Catalina London Ltd v Kapsokolis & Anor [2018] EWHC 1309 (QB)

[2018] EWHC 1309 (QB)Case No QB/2015/0528
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
Venue Royal Courts of JusticeDate Date: 30/04/18
Strand
London WC2A 2LL
Before
MRS. JUSTICE SLADE DBE
Between
CATALINA LONDON LIMITEDAppellant(Assuming liability pursuant to Part VII of the Financial Services and Markets Act 2000 from KX Reinsurance Company Limited)Appellant- and –
Between
KYRIAKOS KAPSOKOLISRespondentANASTASIOS SOFRONIADISRespondent
Digital Transcription by Marten Walsh Cherer Ltd.,1 st Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.Telephone No: 020 7067 2900. Fax No: 020 7831 6864 DX 410 LDEEmail: info@martenwalshcherer.comWeb: www.martenwalshcherer.com
Ms. Saira Paruk appeared for AppellantMr. Bobby Friedman appeared for Second Respondent

JUDGMENT ON NON-PARTY COSTSORDER APPROVED

[1]The appellant is the successor to Lombard Insurance UK Limited (Lombard). The appellant applies for a non-party costs order against Mr. Sofroniadis in respect of and related to proceedings taken in England to register for enforcement a judgment obtained in 1995 in Greece by Mr. Kapsokolis against Lombard for a sum with interest which now amounts to approximately €140,000.[2]The applicant/appellant party will be referred to as "the appellant" throughout this judgment, albeit that there has been a succession along the route from Lombard. The background facts in outline are that Mr. Kapsokolis was a tenant of a restaurant in Greece which was badly damaged by fire on 24th September 1984. Mr. Sofroniadis was the landlord of the premises. Under the lease the tenant was liable to make any good any damage caused to the property. After the fire a claim was made under the insurance policy which was held by Mr. Kapsokolis and the insurance company would not pay. Judgment was obtained in Greece against the insurance company. An application was made in the name of Mr. Kapsokolis for the recognition and enforcement of the Greek judgment. On 22nd September 2015 Deputy Master Partridge granted the application. On 7th October 2015 English solicitors acting for Mr. Sofroniadis served the order of Deputy Master Partridge on the appellant. On 9th November 2015 the appellant lodged a notice of appeal from the order of Deputy Master Partridge. One of the grounds of appeal was that the parties bringing the proceedings in England did not have authority to do so, leaving the appellant open to the risk of being pursued for the judgment sum by the actual judgment creditor.[3]Solicitors for the appellant entered into settlement discussions with Mr. Spyropoulos, a lawyer appointed by Mr. Mpikas, a Greek lawyer holding power of attorney from Mr. Kapsokolis. Mr. Sofroniadis, being interested in the recovery of monies in respect of damages to his property, also participated in the settlement discussions. In July 2016 the parties were about to reach a settlement and a draft settlement agreement was prepared by Holman Fenwick, the solicitors for the appellant.[4]Mr. Spyropoulos provided the solicitors for the appellant with a power of attorney from Mr. Kapsokolis. It was a power of attorney to Mr. Mpikas, dated 13th May 1996 authorising Mr. Mpikas to collect sums pursuant to the judgment. Before finalising the agreement, the solicitors for the appellant were concerned about the proper authority of those proposing to enter into the agreement. They asked for further information and indeed a new power of attorney from Mr. Kapsokolis because it was said that under Greek law the power of attorney, would expire after five years from grant and therefore another was required.[5]At the meeting, in respect of which there is difference of evidence as to what was said, the appellant’s representative said that Mr. Sofroniadis was present at the meeting and Mr. Spyropoulos indicated that they would be able to contact Mr. Kapsokolis in order to get a new power of attorney. On the other hand Mr. Sofroniadis and Mr. Spyropoulos have made statements saying that they did not give any indication that they would contact Mr. Kapsokolis, but that they would attempt to try to do so.[6]Also in the course of communications between the parties, there was a meeting on about 8th September 2016 at which Mr. Sofroniadis produced a document which was a draft power of attorney given to him by Mr. Kapsokolis. Whether it was a power of attorney or an assignment of Mr. Kapsokolis' interest the judgment debt is a matter of interpretation. In any event this may not be material because the document was never executed and is undated and unsigned. Since questions had been raised about the authority of those attending and entering into discussions with representatives of the appellants, enquiries were made, Mr. Mpikas obtained information and indeed a death certificate which showed that Mr. Kapsokolis had died in December 2012. That information was conveyed to those acting for the appellant.