Bhandal, R (On the Application Of) v Revenue And Customs

An order extending time to pay costs is ordinarily concerned with the period required for payment, not with reopening the costs decision or postponing it indefinitely. The applicant must provide evidence showing that payment will be possible within a reasonable time. A statement of means must be comprehensive and supported by proper details of assets, liabilities and loans. Relief from sanctions requires the three-stage approach in Denton v TH White Ltd [2014] 1 WLR 3296: seriousness and significance of the breach, the reason for it, and all the circumstances. A substantial unexplained delay, coupled with inadequate financial evidence, justified refusal of relief and dismissal of the applications.

The claimant sought further time to pay £83,000 costs ordered by Green J after he withdrew an application concerning the special liquidators’ access to documents. Green J had granted liberty to apply by a specified date, supported by a comprehensive statement of means. The claimant filed a witness statement but lodged the formal application seven days late. He argued that payment should be deferred until the special liquidators decided whether to challenge a substantial judgment in his favour and whether to admit his debt in the liquidation. The special liquidators opposed both the requested deferment and relief from sanctions. The issues were whether the application fell within the liberty granted, whether the financial evidence complied with the order, whether further time to pay was justified, and whether relief from sanctions should be granted.

1. The applications failed and were dismissed. An application for further time to pay ordinarily seeks an extension of the period fixed for payment. It does not permit the applicant to rerun arguments previously made about whether costs should have been ordered or to establish an indirect appeal against the earlier order.

2. A statement of means required by an order for costs must be comprehensive. Bare assertions of impecuniosity and vague references to loans are insufficient. The applicant should provide proper details of creditors, loans, assets, liabilities and the circumstances explaining the claimed financial position.

3. Following Gulf International Bank v Al Ittefaq Steel Products Co & Ors [2010] EWHC 2601 (QB), further time to pay should be granted only where the applicant can show by evidence that, if granted an indulgence, payment would be possible within a reasonable time. The claimant’s evidence showed continuing inability to pay and only a speculative prospect of payment dependent on future events.

4. Relief from sanctions under Civil Procedure Rules 1998, rule 3.9 required the three-stage approach identified in Denton v TH White Ltd [2014] 1 WLR 3296. The breach was serious and significant because the clear order required an application by a specified date. No adequate explanation for the delay was provided. Considering all the circumstances, including that the underlying application had been withdrawn after being pursued for several months, there was no basis for relief.

5. The special liquidators were entitled to their costs. Summary assessment was appropriate, but the claimed amount was excessive as against the losing party. The costs were summarily assessed at £13,500.

The judgment records earlier orders by Green J, including the costs order and liberty to apply. This was a first-instance determination of the claimant’s applications for further time to pay and relief from sanctions. Permission to appeal was refused.