Background
This judgment determined matters consequential upon the court’s substantive judgment of 22 May 2026, [2026] EWHC 1182 (Ch), concerning the terms on which Cleveland Potash Limited could acquire mining rights. The parties could not agree the resulting costs and other orders, and scheduling difficulties led Master Kaye, sitting as a Deputy High Court Judge, to decide the outstanding matters principally on written submissions.
Cleveland Potash sought its costs from March 2020 and claimed the enhanced consequences of a Part 36 offer made in March 2024. The respondents accepted that Cleveland Potash was the more successful party but argued for temporal and percentage reductions, relying on matters including an earlier preliminary issue, the parties’ conduct, and Cleveland Potash’s lack of success on certain arguments. They also sought permission to appeal the substantive valuation determinations.
The Court’s Holding
The court ordered the respondents to pay Cleveland Potash’s costs on the standard basis, subject to detailed assessment if not agreed. The order included costs reserved in June 2023 but excluded costs already governed by another specific costs order. The court declined to impose a temporal limit, an issues-based order, or a percentage reduction, finding that the disputes and timelines were too intertwined and that Cleveland Potash was overall the more successful party.
The court held that Cleveland Potash was not entitled to the enhanced benefits claimed under Part 36. It nevertheless ordered an interim payment of £550,000 on account of costs and held that interest should run in the usual way without deferral. The court did not determine the per-tonne extraction royalty for salt and potash, concluding that fairness would require submissions and cross-examination but that a separate hearing on that narrow issue would be disproportionate; the issue could be addressed with any remaining disputed lease terms.
Permission to appeal was refused. The proposed grounds concerning section 8 of the Mines (Working Facilities and Support) Act 1966, key value, and wayleave royalties were attempts to challenge factual findings and the court’s evaluation of expert valuation evidence, rather than arguable errors of law, and had no real prospect of success or other compelling justification.
Key Takeaways
- Once the court identifies the overall successful party, intertwined issues and mixed success on individual arguments will not necessarily justify an issues-based, percentage, or time-limited costs order.
- Questions about whether particular pre-action or issue-specific expenses are recoverable ordinarily belong in the detailed assessment rather than the court’s determination of the general incidence of costs.
- A proposed appeal that merely repackages disagreements with factual findings or the trial court’s evaluation of expert evidence will not satisfy the test for permission to appeal.
Why It Matters
The decision illustrates the High Court’s broad, pragmatic discretion over consequential costs in complex commercial proceedings. It also distinguishes the general entitlement to costs from the granular assessment of which particular items may ultimately be recovered.
For parties making settlement offers, the judgment underscores that overall success does not itself establish entitlement to Part 36 enhancements. For prospective appellants, it reinforces the difficulty of appealing fact-sensitive valuation findings merely by characterising them as issues of legal principle.