March 31, 2021 Court of Appeal - Judgments
Claim No: CA 001/2020
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE COURT OF APPEAL
BEFORE CHIEF JUSTICE ZAKI AZMI, JUSTICE ROGER GILES AND H.E. JUSTICE ALI AL MADHANI
VEGIE BAR LLC, A DULY INCORPORATED COMPANY,
REGISTERED IN THE DIFC, REGD NO 0907.
MR NAKI ALKALAJLEH
EMIRATES NATIONAL BANK OF DUBAI PROPERTIES PJSC
JUDGMENT OF THE COURT OF APPEAL
|Hearing :||25 January 2021|
|Counsel :||Mr Roger Bowden instructed by Banks Legal Consultancy FZE for the Respondent
Mr Tom Montagu-Smith QC instructed by Taylor Wessing LLP for the Applicant
|Judgment :||17 March 2021|
UPON the Judgment of the Court of Appeal issued on 15 October 2020
UPON the Applicant’s application filed on 5 November 2020
AND UPON the First and Second Respondents’ response filed on 6 December 2021
AND UPON hearing the Counsel for the Applicant and Counsel for the First and Second Respondents on 25 January 2021 held by way of teleconference
AND UPON reading the submissions and evidence filed and recorded in the Court file
IT IS HEREBY ORDERED AND DIRECTED THAT:
1. Mr Naki Alkalajleh be added as a party for the purposes of costs only.
2. The Defendant’s costs of the appeal be assessed on the indemnity basis.
3. Mr Naki Alkalajleh pay the Defendant the costs of the appeal and the proceedings below jointly and severally with the Claimant.
4. The Claimant and Mr Naki Alkalajleh jointly and severally pay the Defendant’s costs of these applications, to be assessed if not agreed.
5. The Claimant and Mr Naki Alkalajleh jointly and severally pay the Defendant AED 2,080,234.24 on account of the costs payable by them.
6. The USD 86,864.50 paid into court as security for the Defendant’s costs of the claim be paid out to the Defendant forthwith.
7. Reserve liberty to apply for a further or different order in relation to the costs of these applications.
Ayesha Bin Kalban
Date of issue: 17 March 2021
Date of re-issue: 31 March 2021
1. The judgment in this appeal (the “Judgment”) was issued on 15 October 2020. As there described, the Deputy Chief Justice had dismissed a number of applications by the Claimant (“VB“) and granted the application by the Defendant (“Emirates“) for immediate judgment. VB was ordered to pay the costs of the applications, to be assessed if not agreed. VB’s appeal from these orders was dismissed. VB was ordered to pay Emirates’ costs, again to be assessed if not agreed.
2. Emirates applied for further orders in relation to costs, pursuant to liberty reserved in the Judgment. It applied for orders -
a) that the costs of the appeal be assessed on the indemnity basis;
b) that VB pay on account pending assessment of costs 75% of Emirates’ claimed costs of the appeal and the proceedings below;
c) that the USD 86,864.50 paid into Court as security for Emirates’ costs of the claim be paid out to Emirates forthwith;
d) that Mr Naki Alkalajleh be added as a party for the purposes of costs only, and a hearing be listed to consider the application for the order next described; and
e) that Mr Alkalajleh pay the costs of the the appeal and the proceedings below under joint and several liability with VB.
3. Joinder of Mr Alkalajleh is required by RDC 38.67. By cooperation between the parties, arrangements were made whereby Mr Alkalajleh was to heard on both joinder and a costs order against him at the one hearing of the application. He was represented by the same legal representative as VB’s legal representative, and VB’s submissions on indemnity costs and payment on account may be taken to represent his position also.
4. At the hearing, it was ordered without opposition that Mr Alkalajleh be joined as a party for the purposes of costs only. The order for payment out of the sum held as security for costs was not opposed.
5. By RDC 38.17, costs may be assessed on the standard basis or on the indemnity basis. Where the costs are assessed on the standard basis, the court will only allow costs which are proportionate to the matters in issue and will resolve any doubt as to whether the costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party (RDC 38.18). Where the costs are assessed on the indemnity basis, the court will resolve any doubt as to whether the costs were reasonably incurred or reasonable in amount in favour of the receiving party (RDC 38.19). If costs are assessed on the indemnity basis, the receiving party is more likely to recover his actual costs.
