ORDER FOR PAYMENT ON ACCOUNT OF COSTS CAN BE MADE LATE

In Culliford & Anor v Thorpe [2018] EWHC 2532 (Ch) HH Paul Matthews (sitting as a High Court judge) held that it was possible for the court to make an order  for an interim payment of costs after the date on which judgment was given.

“In my judgment, it is not the law that, once an order for costs has been made, drawn up and sealed, no further application can be made to the court for an order for a payment of a sum on account of those costs. There is nothing in the rules which so requires, and there may be good reason why payment of the sum on account is not considered at the time the order was made. “

THE CASE

The defendant succeeded in defending a case at trial in March 2018. An order for costs was made in the defendant’s favour. No order was made for an interim payment of costs.  The claimant refused to make a voluntary order on account of costs, in June 2018 the defendant issued an application for an interim payment on account of costs.

THE ARGUMENT

The claimant, the paying party, argued that the court had no jurisdiction to make an order on account of costs. Alternatively that the court should not exercise its discretion in the current case.

THE JUDGE’S CONCLUSION

The judge held that the court did have power and it was appropriate for it to order an interim payment in this case.

1. 1. I begin with the question of jurisdiction. In my judgment, it is not the law that, once an order for costs has been made, drawn up and sealed, no further application can be made to the court for an order for a payment of a sum on account of those costs. There is nothing in the rules which so requires, and there may be good reason why payment of the sum on account is not considered at the time the order was made. My decision in Ashman v Thomas [2016] EWHC 1810 (Ch) does not decide to the contrary. It was a case where the court was asked to revisit its order before it had been drawn up and entered. So it turned on the so-called Barrell jurisdiction. There was no need to decide what would have happened if the order had already been entered. Although r 44.2(8) contemplates that the court will decide this question at the time of making the order for costs, to my mind this does not exclude the possibility that the court should decide it later. I see no justification in the rules or authorities for the Claimants’ view that, if an application is not made at the time, the next opportunity arises only after detailed assessment proceedings have been commenced.

Discretion

1. Once it is accepted that the court has jurisdiction in principle to make an order for the payment sum on account of costs in an appropriate case, it is then simply a question of whether the court is minded to exercise that jurisdiction on the facts of the case, at the time when the court is asked to do so. Given the terms of r 44.2(8), I should say that I do not accept that the mere fact that the defendant did not ask for a payment on account by itself amounts to a “good reason” for not making an order for one. No doubt one factor to take into account (not on its own necessarily determinative) will be whether the receiving party made a deliberate decision not to seek such an order at the time and then simply changed his or her mind later. At all events, I turn to consider the circumstances of this case.

Conclusion

1. There is no suggestion here that the Defendant deliberately decided not to ask for a payment on account. I might have raised the point myself at the hearing, and yet overlooked it. In my judgment, there is no good reason why the court should not make an order even at this stage for a payment on account of costs. It would still be of value to the Defendant, who has an order for costs in his favour and is being kept out of his money only because of the need for the detailed assessment to ascertain the exact sum. Accordingly, taking account of r 44.2(8), I consider that the court should make such an order.

2. I turn to the question of the amount. The obvious starting point for the assessment of the amount of the payment is the approved costs budget of the Defendant. This is in the sum of £45,580. The Defendant however asks for a payment in the sum of only £30,000. He refers to the decision of Birss J in Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch), as showing that (in accordance with CPR r 3.18(b)) the court on a detailed assessment of costs will not depart from an agreed or approved budget unless satisfied that there is good reason to do so. In that case, payment on account was ordered in a sum amounting to 90% of the claimant’s approved budget. The Claimants in their written submissions however do not put forward any arguments as to the amount. In these circumstances, the sum of £30,000 seems wholly reasonable to me, and I will so order. Given that this has arisen at a later stage than usual, when the Claimants may not have been expecting to have to provide for it, I will however order that it be paid within 28 days rather than the usual 14.

THE COSTS OF THE APPLICATION

It is worth noting that, although the application arose out of the defendant’s failure to make an application at the end of the trial, the judge ordered the claimant to pay the costs of the application (although this was  a provisional view).

“Costs

1. Finally, in their draft order, the Defendant’s solicitors ask that the Claimants pay their costs of the application. Costs are in the discretion of the court, but if the court decides to make an order the general rule is that they follow the event, although the court may make a different order. Here the Defendant has won, and if costs follow the event he should have his costs from the Claimants. The Claimants may say that if the Defendant has asked for a payment on account at the time there would have been no need for this application. I think that may well be right. But when the Defendant’s solicitors raised the question in correspondence the Claimants did not immediately concede, or (so far as I know) even suggest a compromise. If they had, their objection would have been more soundly based. Instead, they resisted the application, their solicitors in written submissions calling it “doomed to fail”.

   1. Accordingly my provisional view is that I should make a costs order on this application and that the Claimants should pay the Defendant’s costs of the application, to be subject to detailed assessment if not agreed. There is no request that I should order the payment of a sum on account (and nothing to that effect in the draft order), and I have no figures to enable me to reach a view on what would be a reasonable sum for this purpose. If the Claimants wish to challenge my provisional view, they must do so in writing within 48 hours of their solicitors receiving this judgment, with the Defendant having 48 hours thereafter to respond to any such written submissions.”