Musst Holdings Ltd v Astra Asset Management UK Ltd & Anor (Costs as Damages) [2026] EWHC 1599 (Ch)

MR PETER KNOX KC and MS KATHARINE BAILEY (instructed by Taylor Wessing LLP) appeared on behalf of the Claimant

Mr Justice Leech:

I. Introduction

A. The Second Trial Judgment

(1) Findings

• In this judgment, I adopt the defined terms and abbreviations which I used in the reserved judgment which I handed down following the second trial on 20 February 2026 (the “Second Trial“): see [2026] EWHC 357 (Ch). I will refer to that judgment as the “Second Trial Judgment” to distinguish it from the Trial Judgment handed down by Freedman J following the First Trial and references below to paragraphs are intended to be references to the Second Trial Judgment (unless I state otherwise). In that judgment, I held as follows:

(1) Musst is entitled to share in all management fees and performance fees earned by Astra in relation to both Crown II and Crown III because both were Funds managed or advised by Astra for the Current Strategy and were, therefore, Eligible Investments for the purposes of clause 3.1 of the Octave Contract: see [176] and [283].

(2) Astra is bound by an issue estoppel which prevents it from disputing that on 5 November 2014 Astra LLP assumed the obligation to pay the Revenue Share to Musst of any Eligible Investment which fell within clause 3.1 of the Octave Contract and that in July 2016 Astra UK assumed that obligation in place of Astra UK: see [313]. (In the alternative, I also adopted the findings made by Freedman J.)

(3) In the alternative to (2), on 4 February 2015 the Octave Contract was novated with the agreement of all parties so that Astra LLP assumed the obligations of Octave in relation to Crown II and on 28 July 2016 it was novated again so that Astra UK assumed the obligations of Astra LLP under the Octave Contract in relation to Crown II as well as Crown I and 2B: see [332].

(4) Astra had committed breaches of clause 4.5 of the Octave Contract by failing to pay its Revenue Share to Musst but had not committed breaches of clause 11.3 although Musst was permitted to apply for further relief if Astra failed to give adequate undertakings: see [346] to [349].

(5) Astra negligently made false representations to Musst upon which Mr Siddiqi and Ms Galligan had relied and owed a duty of care to Musst for the truth or accuracy of those representations: see [350] to [392].

(6) Astra was not liable to Musst for deliberate concealment. In particular, it was not liable for breach of the contractual duty of good faith, Astra did not conceal from Musst any fact relevant to Musst’s cause of action for the payment of fees and any claim by Musst in contract or tort which accrued before 29 April 2015 was barred by the Limitation Act 1980: see [404] to [417].

(2) Costs as Damages

• Mr Siddiqi gave evidence that Musst only discovered that the representations made by Astra were untrue when it obtained disclosure of Dr Adler’s email dated 3 February 2016 in the Defamation Claim and that if it had been disclosed earlier, Musst would have tried to have all of its claims (i.e. all of the claims in relation to Crown I, Crown II, Crown III and 2B) heard together see [393] to [395]. This evidence was not challenged and I accepted it. However, the parties had agreed that a further hearing would be necessary to determine the final relief to which Musst was entitled and I left open the question whether Musst was entitled to recover the additional expenditure which it had incurred as damages for negligent misrepresentation. For ease of reference I repeat what I stated at [396] to [401]:

“396. Mr Siddiqi’s evidence (which was again unchallenged) was that Musst was advanced £1.7 million in funding for the Second Claim and will be obliged to pay £3.4 million and a second issue fee of £10,000 if successful. It was also his evidence that Musst has taken out an ATE policy under which it will pay a deferred premium of £557,760 if successful. His evidence was that Musst would have avoided these costs if it had been able to pursue the claims in relation to Crown II and Crown III in the First Claim. He accepted, however, that Musst would have to give credit for the additional fees which it would have incurred in the First Claim to the litigation funder and the additional premium which it would have had to pay to the ATE insurer.