[7]Thereafter Mr. Sofroniadis notified the appellants that he was assignee of the benefit of the litigation between Mr. Kapsokolis and the appellant. Further, in the course of the English litigation Mr. Sofroniadis then undertook communication with the court regarding the appeal which was on foot by the appellant against Deputy Master Partridge's order. Solicitors who had been acting, as they believed for Mr. Kapsokolis, applied to and came off the record. The order permitting them to come off the record reports that they were or had been solicitors for Mr. Kapsokolis. Mr. Sofroniadis communicated with the court. His position was that by reason of the death of Mr. Kapsokolis there was an "interruption" in the proceedings and he asked for an adjournment or a delay to the hearing of the appeal by the appellant against the order of Deputy Master Partridge. He was in communication with the Civil Appeals Office and he notified the Civil Appeals Office of his then position as did Mr. Spyropoulos, the lawyer who had been acting at the request of Mr. Mpikas, who held the power of attorney from Mr. Kapsokolis.[8]The appeal from the order of Deputy Master Partridge came before Mrs. Justice Nicola Davies on 9th March 2017. At the hearing the claimant was not represented and Mr. Sofroniadis did not appear. In the course of the judgment the learned judge, who of course did not have before her the full material which is now available to this court, observed in paragraph 9 of the transcript of the judgment that Mr. Kapsokolis had made a declaration in a document of 1996 that Mr. Sofroniadis was appointed as his representative ad litem, Nicola Davies J observed that this gave the irrevocable right to Mr Sofranidis to act in his place and appoint attorneys for all legal transactions. Also that it transferred and assigned to Mr. Sofroniadis all his rights for any compensation for the damage to the shop as a result of the fire.[9]The order of Deputy Master Partridge was set aside because of the date that it was made. By the date of the order Mr. Kapsokolis was dead and the application and registration were nullity. Accordingly the order was set aside. Mrs. Justice Nicola Davies observed at paragraph 20 that Mr. Sofroniadis had held himself out as having power of attorney which would enable him to bring or continue proceedings in respect of the original judgment. The observation was made that solicitors who were purportedly acting on behalf of the claimant had to have instructions from someone. It was said at paragraph 21:
"Given what is now known with about the death of Mr. Kapsokolis, it seems to me appropriate pursuant to section 1 of the Senior Courts Acts 1981 to add Mr. Sofroniadis as a party to those proceedings but only the for the purposes of the costs hearing. It will be done so he has a reasonable opportunity to attend when the court will decide whether or not to make an order for costs against Mr. Sofroniadis."
This has been that hearing.[10]On the facts outlined it is undoubted that Mr. Kapsokolis granted a power of attorney to pursue and in respect of his claim against the appellant for insurance monies. That power of attorney was granted to three lawyers including Mr. Mpikas. The other two lawyers named in the grant had retired so Mr. Mpikas was the remaining attorney. As his English was not perfect, after judgment had been obtained in Greece and it was decided to seek redress by registration for enforcement in England, Mr. Mpikas appointed Mr. Spyropoulos, a lawyer who had a greater command of English, to act for him and therefore for Mr. Kapsokolis for the purpose of the English litigation. In turn English solicitors Davies Johnson were appointed for the purpose of the application to register the judgment obtained in Greece and obtain the enforcement of it.[11]So far as the understanding of Davies Johnson as to who was instructing them, the appellant relies in particular on a letter in 2015 from the solicitors in response to an enquiry as to who their client was, or who the parties were. Davies Johnson wrote on 3rd June 2016 under the heading parties:
"We turn now to the parties involved in the Greek proceedings from the claimant's perspective. The policy was issued to Mr. Kapsokolis. He was the tenant of the restaurant which suffered the fire owned by Mr. Sofroniadis. Mr. Sofroniadis as landlord had the benefit of any insurance policy pursuant to the tenancy agreement when the fire occurred and claim was made and the proceedings were conducted by Mr. Sofroniadis' lawyer, Mr. Mpikas, who had been granted a power of attorney by Mr. Kapsokolis. Copies of the power of attorney, plus translation and tenancy agreement are enclosed with this letter. We confirm that we have identified Mr. Sofroniadis and Mr. Mpikas to the extent required by the regulations governing this case."
