SABZ ALI KHAN v STEPHEN JOHN HUNT As Trustee In Bankruptcy Of ABDUL REZA PAKZAD

Permission to appeal requires a real prospect of success. An appellate court will not interfere with a case-management or discretionary decision unless the judge acted on an irrelevant matter, failed to consider a relevant matter, acted perversely, or exceeded the reasonable ambit of discretion.

A default costs certificate which has been upheld, or whose challenge has become final, establishes the costs debt for subsequent proceedings. A party cannot reopen the underlying points of dispute in a later application to annul a bankruptcy order. Orders remain valid unless and until set aside.

The appellant sought permission to appeal two County Court orders. Deputy District Judge Regan had set aside a 2019 order of District Judge Phillips which had set aside a default costs certificate. District Judge Morgan had refused an application to annul a bankruptcy order founded on that certificate and had made a limited civil restraint order.

The appellant argued that the earlier costs proceedings were invalid, that the default costs certificate was challengeable, that the bankruptcy order was founded on an unsecured debt despite charging orders, and that earlier decisions should be reopened because of an alleged miscarriage of justice. The central issues were whether those matters had already been finally determined and whether either County Court judge had erred so as to give the proposed appeals a real prospect of success.

1. Disposition. The applications for permission to appeal were refused. There was no real prospect of showing that either County Court judge had erred in law.
2. Jurisdiction. Judge Livesey had been cross-assigned and authorised to sit in the County Court. The costs application was properly dealt with in the County Court at Bristol. Under Insolvency Rules 2016, rule 12.41, CPR Parts 44 and 47 applied to costs in insolvency proceedings. Once detailed assessment had commenced, the proceedings were governed by CPR Part 47 and applications were properly made at the appropriate County Court office.
3. Default costs certificate. The earlier refusals to set aside the certificate created a res judicata in relation to the same application. The later order setting it aside was therefore properly reversed. Complaints about the bill of costs could not be raised again in the annulment proceedings.
4. Bankruptcy order. The default costs certificate was in force when the bankruptcy petition and order were made. It established the quantum of the costs debt, and the bankruptcy order and consequential orders were valid while the certificate remained in force.
5. Discretion and restraint order. Regan DDJ was entitled to set aside the 2019 order despite the respondent’s 13-month delay, having considered the unusual history and competing delays. Morgan DJ was entitled to make a limited civil restraint order after applications had been certified totally without merit. No error of principle or decision outside the reasonable ambit of discretion was shown.

• High Court, Chancery Appeals: Permission to appeal the orders of Deputy District Judge Regan dated 3 March 2021 and District Judge Morgan dated 4 May 2021 was refused by Mr Justice Zacaroli on 24 May 2022.
• County Court in Cardiff: Deputy District Judge Regan set aside District Judge Phillips’ 2019 order setting aside the default costs certificate. District Judge Morgan refused to annul the bankruptcy order and made a limited civil restraint order.