6. The Rules do not expand on the exercise of the discretion in this respect, but Practice Direction No 5 of 2014 (PD 5/2014) states that –
“… the following factors, inter alia, will be taken into account in the exercise of a Judge’s discretion:
(i) circumstances where the facts of the case and/or the conduct of the paying party are/is such as to take the situation away from the norm; for example, where the Court has found deliberate misconduct in breach of a direction of the court or unreasonable conduct in a high degree in connection with the litigation; or
(ii) otherwise inappropriate conduct in its wider sense in relation to a paying party’s pre-litigation dealings with the receiving party, or in relation to the commencement or conduct of the litigation itself; or
(iii) where the Court considers the paying party’s conduct to be an abuse of process”.
7. The Practice Direction reflects the authorities. In Balmoral Group Ltd v Borealis Ltd  EWHC (Comm) 2531 (“Balmoral”) Christopher Clarke J said at  -
“The basic rule is that a successful party is entitled to his costs on the standard basis. The factors to be taken into account in deciding whether to order costs on the latter [indemnity] basis have been helpfully summarised by Tomlinson J in Three Rivers District Council v The Governor and Company of the Bank of England  EWGC 816 (Comm). The discretion is a wide one to be determined in the light of all the circumstances of the case. To award costs against an unsuccessful party on an indemnity scale is a departure from the norm. There must therefore be something – whether it be the conduct of the claimant or the circumstances of the case – which takes the case outside the norm. It is not necessary that the claimant should be guilty of dishonesty or moral blame. Unreasonableness in the conduct of the proceedings and the raising of particular allegations, or in the manner of raising them may suffice. So may the pursuit of a speculative claim involving a high risk of failure or the making of allegations of dishonesty that turn out to be misconceived, or the conduct of an extensive publicity campaign designed to drive the other party to settlement. The making of a grossly exaggerated claim may also be a ground for indemnity costs.”
8. See also Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson  EWCA Civ 879 at  –  and Kiam v MGN Ltd (No 2)  1 WLR 2810, explaining that unreasonableness should be to a high degree and not merely wrong or misguided in hindsight.
9. Emirates relied on three principal matters in support of its application, which I summarise as follows. First, it said that in prosecuting its case VB made a number of allegations of fraud, dishonesty and failure to comply with the court orders, which it said were unfounded and were made only to seek to overcome fatal deficiencies in VB’s claim. Secondly, it said that VB had pursued its case in a manner both dilatory and ever-changing. Thirdly, it said that VB’s case was at all times doomed to fail, whether the original causes of action or the causes of action in the proposed amended particulars of claim considered and found wanting in the CFI and on appeal. In Emirates’ submission, it should not have had to incur costs at all, and its costs had been increased by the particular need to counter the unfounded allegations and a changing case.
10. The detail of these submissions went into the course of the proceedings from their commencement. It must be remembered that the costs in question as indemnity costs are the costs of the appeal, not the costs of the proceedings. The prior course of the proceedings may provide background, but it plays a limited part in determining whether VB’s bringing of the appeal and/or manner of prosecuting it are outside the norm.
11. That the appeal failed does not of itself take it out of the norm; many do. There must be a fact-specific determination of whether the particular circumstances require, in justice between the parties, departure from standard costs in favour of indemnity costs. There were, however, a number of aspects of the appeal in favour of such departure.
12. Of most importance is the substantive claim. In the consideration of the applications, it was implicit that the existing particulars of claim were abandoned and the fate of the proceedings rested on the proposed amended particulars of claim. In declining to permit amendment and granting immediate judgment, the Judge considered that the case pleaded in the proposed amended particulars of claim had no prospect of success.That was also the view of this Court. The circumstances took this well beyond mere failure of the appeal.
13. As noted in the Judgment at , the submissions on behalf of VB “did not well address the importance of title by registration to its causes of action“. The subsequent discussion in the Judgment reveals the misconceived submission of assignment of the lease to Emirates and the pleader’s failure to appreciate what was required to establish, under the system of title by registration, that the lease was binding on Emirates, with the result that none of the pleaded causes of action was viable. And there was a separate, equally terminal, deficiency in VB’s case. As described in the Judgment at  – , VB sought to have recognised and enforced a lease to commence at a new date, including that the court should fix a future commencement date. The Judge held that such a lease would be void for uncertainty. On appeal, it was held that this was plainly correct, with the observation that it was hard to take seriously VB’s submissions to the contrary. In short, the appeal was well in the category of “pursuit of a speculative claim involving a high risk of failure” referred to in Balmoral: the deficiencies were such that it was unreasonably brought.