397.  This gives rise to a complex issue on which the parties made only brief written submissions. Mr Knox and Ms Bailey relied on McGregor on Damages 22nd ed (2024) at 22—017 to 22—027 where the editor sets out the cases in which a claimant who relies on an independent cause of action may be able to recover damages for additional costs which it has incurred in earlier proceedings against the same party. Mr Spalton and Mr Mo relied on the decision of the Supreme Court in Hirachand v Hirachand [2024] UKSC 43, [2025] AC 599 and the article “Costs as Damages” by Professor Louise Merrett published in (2009) 125 LQR 468 which Lord Richards JSC cited at [38] to [41] of that decision.

398. Berry v British Transport Commission [1962] QB 306 is one of the cases upon which McGregor relies for the proposition that one party may recover extra costs as damages from the same party if there is a separate and independent cause of action arising out of a different breach of contract or wrong. For example, Devlin LJ found as follows in Berry in support of this proposition:

“I find it difficult to see why the law should not now recognise one standard of costs as between litigants and another when those costs form a legitimate item of damage in a separate cause of action flowing from a different and additional wrong.”

399. In Hirachand v Hirachand, however, the Supreme Court held that a claimant who had made a claim for financial provision under the Inheritance (Provision for Dependants) Act 1975 could not recover an additional sum for the success fee which was payable under a CFA as part of the financial provision to be made for her by the Court. They did so because the success fee payable under the CFA was part of the claimant’s costs and was not recoverable under the CPR costs regime.

400. A brief analysis of these competing authorities demonstrates that the present case gives rise to a novel point (and one which is unlikely to arise very often). Thus, McGregor does not go so far as to state that a claimant is able recover costs as damages in the same action even if that party has an independent cause of action. On the other hand, Hirachand is not authority for the proposition that a claimant is not entitled to recover costs as damages in the same action if they have a separate and independent cause of action and those costs constitute the loss which flows naturally from the relevant breach of contract or wrong.

401. In my judgment, it is not appropriate for me to reach a final decision on this issue in the absence of full argument and since it appears to be common ground that there will have to be a consequential hearing to fix the amount of any sums owed to Musst and of any damages, I consider it appropriate to direct further written and oral submissions on this point if the parties wish to argue it. If Mr Siddiqi’s evidence is accurate, then the amount at stake could be very substantial. It may also be that this point is no longer a live one because I have only found Astra LLP and not Astra UK liable for negligent misrepresentation. But if they wish to take it, the parties should have the opportunity to present further argument on this issue.”

• I also held that as a consequence of Astra’s misrepresentations Musst lost the opportunity to claim its Revenue Share for the period from 1 December 2014 to 19 April 2015. I expressed the view that this claim was likely to be limited to US $715.81 but I gave the parties permission to make further submissions on this issue: see [402].

B. The Second Consequentials Hearing

• On 29 April 2026 the further hearing took place. I will refer to it as the “Second Consequentials Hearing” to distinguish it from the consequentials hearing before Freedman J after which he handed down the Consequentials Judgment: see [2]. I heard detailed argument on the scope of relief to which Musst was entitled for Astra’s failure to comply with its contractual obligations and, in particular, what orders the Court should make (if any) to compel Astra to disclose and permit inspection of documents and to give the Claimant access to inspect the Defendants’ books and records. I also heard detailed argument on the issue of costs as damages.

• In the event, Musst reluctantly agreed (at my prompting) to accept the undertakings which Astra was prepared to offer by the end of the hearing and to adjourn the contractual issues to a further hearing to see whether Astra performed the undertakings which it was offering and, if so, whether this process would provide sufficient information to enable Musst to calculate the fees to which it was entitled under the Octave Contract. By a consent order dated 29 April 2026 (the “Consent Order“) the parties agreed to adjourn the following issues to a further consequential hearing (the “Third Consequentials Hearing“), namely, any further order upon the Claimant’s negligent misrepresentation claim, interest (statutory and contractual), costs and permission to appeal. I also granted permission to Musst to apply for further relief in relation to its contractual claims at that hearing, which has now been fixed for 30 June 2026.

• Although I heard full argument on the scope of the relief to which Musst was entitled for breach of clauses 4.1 and 11.3 of the Octave Contract, it would not be appropriate for me to make any further findings at this stage on the question whether Astra has complied with those obligations and, if not, what (if any) further relief the Court should award. I will, if necessary, address these issues at the hearing on 30 June 2026. In this second judgment, I therefore address only the issue of costs as damages.

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