W Nagel (a firm) & Anor v Pluczenik & Anor

CPR Part 71 may be used to obtain information from a judgment debtor where the only outstanding liability is an order for costs whose amount has not yet been agreed or assessed. The procedure is anterior to enforcement, so immediate enforceability of a quantified debt is unnecessary. The court must nevertheless control the process where it is premature, disproportionate, oppressive or abusive. Relevant considerations include the apparent value of the order, the practical prospect of re-establishing jurisdiction, and the history of compliance. Payment of quantified sums does not automatically terminate an already validly invoked Part 71 process.

The appeal arose from a Commercial Court judgment in favour of a diamond broker against Pluczenik Diamond Company NV. Orders required Pluczenik to pay damages, interest and costs, including indemnity costs which remained to be agreed or assessed. Two company directors had been served in England with orders under CPR Part 71 to provide information and attend examination. After the quantified sums were paid, the directors argued that the Part 71 process had ended because the remaining costs liability had not been quantified or fallen due.

Master McCloud refused to set aside the continuation of the examination. The central issues were whether Part 71 applied to an unquantified costs order, whether the original applications and orders covered those costs, and whether continuation was a proper exercise of discretion.

1. The appeal was dismissed. CPR Part 71 permits a person to be compelled to attend examination where the only outstanding part of the judgment is an order for costs which remains to be agreed or assessed.
2. The definitions in CPR 70.1(2) are broad. A judgment debtor includes a person against whom a judgment or order was made, and a judgment creditor includes a person who has obtained or is entitled to enforce a judgment or order. The CPR deliberately merge the former procedures for money and non-money judgments.
3. Part 71 is an information-gathering process which is anterior to enforcement. It assists the creditor in deciding how, or whether, to enforce. It therefore need not await quantification of the costs or the date on which payment becomes due.
4. The requirements to state the unpaid judgment debt and the amount presently owed do not alter that conclusion. Where costs have not been agreed or assessed, no presently owed amount exists and it would be wrong to invent one. The application may nevertheless identify the order for costs and seek information relevant to its future enforcement.
5. The original applications and the Kay Orders covered the costs orders. References to the amounts then owing did not exclude other parts of the identified orders, including costs to be agreed or assessed. Payment of the quantified sums did not terminate the process as of right.
6. The court retains discretion to regulate, postpone or end a Part 71 examination where it is inappropriate, disproportionate, oppressive or premature. Relevant factors included the substantial apparent value of the costs order, the difficulty of serving the directors again, and the history showing that progress required momentum. Master McCloud’s decision was within the proper ambit of her discretion.

• High Court (Queen's Bench Division): appeal from the order of Master McCloud dated 7 May 2019 dismissed.
• Court of Appeal: the earlier appeal in the underlying commercial proceedings was dismissed on 28 November 2018, with the indemnity costs order increased; the citation is not stated in this judgment.
• Commercial Court: judgment for the claimant was given by Popplewell J on 13 July 2017 in W Nagel v Pluczenik Diamond Company NV [2017] EWHC 1750 (Comm).