Chedington Events Ltd v Nihal Mohamed Brake
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 22 February 2024 |
| Neutral Citation | [2024] EWHC 384 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: PT-2023-BRS-000017 |
and
[2024] EWHC 384 (Ch)
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: PT-2023-BRS-000017
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
William Day (instructed by Stewarts Law LLP) for the Claimant
The First Defendant in person and for the Second Defendant
The Third Party in person
Consequential matters dealt with on paper
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this revised version as handed down may be treated as authentic.
This judgment will be handed down by the Judge remotely by circulation to the parties or representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 16:30 pm on 22 February 2024.
INTRODUCTION
On 25 January 2024 I handed down my judgment on the further consideration of an interim third-party debt order (“TPDO”) originally made on 26 July 2022. That judgment is available under neutral citation number [2024] EWHC 101 (Ch). The interim order was made, on the application of the claimant, to secure part payment of an earlier costs liability of the defendants towards the claimant. That costs liability amounted (ultimately) to £700,000. The debt alleged to be due from the third party to the defendants was £25,000. The defendants and the third party said that there was no debt due, and that the sum of £25,000 had been paid as advance rent for the use of a small “holiday let” residential unit in a barn at the third party's property.
Procedure
The parties agreed that the witnesses should be cross-examined on their witness statements. I set aside 26–27 September to deal with the further consideration. However, the defendants decided that they also wished to argue a preliminary point of law, and also applied to strike out parts of the claimant's evidence in support of the TPDO. I dealt with both of these matters on 26 September 2024. As to the former, I held that it was not possible to reach any conclusion in advance of hearing the witnesses and finding the facts. As to the latter, I struck out some parts of the evidence as irrelevant, and held that other parts should be treated as submissions. On the following day the witnesses were cross-examined on their statements, and I was addressed on the law and the facts.
Substantive decision
In the event I found that the story about payment of advance rent was untrue, and that the sum of £25,000 had been paid to the third party to be held to the order of the defendants. However, I further found that the sum of £25,000 had been reduced by payments to others made by the third party at the request of the defendants, leaving a balance of just £7,755.04 remaining due. I decided to make the interim order final, but only in that reduced sum. The judgment was handed down remotely, in the absence of the parties. Accordingly, I invited written submissions on consequential matters, which I have received and considered. This is my judgment on those consequential matters.
PERMISSION TO APPEAL
I record here that the defendants indicated that they would not seek permission to appeal from me at first instance. Instead, they would ask the Court of Appeal directly. That is their choice, though it runs contrary to the recommendation of the Court of Appeal: P v P [2015] EWCA Civ 447, [63]–[70]. So, I do not have to deal with the question of permission to appeal. However, as part of the written submissions made on consequential matters (taking the place of the adjourned hand-down hearing), the defendants asked me to extend time for filing their appellant's notice at the Court of Appeal under CPR rule 52.12(2). The claimant argued that I had no power to do so. Nevertheless, I held that I had such power, because the written submissions took the place of the hand-down hearing or its adjournment. On 6 February 2024, I exercised that power so as to extend time to file an appellant's notice in relation to my decision of 25 January 2024 to 21 days after the date on which I give my decision on the consequential matters. This judgment contains that decision, and so the period of 21 days runs from the day it is handed down.
COSTS
Costs rules
I deal next with the question of costs. There are three aspects relevant, or said to be relevant, in the present case. First, there are the general rules for costs in civil litigation. Second, there is a special provision relating to the case where a judgment creditor is awarded costs on an application for a final TPDO. Thirdly, there is a regime of fixed recoverable costs, which the defendants say applies to this case. I shall describe each of them briefly.
