Iman Said Abdul Al-Rawas & Anor v Hassan Khan & Co (A Firm) & Anor

Indemnity costs may be ordered where a party’s conduct, the circumstances of the case, or both take the proceedings outside the ordinary and reasonable norm. Moral condemnation or lack of probity is unnecessary. The court must police the automatic right of appeal against committal orders and may mark an abuse of that right through indemnity costs. Pursuing a hopeless appeal to delay enforcement, while defying court orders and withholding promised evidence, falls well outside the norm. Findings of fact will not generally be reopened on appeal. Raising arguments which could and should have been advanced below may constitute an abuse of process. The indemnity order may include the costs of an application seeking conditions on the pursuit of the appeal, even though such conditions are imposed only rarely.

The appellants, a husband and wife resident in Oman, owed the respondent solicitors more than £3 million arising from unpaid fees, costs and interest. After prolonged enforcement proceedings, Morris J found 14 contempt charges proved in [2021] EWHC 2583 (QB). He subsequently imposed sentences of imprisonment in [2021] EWHC 3229 (QB).

The appellants appealed against the contempt findings and committal orders. The respondents applied for payment of the outstanding debt into court and for security for costs as conditions of continuing the appeal. Shortly before that application was heard, the appellants requested dismissal of their appeal with costs. The Court of Appeal dismissed the appeal accordingly.

The remaining issue was whether the respondents’ entire costs of the appeal, including the costs of their application for conditions, should be assessed on the indemnity basis.

1. Appeal dismissed. The appellants were ordered to pay the entirety of the respondents’ costs of the appeal on the indemnity basis, including the costs of the application seeking conditions on the continuation of the appeal. They were also ordered to pay £152,237.77 on account, with the balance subject to detailed assessment.
2. Under section 13 of the Administration of Justice Act 1960, reflected in rule 52.3 of the Civil Procedure Rules, an appeal against a committal order may be brought without permission. That unusual automatic right must be policed carefully. Indemnity costs are one means by which the court can mark its disapproval when the appeal process is abused. The distinction between committal orders and ancillary orders restricts the scope of the automatic right, although it was unnecessary to decide whether every ground advanced in this appeal fell within it.
3. Following Excelsior Commercial and Industrial Holdings Limited [2002] EWCA Civ 879 and Esure Services Limited v Quarcoo [2009] EWCA Civ 595, indemnity costs are justified where conduct or other circumstances take the case outside the ordinary and reasonable conduct of proceedings. Lack of probity or conduct deserving moral condemnation is not required.
4. The appellants’ conduct was far outside that norm. They had used the automatic appeal procedure to prolong enforcement while remaining in open defiance of numerous court orders. Their appeal was hopeless: it attempted to reargue factual findings, raised points which could and should have been advanced before Morris J, and depended on fresh evidence which was never provided or properly identified. Findings of fact are not generally reopened on appeal, and raising available arguments for the first time on appeal may be an abuse of process. The appellants had no genuine intention of advancing the appeal legitimately.
5. The costs of the respondents’ application for conditions were properly included. Although imposing conditions on a contempt appeal is rare, the appellants’ conduct may have justified requiring payment into court of all or part of the outstanding sums. Such conditional orders may also be an appropriate means of preventing abuse of the automatic right of appeal. Coulson LJ gave the judgment, with which Arnold and Phillips LJJ agreed.

1. Court of Appeal (Civil Division): In [2022] EWCA Civ 671, dismissed the appeal at the appellants’ request and ordered them to pay the respondents’ entire appeal costs on the indemnity basis.
2. High Court, Queen’s Bench Division: In [2021] EWHC 3229 (QB), Morris J sentenced the first appellant to 24 months’ imprisonment and the second appellant to 15 months’ imprisonment. He awarded the respondents indemnity costs of the contempt proceedings.
3. High Court, Queen’s Bench Division: In [2021] EWHC 2583 (QB), Morris J found all 14 contempt charges proved to the criminal standard, subject to the rejection of some individual allegations within those charges.