Splitting the costs: The BVI Court retains a discretion to order costs at the end of the liability phase of a split trial
On 17 January 2024, the Eastern Caribbean Court of Appeal handed down its decision in Lau Man Sang, James et al v King Bun Limited et al affirming the lower court’s discretionary power to award costs following a split trial to determine liability. In upholding the costs order of Wallbank J, the Court of Appeal confirmed that there was no need to wait until the issues of relief and quantum are decided.
By way of background to the appeal, the 1st to 6th respondents, in their capacity as minority shareholders, commenced derivative proceedings against the appellants. At a case management hearing, Wallbank J ordered that the issue of liability was to be determined at a split trial and that the issues of relief and quantum were to be stood over for the direction of the trial judge. Subsequent to that decision, Wallbank J decided the liability issue in the respondents favour and awarded them their costs (the Costs Order). The appellant appealed the Costs Order contending that the CPR prevented the court from making an order at the conclusion of the trial on liability thus the learned judge had erred in the exercise of his discretion.
The Court of Appeal rejected the appellants’ position, clarifying that a split trial falls within the ambit of CPR 69B.12 (now CPR 70.12). Consequently, the court retains discretion to award costs following a trial on liability and is therefore not confined to wait until the completion of the quantum and relief stage to award costs.
The court also reasoned that complex commercial disputes can span the course of many years, therefore it would be incorrect and illogical to limit a judge to wait until the determination of the entire proceedings before awarding costs. In the words of the court “such a proposition runs contrary to the ethos of the CPR and the overriding objective”.
The position of the court is consistent with its overriding objective to provide litigants with timely, effective and efficient access to justice.