14. VB submitted to the effect that it had sound reason to believe that there was substance in its case, and that hindsight should not be used to judge the appeal harshly. It may be observed that the submissions were all directed to a case that the lease for which VB contended was binding on Emirates. Even if that were so, the appeal was doomed on the uncertainty ground, which should have been recognised (if not before) following the judgment of the Judge: the attempt at justification rather underlines the unreasonableness in bringing the appeal.
15. The submissions in large part sought to justify what was described in the Judgment at  as VB’s “core submission that the Lease was assigned by UP to Emirates”, a submission which for the reasons there given was said to be misconceived. It was said that the submission “had an impeccable pedigree”, with citation of a remark of Justice Sir Jeremy Cooke in the course of argument in an earlier interlocutory appeal –
“JUSTICE SIR JEREMY COOKE: What you actually mean is not buying the underlying units
subject to the lease but buying the assignment of the lease. That is what you really mean.
MR BOWDEN: That is what I really mean…”.
16. Sir Jeremy’s remark does not assist VB. Mr Bowden was attempting to explain that the leases were valuable and so part of what Emirates was buying; he was speaking in economic terms. Sir Jeremy was taking up the economics, and his remark should not have been treated as judicial advice. In its written submissions in this application, VB maintained that “there was an assignment of the benefit of the lease through the reversion“, in continued failure of regard to the importance of title by registration.
17. The submissions otherwise sought support from remarks in two earlier judgments in the CFI and the Court of Appeal, one that there remained uncertainty as to facts and law and as to the party or parties which might be liable and the other in the terms that “where the fault, if any, lies is unclear”. These remarks were made prior to the presentation of the proposed amended particulars of claim, in connection with interlocutory dispute and when there was no occasion to address the framing of VB’s case. It is necessary to repeat that the costs in question as indemnity costs are the costs of the appeal, not the costs of the proceedings. The Judge had held that VB’s applications should be dismissed and that Emirates should have immediate judgment, and had so held on the proposed amended particulars of claim. At that time, at the least, the proceedings as pleaded should have been recognised as without substance.
18. Two other aspects of the appeal come into consideration.
19. First, the Judgment records at , in relation to the lease being binding on Emirates, that “VB’s submissions paid little regard to its pleaded causes of action and ranged into evidence which often had no apparent relationship with the pleading…“. The grounds of appeal asserted that many findings of fact made by the Judge were unsupported or demonstrated a misunderstanding of the evidence, and there was extensive canvassing of the facts in VB’s written and oral submissions (much of it directed to the submission of assignment of the lease to Emirates). While submitting, correctly, that the pleadings governed the question, Emirates was required to respond in its written submissions and orally, and costs were unnecessarily incurred.
20. Secondly, as also noted in the Judgment, while VB appealed against all of the Judge’s orders it said nothing to support the appeal in relation to the application to join Zain or the witness summons, or in relation to the appeal ground that the Judge “demonstrated apparent or actual bias”. Emirates was nonetheless required to consider and be prepared to deal with those matters, being wasted incurring of costs. As noted in the Judgment at  –  and , before the Judge VB had abandoned the applications to join Zain and for the witness summons; yet it still appealed. The failure to support the appeal ground of actual or apparent bias is significant for another reason. Such a ground is very serious, particularly the assertion of actual bias, and must not be brought without a proper basis; there was none. VB submitted that “[A]ll that was ever said was that the Judge did not listen“, but that is not correct. In this respect VB was at the least highly irresponsible, although harsher words could be used.
21. Emirates submitted also that VB’s submissions included allegations of fraud, and referred to Natixis SA v Marex Financial  EWHC 3163 (Comm) for the accepted position that where fraud is alleged and either withdrawn or not established, the starting point is that an order for indemnity costs is appropriate. That is not this case: there has not been a trial at which a finding has been made one way or the other. It can be said that the allegation of attempted fraud in 2012 was gratuitous, because it was not part of any of the causes of action, and that in other respects VB’s submissions were excessive (for example, in saying that Emirates’ counsel had made “inappropriate submissions … to shield [a person] from the consequences of giving proper evidence“ and “opportunistically leaped upon“ an item of evidence). This provides some small support for inappropriate conduct of the appeal, although not of itself warranting indemnity costs.
