SC-2019-BTP-000531 |
SENIOR COURTS COSTS OFFICE
London, WC1A 2LL |
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B e f o r e :
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Deutsche Bank AG |
Claimant |
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- and - |
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Sebastian Holdings Inc -and- Alexander Vik |
Defendant Defendant for costs purposes only |
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Mr Benjamin Williams QC and Mr Rupert Cohen (instructed by Brecher LLP) for Mr Vik
Hearing dates: 26, 27, 28 February 2020
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Crown Copyright ©
Master Gordon-Saker :
i) the rate and period of interest that should be allowed on the Claimant's costs;
ii) the scope of the costs order; and
iii) the exchange rate that should be used in relation to sums claimed in foreign currency.
It also sets out my reasons for refusing to adjourn the detailed assessment hearing presently listed to commence on 20th April 2020.
The background
103. In all the circumstances I consider that it is entirely just that a non-party costs order be made against Mr Vik so that he is liable for all sums owed by [the Defendant] to [the Claimant] in respect of costs awarded by me in my order of 8th November 2013.
Pursuant to s.51 Senior Courts Act 1981, Mr Vik is to pay [the Claimant] the sum of £36,204,891 by 4pm on 8 July 2014.
Pursuant to s.51 Senior Courts Act 1981, Mr Vik is to pay [the Claimant's] costs awarded against [the Defendant] pursuant to paragraphs 3 and 4 of the order of Cooke J dated 8 November 2013 plus interest accrued thereon.
7. Although this was the obvious consequence of his judgment, the [2 July 2014] order did not expressly contain a more general order that Mr Vik was liable to pay all of the costs payable by [the Defendant] to [the Claimant]. But that was in my view implicit in the interim payment order at paragraph 1.
31. Accordingly, in my judgment, in substance, Cooke J. actually made the NPCO order which would include the need for a detailed assessment, upon making his judgment in June 2014. Therefore, to view paragraphs 1 and 2 of the Order as somehow new orders is to mis-state the position. Although they were not made as such until 10 October 2016 they were in fact an inevitable consequence of the earlier judgments.
Whether the Court should (1) analyse the evidence served by the Claimant in response to Mr Vik's request for further information dated 26 July 2019 and if so, (2) give directions addressing the sufficiency of that evidence; and (3) if so, whether the evidence relied on by the Claimant is sufficient, and, if not, what further evidence the Claimant is to serve and by when.
Interest
(1) Every judgment debt shall carry interest at the rate of 8 pounds per centum per annum from such time as shall be prescribed by rules of court . . . until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment.
(2) Rules of court may provide for the court to disallow all or part of any interest otherwise payable under subsection (1).
(1) Where interest is payable on a judgment pursuant to section 17 of the Judgments Act 1838 or section 74 of the County Courts Act 1984, the interest shall begin to run from the date that judgment is given unless -
(a) a rule in another Part or a practice direction makes different provision; or
(b) the court orders otherwise.
(2) The court may order that interest shall begin to run from a date before the date that judgment is given.
(6) The orders which the court may make under this rule include an order that a party must pay -
….
(g) interest on costs from or until a certain date, including a date before judgment.
MR FOXTON: My Lord, one matter that I can tell your Lordship has been agreed is that the court should make an order awarding interest at base rate plus 1 per cent from the date of payment on legal costs paid by [the Claimant] to the extent awarded by the court to run until today's date, at which point the Judgment Act rate takes over.
MR JUSTICE COOKE: Base rate plus 1 per cent from the date of payment of each of the individual invoices?
MR FOXTON: My Lord, yes, to today's date, and that will be incorporated in the agreed minutes of any order.
3. The Defendant is to pay 85% of the Claimant's costs of the action on the indemnity basis, such costs to be subject to detailed assessment if not agreed.
4. The Defendant is to pay interest on that 85% of the Claimant's costs as has been awarded under paragraph 3 above from the dates on which the Claimant paid invoices until 8 November 2013 at the Bank of England base rate plus 1 per cent (such interest to be pro-rated by reference to the dates of payment).
5. The Defendant is to pay the Claimant £32,000,000 plus non-recoverable VAT of £2,517,115.30 on account of costs by 4pm on 22 November 2013.
Pursuant to s.51 Senior Courts Act 1981, Mr Vik is to pay [the Claimant's] costs awarded against the First Defendant … pursuant to paragraphs 3 and 4 of the order of Cooke J dated 8 November 2013 plus interest accrued thereon.
(3) If –
(a) the paying party has not made an application in accordance with paragraph (1); and
(b) the receiving party commences the proceedings later than the period specified in rule 47.7, the court may disallow all or part of the interest otherwise payable to the receiving party under –
(i) section 17 of the Judgments Act 1838; or
(ii) section 74 of the County Courts Act 1984,
but will not impose any other sanction except in accordance with rule 44.11 (powers in relation to misconduct).
3 months after the date of the judgment etc. Where detailed assessment is stayed pending an appeal, 3 months after the date of the order lifting the stay.
The scope of the costs order
Exchange rates
The paying party can work out in advance the additional risk created by the potential liability to pay interest on costs, but any potential liability to pay currency fluctuations is uncertain and wholly outside his control. Furthermore, it might be argued that the generous rate of interest on costs at 4% over base is designed to provide at least some protection to the payee against such events.
Deloitte's fees