Blackmore v Cummings & Ors

The Court of Appeal determined that a judge considering an application for an interim payment on account of costs under the Civil Procedure Rules must exercise a wide discretion, weighing all material factors rather than applying a fixed presumption. The court rejected the Circuit judge's approach which was treated as effectively creating a one‑stage presumptive test that a top‑up payment should be ordered if the judge could be reasonably certain some additional sum would ultimately be recoverable. Relevant considerations include the receiving party's diligence in pursuing detailed assessment, the likely quantum, whether a detailed assessment is imminent, the practical costs of the application itself, the paying party's ability to pay and the overriding objective. The Court held that District Judge Carson had not erred in law in declining to make a further interim payment and his decision was a sustainable exercise of discretion.

Background and parties: The appellant defendants challenged an order made after an appeal by the receiving party, Mr Blackmore, who had earlier obtained substantive relief under section 459 of the Companies Act 1985 and a costs order from the trial judge (His Honour Wyn Williams). The trial judge had ordered an interim payment of £100,000 on account of costs. After a lengthy delay the receiving party served a detailed bill of costs and obtained a default costs certificate, which was set aside; District Judge Carson thereafter declined an application for a further interim payment on 22 April 2008. That decision was reversed by His Honour Graham Jones on 5 September 2008 and remitted to District Judge Carson to consider making a further interim payment provided he could be reasonably certain the sums would ultimately be payable. The defendants appealed to the Court of Appeal with permission.

Nature of the application: The matter concerned an application for a further interim payment on account of costs, made under CPR 44.3(8) (and comparable in purpose to CPR 47.15 when applicable), pending detailed assessment.

Issues framed:

• Whether the Circuit judge erred in law by effectively imposing a one‑stage presumption in favour of a top‑up interim payment where the judge could be reasonably certain that additional sums would be payable on detailed assessment;
• Whether District Judge Carson erred in declining to make a further interim payment;
• How the authorities (notably Mars and Dyson) should inform the exercise of the discretion to order interim payments on account of costs.

Court's reasoning and decision: The Court of Appeal accepted Jacob J's analysis in Mars that there are strong reasons, as a general matter, for ordering interim payments where a successful party is entitled to costs, but emphasised that this is not a presumption and that the discretion must be exercised having regard to all material factors. The court also recognised Laddie J's distinction in Dyson between an application to the trial judge who heard the case and an application to a judge who did not, while observing that a costs judge with full material may be similarly well placed to make an informed interim assessment. The court concluded that HH Graham Jones' approach came close to imposing a universal test and so was wrongly formulated. However, District Judge Carson had properly weighed the relevant factors — including delay in pursuing detailed assessment, the existence of substantial dispute on the bill, the paying party's ability to meet any award and the risk of incurring disproportionate further costs — and had not erred in law. The Court allowed the appeal and upheld District Judge Carson's decision.

Appeal allowed. The Court of Appeal held that the Circuit judge had erred in approaching the matter as if there were a single test requiring payment of any sum the judge was reasonably certain would ultimately be recoverable. There is no presumption; the judge must exercise the wide discretion under CPR 44.3(8) (and, where applicable, CPR 47.15) weighing all material factors. District Judge Carson had not erred in law in declining to order a further interim payment and his decision was a sustainable exercise of discretion.

Trial before His Honour Wyn Williams (order for costs and interim payment dated 24 March 2005). Detailed bill served later; default costs certificate obtained and then set aside by District Judge Carson on 11 January 2008, who directed service of points of dispute and later (22 April 2008) declined a further interim payment. Appeal to His Honour Graham Jones who allowed the appeal and remitted the matter back to District Judge Carson with directions (judgment 5 September 2008). Permission to appeal to the Court of Appeal was granted and the appeal was heard in the Court of Appeal (judgment 10 June 2009) which allowed the appeal against HH Graham Jones and upheld District Judge Carson's decision.