In Wall v Munday [2018] EWHC 879 (Ch) HHJ Paul Matthews (sitting as a High Court Judge) allowed an appeal in relation to costs.  The judge at first instance had ordered the claimant to pay 80% of the defendant’s costs. That order was overturned and the defendant ordered to pay 60% of the claimant’s costs.  The judge at first instance had failed to ask the basic question about who had won – who pays the cheque.


An action was brought by an estate claiming ownership of a property. The defendant sought to argue that she owned the property outright. The judge at first instance held that it was held as joint tenants, 50% each.  The judge at first instance awarded costs to the defendant, ordering that the claimant pay 80% of the defendant’s costs. The claimant appealed the finding in relation to proportions of ownership (which was rejected). The claimant also appealed the order as to costs. The appeal as to costs was successful.


The question here was who had “won”. The claimant had not obtained all that he sought (100% ownership of the house).  However he had succeeded in establishing at 50% share.  The defendant had denied that the claimant had any entitlement at all. It was the defendant who had “lost”.  On appeal the costs order in favour of the defendant was replaced with an order in favour of the claimant.



    1. The second part of the appeal concerns the costs order which the judge made. He made this following supplementary judgment given ex tempore on 30 June 2017. In that judgment, of which I have seen a transcript approved by the judge, he said this:

“14. The first thing that I have to decide in approaching my discretion under {CPR] Part 44 is who has been the successful party, or whether anybody has been the successful party, and I have been addressed with arguments from both sides which descend to the pleading complexities of the case in order to draw from them logically the consequence on success or otherwise for which they contend. In my judgment, this aspect of the case is much more broadly based. I have to look to see what was it that the claimant was claiming and what was it the defendant was claiming, and then look to see what the result was.

15. The claimant was claiming that he, or the estate, was entitled to the whole of the beneficial interest in the property on account of the deal, for want of a better word, that had been reached in relation to it in 1974. The alternative case that was advanced before me was that if that case failed and therefore we started with a position that the parties, on purchase, were entitled as beneficial joint tenants applying the principles of Jones v Kernott, that there had been a severance. The result of that severance, if severance had been brought about by and the result of it, was an agreement that I should infer from the evidence or from the conduct of the parties to the effect, or impute to the parties to the effect, that a very small part of the beneficial interest resided with the defendant and the great majority of it resided with the estate.

16. The defendant, for her part, was responding to the claim that there was an agreement in 1974 and was asserting that because that claim should fail, that she retained a beneficial interest and she retained a beneficial interest as a beneficial joint tenant. Therefore, by the law of survivorship, she scooped the lot. She failed on that but she defeated the claim of the claimant and the alternative claim, that, even with the agreement being rejected, he was entitled to the lion’s share of the proceeds of sale. In my judgment, looked at in that way, there is no doubt as to who was the successful party overall in this litigation. The defendant recovered 50 per cent of the proceeds of sale and the claimant recovered 50 per cent set against the claimant’s primary contentions that the claimant was entitled to the whole or to a substantial part of the proceeds of sale. Viewed as a jury question, I conclude that the successful party in this case was the defendant.”

    1. Mr Ball criticises this. He says that the judge has got matters the wrong way round. He says that the position before the litigation was that, the deceased having died, the respondent was by survivorship the absolute legal owner and, subject to any argument about severance, the absolute beneficial owner too. Accordingly, at that stage, if the appellant had done nothing, the respondent would have kept everything, legally and beneficially. The appellant brought the claim for 100% of the beneficial interest, based on an alleged agreement for sale between the parties. But there was also a subsidiary argument that there had been a severance of the beneficial joint tenancy by mutual dealings and a variation in favour of the appellant by subsequent conduct. The appellant failed on the claim for 100 percent by reference to an alleged sale, but succeeded on the claim for a severance and so obtained at least 50 per cent. Accordingly, he had obtained at least half of what he had claimed, whereas the respondent had lost at least half of what she had to start with. On this basis, he could properly be regarded as the successful party for costs purposes.

    2. Mr Ball referred me to the decision of the Court of Appeal in Day v Day [2006] EWCA Civ 415. In that case, a mother (Lillian) and her son (Phillip) were disputing beneficial ownership of net proceeds of sale of a house that had belonged to Philip’s grandmother before her death in 2001. By her will, the grandmother had left the house to Phillip. But the house had been bought from the local authority under the right to buy scheme in about 1985, taking advantage of the 60% discount to which the grandmother was entitled, but otherwise using money provided by Lillian’s husband (Phillip’s father) John. John had died in 1992. The question after the grandmother’s death was whether the money had been a gift to the grandmother, so that Phillip took all the proceeds of sale, or whether there was a trust in favour of John (under whom Lillian now claimed). This trust was argued primarily to be one for John, but subject to the grandmother’s right to reside there for the rest of her life. The fallback position was a trust for John and the grandmother in the proportions 40:60 (treating the 60% discount as a contribution to the purchase price).

    3. At first instance, the judge held that the resulting trust analysis had not been displaced by the evidence, and hence the grandmother had held the property on trust for herself and her son John in shares of 60% and 40% respectively. As to costs, he ordered that Philip should pay Lillian’s costs down to the point where the evidence and preparation for trial was complete, but nothing thereafter. Lillian appealed on costs, arguing that she was the successful party, because she had obtained 40% of what she originally asked for, whereas Phillip had lost 40% of what he originally had. So she should have her costs not only down to the completion of trial preparation, but also of the trial itself. The Court of Appeal allowed the appeal on costs.

