Fattal & Anor v Walbrook Trustees (Jersey) Ltd & Anor (Rev. 1)

Interest on costs ordinarily runs from the date judgment is given, but the court may order a different starting date under the Judgments Act 1838 and the Civil Procedure Rules. No exceptional-circumstances threshold applies.

The controlling consideration is justice, including compensation for money expended on costs. Interest-free funding by a company connected with the receiving party may still represent a real indirect loss. On detailed assessment, a substantial reduction caused materially by inadequate attendance notes may justify denying the receiving party its assessment costs, even without misconduct.

The claimants appealed two aspects of Master O'Hare's decision on the detailed assessment of costs arising from earlier trust and property litigation. The Master ordered payment of the defendants' assessed costs with interest from 3 October 2003, but refused the claimants any costs of assessing their own costs.

The appeal challenged the commencement and availability of interest on costs, the Master's jurisdiction to make the relevant order, and the refusal of costs of assessment under CPR 47.18. The central questions were whether exceptional circumstances were required and whether the substantial reduction of the claimants' bill justified departing from the usual entitlement to assessment costs.

Appeal dismissed.

1. Under section 17 of the Judgments Act 1838, as amended by article 3 of the Civil Procedures (Modification of Enactments) Order 1998, and CPR 40.8, interest ordinarily runs from the date judgment is given. The court may order an earlier or later date. Neither the statute nor the Rules require exceptional circumstances before that discretion is exercised. The incipitur rule described in Hunt v Douglas Roofing [1990] 1 AC 398 was therefore subject to the amended statutory and procedural scheme.
2. The primary purpose of interest is compensatory. The court must consider what justice requires, including whether money has been expended, when it was expended, and the nature of the funding. Where costs have not yet been paid, justice may require interest to start later. A wholly voluntary, interest-free advance from a benevolent and disinterested third party might produce a different result, as contemplated in Fosse Motor Engineers Limited v Conde Nast and National Magazine Distributors Limited [2008] EWHC 2527 QB.
3. The fact that BS 2000 advanced the money interest-free did not eliminate the relevant loss. The company was owned for the benefit of the trusts, and its deprivation of the use of the money represented an indirect loss to the trust estate. The defendants could properly be considered collectively for this purpose.
4. CPR 2.4 permitted the Master, as a High Court judge, Master or district judge, to perform an act assigned to the court by the Rules. Consistently with Powell v Herefordshire Health Authority [2002] EWCA Civ 1786, the costs judge could determine the period for which interest should run after earlier costs orders had been made. This was not an impermissible retrospective variation.
5. Under CPR 47.18, the receiving party's entitlement to the costs of detailed assessment is subject to the court's discretion. Relevant circumstances include conduct, the amount by which the bill was reduced, and the reasonableness of claiming or disputing items. A reduction of more than 60 per cent, substantially attributable to missing attendance notes and resulting uncertainty in the assessment, justified refusing the claimants any assessment costs. The trustees' less substantial reduction for ordinary reasons did not justify the same order. The absence of a Part 36 offer was not determinative.

1. High Court (Chancery Division): On appeal, the court dismissed the claimants' challenges to the orders on interest and the costs of detailed assessment: [2009] EWHC 1674 (Ch).
2. Master O'Hare: Following a detailed assessment, the Master ordered interest on the defendants' assessed costs from 3 October 2003 and refused the claimants any costs of assessing their own costs. The decision is described as having been given on 28 April 2007, with a final certificate dated 13 September 2007.