22. Considering the above matters together, in my view costs on the indemnity basis are called for. The appeal was, and should have been seen as, speculative at best, to the point where it was unreasonably brought, and the unreasonableness was in a high degree and not just in hindsight. It included the assertion of bias which should not have been made, and it was prosecuted in a manner causing unnecessary and wasted incurring of costs, including with abandonment of grounds of appeal which should never have been put forward. If the expression “out of the norm” is invoked, as a conclusory description, it is satisfied.
Payment On Account
23. By RDC 38.13, where the Court has ordered a party to pay costs, it may order an amount to be paid on account before the costs are assessed. The rationale includes that a party who has obtained the benefit of an order for costs should not be kept out of his money longer than is necessary (Al Khorafi v Bank Sarasin- Alpen (ME) Ltd CFI 026-2009 (30 October 2014) at ), but the discretion is unfettered and is to be exercised having regard to all the circumstances of the case. These include the parties’ financial circumstances, relevantly because, as was said in Rupert Allison and Westinel Research Ltd v Random House UK Ltd (Laddie J, 27 February 2002, unreported: cited in Al-Awlaqi v Tabarak Partners LLP CFI 023-2009 (22 December 2002) at ), if the paying party has limited funds the court should not force the receiving party to engage in a detailed assessment, spending more money which will not be recovered, before receiving any money at all.
24. As guidance to the profession, PD 5/2014 provides that where the Court has ordered a party to pay costs subject to detailed assessment unless agreed, it will order 50% of the amount claimed in the statement of costs to be paid on account before the costs are assessed, unless the Court sees fit to order otherwise.
25. VB accepted that an order for payment of costs on account was appropriate. Initially, it submitted that this Court’s orders should be limited to the appeal costs and that the CFI costs should be left to the Court below, but the submission was abandoned during the course of the hearing – properly so, as a stay order had prevented application in the CFI and it made no sense that the expense of yet another application should be incurred. Again initially, VB submitted that the payment on account should be limited to the 50% in the Practice Direction, but it accepted that, if indemnity costs were to be paid, the higher percentage should be ordered.
26. It was common ground that VB was impecunious. In a witness statement filed in December 2019 in relation to an earlier interlocutory application, Mr Alkalajleh said that his personal circumstances did not extend to paying the costs then sought, and that he had needed to borrow the USD 86,864.50 paid into Court and was paying his lawyers by small monthly payments. Emirates submitted that the payment on account should be at the higher percentage because it was most unlikely that there would be an assessment, the further costs of an assessment almost certainly being irrecoverable; further, it submitted, the same matters on which it relied in relation to indemnity costs warranted the higher percentage, and in particular if the costs were to be paid on the indemnity basis, the Court could be all the more confident that on assessment no less than 75% of the claimed costs would be allowed.
27. In relation to the costs of the appeal, indemnity costs are to be paid. VB’s acceptance above-mentioned was appropriate; it is clearly a case for payment on account, and Emirates’ submission for 75% is compelling. The order in relation to the costs of the appeal should be for 75% of Emirates’ costs.
28. In relation to the costs of the proceedings below, no order for indemnity costs has been made. The 50% is clearly taken as a “safe” percentage, an assured least figure (unless something appears calling for a lesser figure) and open to increase in the particular circumstances. The fact that in the present case assessment would only occur upon Emirates incurring further almost certainly irrecoverable costs in my view requires that a higher percentage be considered. Of necessity, it must be a broad assessment in the light of the amount claimed. Having regard to the long and tortuous course of the proceedings, the amount in Emirates’ statement of costs does not seem excessive, and I consider that 75% of that amount can be ordered as the least amount Emirates would be likely to recover on assessment. The order in relation to the costs below should also be for 75% of Emirates’ costs.
29. Emirates filed statements of costs in the amount of AED 1,841,882.73 (the proceedings below) and AED 639,907.60 (the appeal), a total of AED 2,481,790.33. Emirates is entitled to payment on account of 75% of that amount, being AED 1,861,342.74.