That letter is relied upon on behalf of the appellant to show that Mr. Sofroniadis from the outset of litigation in this country, had conduct, together with Mr. Mpikas, of that litigation. It is however to be observed, as will be commented upon later, that the English solicitors described Mr. Mpikas as Mr. Sofroniadis' lawyer and enclosed the power of attorney which was the power of attorney given to Mr. Mpikas, not by Mr. Sofroniadis, but by Mr. Kapsokolis.[12]Following the registration of the successful application before Deputy Master Partridge in July 2016 the parties were about to reach a settlement agreement. In the course of those discussions the power of attorney given by Mr. Kapsokolis to Mr. Mpikas which was dated 13th May 1996 was provided. A draft settlement agreement was drawn up by Holman Fenwick which describes the parties to the agreement. It is expressed to be an agreement between Mr. Kapsokolis, Mr. Sofroniadis, Mr. Mpikas and the predecessor company of the appellant. It describes the role of each of the parties, or the relevant parties, at the time of the fire in the background recital. Mr. Sofroniadis was landlord and/or owner of the property. Mr. Kapsokolis was the tenant of the property. It then recites at (c) the insurance Mr. Kapsokolis had taken out and at (f) that pursuant to a power of attorney dated 13th May 1996 Mr. Kapsokolis gave a comprehensive power of attorney to Mr. Mpikas to act for Mr. Kapsokolis in relation to the 1995 judgment, including receipt of the recoverance. Further in the draft agreement it is said under "release":
"This settlement agreement is made in full and final settlement of and each party hereby releases and forever discharges any and all claims, counterclaims, actions, rights, demands and set offs whether in this jurisdiction or any other, whether or not presently known to the parties or whether in law or equity which each party (its subsidiaries, assignees, transferees, representatives, principles, agents, officers and directors or any of them have had or may hereafter can or shall or may have against the other party and/or the other parties' subsidiaries, assignees, transferees, representatives, principles, agents, officers and directors arising out of or in connection with the dispute and/or the underlying facts relating to the dispute, collectively the released claims."
Then warranties given were set out:
"Mr. Mpikas and Mr. Sofroniadis hereby warrant that the power of attorney is in all respects valid under Greek law and that Mr. Mpikas therefore has full power and authority to act on behalf of Mr. Kapsokolis in relation to the release of claims. Mr. Mpikas gives this warranty both in his personal capacity and on behalf of Mr. Kapsokolis pursuant to the power of attorney."
[13]There then is a paragraph on agreeing not to sue:
"Each party agrees on behalf of itself and on behalf its subsidiaries, assignees", not, "to pursue a claim in this jurisdiction or any other including taking any steps in England and Wales or any other jurisdiction to enforce the order for the 1995 judgment. The parties agree that from this time this agreement is executed they will forthwith take all reasonable steps to immediately discontinue the English proceedings."
[14]On 20th July 2016 Holman Fenwick asked Mr. Spyropoulos to provide details of all parties to settlement, including Mr. Kapsokolis. Mr. Spyropoulos gave details relating to Mr. Kapsokolis with an address in Greece. Details were also given of Mr. Mpikas and Mr. Sofroniadis. Having received advice from their local Greek lawyer that the power of attorney, with which they had previously been provided, was unlikely to be still valid they asked that Mr. Spyropoulos provide a new power of attorney from Mr. Kapsokolis. On 8th September 2016 Mr. Spyropoulos and Mr. Sofroniadis came unexpectedly to Holman Fenwick's offices to discuss the settlement. Mr. Sofroniadis provided the solicitors with a further document, apparently an assignment or power of attorney in 1996 by Mr. Kapsokolis to Mr. Sofroniadis of his claim against the appellants.[15]There is a difference in the written statements as to what was said by Mr. Sofroniadis and Mr. Spyropoulos when they were asked to get another power of attorney from Mr. Kapsokolis. The differences are set out in the statements before the court. Mr. Frangeskides, who is a solicitor and partner in Holman Fenwick, wrote in paragraph 20 of his statement:
"On 8th September 2016 Mr. Sofroniadis and Mr. Spyropoulos turned up at Holman Fenwick's London offices unannounced to discuss the matter. I and my associate, Simon Banner, met with them throughout the day. In our meetings Mr. Sofroniadis and Mr. Spyropoulos again gave the impression that Mr. Kapsokolis was alive. They repeatedly told me in Greek that they were in touch with Mr. Kapsokolis. I told Simon that they had said this to me in Greek. This is also confirmed by a subsequent e-mail I sent to Mr. Karamitsios, dated 22nd September 2016, when I told Mr. Karamitsios, 'When we met them I said to them repeatedly why could they not simply speak to Mr. Kapsokolis and have him issue a valid power of attorney? After all, Mr. Spyropoulos had told me that they were in touch with him (which I now do not believe)'."
[16]However Mr. Spyropoulos gives a somewhat different account of what occurred in his statement at paragraph 15. He says:
"Mr. Mpikas asked me in August 2016 to travel to London to meet the attorneys of the appellant in order to complete the settlement. He informed also Mr. Sofroniadis that he had asked me to do this. Mr. Sofroniadis wanted to visit his bank in London, NatWest, and said he would attend the meetings. We arranged to travel to London at the beginning of September. We had a meeting with the attorneys of the appellant at the offices of the solicitors. At this meeting Mr. Sofroniadis never said that he was in contact with Mr. Kapsokolis nor did I. I did say that I could be in touch with him, meaning that I could, if necessary, contact Mr. Kapsokolis to obtain a new power of attorney. I said this because I had no idea that Mr. Kapsokolis was dead so I believed that he could be contacted."
He continues:
"I remember that Mr. Sofroniadis said at our meeting that he was in possession of an assignment."
