APPEAL COSTS ARE PAYABLE IMMEDIATELY: HIGH COURT DECISION

In Khaira -v- Shergill [2016] EWHC 628 (Ch) Richard Spearman QC (sitting as a Deputy Judge) held that costs ordered by the Supreme Court were payable forthwith and an assessment should not be stayed until the end of the case.

KEY POINTS

  • Where an appeal court orders a party to pay the costs of the appeal those costs are to assessed and paid forthwith.
  • It was reasonable for the Master to continue with the assessment despite the defendants’ request that it be stayed.

PRACTICE POINTS

Note the suggestion by the judge that parties should ask for clarification that the costs are payable immediately. In fact however, given the terms of the judgment, the onus may be on the paying party to obtain an order that the costs are not payable immediately.

THE CASE

The claimants had been successful in an appeal to the Supreme Court.

“The [Defendants] pay the [Claimants’] costs in the Supreme Court and the Court of Appeal, the amount of those costs to be assessed on the standard basis if not agreed between the parties”.

The claimants sought to assess those costs forthwith.   The defendant objected stating that costs should be assessed at the end of the case.

THE SURPRISING ABSENCE OF AUTHORITY

Since these orders are common it was surprising that there was no authority. The judge also found it surprising that an issue concerning the wording of an order made by the highest court in the land was not being dealt with by that court.

THE JUDGE’S CONCLUSION: COSTS PAYABLE HERE AND NOW

The judge held that trial and appeal are treated as separate proceedings for the purpose of costs.  CPR 47.1 was not germane.  The relevant proceedings were brought to an end at the conclusion of the hearing before the Supreme Court.

THE MASTER HAD POWER TO ALLOW THE ASSESSMENT TO CONTINUE

The judge rejected an argument that the court had no jurisdiction to allow the assessment to continue.

THE MASTER WAS ENTITLED TO EXERCISE THE JURISDICTION AS HE DID

Finally the judge held that it was open to the Master to reject the defendants’ application for a stay.  He had given full and adequate reasons for the decision. Indeed in the light of the paucity of the defendants’ arguments there would have been no proper basis for him to find to the contrary.

THE SOLUTION

The judge suggested a solution to this issue:
  1. One way of avoiding such disputes in the future would be for the receiving party to follow the counsel of prudence suggested (in relation to the regime under the Rules of the Supreme Court) by Sir Mervyn Davies in Harrod (Buenos Aires) Ltd (10 March 1993): Where there is a doubt as to whether or not an order results in the ‘conclusion of the cause or matter’ the wise course is to ask the court (whether the High Court or the Court of Appeal) for consent to proceed to taxation forthwith”. From the extracts of the transcript of the argument concerning costs which are quoted in one of the cases to which I was referred, that appears to have been what happened in Morris v Bank of America National Trust [2001] 1 All ER 954. According to those extracts, Leading Counsel for the receiving party sought an order for “an immediate detailed assessment” and for payment“forthwith”. This was granted on the footing explained by Morritt LJ that: “It is certainly the practice, as I understand it, in this court that where the appeal is a discrete matter the costs are ordered there and then and do not wait for the conclusion of the proceedings as a whole. The practice precedes the new rules”. So far as concerns the present case, however, it is unclear from those extracts whether it was necessary for Leading Counsel to make the application which he made, or whether the Order of the Court of Appeal would in any event have had the effect of ordering costs “there and then”.

THE RELEVANT RULES AND PRACTICE DIRECTION

  1. CPR 47.1 provides:
“Time when detailed assessment may be carried out

47.1  The general rule is that the costs of any proceedings or any part of the proceedings are not to be assessed by the detailed procedure until the conclusion of the proceedings, but the court may order them to be assessed immediately.

(Practice Direction 47 gives further guidance about when proceedings are concluded for the purpose of this rule.)”

  1. Practice Direction 47 provides:
“Time when assessment may be carried out: rule 47.1
1.1  For the purposes of rule 47.1, proceedings are concluded when the court has finally determined the matters in issue in the claim, whether or not there is an appeal, or made an award of provisional damages under Part 41.
1.2  The court may order or the parties may agree in writing that, although the proceedings are continuing, they will nevertheless be treated as concluded.
1.3  A party who is served with a notice of commencement (see paragraph 5.2 below) may apply to a costs judge or a District Judge to determine whether the party who served it is entitled to commence detailed assessment proceedings. On hearing such an application the orders which the court may make include: an order allowing the detailed assessment proceedings to continue, or an order setting aside the notice of commencement.
1.4  A costs judge or a District Judge may make an order allowing detailed assessment proceedings to be commenced where there is no realistic prospect of the claim continuing.”

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