Benyatov v Credit Suisse Securities (Europe) Ltd

Under CPR rule 44.2(8), where costs are subject to detailed assessment, the court will ordinarily order a reasonable payment on account unless there is good reason not to do so.

Unassessed, contingent or uncertain costs owed to the opposing party should not ordinarily be brought into account to defeat that entitlement, particularly where the opposing party has not sought an interim payment. Possible future costs orders and permission to appeal likewise do not generally justify refusal, although the court may postpone the payment period pending determination of an appeal application. The amount may be assessed on a broad-brush basis.

The claimant sought an interim payment on account of his costs of the defendant’s earlier applications to strike out or obtain summary judgment, and for security for costs. The earlier judgment dismissed the applications for a conditional payment and security for costs, while succeeding and failing in significant parts on the strike-out and summary-judgment application. A subsequent costs order required the defendant to pay one third of the claimant’s costs and required the claimant to pay costs relating to struck-out parts of the pleading.

The defendant resisted an interim payment, relying on those competing costs orders, possible future costs, permission to appeal, and the claimant’s ability to repay. The issues were whether there was good reason under CPR rule 44.2(8) to refuse payment and, if not, what sum should be ordered.

1. Interim payment ordered. The claimant was entitled in principle to a payment on account under CPR rule 44.2(8). The defendant’s objections did not establish good reason to refuse one.
2. The defendant’s unassessed costs relating to struck-out parts of the pleading could not properly be brought into credit at this stage. The defendant had not applied for an interim payment, and the amount could only fairly be assessed after the work on the Defence had been considered in its full context. Treating contingent and uncertain costs as defeating an otherwise sure entitlement would undermine the operation of CPR rule 44.2(8) and encourage satellite disputes.
3. A possible future costs order arising from the claimant’s proposed amendment application was not a reason to deny payment. Its consequences should be dealt with when, and if, that order was made.
4. Permission to appeal did not prevent an interim-payment order. However, because the time for seeking permission to appeal had been extended, the time for payment was ordered not to begin until that application had been determined.
5. The evidence did not show that the claimant would be unable to repay the payment. Quantum could be assessed broadly. Although the claimant claimed costs of £368,774.41, the court considered £120,000 a suitable broad-brush figure for interim-payment purposes and ordered one third, namely £40,000.

This was a further first-instance judgment concerning costs consequences of the court’s earlier interlocutory decisions in the same proceedings.

• Earlier judgment: The defendant’s applications for a conditional payment and security for costs were dismissed. The strike-out or summary-judgment application succeeded in part and failed in part.
• Second judgment: The defendant was ordered to pay one third of the claimant’s costs of the applications, while the claimant was ordered to pay costs attributable to struck-out parts of the pleading.
• Present judgment: The claimant’s application for an interim payment was granted, subject to the deferred commencement of the payment period.