Peak Hotels And Resorts Ltd v Tarek Investments Ltd & Ors

An unless order may enforce payment of interlocutory costs where non-payment is serious and substantial. The court should consider the explanation for default, time already allowed, proportionality, prejudice, ability to pay and access to justice. The compliance period must remain reasonable given the seriousness of the sanction.

The Sherway parties sought an unless order against Mr Amanat for £40,000 due under an interlocutory costs order. The payment deadline had been extended twice. Mr Amanat was unrepresented, and his solicitors said that he was seeking a loan because his assets were illiquid.

The court considered whether the default justified an unless order and, if so, what deadline was proportionate.

1. Application granted. Mr Amanat was ordered to pay £40,000 by 4.00 pm on 30 March 2016.
2. The breach was serious and substantial. He had been given considerable time to pay, had proposed the previous deadline himself, and had provided no adequate explanation when it passed. The court could also consider the history of non-compliance and prejudice caused by continued preparation for the forthcoming trial (paras [15]–[25]).
3. The court applied a Denton-style assessment, considering seriousness, the reason for default, proportionality, prejudice and the overall circumstances. It relied on Crystal Decisions UK Ltd v Vedatech Corporation [2008] EWCA Civ 848, which recognised payment of interlocutory costs as a condition of continuing litigation where no other effective enforcement existed, subject to access to justice.
4. The order would not deny access to justice because the evidence showed that £40,000 was affordable despite the asserted illiquidity of assets (para [26]).
5. The shorter deadlines sought were inappropriate. A short further period was necessary to balance enforcement against prejudice to the Sherway parties (paras [28]–[29]).

First-instance application in the High Court. No appeal is stated.