Hincks v Sense Network Ltd (Costs)

A stay of an order for payment on account of costs depends on all the circumstances and the interests of justice. The court should assess the risk of injustice to both parties, including the risk that enforcement may stifle an appeal and the risk that sums paid may not be recoverable if the appeal succeeds. A party asserting that payment would stifle an appeal must establish that contention on the balance of probabilities with evidence of its financial position. A reasonable payment on account is presumed where costs are subject to detailed assessment, unless there is a good reason to order otherwise.

The ruling concerned costs following the court’s liability judgment in favour of Sense Network Ltd. The parties agreed that the defendant was entitled to costs, subject to detailed assessment on the standard basis, but disagreed about a payment on account and whether enforcement should be stayed pending an intended appeal.

The claimant argued that payment would stifle the appeal because of his financial circumstances. The defendant disputed that contention and sought payment of 90% of its budgeted costs, together with a further sum for costs exceeding the budget. The central issues were whether a stay was justified, whether payment on account should be ordered, and the appropriate interim amount.

1. The stay application was refused. The court had a broad discretion to make the order which best served the interests of justice, taking account of all the circumstances. The relevant risks included whether refusal of a stay would stifle the appeal, whether a stay would leave the respondent unable to enforce its judgment if the appeal failed, and whether sums paid could be recovered if the appeal succeeded.
2. The claimant had to establish, on the balance of probabilities, that payment on account would stifle the appeal. He provided no evidence of his current earnings, assets, litigation funding, or ability to meet costs if the appeal failed. The limited financial material emerging at the liability trial did not justify an inference that payment would prevent an appeal. The court did not need to consider the prospects of the appeal.
3. Under CPR 44.2(8), payment of a reasonable sum on account was presumed where costs were subject to detailed assessment unless there was a good reason not to order it. No such reason had been advanced.
4. The court declined to determine finally whether the defendant’s costs would exceed its approved budget. It ordered payment of 90% of the defendant’s budgeted costs on account, stated to be £159,108. The final amount remained for detailed assessment.

The ruling followed the High Court’s liability judgment of 15 March 2018, which found in favour of the defendant. No appellate decision is stated in the judgment.