Chedington Events Ltd v Nihal Mohamed Brake & Anor

Costs in third-party debt order proceedings remain governed by the ordinary costs jurisdiction. The specific rule permitting a judgment creditor to retain costs from money recovered does not create a separate costs code or restrict the court’s power under Part 44.

Fixed recoverable costs apply by default, but the court may order otherwise where enforcement has been substantially contested. The successful party is identified by considering the litigation overall, although partial success may justify a percentage reduction. Non-parties may be made liable for costs where the circumstances justify it. Indemnity costs require conduct or circumstances taking the case outside the norm. Interest under section 35A of the Senior Courts Act 1981 is unavailable on a third-party debt order because such an order is enforcement of an existing judgment, not a cause of action against the third party.

The claimant sought consequential orders following the court’s earlier decision to make an interim third-party debt order final for £7,755.04. The order secured part of a £700,000 costs liability owed by the defendants. The third party had denied owing the defendants money, but the court found that £25,000 had been paid to her to hold to the defendants’ order and that £7,755.04 remained due.

The consequential issues concerned costs, the basis of assessment, payment on account, interest, and a stay pending appeal. The defendants and third party disputed liability for costs and sought to limit recovery by reference to fixed costs.

1. Costs jurisdiction and fixed costs. Costs remained discretionary under section 51(1) of the Senior Courts Act 1981 and CPR rule 44.2. CPR rule 72.11 governed the priority and retention of costs from money recovered under a third-party debt order. It did not constitute a separate costs code or prevent an award under Part 44. The fixed-cost regime under Part 45 applied by default, but the phrase permitting the court to order otherwise preserved a discretion to award substantive costs.
2. Successful party and proportion. The claimant was the successful party overall because it obtained the final third-party debt order, notwithstanding that the amount recovered was lower than claimed and part of its evidence was struck out. Those matters justified reducing the recoverable costs to 90 per cent.
3. Liability of the third party. The third party was not neutral. She participated in advancing an account which the court found untrue. In the circumstances, she was properly made jointly and severally liable with the defendants under the court’s broad non-party costs jurisdiction.
4. Assessment basis. The application was unusual and heavily contested, but the conduct relied upon did not take the case outside the norm. Costs were therefore payable on the standard basis, not the indemnity basis. The instruction of the claimant’s London solicitors was reasonable in the context of the litigation’s complexity and history, although the London 2 guideline rates were appropriate.
5. Payment on account and interest. A payment on account was appropriate under CPR rule 44.2(8). The reasonable sum was £20,000, subject to detailed assessment. Section 35A of the Senior Courts Act 1981 did not permit interest on the TPDO debt because a TPDO is a form of execution or enforcement of an existing judgment, not a cause of action against the third party. The court therefore declined to award interest against the third party.
6. Orders. The defendants and third party were ordered jointly and severally to pay 90 per cent of the claimant’s costs on the standard basis and £20,000 on account within 14 days. The orders against the defendants were stayed pending their applications for permission to appeal, conditional on compliance with CPR rules 6.23–6.24.

The judgment concerned consequential matters following the court’s earlier judgment on the TPDO, reported at [2024] EWHC 101 (Ch). The defendants indicated that they would seek permission to appeal directly from the Court of Appeal. The present court extended time for filing the appellant’s notice and stayed its orders against the defendants pending determination of the applications for permission to appeal.