Adlem v Arlow

This is a Supreme Court of Appeal decision dealing with a supplementary application to vary a provisional costs order made by the court. The court had previously allowed the appeal and made a provisional costs order (paragraph 2(b)) regarding costs in the high court. The parties were granted leave to make submissions regarding the provisional costs order in the high court. The respondent sought to vary the costs order. The order in question was limited to the costs occasioned by the argument on the specific question before the high court, not the costs of the proceedings as a whole.

• Whether the provisional costs order in paragraph 2(b) relating to the high court costs should be varied
• Whether the appellants should be awarded costs occasioned by the argument to vary the provisional costs order
• The proper principles for awarding costs where a party succeeds on a specific argument but the overall effect on the proceedings remains uncertain

The court made the following order: (a) Paragraph 2(b) of the order made by the Supreme Court of Appeal in relation to the costs in the high court was confirmed; (b) The respondent was ordered to pay the appellants' costs occasioned by the argument to vary such order.

Where a party succeeds on a specific argument or question before the court, the usual rule that costs follow the event applies to the costs occasioned by that argument, even if: (1) the ultimate effect of the court's determination on the proceedings as a whole is uncertain; (2) the determination may have adverse consequences for both parties; or (3) the proceedings will continue and claims may be amended. A costs order can be properly limited to 'the costs occasioned by the argument' on a specific question, as distinct from the costs of the entire proceedings. An appellate court should not speculate on the fate of claims and counterclaims that remain to be determined by the lower court following its determination of a specific legal question.

The court noted that the ramifications of its order would have their own consequences on costs, but those ramifications were by no means certain - either party might amend their pleadings. The court observed that it was as unnecessary for the SCA to decide on the fate of the claim and counterclaims as presently formulated as it had been for the high court. The court also noted the respondent's submission that the answer given to the legal question would be as fatal to the appellants' first counterclaim as it would be to the respondent's claim, though this observation did not affect the costs determination.

This case provides guidance on the proper approach to costs orders in appellate proceedings where a specific question or argument is determined but the overall effect on the litigation remains uncertain. It confirms the principle that costs follow the event even where the ultimate ramifications of a successful argument are unclear or may affect both parties adversely. The case also illustrates the court's approach to limiting costs orders to specific aspects of proceedings ('costs occasioned by the argument') rather than awarding costs for the entire proceedings where only a discrete issue has been determined. It demonstrates judicial restraint in not pre-judging the effect of a legal determination on claims that may be amended and will be determined by a lower court.