Blakemore v Cummings and another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Dyson,LORD JUSTICE ELIAS |
| Judgment Date | 10 June 2009 |
| Neutral Citation | [2009] EWCA Civ 1276,[2009] EWCA Civ 404 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2008/2436,Case No: A2/2006/2436 |
| Date | 10 June 2009 |
[2009] EWCA Civ 1276
Before : The Chancellor of the High Court
Lord Justice Keene
and
Lord Justice Elias
Case No: A3/2008/2436
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
Dr Mark Friston for the Appellant
Mr Guy Blackwood for the Respondent
Hearing dates : 10 June 2009
Mr Blackmore, the respondent to this appeal, successfully obtained relief under section 459 of the Companies Act 1985 following a fifteen day trial before His Honour Wyn Williams (as he then was). By an order dated 24 March 2005 the judge awarded costs in his favour and ordered an interim payment on account of costs in the sum of £100,000.00. The appellants are two of the defendants named in the costs order; there are two other defendants, with whom we are not directly concerned, who are also subject to that order.
Subsequently, some twenty nine months after the order by HH Judge Wyn Williams had been made, Mr Blackmore served a bill of costs which amounted to almost £500,000.00. This was higher than the estimate which had been placed before His Honour Judge Wyn Williams. At that stage the costs had been estimated at £382,000.00., The appellants failed to serve points of dispute within the appropriate time as required by CPR 47.9 and Mr Blackmore obtained a default costs' certificate. That certificate was set aside by District Judge Carson on 11 January 2008. He directed service of points of dispute.
Mr Blackmore requested a further payment on account of costs and indeed contended that making such a payment ought to be a condition of discharging the costs' certificate. The application was made under CPR 44.3(8) which simply provides that where an order for costs has been made, the court may order an amount to be paid on account pending detailed assessment. Applications for a further payment on account of costs can also be made under CPR 47.15 which provides that after the receiving party has filed a request for a detailed assessment, the court may issue an interim costs certificate in such sum as it thinks appropriate. That provision was not applicable because no request had been filed, but it was conceded that in practice the District Judge had virtually the same material before him as he would have had if such an application had been made.
That application for a further payment on account was adjourned until 22 April 2008 when the costs judge, District Judge Carson, declined to make the Order sought. This was notwithstanding the fact that he did by then have the detailed bill of costs and the points of dispute before him. His decision was appealed to His Honour Graham Jones. He gave judgment on 5 September 2008, in which he upheld the appeal. He remitted the matter back to District Judge Carson to make a further interim payment on account of costs in favour of Mr Blackmore, provided that the judge was satisfied that he could be reasonably certain that the sums he ordered would ultimately be payable by way of costs to Mr Blackmore.
The appellants now challenge that Order. They submit that His Honour Graham Jones erred in law in a number of respects in his judgment and was not entitled to interfere with the District Judge's decision.
Permission to appeal was granted by Lord Justice Dyson, notwithstanding that it was a second appeal. He considered a point of principle was involved.
The authorities.
Two cases have figured significantly in the appeal. They are Mars (UK) Ltd v Technology Ltd [2000] FSR Volume 27, page 138, a decision of Mr Justice Jacob (as he then was), and Dyson v Hoover [2000] EWAC 624 a decision of Laddie J. In the Mars case Jacob J was considering the situation where the judge who had conducted the trial and had awarded costs was considering an application for a payment on account. The judge said this :
“I now turn to the second issue, whether or not there should be an order for interim payment. The first thing to do is to consider what the general rule should be, interim payment or not. There is no guidance given in the rules other than that the Court may order a payment on account. There is no guidance in the Practice Direction. So I approach the matter as a question of principle. Where a party has won and has got an order for costs, the only reason that he does not get the money straightaway is because of the need for a detailed assessment. Nobody knows how much it should be. If the detailed assessment were carried out instantly, he would get the order instantly. So the successful party is entitled to the money. In principle, he ought to get it as soon as possible. It does not seem to me to be a good reason for keeping him out of some of his costs that you need time to work out the total amount. A payment of some lesser amount which he will almost certainly collect is a closer approximation to justice. So I hold that where a party is successful, the Court should, on a rough and ready basis, also normally order an amount to be paid on account; the amount being a lesser sum than the likely full amount.”
Jacob J pointed out that there were significant practical advantages in ordering a payment. It will tend to discourage the paying party from seeking to drag out the assessment, and will minimise the amount still in dispute, thereby encouraging a settlement. He went on to emphasise, however, that although he started from the proposition that a payment on account should be made, the court has a discretion and it has to be exercised in the light of all the particular circumstances. He gave as examples of relevant factors to be considered the need to act justly in accordance with the overriding objective, the relative wealth of the parties, and the likelihood of a possibly successful appeal.
In Dyson Mr Justice Laddie distinguished the approach adopted by Mr Justice Jacob in the circumstances before him. Jacob J had been dealing with an application for an interim order when made to the judge who has heard the full trial. By contrast, Mr Justice Laddie was concerned with an application for interim payment in relation to a trial over which he had not presided. His Lordship was of the view that in those circumstances there was no presumption at all, either for making an interim order or for not doing so. He said this (paras 30–31). :
“…It seems to me that in this type of case CPR 44.3(8) should be taken simply at face value. There is no presumption that an order for interim payment should be made. On the other hand, I do not accept the suggestion I think inherent in Mr Purvis's argument there is a presumption against ordering such an interim payment because of the interest provisions, to which I have already referred. It seems to me that the interest provisions are merely factors which the Court can take into account in deciding whether, in the particular circumstances, the proper exercise of the discretion should be in favour of making an order.
'It seems to me that the Court should simply consider an application for an order for interim payment on its own merits. Because the receiving party is asking the Court to exercise the discretion in its favour, it will need to justify the Court doing so, but save in this respect I do not think that there is any particular norm which applies. So what should the Court do when faced with an application like this? What are the factors that it should take into account? Once again, I think it is useful to go back to what was said in Mars.'”
Laddie J did, however, also distinguish his situation from that of a costs judge asked to order an interim certificate under CPR 47.15. The costs' judge would typically have a significant amount of information available to him and would, like the trial judge, be in a position to make an informed and reliable decision. Therefore the approach adumbrated in Mars should apply in such a case.
It is pertinent to note that in the Dyson case Laddie J decided not to make any award on account because he thought that he was ill equipped to do so—“it would look more like playing roulette, than making an informed and reasoned assessment” was how he put it—and because any relatively small sum which he might feel confident enough to order would not have the practical advantages of discouraging delay and encouraging settlement.
The hearing before District Judge Carson.
District Judge Carson noted that His Honour Judge Wyn Williams, when making the original order on account for a payment of costs, was fully cognisant of the relevant facts since he had been the trial judge. By contrast, the judge had very limited understanding of the issues in the case. He referred to the Dyson case which he treated as establishing that there was neither a presumption in favour of making an interim payment, nor a presumption against it. All the circumstances had to be considered in determining whether the discretion should be exercised.
The judge then identified certain factors which he weighed in the balance when determining whether or not to make an order. He noted that the claimant was not in such a difficult financial position as would point in favour of making a payment on account; that the defendants would ultimately be able to meet any payment, together with interest, which a court was likely to make; that there was plainly a genuine dispute of substance as to the appropriate costs that should be awarded; that there had been a delay of some two years before the claimant had commenced the detailed assessment proceedings; and significantly, and particularly importantly, that the judge who...
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