Hassan Khan & Company v Iman Said Abdul Al-Rawas
| Jurisdiction | England & Wales |
| Judge | Master Leonard |
| Judgment Date | 13 May 2020 |
| Neutral Citation | [2020] EWHC B21 (Costs) |
| Date | 13 May 2020 |
| Docket Number | Case No: HQ13X03903 & HQ13X03907 |
| Court | Senior Court Costs Office |
[2020] EWHC B21 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building
Royal Courts of Justice
Strand, London WC2A 2LL
Master Leonard
Case No: HQ13X03903 & HQ13X03907
Dan Stacey (instructed by The Khan Partnership LLP) for the Claimants
Lawrence Power (Public Access counsel) for the Defendants
Hearing dates: 2 December 2019
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 version as handed down may be treated as authentic.
On 21 May 2019 the Claimants served on the Defendants a bill of costs totalling £305,275.64, representing the amount sought by the Claimants from the Defendants under paragraph 5 of an order of Morris J made on 6 December 2018.
The same order of 6 December 2018 provided at paragraph 2 that unless the Defendants made payment of sums payable under previous orders of the court, variously within 14 or 21 days, the Defendants would be “prohibited from contesting any of the extant proceedings until such time as payment including interest is made in full to the Claimants”. Payment of those sums plus interest, amounting to £107,113, was not made until 28 November 2019.
That was two working days before I heard the Defendants' application of 14 June 2019 to set aside a default costs certificate obtained by the Claimants in respect of their May 2019 bill on 13 June 2019, and the Claimants' application of 25 September 2019 to strike out Points of Dispute that had been sent to the Claimants by the Defendants on 11 June 2019.
I took the view that whilst the Claimants were right to say that the prohibition at paragraph 2 of the order of Morris J extended to detailed assessment, on the proper application of CPR 47.9 the Claimants had not been entitled to a Default Costs Certificate, even given the Defendants' failure to pay. They should rather have applied for the Points of Dispute to be struck out and their costs assessed by default in the sum claimed. Such an application, in my view, would have been likely to succeed.
Had the Defendant not finally paid £107,113 just before the hearing of 2 December, the Claimants' September 2019 application to strike out the Points of Dispute would have been equally likely to succeed. Payment finally having been made, however belatedly, the Default Costs Certificate was set aside and the application to strike out the Points of Dispute dismissed.
On 2 December 2019 I also heard an application for an interim costs certificate, which I allowed at £75,000. The Claimants' application for a Days Healthcare order, which would prohibit the Defendants from being actively represented on the detailed assessment of the Claimant's bill, was adjourned for further evidence and submissions.
I set a timetable for evidence and submissions with a view to delivering a written decision to be handed down at a hearing at which outstanding matters such as the costs of the applications could be disposed of. The timetable was disrupted by an application by the Defendants, made on 6 January 2020, for an “unless” order requiring Ms Madeleine Binkley of the Claimant solicitors to supplement a witness statement dated 23 December 2019, served in accordance with my directions, to specify the sources of information referred to in her statement, failing which it be struck out.
I found that application to be so weak that I dismissed it without a hearing, but given that the Defendant had also sought an extension of time for responding until the alleged defects had been remedied, it was also necessary for me to amend the timetable so that submissions were due by 28 February 2020. The handing down hearing was listed for 1 April, but that date was vacated following, it would appear, some of the Defendant's filed evidence having gone astray
Conduct Complaints
I should at this point address some submissions made in relation to the Defendants' application of 6 January. The Defendant's evidence, in response to that of Ms Binkley, was to be served by that date. A letter from counsel for the Defendant, Mr Power, complaining of the alleged defects in Ms Binkley's evidence, was emailed to the Claimants at 4:32 p.m. on 2 January 2020. The Claimant responded on 3 January confirming that the person with day to day conduct of the matter (as I understand it, Ms Binkley) was away from the office until 6 January, and that they would revert thereafter. A written response rejecting his contentions was emailed to Mr Power at 4:37 pm on 6 January. Mr Power characterises this as deliberate delay.