Order Against Mr Alkalajleh
30. RDC 38.67 recognises the Court’s power to make a costs order against a person who is not a party to proceedings. The Rules make no provision for the exercise of the power; it is left to the general discretion in RDC 38.6, as informed by RDC 38.8 and the general law.
31. In Dymocks Franchise Systems (NSW) Pty Ltd v Todd  1 WLR 2807 (“Dymocks”), the principles governing the discretion to award costs against a non-party were summarised (at ) in the opinion of the Privy Council delivered by Lord Brown -
“(1) Although costs orders against non-parties are to be regarded as ‘exceptional’, exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such ‘exceptional’ case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against.
(2) Generally speaking the discretion will not be exercised against ‘pure funders’, described … as ‘those with no personal interest in the litigation, who do not stand it to benefit from it, are not funding it as a matter of business, and in no way seek to control its course. In their case the court’s usual approach is to give priority to the public interest in the funded party getting access to justice over that of the successful party recovering his costs and so not having to bear the cost of indicating his rights.
(3) Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party’s costs. The non-party in these cases is not so much facilitating access to justice by the party funded as himself gaining access to justice for his own purposes. He himself is the ‘real party’ to the litigation, a concept repeatedly invoked throughout the jurisprudence…. Nor, indeed, is it necessary that the non-party be ‘the only real party’ to the litigation…, provided that he is ‘a real party… in a very important and critical respect’” (case citations omitted).
32. In more directly addressing the position of a shareholder and director of the party, their Lordships cited at  from an unreported New Zealand case, Arklow Investments Ltd v MacLean -
“(20) … where a person is a major shareholder and dominant director in a company which brings the proceedings, that alone will not justify a third-party cost order. Something additional is normally warranted as a matter of discretion. The critical element will often be a fresh injection of capital for the known purpose of funding litigatIon.
(21) … The overall rationale [is] that it is wrong to allow someone to fund litigation in the hope of gaining a benefit without a corresponding risk that that person will share in the costs of the proceedings if they ultimately fail.”
33. The ultimate summary of their Lordships was –
“ 29. In the light of these authorities their Lordships would hold that, generally speaking, where a non-party promotes and funds proceedings by an insolvent company solely or substantially for his own financial benefit, he should be liable for the costs if his claim or defence or appeal fails. As explained in the cases, however, that is not to say that orders will invariably made in such cases, particularly, say, where the non-party is himself a director or liquidator who can realistically be regarded as acting rather in the interests of the company (and more especially its shareholders and creditors) than in his own interests.”
34. Mr Alkalajleh is a shareholder and director of VB, and has been a shareholder and director at all material times. There was another director, Mr Rafiq Saeed, possibly also a shareholder but his position is not made clear. What is clear is that Mr Alkalajleh has been the manager and authorised signatory of VB, and has caused to be brought and has controlled the litigation: there is no indication that Mr Saeed has played any part in it. Mr Alkalajleh has provided no less than eleven witness statements in the course of the proceedings, and Emirates drew attention to instances in which he has identified himself with VB in the litigation, including referring to the lease in issue as “my lease” and saying, “I have had to fight this matter on every point and have been left with an enormous legal bill“. In the submissions on his behalf he is again identified with VB, as examples see  and  below.
35. Mr Alkalajleh has also funded the litigation. VB has never traded – that is its complaint, that the lease of the premises in which it would have conducted a restaurant and bar has been denied to it. In the circumstances referred to in the Judgment, it was struck off the Register for a considerable period, and and on the evidence in this application its return to the Register will be short-lived. As earlier noted, Mr Alkalajleh provided from borrowed money the USD 86,864.50 paid into Court and has been paying for VB’s representation.
36. It is apparent that Mr Alkalajleh has funded the litigation in the hope of himself gaining a benefit, whether or not Mr Saeed may also have gained a benefit from its success. It is highly unlikely (and was not suggested) that there are creditors left over from VB’s start-up days in 2011 - 2012 who may have benefited. It is clear that VB will not trade in the future. Mr Alkalajleh identifies himself with the litigation, success in it would have been to his benefit as substantial shareholder, and there is no realistic other reason for his endeavours.
