Deputy Judge of the High Court). In a lead judgment given by Lord Justice Foxton, the Court of Appeal set aside the order of Mr Simon Gleeson only to reinstated it upon exercising the costs discretion afresh.

Background

The underlying Claim was that money paid by Mr Carl to intermediaries to acquire historic sports cars had not been applied for that purpose and/or the sports cars acquired had never been delivered to him. The three original Defendants were Mr Edwards, Mr Hawkins and SCM (a company linked with Mr Hawkins).

A final order was made for delivery up of the vehicles on 20 October 2015. Mr Carl sought to commit Mr Edwards for breach of that order. In response, Mr Edwards claimed to have delivered them to “Vic” (clearly Mr Limbani). Mr Carl applied to join Mr Limbani to the proceedings in May 2018. Judgment was entered in default but subsequently set aside on the terms that Mr Limbani pay the cost. Directions were given for disclosure but Mr Limbani took the position that he had no documents to disclose. He initially served no disclosure certificate but, after obtaining relief from sanctions, eventually filed one stating that he had no relevant documents. At trial, the Judge considered that Mr Limbani was an unsatisfactory witness who clearly knew a great deal more than he was prepared to disclose. The Judge also found that Mr Limbani had made false statements when he spoken to a police officer over the phone prior to being made a party to these proceedings. Nevertheless, the Judge considered that the evidence was not sufficient to support a finding that Mr Limbani was actually involved.

In the closing paragraphs of his Judgment, the Judge confirmed that he was prepared to hear further submissions on the award and quantum of costs before making a final determination, but nevertheless set out his preliminary view that there should be no order for costs as between Mr Carl and Mr Liambi. At the consequentials hearing, the Judge treated this as a final determination and declined to hear submissions from Counsel for Mr Limbani on the point. Mr Limbani appealed on the basis (inter alia) that it was wrong not to hear or allow submissions on costs despite the earlier order.

Ruling

The Court of Appeal considered that, having set out an expressly provisional view in his judgment on the basis that there would be an opportunity to make submissions on the issue, the Judge misdirected himself and occasioned a serious procedural irregularity by refusing to hearing further submissions on costs. That error could not be anything other than serious because it involved departing from the established starting point for the exercise of the costs discretion without permitting Mr Limbani to make any submissions. The costs order was accordingly set aside pursuant to CPR 52.21(3)(b).

The next issue was what weight, if any, should be given to the Judge’s provisional view. The answer was none. That view was expressed without hearing argument and did not represent a judicial determination against which an appeal could be brought. The suggestion that the final determination (which was vitiated by procedural error) could bear on the decision of the appellate court was counterintuitive. The Court’s discretion as to costs was therefore exercised afresh.

The Court of Appeal considered that the order for costs should both reflected the consequences of Mr Limbani’s conduct on the proceedings and act as a proportionate sanction for that conduct. In respect of the former, it was patent that Mr Limbani’s statement to the officer had influenced Mr Carl’s decision to pursue proceedings against him. To that extent, Mr Limbani had brought the proceedings on himself. Further, Mr Carl’s Claim had failed not because Mr Limbani had not done any of the things alleged but because of a lack of evidence and the Judge’s findings as to the legal capacity in which and purpose for which Mr Limbani acted. In respect of the latter, Mr Limbani’s conduct plainly required a costs sanction irrespective of its consequences. No order for costs was therefore appropriate.

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