Michael Wilson & Partners Ltd v Sinclair & Anor (No. 2)

The setting aside of a default costs certificate may in principle be made conditional on payment of outstanding judgment debts. Whether to impose such a condition is a discretionary case-management decision requiring consideration of the parties’ conduct in the round. The court may consider connected litigation where it materially illuminates that conduct. It should not, however, undertake a disproportionate investigation into a complex history of litigation merely to impose a condition based on alleged misconduct. The overriding objective includes saving expense, dealing with cases fairly and expeditiously, and allotting court resources proportionately. Draft judgments are circulated for correction, not for reargument. Reopening is appropriate only in the most exceptional circumstances.

Michael Wilson & Partners Ltd appealed from an order of Master Gordon-Saker, sitting as Senior Costs Judge, setting aside a default costs certificate obtained by MWP. In the first judgment, the court dismissed the challenge to the decision in principle to permit detailed assessment of MWP’s costs.

This judgment addressed whether the setting aside should have been conditional on payment of various outstanding judgment debts allegedly owed by the respondents to MWP, and, if so, what condition should be imposed. The respondents relied on MWP’s conduct in related litigation and on observations made in Emmott v Michael Wilson & Partners Ltd. The court also considered an attempt to reopen the appeal after circulation of the draft judgment.

1. Condition on setting aside. The Senior Costs Judge had, by necessary implication, declined to make the setting aside of the default costs certificate conditional on payment of the alleged judgment debts. That was a discretionary decision. Although such a condition could in principle be imposed, the court had to consider the parties’ conduct in the round.
2. Conduct and proportionality. In assessing conduct, it would be artificial to disregard the Court of Appeal’s criticisms of MWP’s refusal to discharge judgment debts in favour of Mr Emmott, particularly where Mr Sinclair had funded or discharged obligations connected with that litigation by set-off. Imposing the proposed condition could enable MWP to recover substantial costs which were not properly or reasonably incurred while keeping another judgment creditor out of money due to him. That would be unjust.
3. Case-management discretion. The proposed condition required an examination of the balance of rights and wrongs across a complex web of litigation. The Senior Costs Judge was right not to undertake that analysis. The court would likewise decline to do so because of the disproportionate deployment of judicial resources. The observations in Emmott v Michael Wilson & Partners Ltd were relevant and illuminating, and were applied to the exercise of discretion.
4. Postscript. The circulation of a draft judgment for editorial correction is not an invitation to reargue the case. The authorities cited on that point supported the principle that reconsideration of substance should occur only in the most exceptional circumstances. The appellant’s note sought to reopen the merits and was rejected.
5. The appeal was dismissed. The default costs certificate remained set aside without the proposed condition, and the appeal was not reopened.

• High Court (Queen's Bench Division): On appeal from the Senior Courts Costs Office, the court upheld the Senior Costs Judge’s decision to set aside the default costs certificate without imposing the proposed payment condition. The appeal was dismissed.