Wirsol Energy Ltd v Toucan Energy Holdings Ltd (2018)
A claimant was entitled to its costs leading up to the withdrawal of its summary judgment application as it had been reasonable to make the application on the basis of the original three grounds of defence. Costs that accrued following abandonment of those defences and the raising of a new defence, and the consequent withdrawal of the application, were reserved.
The court was required to determine costs following the claimant's withdrawal of its application for summary judgment against the defendant.
The claimant's group had sold to the defendant its interest in 19 special purpose vehicles that owned solar energy farms. Under a side agreement, the claimant was to receive additional payments if it procured extensions to leases over the solar farm sites. Payment was subject to certain conditions subsequent being satisfied or waived. The claimant submitted an invoice for £6 million in respect of lease extension payments. The defendant raised three defences in correspondence. The claimant issued proceedings and its summary judgment application in August 2018. The defendant informed the claimant that the special purpose vehicles had assigned to it the benefit of various claims against the claimant regarding the construction and maintenance of the farms. On 1 October the defendant issued proceedings in relation to the assigned claims in the Commercial Court and alleged that that gave rise to a set off argument which justified non-payment of the invoice. On 16 October 2018, the defendant withdrew its original three defences and raised a new defence that condition subsequent 49 had not been satisfied. The claimant responded that condition 49 had been waived by the defendant's solicitors. On 20 November 2018 the defendant served witness evidence that the solicitors had not been acting for the defendant in giving the waiver. On 26 November the claimant withdrew its summary judgment application.
The claimant argued that the defendant should pay its costs up to 16 October and thereafter costs should be in the case. The defendant argued that it should have its costs until 1 October on the standard basis and thereafter on the indemnity basis.
It was necessary to consider whether the summary judgment application should ever have been made, and if reasonably made at the time, to consider when it should have been abandoned. The application had been properly made: only three defences had been raised at the time, and the claimant had raised in correspondence the fact that the conditions subsequent had been satisfied and the defendant had been silent on that matter in response. Nothing had changed up to 1 October. The fact that the claimant was informed about the assignments did not mean that the application should have been immediately abandoned; the three defences were still being run and the claimant had been entitled to keep going with the application. It had been entitled to take a day or two to study the evidence. The claimant should have its costs up to and including 16 October. Thereafter, costs would be reserved.
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06 Dec 2018
LTL 12/12/2018 EXTEMPORE :  12 WLUK 152
John McGhee QC