Blackmore v Cummings & Ors

Applications for interim payments on account of costs under the Civil Procedure Rules 1998 attract no presumption either for or against payment. The court has a wide discretion and must weigh all material circumstances.

The likelihood that a sum will ultimately be due is an important consideration which will normally carry significant weight, but it is not conclusive. Relevant considerations may include the court’s ability to assess the likely recoverable costs reliably, an earlier payment on account, delay by the receiving party, the paying party’s solvency, accrued interest, the proximity of detailed assessment and whether the likely additional payment justifies the costs of the application.

Following proceedings under section 459 of the Companies Act 1985, Mr Blackmore obtained a costs order and an interim payment of £100,000. He later served a bill approaching £500,000 and sought a further payment on account.

District Judge Carson refused that application. On appeal, HH Judge Graham Jones directed him to reconsider whether any further sum was reasonably certain ultimately to be payable. Two defendants subject to the costs order appealed, contending that this approach improperly reduced a broad discretion to a substantially single question.

The central issue was how the discretion to order an interim payment under rules 44.3(8) and 47.15 of the Civil Procedure Rules 1998 should be exercised.

1. Appeal allowed. The circuit judge’s approach was incorrect because it came close to imposing a single test requiring payment whenever the court could identify with reasonable certainty a further sum that would ultimately be due. In substance, that approach introduced a presumption in favour of payment.

2. Neither rule 44.3(8) nor rule 47.15 of the Civil Procedure Rules 1998 creates a presumption for or against an interim payment. Each confers a wide discretion which must be exercised by weighing all material circumstances of the particular case.

3. The court approved the principle in Mars (UK) Ltd v Technology Ltd [2000] FSR Volume 27, page 138 that a successful party should not be kept out of money which will almost certainly prove due. That consideration will ordinarily carry significant weight. It remains one factor rather than a determinative rule, and Mars itself preserved the court’s discretion.

4. Even where the court can estimate a further recoverable amount with some certainty, it may properly decline to anticipate detailed assessment. Relevant matters include the costs of the interim application, the imminence of detailed assessment, the comparatively small amount likely to be ordered and the existence of an earlier substantial payment on account.

5. Delay by the receiving party in pursuing detailed assessment is also relevant. It may carry particular weight where the paying party can meet the eventual award with interest, so that postponement causes no significant prejudice.

6. District Judge Carson had properly considered his limited familiarity with the litigation, the substantial dispute over the bill, the earlier payment, a possible set-off, delay, solvency and absence of material prejudice. His refusal of a further payment was a sustainable discretionary decision containing no error of law. The circuit judge’s order was therefore displaced.

1. Court of Appeal (Civil Division): Allowed the appeal. It held that District Judge Carson had committed no error of law and had reached a conclusion open to him in the exercise of his discretion.

2. Circuit judge: HH Judge Graham Jones allowed Mr Blackmore’s appeal and remitted the application to District Judge Carson to determine whether a further sum was reasonably certain ultimately to be payable.

3. Costs judge: District Judge Carson refused Mr Blackmore’s application for a further interim payment on account of costs.