Argus Media Ltd v Halim

On an application for a payment on account of costs under Civil Procedure Rules 1998, r 44.2(8), the court should order a reasonable sum unless there is good reason not to do so. The sum should reflect likely recoverable costs, with an appropriate margin for error, and all relevant circumstances, including the parties’ means, prospects of recovery, imminence of detailed assessment and delay. Impecuniosity may justify postponement where it affects access to justice or there is a realistic prospect of payment by instalments, but it is not automatically a reason to refuse an order. Concerns about excessive or inadequately explained costs ordinarily affect the amount ordered rather than the existence of the obligation. Costs of the interim application may be left to detailed assessment where conduct, reasonableness and proportionality require fuller examination.

Argus Media Ltd obtained judgment against Mounir Halim for breach of contract and breach of confidence arising from his employment, including enforcement of post-termination restrictions. The court ordered Halim to pay specified proportions of Argus’s costs and adjourned an application for a payment on account.

After the financial-remedies issues were abandoned, the application was restored. Argus sought approximately £504,000 on account of costs said to be about £830,000. Halim, acting in person, asserted that he had no resources and that an order would cause bankruptcy. The issues were whether there was good reason to refuse or postpone an order and, if not, what sum should be ordered.

1. Application granted in part. The court ordered Halim to pay £250,000 on account of Argus’s costs. It made no further payment-on-account order for the costs of the application itself, which were left to detailed assessment.
2. Under Civil Procedure Rules 1998, r 44.2(8), a reasonable sum on account is ordinarily required unless there is good reason not to order one. The assessment is an estimate of likely recovery, subject to an appropriate margin for error. Relevant matters include the likely proportion recoverable, difficulty of recovery, the parties’ means, the imminence of assessment, delay and the risk of overpayment.
3. Halim had provided no formal evidence of his means. His oral assertions indicated severe impecuniosity, but there was no realistic evidence that postponement would improve his position. Want of means therefore carried little weight and did not constitute good reason to refuse the order. A stay or instalments might be sought on solid evidence if realistic proposals later emerged.
4. Argus’s delay, the disproportionate cost of the application, unexplained increases in its estimates and failures to apply ordered percentage reductions justified particular caution. Those matters concerned the quantum likely to be recovered, rather than the existence of an entitlement to an interim payment. The court therefore adopted a conservative figure well below the sum sought and ordered £250,000.
5. The costs of the payment-on-account application were not summarily assessed. Conduct under Civil Procedure Rules 1998, rr 44.2(4) and (5), and reasonableness and proportionality on detailed assessment under r 44.3(2) perform different functions. The costs judge was better placed to assess those matters in the context of the action as a whole.

The judgment records earlier consequential costs orders in the same proceedings, but no appeal was pursued. This was a renewed first-instance application for a payment on account of costs.