In what may be the last chapter of this hard-fought litigation, the defendants in Invest Bank v El Husseini have defeated the claimant Bank’s attempt to vary numerous costs awards made earlier in the proceedings. This follows the comprehensive dismissal of the Bank’s substantive claims at trial last year.
The variation application by the Bank arose from a complex series of interlocutory skirmishes from the early stages of the claim. Over the course of three hearings in February, May and September 2022, Andrew Baker J was asked to determine no fewer than 15 applications. Characterising the overall outcome as an ‘entertaining high-scoring draw’, he ordered almost all their costs (amounting to almost £2m in total) to lie in the case.
The Bank later succeeded in the Court of Appeal in overturning Andrew Baker J’s judgment on a narrow issue of law – namely, whether acts of a company acting by a defendant could, without more, constitute a transaction entered into by that defendant for the purposes of s.423 Insolvency Act 1986: [2023] EWCA Civ 555. This success allowed the Bank to advance some of its claims on an alternative factual basis. In June 2023, the Bank issued an application asserting that it was now properly regarded as the winner of the 2022 hearing and should have almost all its costs.
The Bank’s application was adjourned because of the Third and Fourth Defendants’ pending appeal to the Supreme Court on the separate question of whether s.423 applies only where the transaction involves an asset beneficially owned by the debtor. By the time that appeal was dismissed (by judgment dated 19 February 2025: [2025] UKSC 4), the Bank’s claims under s.423 had already been rejected by Mr Justice Calver, in a judgment handed down on 21 November 2024 following a 4-week trial earlier in July that year: [2024] EWHC 2976 (Comm).
The Bank’s costs variation application finally came before Andrew Baker J on 24-25 November 2025, who dismissed it. He considered that an order for costs in the case was still the just order for the outcome of the 2022 hearing, which remained ‘a mixed bag’: [31-34]. In doing so, Andrew Baker J considered at [16-21] whether it would be permissible for him to have regard to the failure of the Bank’s claims at trial. As to that:
- The Bank had argued (based on Compagnie Noga D’Importation v Abacha [2003] EWCA Civ 1101, and the policy behind costs orders of encouraging discipline in the conduct of litigation) that the trial outcome was not admissible.
- The Defendants had relied on the rule from Tibbles v SIG [2012] EWCA Civ 518 that the Court varying a previous order is required to decide the issue afresh in light of the circumstances at the time of the variation, and the case of Taylor v Burton [2014] EWCA Civ 21, in which the Court of Appeal had regard to the outcome of the trial in a case where costs had been reserved to the trial judge.
- Andrew Baker J noted that there appeared to be no authority on how these principles applied to an attempt to vary an order for costs in the case, which was always intended to be contingent on the trial outcome. But he considered that, at least in the present case, there was force in the Bank’s submissions that it was arbitrary that the variation application had been heard only after the conclusion of the trial.
- Without deciding the issue, he therefore proceeded on the assumption, in the Bank’s favour, that the trial outcome was irrelevant. He nevertheless had no hesitation in dismissing the application.
In the light of certain allegations advanced and subsequently abandoned by the Bank in the course of the application, he went on to award the defendants part of their costs on the indemnity basis.
Niranjan Venkatesan KC and Constantine Fraser acted for the successful defendants on this application and at the main trial in July 2024, instructed by Debenhams Ottaway LLP.
The judgment from this application can be accessed below, and the judgment from the main trial can be accessed here.
View Judgment