GILLIAN MA'HAR v (1) MICHAEL O'KEEFFE (2) ANGELA O'KEEFFE
On 26 November 2014, the Court of Appeal dismissed the appeal in Ma’Har v O’Keeffe and set out the principles on which the costs of taking an account upon dissolution of a partnership are to be treated.
The parties were members of a partnership until the Appellant and First Respondent left. Upon the dissolution of the partnership it was necessary to take an account to determine the parties’ respective shares. Numerous issues of fact needed to be resolved in the account and the matter came before the Judge at first instance. Although no one party was completely successful, the First Respondent was the most successful overall. The Appellant was ordered to pay a proportion of the First Respondent’s costs of the account. This order was appealed on the basis that the Judge’s decision was wrong in law, failed to take into account the conduct of the First Respondent and incorrectly took into account offers made by the First Respondent.
Lewison LJ (with whom Longmore and Burnett LJJ agreed) held that the normal order on a dissolution account was no order as to costs, assuming that there was no fault on either side, but costs of the parties attributable to contentious issues could be dealt with on the principles set out in CPR r.44.3, Hamer v Giles (1879) 11 Ch. D. 942 considered.
In accordance with settled principles, the Court of Appeal would not interfere with a first instance Judge’s decision on costs unless he had taken irrelevant matters into account, ignored relevant matters, erred in principle or was plainly wrong. The Judge at first instance had correctly stated the law and correctly applied it to the facts; he had taken into account the conduct of the First Respondent and was right to take into account the offers made by the First Respondent. Accordingly, there were no grounds for interfering with his decision and the appeal was dismissed.
Alexander Brown appeared for the successful First Respondent and was instructed by Oglethorpe Sturton & Gillibrand.