08/09/2016

Please sir, can I have some more?

This is really a costs issue, though it was on a leasehold disrepair claim. A county court decision, so not binding, but as we’ll see, consonant with a High Court decision and on an issue on which there appears to be some debate. This was an application hearing at Oxford County Court on 7 September 2016.

The disrepair claim had settled at trial for £2000 and an agreement on works. A final order was made recording the settlement and Defendant was ordered to pay 80% of Claimant’s costs. An order for payment on account of costs of £25,000 was made pursuant to CPR 44.2(8)

“Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.”

Some while later, after serving the bill of costs (and after points of dispute were served in response), but before commencing detailed assessment proceedings, C made an ex-parte application for a further payment on account of costs of £80,000. The bill was enclosed with the application, but not D’s points of dispute.

The court refused the ex parte application and set it down for a hearing. D opposed the application, and before the hearing, the High Court decision in Ashman v Thomas [2016] EWHC 1810 (Ch) was handed down and raised by D in correspondence with C. C did not reply and the hearing went ahead.

C’s application argument was, effectively, that the court’s discretion at CPR 44.2 meant that an order for payment on account of costs could be made at any time.

D argued that CPR 44.2(8) meant that a court shall make an order for payment on account of costs of a reasonable sum when detailed assessment of costs was ordered, and that there was no jurisdiction to do so after that order, let alone make a subsequent supplementary or second order for payment. C could seek an interim certificate in the detailed assessment proceedings once they had been commenced, but not a payment on account before then.

Asham v Thomas concerned the possibility of making an application for a payment of costs on account after judgment, including on costs, but before the order was perfected and sealed. The court found that an application could be made, and an order for payment made, up to the point of the perfecting and sealing of the order. While not precisely on point, D argued that the judgment only made sense if an application for costs on account under CPR 44.2(8), or generally, could not be made after the order for detailed assessment.

In addition, the notes on CR 44.2(8) in 2nd Edition of CPR Costs and Funding Commentary, at para.8-13 say: “This provision has also changed, seeming to make a temporal link between the order for costs to be assessed and the payment on account. Many courts interpret this to mean that there can only be one payment on account, with this being ordered at the time of the costs order and that any further interim sums can only be obtained under the procedure for an interim costs certificate after the receiving party has filed a request for a detailed assessment hearing.”

D also argued that in any event there were good reasons why the order sought should not be made, including the timing of the application – a few days after serving the bill of costs, the imminence of detailed assessment proceedings and on  a “reasonable sum” – as per Laddie LJ, in Dyson Ltd v Hoover Ltd [2003] EWHC 624 (Pat) – the court was “effectively blind” and in the limited time available would be unable to come to a reasoned and informed decision as to what would be a “reasonable sum” in circumstances where points of dispute ran to around 50 pages.

The court held that it had no jurisdiction to consider a further application for costs on account after the point where detailed assessment of costs was ordered. That this was an application for a second order for payment on account was a further factor, but the jurisdictional point was that no order for costs on account could be made after the order for detailed assessment, and before seeking an interim certificate in assessment proceedings.

If it were necessary, the court would also have held that there would have been a clear difficulty in assessing ‘a reasonable sum’ in the circumstances.

C to pay D’s costs in the application.

Comment

I have taken this to be the case – and indeed had my local court rule that it was – for quite some time. But it appears that this is a contentious issue, with C’s costs lawyers in this case adamant that such an application could be made. I’ve also seen costs lawyers arguing of the issue after Ashman v Thomas. So, this is a data point on the way the argument is running in the county courts.

Our thanks to Amy Just of Arden Chambers for her note of the ruling. Full disclosure – I was instructed by D.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

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