37. At first sight this presents as a paradigm case for an order against Mr Alkalajleh. He has funded and controlled litigation by VB, when VB was impecunious, in the hope of a benefit to himself, and should shoulder the burden of costs upon the failure of the litigation.
38. What was Mr Alkalajleh’s response? He accepted Dymocks as the guiding authority, and his submissions came down to the following contentions.
39. First, in his written submissions he said that “he“ sought specific performance in order to proceed with “his” business plans, and it was “not a case of a funder simply seeking to benefit himself“. In oral submissions, it was put that while he was the driving force, it was not for his personal benefit but “in pursuit of the goals of the business”; at another point, it was said to be for the benefit of VB. He submitted that he was not the only shareholder and that the proceedings were for the benefit of VB, meaning its shareholders, not himself. This was repeated in various ways, and at another point in the written submissions it was said that “it cannot be said that there was any private interest pursued”.
40. The submission is difficult to understand. Had VB traded profitably in the leased premises, in economic reality the benefit would have gone through it to Mr Alkalajleh and possibly Mr Saeed. The goals of its business were Mr Alkalajleh’s goals, and it is not correct that, as the submission required, Mr Alkalajleh was altruistically suing for VB’s benefit and not his own. This was not a case of a director causing a company to sue in order that other shareholders, to whom he owed a fiduciary duty to promote the company’s interests, should benefit, and the shadowy figure of Mr Saeed does not detract from the clear position that Mr Alkalajleh stood substantially to benefit personally from the litigation which he caused to be brought, funded and controlled – and that that is why he did so.
41. Mr Alkalajleh referred to Taylor v Pace  BCC 406 for the passage in the judgment of Lloyd LJ at 409 –
“The controlling director of a one-man company is inevitably the person who causes the costs to be incurred, in one sense, by causing the company to defend the proceedings. But it could not be right that in every such case he should be made personally liable for the costs, even if he knows that the company will not be able to meet the plaintiff’s costs, should the company prove unsuccessful. That would be far too great an inroad on the principle of limited liability. I do not say that there may not be cases where a director may not properly be liable for costs. Thus he might be made liable if the company’s defence is not bona fide, as, for example, where the company has been advised that there is no defence, and the proceedings are defended out of spite, or for the sole purpose of causing the plaintiffs to incur irrecoverable costs. No doubt there will be other cases. But such cases must necessarily be rare. In the great majority of cases the directors of an insolvent company which defends proceedings brought against it should not be at personal risk of costs.”
42. Two things maybe said about his appeal to this passage. First, there is much more in the present case than a director of an insolvent company bringing proceedings. Secondly, as was noted in Goodwood Recoveries Ltd v Breen  EWCA Civ 414 at  -
“… the law has moved a considerable distance in refining the early approach of Lloyd LJ in Taylor v Pace Developments. Where are a non-party director can be described as the ‘real party’, seeking his own benefit, controlling and/or funding litigation, then even where he has acted in good faith or without any impropriety, justice may well demand that he be liable in costs on a fact-sensitive and objective assessment of the circumstances. It may also be noted that in Lord Brown’s comments at para 33 of his opinion [in Dymocks] ‘the pursuit of speculative litigation’ is put into the same category as ‘impropriety’”.
43. Secondly, Mr Alkalajleh said in the written submissions that “his“ problems were not of his own making, but “a byproduct of the sale process between UP and Emirates“; that it had been transparent that VB could not pay costs; and that VB had had a good arguable case: in relation to the last, there was repetition of the suggested reasons for believing there was substance in the case with which I have dealt in considering indemnity costs. These matters, as I understand it, were intended to support the submissions that this was not an exceptional case and that (from the written submissions) “there is a strong public interest in ensuring that impecunious claimants can have access to justice even if that means that successful defendants are left substantially out of pocket”.
44. There is an air of unreality in this. The source of the problem is beside the point: what matters is the doomed attempt to do something about it and Mr Alkalajleh’s part in that attempt. It could not sensibly or properly be said that VB had a good arguable case when it had been held, in the CFI and on appeal, that VB should suffer immediate judgment: in this Court, because none of the pleaded causes of action had a real prospect of success in establishing a lease binding on Emirates (Judgment at ) and in any event it could not reasonably be argued that the lease for which it contended had the necessary certainty (Judgment at ). In this respect, see also the consideration above of indemnity costs. To take up the expression from Dymocks at [25(3)], Mr Alkalajleh was gaining access to justice for his own purposes, and there is no public interest in allowing him to do so without shouldering the burden of costs if unsuccessful.