He continues:
"The appellant's attorneys asked me to provide a new power of attorney for Mr. Kapsokolis. Although Mr. Mpikas and I truly believe that the existing power of attorney was valid and absolutely sufficient in order to assign the settlement agreement, Mr. Mpikas and I agreed to obtain and bring a new power of attorney from Mr. Kapsokolis. If we really knew at the time that Mr. Kapsokolis had passed away in December 2012, we would never have agreed to provide a new power of attorney from a dead man. The allegation of the appellant and its attorneys and I or Mr. Mpikas or Mr. Sofroniadis knew about the death of Mr. Kapsokolis is absurd, unacceptable and defamatory."
The attorney continues:
"Mr. Mpikas discovered the death of Mr. Kapsokolis in October 2016 as he tried to contact him in order to obtain a new power of attorney. He was informed about the death by a relative of Mr. Kapsokolis. As soon as he received this information he informed immediately Davies Johnson, Holman Fenwick and the High Court about this."
[17]So far as Mr. Sofroniadis' evidence about what was said at the meeting in September and events thereafter is concerned, at paragraph 20 of his statement of 19th March 2018 he said:
"Mr. Frangeskides suggests that Mr. Spyropoulos and I said at that meeting that we were in touch with the first respondent. This is untrue. The suggestion that Mr. Spyropoulos would lie this way is also ridiculous. I do recall that Mr. Frangeskides repeatedly asked us to contact the first respondent. We did not say that we were in touch with the first respondent. I recall clearly that what was said was that we could be in touch with him. The point being made was that it was possible to contact the first respondent to obtain a new power of attorney, but and I and Mr. Spyropoulos and Mr. Mpikas believed it this was not necessary to take a new proxy from the first respondent as the power of attorney sufficed. Of course I, Mr. Spyropoulos and Mr. Mpikas did not realise that was not in fact realise possible to contact the first respondent as he was, unknown to us, dead. I recall that Mr. Mpikas gave to me a proxy to sign the agreement in the name of the first respondent and to receive the compensation in his name."
[18]Mr. Banner, a solicitor of Holman Fenwick, e-mailed Mr. Spyropoulos on 20th September 2016 saying that none of the additional documents, which had been produced at the meeting on 8th September, changed their client's position that the power of attorney which had been produced was not valid under Greek law. They again requested that Mr. Spyropoulos approach the claimant to issue a new valid power of attorney and the e-mail says "in your favour". In other words in favour of Mr. Spyropoulos. Mr. Fourtounidis, a lawyer for Mr. Sofroniadis, in a related claim in Greece against the appellant, exhibited an affidavit by Mr. Mpikas made on 23rd January 2018. In the affidavit he explained that he appointed Mr. Spyropoulos to carry out all actions concerning recovery of the judgment sum in England he having, "perfect knowledge of English." Secondly Mr. Mpikas deposed:
"The company requested, although there was no need, a new power of attorney. When seeking my principal for a new power of attorney I realised for the first time on 12th October 2016 when I received an official copy of the death certificate that he had died on 2nd December 2012."
Mr. Mpikas wrote:
"All the steps taken on behalf of my principal, Mr. Kapsokolis, up to the date I was informed about his death, even the ones carried out after his death, are legal and in effect under article 224 4 of the civil code."
[19]An attendance note prepared by Holman Fenwick's then solicitor in Greece to Mr. Banner on 27th October 2016 exhibited to the statement Mr. Frangeskides reports that he met Mr. Spyropoulos and Mr. Sofroniadis in his office. They advised him that Mr. Kapsokolis passed away on 2nd December 2012. It reports that Mr. Sofroniadis, "intends to continue with the claim on the basis of an assignment which he has received from Mr. Kapsokolis in the 1996." He records that Mr. Sofroniadis asked that the appellant let him know whether a further postponement of proceedings in the English court, namely the appeal which had been lodged, should be granted or whether proceedings should be stayed pending discussions.[20]On 10th November 2016 Mr. Spyropoulos informed the court that Mr. Kapsokolis had died and the litigation should be interrupted and when communicating with the court he attached a copy of the death certificate. He contended that there should be an interruption of proceedings until a legal successor or assignee enters the trial. On 10th January 2017 Mr. Sofroniadis sent the Queen's Bench Appeals Office what he described as a document evidencing an extra judicial act. That extra judicial act was what was described as an extra judicial statement invitation of protest with a reservation of rights served by Mr. Sofroniadis addressed to the appellant. It states as follows in paragraph 1:
"You have already been informed, by the attorney of K. Kapsokolis, that he has passed away. 2) You have been notified, as per Article 460 of the civil law, here under attached translated into English, that the deceased K.Kapsokolis has legally assigned his claim vs. the Insurance Company LOMBARD to me and you were sent my full contact details etc in Greece. 3a) A copy of the above assignment, translated into English, is here under attached."