    4. Ward LJ (with whom Sir Martin Nourse agreed) said:

“14. The court, as it is now well known, has wide powers, including the power to apportion costs or to make issue-related orders for costs. Our attention has been drawn by both counsel to an unreported case of Johnsey Estates v Secretary of State for the Environment [2001] EWCA Civ 535, a landlord and tenant case where there was a claim, broadly speaking, of about one million pounds, a payment into court of about £200,000 and a judgment for a further £236,000. In his judgment, with which the other members of the court agreed, Chadwick LJ stated the applicable principles to be these (paragraph 21):

‘(1) Costs cannot be recovered except under an order of the court; (2) the question whether to make any order as to costs – and, if so, what order – is a matter entrusted to the discretion of the trial judge; (3) the starting point for the exercise of discretion is that costs should follow the event; nevertheless (4) the judge may make different orders for costs in relation to discrete issues – and in particular, should consider doing so where a party has been successful on one issue but unsuccessful on another, and, in that event, may make an order for costs against the party who has been generally successful in the litigation; (5) the judge may deprive a party of costs on an issue on which he has been successful if satisfied that the party has acted unreasonably in relation to that issue; (6) an appellate court should not interfere with the judge’s exercise of discretion merely because he takes the view that it would have exercised that discretion differently.’

“22. The last of those principles requires an appellate court to exercise a degree of self-restraint. It must recognise the advantage which the trial judge enjoys as a result of his ‘feel’ for the case which he has tried. Indeed, as it seems to me, it is not for an appellate court even to consider whether it would have exercised the discretion differently unless it had first reached the conclusion that the judge’s exercise of his discretion is flawed. That is to say, that he has erred in principle, taken into account matters which should have been left out of account; left out of account matters which should have been taken into account; or reached a conclusion which was so plainly wrong that it can be described as perverse – see Altrans Express Ltd v CVA Holdings Ltd [1994] 1 WLR 394, per Lord Justice Stephenson at page 400C-F and Lord Justice Griffiths at page 403G-H.”

15. The first question, therefore, is whether the judge was correct in characterising the outcome of this litigation as a draw. Mr Margolin contends in effect – these are not his words but mine – that it was a no-score draw in the sense that both parties’ main shots at goal missed, and neither managed to score any goal at all. The case therefore petered out as a stale draw because the fallback position was maintained by the judge.

16. We must ask ourselves whether the primary rule applies in this case – the general rule, that is, that the unsuccessful party will ordinarily be ordered to pay the cost of the successful party unless the court thinks otherwise. The question is, which, if any, of these parties did enjoy success in this litigation? We were referred to a judgment of Lightman J in Bank of Credit and Commerce International SA v Ali (no.3) [1999], NLJ 1734 Vol. 149 where he said that:

“For the purposes of the CPR success is not a technical term but a result in real life, and the question as to who has succeeded is a matter for the exercise of common sense.”

17. I would go further and say that in a case like this, the question of who is the unsuccessful party can easily be determined by deciding who has to write the cheque at the end of the case; and there is absolutely no doubt at all that the person who has to put his hand in his pocket and pay up the money that is in dispute was Phillip. He failed; his mother succeeded. She succeeded, all the more so, because Phillip adamantly and persistently refused to pay her a penny piece, notwithstanding his fall-back position. So I am in no doubt at all that this case did not end in a draw, but ended in victory for mother. Therefore the ordinary rule should apply, and the judge was correct in applying it to the cut-off point of 14 February; but was, I regret to say, in error in failing to apply it for the costs of the hearing. That hearing was necessary. This unfortunate mother had to pursue her son to the judgment seat in order to recover that which was rightfully found to be hers. There was in my judgment, therefore, a fundamental error of principle in the judge’s analysis which itself allows this court to intervene.”

    1. So, too, in this case, Mr Ball says that the appellant had to come to court in order to get the 50 per cent of the property which he has now ended up with. The fact that he failed on other arguments to get himself more than 50% does not mean that he is not the successful party. Indeed, he also made a further recovery out of the proceeds of sale in the accounting exercise. The respondent, on the other hand, has lost more than a half of what she started with. So she is certainly not the successful party.


  1. In my judgment, Mr Ball is right. His client, like Lillian in Day v Day, claimed the entire fund, but failed to prove his primary case and was left with his fallback position (severance of joint tenancy) which gave him 50%. Conversely, the respondent, like Phillip in Day v Day, refused to share what she had with the appellant, and the appellant was forced to come to court to get anything at all. And if one asks the question posed by Ward LJ in paragraph 17 of his judgment, “who has to write the cheque at the end of the case?” there is only one answer: the respondent. So the successful party at first instance in this case was the appellant.

  2. The judge having misunderstood who was the successful party, the appeal court can intervene and make the decision afresh. Here the appellant failed on its primary case, but succeeded on its secondary case of severance, which gave him 50%. He then tried to increase this by arguing that there had been a variation in his favour, but failed on that too. (However, he made further recoveries in the accounting exercise.) Under the rules, if the court decides to make an order about costs at all, the general rule is that the unsuccessful party will pay the costs of the successful party, but the court may make a different order. In this case, it seems to me right and just that the court should make a costs order. So the question is whether costs should follow the event. In principle, in my view they should. The question then is whether there should be a discount from 100 per cent to represent those parts of the case in which the appellant failed. In my judgment there should be. Here the appellant failed on two substantial parts of his case, either of which would have given him the whole or nearly the whole of the beneficial interest. Significant amounts of time and costs were spent on these arguments. In my judgment it is therefore right to discount the costs that the respondent must pay to the appellant by 40 per cent. The appeal on costs is therefore allowed, and I will substitute for the judge’s costs order an order for the respondent to pay 60 per cent of the appellant’s costs of the hearing below, to be assessed on the standard basis if not agreed.