Where the Court orders a party to pay costs subject to a detailed assessment it will order that party to pay a reasonable sum on account of costs unless there is a good reason not to do so. Such power is not dependent upon the filing of a statement of costs, nor the type of funding arrangement in place.
ASTONLEIGH RESIDENTIAL v GOLDFARB [2014] EWHC 4100 (CH)
PAYMENTS ON ACCOUNT : INTERIM PAYMENTS : CPR 44.2(8)
This matter arose from an order dated 3 June 2014 of Wright J sitting in the Brighton County Court by which the second respondent was ordered to pay the applicant’s costs on the standard basis subject to detailed assessment, if not agreed, and was ordered to pay a sum of £20,000 plus VAT on account by 4.00 pm on the following day, 4 June.
The second respondent appealed and sought a stay of execution on grounds that
i) the power to order a payment on account is dependent on the availability to the court of a written statement of costs and that such a statement is essential because otherwise there is no way of testing whether the discretion had been properly exercised and, therefore, it was a fundamental issue of fairness that a statement be provided;
ii) there is no jurisdiction in a case where there is a CFA to make an interim payment on account in relation to costs where a detailed assessment has been ordered;
iii) the sum was excessive and would tie up money until the assessment of costs and any money paid to the liquidator might not be recoverable; and
iv) it was wrong to order a payment on account before disposal of the case against a Mr Gopal.
The second respondent relied heavily upon extracts from Cook on Costs (at para 5.24, 2015 edition) which it was said demonstrated that where a Part 36 Offer has been accepted there is no scope to seek an interim payment of costs until a detailed assessment hearing is requested, continuing…
“Consequently, these circumstances should prove a powerful incentive for you to get your breakdown or bill drafted and submitted to the other side as soon as possible.
“Where there has been a mediation or other form of negotiation which requires a consent order to be prepared for the court’s approval, there is scope for you to include an order for an interim payment. Given the words of CPR 44.2, sub rule 8, it would be difficult for your opponent to justify any outside opposition to an interim payment.
“Don’t forget, cash (flow) is king. If you do not get an order as discussed here, you will have to wait until you have requested a detailed assessment hearing”
Dismissing the application for permission to appeal, Mrs Justice Asplin held that…
9. It seems to me, overall, and it is quite clear, that under CPR 44.2, sub rule 8, that where the court orders a party to pay costs subject to a detailed assessment (and that was the order here) it will order that party to pay a reasonable sum on account of costs unless there is a good reason not to do so. It is not suggested that there is any specified good reason in this case not to do so and, therefore, the assumption would have been on this occasion that there would be an order for payment on account of a reasonable sum. Therefore, the question is whether it was within the district judge’s discretion to order a payment on account of this magnitude and whether it was necessary in order to determine the amount that there be a written costs schedule. In relation to that, I agree with Mr Pickering that there is nothing in the rules which requires that. There is nothing, also, in this case to suggest that the figures which Mr Pickering gave to the judge on that occasion were inaccurate or untrue in any way. One has to bear in mind that there is to be a detailed assessment and therefore as long as the discretion has been exercised properly any adjustment as to the ultimate sum due can been made at the detailed assessment stage.
10. It seems to me that given the note of the submissions on costs made and the figures which were given to the district judge and which are not in themselves in any way challenged, that in fact it was fully within with all (sic) the power of the district judge to decide to make the Order that she made. It is a particularly high hurdle to jump to seek to dislodge a decision made within the bounds of a proper discretion in relation to costs. Given the figures here, whether you call it 26% or whether you call it a third, the order made was within the reasonable parameters of the discretion on such an occasion in making such an order for payment on account.
11. It seems to me that what is discussed in Cooke (sic) as to the power to make such an order where there is acceptance of the Part 36 Offer, is all concerned with matters of practicality and whether one would be coming before the court or not. There is no suggestion that it is a matter of jurisdiction and there is certainly no suggestion in the CPR itself that in such circumstances there is no power to grant such an order.
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Toby Moreton
