Wills & Ors v Crown Estate Commissioners & Ors

Interest under the Judgments Act 1838 is not ordinarily payable on costs payable from a fund held on trust for the parties. Such a liability is not an adversarial judgment debt where the paying party must make good any shortfall. Where costs provisions form part of a Tomlin order’s schedule, they do not attract statutory judgment interest unless the agreement expressly provides for it.

On detailed assessment, the receiving party is prima facie entitled to its costs. A paying party seeking protection under CPR 47.19 should make a realistic offer at an early stage. Late offers may receive less weight, particularly where no good reason explains the delay.

The applicants obtained a consent order providing for their costs to be assessed and paid from proceeds held in a joint solicitors’ account. The Deputy Master assessed the costs at £122,289.50 and awarded interest under the Judgments Act 1838, while ordering the applicants’ costs of the detailed assessment.

The appellants challenged both decisions. They argued that statutory interest was unavailable where costs were payable from a fund, and that the Deputy Master should have given greater effect to their later settlement offers. The appeal concerned the proper characterisation of the costs fund, the scope of appellate review, and the application of CPR 47.18 and CPR 47.19.

1. Interest. The appeal was allowed in relation to interest. The proceeds of sale were held on trust for the parties in proportionate shares. The appellants were not personally liable to make good any shortfall in the costs fund. Accordingly, the costs were payable out of a fund rather than under an adversarial order attracting statutory interest.
2. The authority of A G v Nethercote [1841] 11 SIM. 529 was not confined to the administration of estates. The decision in Re Marsdens Estate [1889] 40 Ch D 475 supported the same conclusion. The substantive costs provisions appeared in the schedule to a Tomlin order and did not constitute a judgment for the purposes of the Judgments Act 1838. Any entitlement to interest therefore required express contractual provision.
3. Detailed assessment costs. The appeal was dismissed on this issue. An appeal is ordinarily a review, not a rehearing. Under CPR 52.11(3)(b), a rehearing required serious procedural or other irregularity causing injustice, which was not established. The appellants therefore had to show that the Deputy Master had exercised his discretion on wrong principles.
4. CPR 47.18 establishes that the receiving party is ordinarily entitled to the costs of detailed assessment, subject to the circumstances identified in the rule. The Deputy Master was entitled to conclude that the appellants’ offers did not justify departing from that prima facie position. Under CPR 47.19 and section 46 of the Costs Practice Direction, the only materially compliant offer was an early offer of £88,250, which was unreasonably low. The later offers were entitled to less weight because no good reason was given for their lateness.
5. The court emphasised that parties wishing to protect themselves against costs consequences should make realistic offers at the beginning of detailed assessment proceedings. The provisional view was that no order should be made as to the costs of the appeal, subject to written submissions.

• Supreme Court Costs Office: Deputy Master Jefferson assessed the applicants’ costs at £122,289.50, awarded interest under the Judgments Act 1838, and ordered the appellants to pay the applicants’ costs of detailed assessment.
• High Court (Chancery Division): The appeal was allowed on the interest issue and dismissed on the costs-of-assessment issue.