There were also attached copies of the passages in the Greek Civil Code. At paragraph 4 he writes:
"In view of the above and despite the fact that you have been informed both about the death of Mr. Kapsokolis and his legal assignment of his claim against the insurance company, Lombard, which he has succeeded to me and furthermore that there is absolutely no power of attorney given to any attorney after the notification of the death of Mr. Kapsokolis, you have ignored and concealed the above in your actions fully, falsely, misleadingly and illegally even before the court which I strongly protest."
[21]Mr. Sofroniadis asks that :
"The pending trial is promptly interrupted due to the death of a party involved under the law."
The attached document which was referred to by Mr. Sofroniadis as an assignment of the claim by Mr. Kapsokolis against the appellant is merely dated Athens 1996 headed, "Solemn Declaration". It reads as follows from Mr. Kapsokolis:
"In my personal responsibility and knowing this action set out in the provisions of paragraph 6 of Article 22 of law 1599/1986 I declare that I appoint Mr. Sofroniadis the owner of the ground shop at 44 Montague Street, Piraeus, as my representative ad litem and I provide him with the irrevocable right to act in my place and appoint attorneys for all legal transactions against the insurance company, Lombard. I also transfer and assign him all my rights for any possible compensation for the damages of the aforementioned shop as a result of fire which Mr. Sofroniadis handled, repairing and restoring the shop. The costs of the above actions shall be paid in my place by Mr. Sofroniadis."
[22]The English solicitors, Davies Johnson, came off the record in January 2017 and solicitors for the appellant agreed to a postponement of the appeal hearing until 9th March 2017. Apart from the communications on 6th March 2017 referred to earlier, Mr. Sofroniadis sent an e-mail to Mr. Jenkins in the Queen's Bench Appeals Office in which he repeated the contents of his e-mail of 10th January 2017. Accordingly there were communications by Mr. Sofroniadis with the court office although he did not appear before Mrs. Justice Nicola Davies.[23]The Application for a Non-Party Costs OrderCounsel for the parties both agree the core principles applicable to a non-party costs order while differing in two respects. The power to make a costs order against a non-party is derived from the Senior Courts Act 1981 section 51 which provides that: ‘(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in –(a) the civil division of the Court of Appeal,(b) the High Court; and(c) and county court, shall be in the discretion of the court. The court shall have full power to determine by whom and to what extent the costs are to be paid.” Section 51 gives a wide discretion to make whatever order for costs it considers just in all of the circumstances, including an order that the costs of the proceedings be paid by a non-party. Each decision on an application for costs against a non-party will be determined on its own facts, although the principles to be applied have been established in case law.[24]Both counsel refer to the speech of Lord Brown in Dymocks Franchise Systems (NSW) Pty Ltd v Todd (Costs) [2004] UKPC 39. At paragraph 25 Lord Brown said:
"(1) Although costs orders against non-parties are to be regarded as 'exceptional', exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and for their own expense. The ultimate question in any such “exceptional” case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against. (2) Generally speaking the discretion will not be exercised against 'pure funders' i.e. those with no personal interest in the litigation, who do not it from it, are not funding it as a matter of business, and in no way seek to control its course. In their case the court’s usual approach is to give priority to the public interest in the funded party getting access to justice over that of the successful unfunded party recovering his costs and so not having to bear the expense of vindicating his rights. (3) Where the non-party not merely funds the proceedings but substantially controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party’s costs. The non-party in these cases is not so much facilitating access to justice by the party funded as himself gaining access to justice for his own purposes. He himself is 'the real party' to the litigation."
[25]Both Ms. Paruk and Mr. Friedman also agree that applying Petromec Inc v Petroleo Brasileiro SA Petrobras [2005] EWHC Civ 1038:
"The conduct of the non-party must have been the cause of the applicant incurring the costs it seeks to recover."
Mr. Friedman submitted that causation is a necessary pre-requisite whilst Ms. Paruk stated that in the absence of such causative link it will not normally be just to make a non-party costs order. There was a difference between Mr. Friedman and Ms. Paruk on the standard of proof to be applied in determining an application for a non-party costs order. Mr. Friedman contended that the appellant/applicant needs to prove to the summary judgment standard the factual matters on which it relies. Mr. Friedman relied upon Grecoair Inc v John Tilling and Ors [2009] EWHC 115 at paragraph 32 and Barndeal Ltd & Others v The London Borough of Richmond-Upon-Thames [2005] EWHC 1377, to submit that an application for a non-party costs order must be dismissed if it turns on a factual dispute to which the answer is not clear. In this regard Mr. Friedman relied upon paragraph 30 of Grecoair in which it was stated:
"An approach similar to what would be applied on a summary judgment application pursuant to what is now Part 24 , namely that, whereas a court is not on such application prevented from resolving an issue, if there is a dispute if, for example, it is satisfied, notwithstanding evidence to the contrary, that in the light of the overwhelming nature of one side's evidence, or its corroboration by contemporaneous documents, it can, despite denials and disputes, resolve it, then it will; but that otherwise it is not in a position to resolve contested issues of fact where there are vigorous swearing matches on both sides."