I do not regard the timing of the Claimant's letter of 6 January as open to criticism. Ms Binkley responded to Mr Power's letter on same the day that she returned. By any reasonable standard that is a prompt response. Mr Power complains that her email was sent after close of business, but even if that were a valid criticism (and in my view it is not) he did not wait until close of business to issue his application.
The characterisation of the alleged delay as “deliberate” is part of a pattern pervading both Mr Power's submissions and his client's witness evidence, in that they repeatedly accuse Ms Binkley of deliberately unreasonable conduct, in particular in the way in which her evidence is presented.
I do not accept that there is any validity in these criticisms. Ms Binkley's evidence seems to me to be fairly and properly presented. As for her alleged intentions, neither Mr Power nor his client could have any insight into the workings of Ms Binkley's mind.
The Days Healthcare Application
In Days Healthcare UK Ltd v Pihsiang Machinery Manufacturing and others [2006] EWHC 1444 (QB), Mr Justice Langley considered the conduct of Taiwan-based defendants who had been ordered to pay damages in excess of £10 million and costs, with £2 million on account of costs.
Nothing had been paid. Having regard to the history of attempts to enforce against the defendants' assets in Taiwan, Langley J concluded (paragraph 10):
“I have no doubt at all that the defendants will not honour any orders which involve payment or of which they otherwise disapprove made by any court in this country and will pay nothing unless and until the legal machinery in a country where they have assets successfully executes an order against those assets. They have, in contrast, paid and no doubt will continue to pay the legal and other costs incurred on their own behalf in this country and in Taiwan in whatever proceedings seem to them to be of benefit to them or damaging to…” (the claimant).
His particular concern (paragraph 17) was with:
“… the defendants' defiance of and yet wish to use the courts of this country.”
Langley J found that the court had an inherent jurisdiction to control its own processes, and that the inherent powers of the court were expressly preserved by CPR 3.1(1). Furthermore, the power of the court to attach conditions to an order under rule 3.1(3)(a) was not limited to the attachment of a condition to a direction that the court was being asked to make. The wording of the rule was general.
So, whilst there had to be an assessment by reference to their Points of Dispute, if the defendants did not comply with the condition of paying the claimant the £2 million payment on account plus interest, they would be debarred from participating in that assessment. An order was made accordingly.
In this case the Claimants ask me to make a similar order to the effect that unless the Defendants pay £152,710, half the amount claimed in their bill of costs, the Defendants similarly be debarred from participating in the assessment (although their Points of Dispute will still be fully considered).
The application is made against this factual background. The Claimants had acted for both Defendants in substantial litigation and on 1 August 2013, brought proceedings against them for unpaid bills. On 14 March 2018, the Claimants obtained judgment against the first Defendant for £511,458.05 and against the second Defendant for £648,641.19.
The Defendants have not paid those judgment debts. The Claimants, seeking to enforce them, applied under CPR 71 to obtain information from the Defendants. Orders were made accordingly on 24 May 2018, requiring the Defendants to attend the court on 6 July 2018 to provide information about their means before Deputy Master Stevens. The orders were accompanied by details of the information the Defendants were to provide, including a very wide and comprehensive list of documents in their control.
The Defendants did not attend, and on 25 July 2018 Mrs Justice Cheema-Grubb made committal orders against both Defendants, suspended provided they attended a further hearing before Deputy Master Stevens listed for 31 July 2018. Again the Defendants did not attend, and Deputy Master Stevens referred the suspended committal orders to Cheema-Grubb J for consideration of the grant of a warrant of arrest. He also ordered the Defendants to make payments on account of costs totalling £60,000 by 4 pm on 14 August 2018.
On 3 September 2018, the Claimants received a letter from Mr Power confirming that he had been instructed by the Defendants under the Bar's Public Access Scheme. Mr Power confirmed that all correspondence should be addressed to him, but also stated that he and his chambers were not instructed to accept service. The result, for the time being, was that the Defendants (whose previous solicitors had come off the record) had UK legal representation notwithstanding that they had not provided an address for service within the EEA in accordance with CPR 6.23(1).
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