BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (KBD)
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
(sitting as a Deputy High Court Judge)
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J ROBBINS CAPITAL PARTNERS LIMITED | Claimant | |
- and - | ||
(1) ZAMSORT LIMITED | ||
(2) ORTAC RESOURCES (UK) LIMITED | ||
(3) ARC MINERALS LIMITED | Defendants |
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The First Defendant did not appear and was not represented
Mr James Stuart (instructed by Hill Dickinson LLP) for the Second and Third Defendants
Hearing dates: 19 July 2024
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Crown Copyright ©
PAUL STANLEY KC:
Introduction
The law
"The court's ability to make interlocutory costs orders following, in particular, the Access to Justice reforms in 1998, is a sanction which is available to it in order to encourage responsible litigation. The court marks what it regards as an irresponsible application by an immediate order for the payment of costs. That is intended to bring home to a party—when considering whether to make an application—that an unsuccessful application may carry a price which will have to be paid at once. If the court is not in a position to enforce immediate interlocutory orders for the payment of costs which it was thought right to make, then the force of that sanction is seriously undermined."
"... the 'working' or 'default rule' is that a litigant should not be able to continue with his or her claim without satisfying an existing and non- appealed final costs order, and the court should impose a condition requiring compliance."
It also chimes with Sir Richard Field's observation in Michael Wilson and Partners Ltd, at [29(5)] that
"Where the defaulting party appears to have no or markedly insufficient assets in the jurisdiction and has not adduced proper and sufficient evidence of impecuniosity, the court ought generally to require payment of the costs order as the price for being allowed to continue to contest the proceedings unless there are strong reasons for not so ordering."
To similar effect, in Aramco, HHJ Pelling KC quoted a remark by Lord Neuberger that "Once a court order is disobeyed, the imposition of a sanction is almost always inevitable if court orders are to continue to enjoy the respect which they ought to have": at [23], quoting Al-Saud v. Apex Global Management Ltd [2014] UKSC 64, [2014] 1 WLR 4495 at [23]. See also Khokan v Nirjhor [2024] EWHC 1872 (KB) at [82] (Hill J) ("normal consequence of a failure to comply with an immediate costs order ... is that compliance is a condition of being able to continue with the litigation").
"The fact that the man has no capital of his own does not mean that he cannot raise any capital; he may have friends, he may have business associates, he may have relatives, all of whom can help him in his hour of need."
"Has the appellant company established on the balance of probabilities that no such funds would be made available to it, whether by its owner or by some other closely associated person, as would enable it to satisfy the requested condition?"
Relevant procedural history
"I am not going to order security for costs today. I am troubled that we are at a position where all current indications that I can see are that this is a company which is operating on nothing, pretty much. If Mr Singh has got money, it does not look like a huge amount. He has got advice which, as to the merits, the bottom line from Mr Cakebread is a not unfavourable assessment. So this is a bona fide claim on the face of it. However, I do see your point that if this were a represented party, this is not the kind of evidence that I would be at all happy about."
"The inability, through impecuniosity, to pay a costs order is not in itself a reason to extend the usual time periods, particularly in circumstances where there is no real prospect of a future payment within a reasonable period. That principle was recognised by the Court of Appeal in Loson v Stack [2018] EWCA Civ 803, which Mr Stuart, counsel for the Defendants, drew to my attention. It is not relevant in that respect that it is said that the Defendants, who will be the recipients of the costs payments, are themselves wealthy.
In the present case, the Claimant is seeking a very lengthy extension of time, up to 12 months. However, there is, in my view, no real reason to think that additional funding for the Claimant would be forthcoming even in that period. Mr Singh explained in his statement that the Claimant was already heavily indebted to its existing third party funding sources, and that he could not practically request further financial assistance from them. He said: 'I believe that if the claimant is afforded an opportunity of a substantial extension of time to pay the three costs orders, then it is possible I could explore approaching friends of friends, family outside the UK and other business associates which I have not already contacted', but those persons were not named or otherwise identified. No more detail was given, and the speculative possibility of raising funds in the future is not, in my judgment, a sufficient ground to justify the lengthy extension that is sought, or, indeed, any extension."
Application of the principles
"I am hoping that within-- at that point or near that point I can reach out to other relatives, friends of friends and other family members which I have not currently contacted now, to help pay £10,000 within six months, and the remaining balance within 12 months, if your Honour provides the opportunity to do so."
Mr Stuart submits that given that statement, Mr Singh has not established that he could not meet the payments, either from his existing lenders or from other family and friends.
"I do not currently receive or have available additional financial support from my friends and family (i.e. the Third Parties), as I have exhausted such personal relationships pursuant to the Claimant already being heavily indebted to them. I have also since confirmed with my other relatives in India who were unwilling to provide credit to the Claimant."