Matrix Receivables Limited v Musst Holdings Limited

On an interim payment on account of costs, the court must apply a broad-brush assessment. The paying party’s own costs are relevant to reasonableness and proportionality, but they are only a factor and are not decisive. Particular caution is required where substantial costs are incurred after the hearing, especially after the successful party is known, because those costs remain subject to detailed assessment. Where costs orders relate to several applications heard together, caution is also required in apportioning costs between them. The appropriate percentage may therefore differ between costs already estimated and later additional costs.

This was a costs judgment following an order that Musst Holdings Limited pay Matrix Receivables Limited’s costs of a summary judgment application, described as the March Application. The court had previously ruled on the substantive application and on other costs issues in the same proceedings.

The issue was the amount to be paid on account. Matrix sought 70% of its claimed costs of £274,138.61. Musst argued for 60% applied principally to the earlier costs schedule, with a limited uplift for later costs. The central questions concerned the appropriate percentage and the costs base to which it should be applied.

1. Outcome. Musst was ordered to pay Matrix £151,828.20 on account of the costs awarded for the March Application, payable within 28 days of the order.
2. The court adopted a broad-brush approach appropriate to a payment on account. The exercise is not a detailed assessment. It must nevertheless reflect the apparent reasonableness and proportionality of the costs and the uncertainties concerning later apportionment between applications.
3. The paying party’s own costs may assist in assessing the receiving party’s costs, but they remain only a factor. They are not decisive because either party may have incurred unreasonable or disproportionate costs. Only reasonable and, where applicable, proportionate costs may ultimately be allowed.
4. Additional costs incurred during and after the hearing require caution. That was particularly so where Matrix’s costs increased by more than 87% after the earlier schedule and after the successful party was known. The court considered that detailed assessment would require particular scrutiny of those additional costs.
5. Different costs orders for applications heard together create a further apportionment risk. The court therefore applied 60% to the costs in the 2 May 2024 schedule of £146,213.97, and 50% to additional costs of £127,924.64, producing £151,690.70 on the stated calculation. The formal order was for £151,828.20.

The judgment records earlier decisions in the same proceedings:

• High Court (Chancery Division): strike-out ruling dated 17 June 2024, [2024] EWHC 1495 (Ch).
• High Court (Chancery Division): costs rulings dated 19 August 2024, [2024] EWHC 2167 (Ch).
• High Court (Chancery Division): the present costs judgment determined the payment on account.