The Supreme Court Costs Office

No.4 of 2005

Walker v Walker

27 January 2005

Court of Appeal (Chadwick, Laws & Jonathan Parker LJJ)

A liquidator brought misfeasance proceedings against two directors of the company in liquidation, though he knew that there were only limited funds in the liquidation. In due course, after the Department for Trade & Industry initiated disqualification proceedings, the liquidator decided that these would achieve the desired result, and sought and obtained leave from the court to discontinue his misfeasance proceedings. He successfully persuaded the Chancery Judge at first instance that he should be allowed to discontinue, without having to pay the successful defendants’ costs.

The Court of Appeal reversed that finding, holding that there was nothing unusual about the facts of this case which took it out of the ordinary rule, which was that he who discontinues must pay the costs of his opponent. This was even more clear in this case because the liquidator knew from the outset that there were only limited funds in the liquidation.