Ms. Paruk submitted that no different standard of proof is required in a costs application against a non-party. In other proceedings determined on written evidence disputed issues of fact are to be decided on a balance of probabilities. It is for the applicant for a costs order to establish the facts relied upon. If they cannot establish essential facts on the balance of probabilities, the application will fail. In my judgment no different standard of proof is required. I agree with the submission of Ms. Paruk. The burden is an applicant for a costs order against a non-party to establish the facts relied upon in support of the application. If they do not establish essential facts, on the balance of probabilities, the application will fail. No different standard of proof is required.[26]Another difference between counsel was on whether the court may exercise its discretion to make a costs order against a non-party in circumstances in which the non-party was not at fault in making representations that they are entitled to conduct proceedings when they had no such authority. In her submissions the discretion should be exercised to make such an order if in fact litigation were conducted by the non-party irrespective of fault on their part. Ms. Paruk relied upon the judgment of the Court of Appeal in Bank of Scotland v Azam Qutb [2012] EWCA Civ 1661. Giving the judgment of the court Mummery LJ held at paragraphs 11 and 12:
"11. In our judgment this is clearly a case in which it is just for the court to exercise its discretion under section 51.3 of the Senior Courts Act 1981 and CPR 48.2 to make an order for costs personally as against Mr. Qutb. 12. He has managed to maintain the trial of the action and he has obtained permission to appeal, which we have set aside. He has done so for his only personal benefit being a beneficiary of his mother's estate. He has deceived the bank into spending significant costs in the belief that he was entitled to conduct the proceedings on his mother's behalf as her litigation friend when he was not entitled to act after her death. He has, without doubt, been guilty of gross misconduct by making false representations in evidence and his submissions in the proceedings that his mother was still alive when he knew that she had died on 1st January 2010, many months before the trial took place."
In my judgment the court reached their conclusion on the basis that the non-party knew that he had no authority to conduct the litigation on his mother's behalf as her litigation friend. He knew she was dead. The non-party was the son of the deceased. He was well aware that she had died when he made false representations that she was alive and that he could conduct proceedings as her litigation friend. The judgment of Mummery LJ highlights the knowledge of the falsity of representation of authority to conduct litigation by a non-party as an important factor in the exercise of discretion in such circumstances. Azam Qutb highlights the importance in this case of the applicant establishing, not only that Mr. Sofroniadis conducted the English proceedings, but also that when he did so he knew that Mr. Kapsokolis was dead.[27]The Submissions of the PartiesMs. Paruk submitted that in any particular case an application satisfying even one of the three factors outlined in Qutb was sufficient for the exercise of discretion to grant an order for costs against a non-party. It was not suggested, nor in my judgment would it be right, on the facts of this case for an order to be granted merely on the basis that Mr. Sofroniadis could benefit from the English proceedings to register and enforce the judgment of the Greek court in favour of Mr. Kapsokolis. In this case if the judgment in favour of Mr. Kapsokolis could have been enforced, which it could not as he had died and the power of attorney to Mr. Mpikas was therefore of no effect, it would have benefited his estate. Mr. Sofroniadis on his account may have a claim against the estate in any event and also against the appellants. He is pursuing proceedings in Greece. Mr. Sofroniadis would only benefit from the enforcement of the judgment in favour of Mr. Kapsokolis if proceedings, which were bought to an end by the judgment of Mrs Justice Nicola Davies he had participated as an assignee of the judgment debt. If that had been his position, he would no doubt have sought to be joined as a party.[28]The evidence relied upon by the appellant is that when the issue of his authority to participate in a settlement of the English litigation arose, Mr. Sofroniadis produced to the solicitors for the appellant, a draft power of attorney and assignment dated 1996. In my judgment it is not clear whether the draft is a power of attorney or an assignment. It could not be both. Either it gave Mr. Sofroniadis the power of attorney to pursue the claim against the appellant on behalf of Mr. Kapsokolis who would receive the sums at issue, or the claim in the judgment had been assigned to Mr. Sofroniadis. If the benefit of the claim had been assigned, Mr. Sofroniadis should have been the applicant party in the English litigation. Mr. Kapsokolis would have had no role to play in such litigation. On the evidence, Mr. Mpikas and the two other lawyers who have now retired, were given the power of attorney to act on behalf of Mr. Kapsokolis. Mr. Mpikas assigned that role in England to Mr. Spyropoulos as his English was not good. Mr. Friedman submitted that Mr. Sofroniadis was not reliant on the success of litigation undertaken by Mr. Kapsokolis in order to recover money for the damage to his property. He could recover from the estate of Mr. Kapsokolis or from Mr. Kapsokolis when he believed him to be alive. It was said Mr. Sofroniadis also had right of action against the appellant under the insurance policy. He is indeed pursuing proceedings for those monies by litigation in Greece. It is said that his interest in the litigation was that he did not want Mr. Kapsokolis to have to pay him before he had recovered moneys under the insurance policy. As explained in his statement and in that of Mr. Spyropoulos, Mr. Sofroniadis only became involved when settlement discussions started towards the end of 2015. The extent of his involvement, as is shown by the draft agreement, is to ensure that a settlement is binding for all interested in recovery of recompense for damage to his property.