Kingsley v Orban

A party who has clearly been warned that work will continue unless a statutory demand is withdrawn in writing may reasonably proceed with an application before the deadline where written confirmation has not arrived. The resulting costs may properly be awarded against the party who failed to give the confirmation.

Failure to serve a costs schedule within the required time should be dealt with proportionately. The court should first consider whether the failure caused prejudice. Without aggravating factors, the usual response is to allow a short adjournment or otherwise ensure that the paying party can address the schedule, rather than automatically depriving the receiving party of costs.

The appellant appealed from a decision of Deputy District Judge Brafield in the Kingston County Court dated 9 September 2013. The deputy district judge ordered Mr Kingsley to pay Judith Orban’s costs of an application to set aside a statutory demand and summarily assessed those costs at £2,208 plus VAT.

Mr Kingsley had indicated by telephone that he would withdraw the demand, but had not confirmed the withdrawal in writing when Miss Orban’s solicitor attended court and issued the application. The demand was subsequently agreed to be set aside, leaving costs as the only substantive issue. The appeal concerned whether the application had been issued prematurely and whether the failure to serve a costs schedule at least 24 hours before the hearing justified reducing or disallowing the costs.

1. The appeal was dismissed on both grounds. The deputy district judge was entitled to find that the application had not been issued over-hastily. A written confirmation of withdrawal was reasonably requested, and Mr Kingsley had been clearly warned that work would continue until it was received. It was readily open to him to stop the work by sending a simple written confirmation.

2. The failure to serve the costs schedule in accordance with paragraph 9.5 of the Practice Direction to Part 44 was established, and there was no reasonable excuse. However, applying the guidance in MacDonald v Taree Holdings (2000) All ER (D) 2204, the court had to act proportionately. The relevant distinction was between a bare failure to comply and a failure accompanied by aggravating factors.

3. No aggravating factor was established. The fact that the hearing ultimately concerned costs did not make the failure particularly culpable. Nor did the correspondence about a breakdown of costs show an aggravating refusal to engage with the issue, viewed in its wider context.

4. There was some prejudice because Mr Kingsley received the schedule only at court. The preferable course would have been to allow a short adjournment, of about 15 minutes, to consider it. Nevertheless, he was able to raise several objections and the judge could address them on the appeal.

5. The summary assessment was not disturbed. It was reasonable to use a grade A fee earner, given the potential bankruptcy consequences and the nature of the dispute. The background material in the witness statement was reasonably necessary and proportionate. Any possible reduction in the hourly rate was offset by hearing time that had not been charged. The costs were therefore allowed in full.

• High Court (Chancery Division): appeal from the decision of Deputy District Judge Brafield in the Kingston County Court dated 9 September 2013. The appeal was dismissed.