Joanne Laura Brierley v Christopher Howe & Anor

Where a party is successful on a strike-out application, the general costs rule ordinarily applies. A summary assessment is appropriate where it is cost-effective and consistent with the overriding objective. The court may impose an immediate payment deadline, even where the paying party says that payment may prevent continuation of residual proceedings. A request for deferred payment should be supported by evidence of means prepared in good time. The court may protect the paying party by including a rider extending the deadline if a properly evidenced application for a stay or extension is made promptly. Litigation choices, the party’s conduct, the avoidability of costs and the interests of the successful party are relevant to the exercise of the costs discretion.

The petitioner brought proceedings under section 994 of the Companies Act 2006 against the first respondent and the company. The first respondent succeeded on a strike-out application concerning parts of the petition. The court then considered the amount of costs, whether they should be summarily assessed, and whether payment should be deferred until a later case management hearing because immediate payment might affect the petitioner’s ability to continue her residual claim.

The central issues were whether the costs should be assessed summarily, whether a payment deadline should be imposed, and whether the petitioner had shown sufficient grounds for deferral.

1. The first respondent was the successful party. The general rule in CPR 44.2(2)(a) therefore applied, and no good reason had been demonstrated for making a different order. The petitioner was ordered to pay the costs of and occasioned by the strike-out application.

2. Summary assessment was ordered because the hearing time was approximately one day and summary assessment was the more cost-effective course, furthering the overriding objective. The costs were assessed at £30,000 plus VAT. The technical nature of the application justified London grade 1 treatment, although other aspects of the litigation might warrant a lower grade.

3. The court refused to defer the question of payment until the later CCMC. The petitioner had known for a substantial period that she might lose and face a costs order, and had not prepared or served evidence of means. If the consequences of payment were materially serious, evidence should have been prepared before judgment was handed down.

4. The authorities and guidance cited on deferred payment did not require the court to impose no deadline. A rider was sufficient protection: if the petitioner made a fully evidenced application for a stay or extension within the specified short period, the payment deadline would be extended until final disposal of that application or further order.

5. The court took account of the petitioner’s litigation choices, the warnings given about the limits of the section 994 jurisdiction, the avoidable costs incurred, and the need to avoid keeping the first respondent out of pocket. The petitioner’s anticipated success at trial could not be treated as a given. The costs were payable within 21 days, subject to the rider.