[29]In support of the contentions that Mr. Sofroniadis controlled and funded the litigation, Ms. Paruk relied upon evidence of communications from the English solicitors, Davies Johnson, instructed to initiate and pursue proceedings in England. Reliance was placed on a letter from Davies Johnson to the appellant dated 3rd June 2015. In the passage regarding parties which has been referred to earlier in this judgment, it is to be noted that Davies Johnson stated that Mr. Mpikas was Mr. Sofroniadis' lawyer, notwithstanding that it was Mr. Kapsokolis who had granted the power of attorney to Mr. Mpikas. Further, reliance was placed on the fact that Mr. Sofroniadis attended meetings in London and Athens with legal representatives of the appellant. The lawyer representing Holman Fenwick in Athens reported that Mr. Sofroniadis referred to the costs incurred by him in pursuing the claim against the appellant and he also referred to having vouchers supporting those costs. It was said that it is established by the statement of Mr. Frangeskides that Mr. Spyropoulos and Mr. Sofroniadis gave the impression that Mr. Kapsokolis was alive, and they were in contact with him. In other words, it is suggested that there was a deliberate deception carried out by Mr. Sofroniadis to that effect. Ms. Paruk also referred to Mr. Banner's note of a conversation with Mr. Patterson of Davies Johnson on 7th January 2017 in which it was said that the solicitor informed him that he was going to cease to act and that he had e-mailed his clients, in plural. Reliance is also placed on the fact that Mr. Sofroniadis had communicated with the court on several occasions in connection with the appellant's application to discharge the order of Deputy Master Partridge.[30]Mr. Friedman submitted that the evidence does not establish that Mr. Sofroniadis funded or controlled the English proceedings. The evidence relied upon by the appellant was slender in the extreme, consisting as it does of communications from Davies Johnson. The fact that they informed the appellant that they included Mr. Sofroniadis' name under the heading of "parties" and had satisfied themselves that they had properly identified him for purposes of being instructed was not sufficient to establish that Mr. Sofroniadis controlled the English litigation. Further it was said that presence at meetings to discuss a settlement of the English proceedings did not show that Mr. Sofroniadis was conducting or financing that litigation. Ms. Paruk referred to the absence of fee notes from Davies Johnson to show that others, and not Mr. Sofroniadis, were funding the litigation. However it was said by Mr. Friedman that it is for the appellant to prove their case, not the other way around. Mr. Friedman submitted that there was not sufficient evidence to establish that Mr. Sofroniadis was controlling and funding the English proceedings. Further, there was no evidence to establish that Mr. Sofroniadis had participated in or carried out a deception of solicitors for the appellant to the effect that Mr. Kapsokolis was still alive at the time settlement discussions were on foot.[31]Discussion and ConclusionMr. Paruk and Mr. Friedman agree that the exercise of discretion in making a costs award against a non-party depends on the facts of each case. Dymocks sets out the principles to be applied to the exercise of discretion whether to grant an order for costs against a non-party. Such orders are exceptional and the three factors set out in Dymocks are to be taken into account. However, the courts are not to apply these rigidly and other factors may be relevant in any particular case. An order for a non-party to pay a proportion of the costs, if that meets the justice of the case, may be made. It is for the applicant for an order for costs against a non-party to establish their case on the balance of probabilities. In doing so different factual issues may have different weight and importance to the application.[32]Mr. Sofroniadis was the landlord of the premises damaged by fire. Mr. Kapsokolis was liable under the lease with him to make good any damage. Mr. Kapsokolis obtained a judgment under his insurance policy. He gave a power of attorney in 1996 to Mr. Mpikas and another two lawyers, who are now retired, to recover those monies. Mr. Sofroniadis was interested in the recovery of the monies but was not dependent on the success of the litigation conducted by Mr. Kapsokolis or dependent upon the registration of enforcement proceedings in this country. He could recover from Mr. Kapsokolis in any event if not directly under the insurance policy.[33]It is not established that Mr. Sofroniadis was directly interested in the pursuing the enforcement of the Greek judgment in England. He was interested to the extent that if Mr. Kapsokolis was paid, he too would be paid. An indication of the extent of his involvement is shown by the draft settlement prepared by Holman Fenwick. Mr. Sofroniadis is not described as a direct party, but he is bound in the draft settlement, giving warranties and agreeing not to pursue any litigation against the appellant. The evidence before the court is to the effect that the purpose of the discussions and the settlement was to ensure that all parties who had or could have a possible claim arising out of the damage to the premises by reason of the fire were precluded from pursuing any further proceedings after settlement.