Dolphin Quays Development Ltd v Mills [2008] EWCA Civ 385, [2008] 4 All ER 58
In the vast majority of cases, it would be unjust to make an award of costs against a person who is not a party to the proceedings. Consequently, an order for the payment of costs by a non-party will always be exceptional, but “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 at their own expense.
The ultimate question in any such exceptional case is whether or not it is just to make the order. Injustice might be caused where litigation is conducted by a receiver on behalf of an insolvent company for the benefit of secured creditors; therefore, in appropriate cases, a non-party costs order against a receiver or against the secured creditor may be made, especially where the non-party is the “real party”.
A costs order against receivers will be made more readily where the company is in liquidation and the receiver’s agency has terminated, or where the successful party has not been able to obtain security for costs. Impropriety or unreasonableness is also a factor in the exercise of the discretion.
