Idrees Hashmi v Paul Lorimer-Wing

APPROVED JUDGMENT

ICC JUDGE

This is an application brought by the petitioner, seeking an unless order against the first respondent (hereafter “the respondent”) requiring payment of three outstanding costs orders, failing which the respondent will be debarred from relying on quantum evidence and from further defending the proceedings.

The costs orders in question are firstly, the order of ICC Judge Burton dated 16 January 2024, when costs were summarily assessed in the sum of £16,800 and were payable by 30 January 2024; secondly, the costs order of Leech J dated 14 February 2024, when costs were summarily assessed in the sum of £10,000 and payable by 16 March 2024; and finally the costs order of Edwin Johnson J dated 13 May 2024, when costs were summarily assessed in the sum of £19,578 and were due to be paid by 10 June. The total of the outstanding costs orders comes to £46,378. They are all discrete, summarily assessed costs orders relating to applications post-dating the liability trial on this s 994 petition.

Having been successful at the liability trial, the petitioner was also awarded his costs of the liability trial, such costs to be the subject of detailed assessment if not agreed. The detailed assessment of those costs has yet to take place, but after a four-day trial on liability, those costs are likely to be substantial, subject to any further arguments or developments following the quantum trial. The quantum trial is scheduled to take place in March of next year.

I should say a little bit about the background leading to the three summarily assessed costs orders forming the subject matter of this application, as that background is in my judgment relevant to the application.

When handing down judgment following the conclusion of the liability trial, Chief ICC Judge Briggs ordered the respondent to purchase the petitioner's shares in the company at fair value on various assumptions. In order to determine fair value, the judge made further orders; among other things, the petitioner was granted permission to adduce valuation evidence from a forensic accountant, and so a forensic accountant was instructed. The petitioner's expert requested information and documents from the respondent to enable him to complete the report, but the information and documents were not provided. It was that refusal which prompted the application (the “disclosure application”) which led to the ICC Judge Burton costs order. At the adjourned hearing of the disclosure application on 16 January 2024, ICC Judge Burton ordered the respondent and other directors of the company to provide the information and documents sought by the petitioner's expert and then, in that context, ordered the respondent to pay the petitioner's costs, summarily assessed in the sum of £16,800, by 30 January 2024.

When ordering these costs, ICC Judge Burton was critical of the stance that had been adopted by the respondent in relation to the disclosure application. She observed that the respondent had taken active steps to oppose the disclosure application, that he had had ample opportunity to comply, and that his own personal opinions about what should or should be provided to the expert for the valuation process did not justify non-compliance. She also noted that the petitioner had been put to significant costs.

Following that order, the respondent failed to pay the costs by the deadline of 30 January 2024. Instead, by email of 1 February 2024, he wrote to the petitioners asking whether they would consider a payment plan, stating:

“The sum total of £16,800 exceeds the entirety of funds that I possess. Given the CCJ, my unsalaried status and existing loans, I am unable to borrow any more funds.”

That was the basis on which the respondent asked the petitioner to consider a payment plan. It is clear from the bank statements in evidence, however, that on 30 January 2024, (very shortly before the email of 1 February), the respondent had transferred sums of £18,000 and £6,000 from his savings account to his current account and on the same day had then transferred £18,000 to his wife. It was against that backdrop that, on 1 February 2024 the respondent had stated that the sum of £16,800 ‘exceeds the entirety of funds that I possess’.

In submissions before me, the respondent claimed that he had been in a ‘very low place’ at the time and that he had transferred £18,000 to his wife in order that she would have at least three months of £6,000 to cover monthly outgoings. This was not addressed in the evidence, however; and in my judgment the timing of the transfer is significant: the savings were being drawn down and transferred to his wife just before the due date for payment of the ICC Judge Burton costs order. This was a textbook example of moving assets out of the reach of a judgment creditor with a view to those assets not being available to pay off a judgment debt.

Having moved those funds over to his wife and having then requested a payment plan based on lack of funds, a few days later, on 7 February, the respondent issued an urgent application for an injunction to stay any action in the claim until the conclusion of the quantum trial and for an order extending time for an appeal against ICC Judge Burton's order. That application came before Leech J on 14 February and was dismissed with costs, giving rise to the Leech J costs order of £10,000 which was payable by 16 March 2024. Again, it is in my judgment appropriate to pause and consider certain of the comments made by Leech J when dismissing the application. In relation to costs, Leech J said:

“What weighs most strongly with me is it seems to me that he failed to send any pre-action correspondence or engage in a dialogue with Mr Hashmi or his solicitors before making this application. It seems to me that the prudent litigant, whether in person or professionally advised, is well-advised to do that before issuing an application in the interim applications court. This is a court intended for urgent applications; it is not intended to be a court where litigants can bring on their applications or take a different route in relation to appeals. If Mr Lorimer-Wing had engaged with Mr Sutton before issuing this application in relation to an appeal, that is what he would have been told. For these reasons, it seems to me that the costs should follow the event.”