45. Thirdly, Mr Alkalajleh submitted in the written submissions that “if the corporate veil can be simply stripped away, there is little to no point in having limited liability companies and the result will be chilling“, and repeated the same submission elsewhere.
46. The submission is quite misconceived. As was said by Lewison LJ, with whom Tomlinson and Richards LJJ agreed, in Axel Threlfall v ECD Insight  EWCA Civ 144 at  –
“ If a non-party costs order is made against a company director, it is quite wrong to characterise it as piercing or lifting the corporate veil; or to say that the company and the director are one and the same. As Mr Shaw has demonstrated, the separate personality of a corporation, even a single-member corporation, is deeply embedded in our law. But its purpose is to deal with legal rights and obligations. By contrast, the exercise of discretion to make a non-party costs order leaves rights and obligations where there are. The very fact that the making of such an order is discretionary demonstrates that the question is not one of rights and obligations of a non-party, for no obligations exist unless and until the court exercise its discretion. Moreover the fact that the discretion, if exercised, is exercised against a non-party underlines the proposition that the non-party has no substantive liability in respect of the cause of action in question. Of course, it is not enough merely to say that Mr Whitney was a director of ECD, but in deciding whether or not to make such an order, the court is not fettered by legal realities. It is entitled to look to the economic realities.”
47. Fourthly, Mr Alkalajleh referred to causation, drawing attention to the assumption in Dymocks at  that a third party could not ordinarily be made liable for costs if those costs would in any event have been incurred without the non-party’s involvement in the proceedings. He submitted that (from the written submissions) “there is nothing pointed to which establishes that he caused the litigation to be pursued in any manner, or with additional cost, which would not also be attributable to the company“.
48. The submission was not enlarged. It is difficult to see how it could be put consistently with the acceptance that Mr Alkalajleh was the funder of and driving force behind the litigation. It is not well founded – plainly, the proceedings would not have been brought or continued without Mr Alkalajleh’s doing or without his funding. It should not be accepted.
49. It should be ordered that Mr Alkalajleh pay costs under joint and several liability with VB. So far as he submitted that this Court should not deal with his liability to pay the CFI costs, that initial position was also abandoned. At one point he may have submitted that he should be liable, if at all, only for the costs of the appeal and not for the costs of the proceedings below. If he did, I understand that position also to have been abandoned, but in any event there is no reason to distinguish between the costs. For the avoidance of doubt, the order applies to the payment on account.
50. Emirates has wholly succeeded in these applications, and VB and Mr Alkalajleh should pay the costs of the respective applications against them. Emirates provided a statement of costs in the amount of AED 294,522.00, which understandably did not distinguish between the costs of the applications against VB and the costs of the application against Mr Alkalajleh. Nothing was said of these costs in submissions.
51. It would be wrong to inflict the expense of further submissions on the parties, and a practical solution is warranted. The costs payable by VB are caught by the order against Mr Alkalajleh, and a joint and several order against them for all the costs can be made, with the costs appropriately subject to payment of 75% on account. The figure for 75% of the AED 294,522.00 will be added to the figure of AED 1,861,342.74, which will become AED 2,082,234.24. However, since the parties have not been heard on this, liberty to apply should be reserved.
52. I propose the orders –
1. That the Defendant’s costs of the appeal be assessed on the indemnity basis;
2. That Mr Naki Alkalajleh pay the Defendant the costs of the appeal and the proceedings below jointly and severally with the Claimant.
3. That the Claimant and Mr Naki Alkalajleh jointly and severally pay the Defendant’s costs of these applications, to be assessed if not agreed.
4. That the Claimant and Mr Naki Alkalajleh jointly and severally pay the Defendant AED 2,080,234.24 on account of the costs payable by them.
5. That the USD 86,864.50 paid into court as security for the Defendant’s costs of the claim be paid out to the Defendant forthwith.
6. Reserve liberty to apply for a further or different order in relation to the costs of these applications.
Ayesha Bin Kalban
Date of issue: 17 March 2021
Date of re-issue: 31 March 2021
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