Christian Mark Richard Evans v Andrew McTeare & Ors

A respondent’s entitlement to costs after settlement or discontinuance depends on the substance of its role, rather than its procedural label. A respondent with a distinct interest may recover costs where it would actively oppose the appeal while office-holders adopted a neutral stance.

Questions of duplication, reasonableness and proportionality ordinarily belong to detailed assessment. Under CPR rule 44.2(8), an interim payment on account is normally appropriate after a costs order. Impecuniosity alone is not a good reason to refuse it, although means may affect the amount and timing.

Mr Evans appealed against rejection of his proof of debt against PVE Capital LLP. The appeal was settled and discontinued as against the liquidators and the LLP for a nominal payment and no order as to costs, but continued against PVE Capital Limited until dismissal.

The Third Respondent sought its costs, arguing that it was a successful respondent because it had a financial interest and would actively have opposed the appeal. Mr Evans argued that it should bear no costs, or that costs should be reserved for the judge hearing overlapping Part 7 proceedings. The court had to determine the proper costs order, the Third Respondent’s role and whether an interim payment should be made.

1. Costs liability. The Third Respondent was to be treated according to the substance of its role, not its nomenclature. It had a distinct financial interest, intended actively to oppose the appeal and would have taken the lead in opposition while the liquidators adopted a neutral role. It was therefore a successful respondent and Mr Evans was ordered to pay its costs, to be assessed if not agreed.
2. The court should guard against duplication, but whether costs were unnecessary, disproportionate or duplicated the liquidators’ costs was a matter for assessment. The existence of overlapping Part 7 proceedings did not justify reserving costs or staying assessment.
3. The Insolvency Rules were to be read with the CPR under rule 12.1. The CPR applied subject to inconsistency or necessary modification arising from the insolvency regime. The jurisdiction to address costs was not inconsistent with a creditor’s ability to withdraw a proof under rule 14.10.
4. The settlement represented abandonment of the claim to creditor status subject only to a nominal payment. Mr Evans could not rely on the resulting dismissal to resist the Third Respondent’s costs application.
5. Under CPR rule 44.2(8), detailed assessment and payment on account should ordinarily be ordered where summary assessment was inappropriate. Impecuniosity alone was insufficient. A reasonable payment depended on the likely recovery, relevant uncertainty and other circumstances; £40,000 was ordered on account.
6. A stay of enforcement was inappropriate because there was no adequate evidence of means, no permission to appeal and no properly supported basis for such relief.

Not stated in the judgment. The decision determined costs arising from the discontinuance and dismissal of the appeal against rejection of the proof of debt.