General
First, under the general law, costs are in the discretion of the court: see the Senior Courts Act 1981, section 51(1); CPR rule 44.2(1). If the court decides to make an order about costs, the general rule is that the unsuccessful party in the proceedings pays the costs of the successful party: CPR rule 44.2(2)(a). However, the court may make a different order: CPR rule 44.2(2)(b). In deciding whether to make an order, and if so what, the court will have regard to all the circumstances, including conduct of all the parties and any admissible offer to settle the case (not falling under CPR Part 36) which is drawn to the court's attention: CPR rule 44.2(4).
If the general rule applies, it requires the court to ascertain which is the “successful party”. In Kastor Navigation Co Ltd v Axa Global Risks (UK) Ltd [2004] 2 Lloyd's Rep 119, [143], Rix LJ (giving the judgment of the Court of Appeal) said that the words “successful party” mean “successful party in the litigation”, not “successful party on any particular issue”. As a general proposition, the courts prefer to make costs orders covering the entire claim (even if then extending only to a proportion of costs), rather than issue-based costs orders. But it is clear that the court may still make an issue-based order if it considers that this better meets the justice of the case. The court may also make a costs order against a non-party in special cases.
Second, in relation to costs in the context of a TPDO, there are other provisions which the defendants submit are relevant. CPR rule 71.11 says:
“If the judgment creditor is awarded costs on an application for an order under rule 72. 2 or 72.10 –
(a) he shall, unless the court otherwise directs, retain those costs out of the money recovered by him under the order; and
(b) the costs shall be deemed to be paid first out of the money he recovers, in priority to the judgment debt.”
In the present case, the claimant's application for a TPDO was made under rule 72.2. So the rule applies to this case. I referred to it briefly in Brake v Guy [2022] EWHC 1911 (Ch), [8], though in a different context. The defendants say that the effect of rule 72.11 here is that the court's power to award costs to a judgment creditor in relation to a TPDO is usually limited to payment out of the funds ordered to be recovered by that creditor under the TPDO, and that
“it would be a departure from the normal rules to award costs under CPR part 44”.
I reject this submission. CPR rule 72.11 is not a separate code on costs for the TPDO context, and does not provide a source of power for the court to award costs in TPDO cases. Costs are still awarded under Part 44. Rule 72.11 relates to a specific point about payment of the costs awarded (under Part 44) to a judgment creditor. That rule means that in such a case the costs can in effect be added to the judgment debt, and so paid out of the recovered fund. But the rule does not mean that, if the fund is exhausted by the judgment debt, no costs can be awarded to the judgment creditor. The rule adds to the judgment creditor's security. It does not reduce its rights.
Fixed recoverable costs
Third, in their (final) reply submissions, the defendants also refer to the fixed recoverable cost (“FRC”) provisions in CPR Part 45. An extended FRC regime was introduced on 1 October 2023. FRCs now extend, for example, to many personal injury cases. But the regime existed before then, and in particular it applied to non-complex cases which were short-lived because the defendant admitted the claim from the beginning, or the claimant obtained a judgment in default or otherwise without opposition, or a judgment obtained was enforced without opposition or other difficulty. It is that (pre-existing) part of the regime that is said to be relevant here. Thus, the rules which are relevant to this case were more or less the same under the old regime as under the new.
Until 1 October 2023, former rule 45.1 relevantly provided:
“(1) This Section sets out the amounts which, unless the court orders otherwise, are to be allowed in respect of legal representatives' charges.
(2) This Section applies where –
[…]
(g) a judgment creditor has taken steps under Parts 70 to 73 to enforce a judgment or order …”
Former rule 45.8, headed “Fixed enforcement costs”, then referred to a table (Table 5) containing the following entries:
“On the making of a final third party debt order under rule 72.8(6)(a) or an order for the payment to the judgment creditor of money in court under rule 72.10(1)(b):
If the amount recovered is less than £150: one half of the amount recovered otherwise: £98.50”.
Since 1 October 2023, the rules are now rules 45.16 and 45.23. These relevantly provide:
“45.16.(1) In any case to which this Section applies, unless the court orders otherwise, the only costs...
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