[34]As to whether Mr. Sofroniadis financed or controlled the litigation, the only evidence that he was financing the English litigation depends on the memo or attendance note reporting that he observed that the proceedings were costing him money. There is no other evidence that he is or was funding the litigation. It is for an applicant for costs against a non-party to establish their entitlement. There is no evidence from the English solicitors pursuing the litigation before the English courts as to who was funding that litigation. It is not for the respondent to the application, Mr. Sofroniadis, to establish that it was not him who was funding the litigation. It is for the applicant/appellant to establish that fact. In my judgment it has not done so.[35]As for whether Mr. Sofroniadis was the real party in the English proceedings, that he was the driving force behind those English proceedings, it is apparent that the English solicitors were taking their instructions from Mr. Mpikas through his English speaking lawyer, Mr. Spyropoulos. The English solicitors also had dealings with Mr. Sofroniadis. However, the court has reservations about the placing great weight on the correspondence from the English solicitors in June 2015. They make one obvious error in saying that Mr. Mpikas is the lawyer of Mr. Sofroniadis when there is absolutely no evidence to that effect. In fact, there is contrary evidence. It is plain that Mr. Mpikas had a power of attorney and was the lawyer for Mr. Kapsokolis. Mr. Kapsokolis' and Mr. Sofroniadis' interests were not in all respects identical. After all Mr. Kapsokolis would have had to pay money to Mr. Sofroniadis to rectify the damage to Mr. Sofroniadis' property. True it is that Mr. Sofroniadis did participate to a certain extent in the discussions that took place over the English litigation. The evidence of the lawyers, in particular that of Mr. Spyropoulos, is that the Mr. Sofroniadis became involved at the time that there were to be settlement discussions. In my judgment on the balance of probabilities that was the reality of his involvement in the proceedings up until a certain point. I am not satisfied on the evidence before court that Mr. Sofroniadis was the effective party in the English proceedings or effectively had control of those proceedings up to a certain point.[36]After Mr. Mpikas learned of the death of Mr. Kapsokolis, it was apparent to all that the role of Mr. Sofroniadis changed. By his actions he had notified the court and also the appellant that he was the assignee of the judgment debt. He notified the court that there should be an interruption of proceedings because of the death of Mr. Kapsokolis. He asked for an adjournment. At the point from knowledge of the death of Mr. Kapsokolis Mr. Sofroniadis stepped into his shoes in effect, under the assignment of the benefit of the judgment. Mr. Sofroniadis is to be regarded as the effective party in the English proceedings from that time. From that time no solicitors were instructed because the English solicitors had come off the record stating that they had ceased to act for their client, Mr. Kapsokolis, who had died. Accordingly, any actions in respect of the proceedings after that were taken by the non-party himself, not acting through any lawyer. However, Mr. Sofroniadis took steps in the proceedings by asking for their interruption, effectively an adjournment. Therefore from that time Mr. Sofroniadis should be treated as in the frame for a costs order against him as a non-party. However, in making such an order I have regard to the justice of the case and what fulfils that objective in the particular factual circumstances.[37]In my judgment, Mr. Sofroniadis should bear some responsibility for costs incurred after it was known that Mr. Kapsokolis had died and, therefore, the order made by the Deputy Master Partridge was bound to be set aside. However, Mr. Sofroniadis is not a lawyer. I would not make an order that he bears the costs of the appellant incurred from the date that the death was known to all parties and from the date that he notified the court and the appellant of the assignment of the benefit of judgment to him. Whilst it was would be apparent to any lawyer that the appeal would succeed, that may not be the case with a layperson. In my judgment, therefore, some leeway should be granted to enable Mr. Sofroniadis, as a reasonable person, to take legal advice on his position. If it were to be the case that on the balance of probabilities that advice would be to the effect that the setting aside application or appeal should no longer be resisted but consented to, in my judgment it would be just and equitable to make an order for costs against the non-party, Mr. Sofroniadis, from that point. I will hear submissions from counsel as to when and how that should be done. The effect of this judgment is to make a costs order against the non-party, Mr. Sofroniadis, to the limited extent only of the costs incurred by the appellant after Mr. Sofroniadis assumed conduct of the English litigation, which he must be assumed to have done, once he had notified the court and the appellant of the assignment of the benefit of the judgment to him. I will hear submissions from both of you as to what date and to what extent that should be.

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