For the first time in almost 20 years, the Court of Appeal clearly sets out who should pay the costs when an interim injunction is granted. This significant judgment was secured by the specialist law firm Thomas Mansfield Solicitors in a bitter private equity partnership dispute between Melford Capital Partners (Holdings) LLP and Others and Frederick John Wingfield Digby.
The decision made by the Court of Appeal on 4 December offers a glimpse into the ferocious and costly legal battle raging between Harry Bimbo Hart and Mr Wingfield Digby, both founding partners of the London based property investment fund Melford Capital.
In April 2020, Mr Hart and fellow founder partner James Osborne caused 13 entities which form the Melford group to issue proceedings preventing Mr Wingfield Digby from discussing with investors his concerns about an earlier restructuring of the group.
Mr Wingfield Digby agreed that he would not contact the investors until the legal issues had been considered at the trial of the action in 2021. The judge concluded that this meant that Melford had won, and so should recover their costs. He ordered Mr Wingfield Digby to pay an astounding sum of £277,000 for two unopposed short hearings.
In December, the Court of Appeal dismissed this outcome as unjust, and strongly re-affirmed the long-standing point of principle that when the court issues an injunction until trial to ‘hold the ring’ the Claimants cannot be said to have won the case.
The Court also heard that Mr Wingfield Digby’s actions were reasonable and ‘pragmatic’, and ordered Melford to repay the £166,000 that Mr Mingfield Digby paid on account in spring, together with all of his costs of bringing the matter to the appeal.
Melford was represented by Anthony ‘Andy’ Kerman, founding partner of law firm Kerman & Co, together with specialist aviation lawyer Philip Shepherd QC of XXIV Old Buildings. Mr Wingfield Digby was represented by Paul Thomas, a commercial litigation lawyer and Consultant at Thomas Mansfield Solicitors, and Thomas Grant QC of Maidstone Chambers.
Commenting on the ruling, Paul Thomas, Dispute Resolution Consultant at Thomas Mansfield, said: “In a David against Goliath type of battle, his former partners are ruthlessly attacking Mr Wingfield Digby with a never-ending string of claims and extraordinary expenditure of legal costs. We hope that Mr Wingfield Digby’s crushing victory in the Court of Appeal in December, at which the conduct of the other party was roundly criticised by the judges, will set the tone for our future legal triumphs. We are also pleased with the decision as it marks an important milestone for litigation practitioners across England and Wales.”
A full report of the Court of Appeal hearing can be found at https://www.bailii.org/ew/cases/EWCA/Civ/2020/1647.html.