NIHAL MOHAMMED KAMAL BRAKE & Anor v GEOFFREY WILLIAM GUY & Ors

This judgment addressed consequential matters following a third-party debt order (TPDO) made against a pension fund and a subsequent application for an injunction under section 37 of the Senior Courts Act 1981. The court refused a three-week extension of the timetable sought on health grounds because there was no evidence of lack of capacity and the outstanding tasks were modest. On costs, the court held that the Guy Parties were the overall successful party and that both the judgment debtor (Mr Brake) and the third party had opposed the applications; the third party's conduct was found to be "out of the norm" (late objections, failure to comply with CPR rule 72.6(4), misleading communications and apparent coordination with the Brakes). For those reasons the court ordered the third party to pay 90% of the Guy Parties' costs of the two applications, assessed on the indemnity basis and summarily assessed at £30,000, producing an order that the third party pay £27,000 by 4 pm on 3 August 2022. The court reduced the proportion of costs payable by the third party by 10% to reflect some responsibility of the Guy Parties in relation to the debt issue.

Background and parties

This decision deals with consequential matters arising from: (i) an interim TPDO originally made by Lewison LJ on 4 April 2022; (ii) the Court of Appeal's dismissal on 2 March 2022 of an appeal by the Brakes ([2022] EWCA Civ 235); and (iii) a further application made by the Guy Parties on 20 May 2022 seeking an injunction under section 37 of the Senior Courts Act 1981 requiring Mr Brake to seek payment of the balance of his pension fund from the third party. The TPDO related to a pension fund held by the third party for the benefit of the second claimant, Mr Brake.

Nature of the applications and issues

• The principal relief sought was enforcement of the judgment debt by way of TPDO and, in response to the third party's late objection, an injunction under section 37 Senior Courts Act 1981 to require Mr Brake to obtain payment of the pension fund.
• Consequential issues determined were: (a) whether to extend the timetable for compliance; (b) which parties should bear the costs of the TPDO and the injunction application; (c) whether costs should be assessed on the indemnity or standard basis; (d) whether a summary or detailed assessment should be ordered; and (e) the amount to be allowed.

Court's reasoning

The judge refused the requested three-week extension because the matters to be done by 28 July 2022 were limited (obtaining pension information and a tax code) and there was no evidence of incapacity. The court accepted that, if desired and unopposed, HMRC could be ordered to disclose the tax code directly to the Guy Parties, but declined to delay the timetable.

On costs the court applied CPR rule 44.2 principles and held the two applications formed part of a single enforcement proceeding. The Guy Parties were the overall successful party; both Mr Brake and the third party resisted. The court rejected the third party's claim to be neutral: it failed to comply with CPR rule 72.6(4), served a position statement late, advanced substantive factual and legal points which were incorrect or weak, and had communications with the Brakes which suggested coordination. This conduct materially increased the costs incurred by the Guy Parties.

The judge concluded the third party's behaviour justified assessment on the indemnity basis, reduced the proportion payable by the third party to 90% (to reflect some blame on the Guy Parties over the meaning of "crystallised" in a benefit statement), and ordered summary assessment rather than a detailed assessment. Applying guideline thinking (London 2 rates) and allowing counsels' fees, the court summarily assessed total costs at £30,000 (plus VAT if applicable) and ordered payment by the third party of £27,000 by 4 pm on 3 August 2022.

Procedural notes: the TPDO had been made final by the judge on 11 July 2022; submissions on consequential matters were dealt with on paper and the judge approved circulation of the judgment.

The court refused the Brakes' application to delay the timetable and ordered the third party (James Hay Pension Trustees Limited) to pay 90% of the Guy Parties' costs of the TPDO and the subsequent injunction application, those costs to be assessed on the indemnity basis and summarily assessed at a total of £30,000; accordingly the third party was ordered to pay £27,000 by 4 pm on 3 August 2022. The rationale was that the third party's late, substantively incorrect and coordinated opposition materially increased costs and was "out of the norm", justifying indemnity assessment and a substantial adverse costs order, subject to a 10% reduction to reflect some responsibility on the Guy Parties over the pension "debt" issue.

The Court of Appeal dismissed the Brakes' earlier appeal on 2 March 2022 ([2022] EWCA Civ 235). An interim TPDO was made by Lewison LJ on 4 April 2022 and made final by HHJ Paul Matthews on 11 July 2022. This judgment determines consequential matters (including costs) arising from those applications.