Kamlesh Patel & Ors v Isabelle Michelle Paule Awan & Anor

An interim payment on account of costs is a binding judicial determination of a reasonable sum. It is not a contingent liability merely because detailed assessment remains outstanding. Once the specified payment date has passed, the sum is due and enforceable as a money judgment, including by charging order.

Unassessed costs remain contingent and cannot themselves be secured by charging order. The court may make an order for sale where the secured debt, the evidence concerning the debtor’s circumstances, the prospects of repayment and the delay in enforcement show that the balance of interests favours sale. A short period for payment or possession may appropriately protect the debtor’s and family’s interests.

The claimants sought an order for sale of a property registered to the first defendant. The application relied on a charging order securing an unpaid interim payment on account of costs ordered in earlier proceedings. The defendants accepted the payment had not been made and that they were in breach, but argued that the payment was not yet due until detailed assessment of the underlying costs had been completed.

They also opposed sale on discretionary grounds, relying on their financial circumstances, the position of family members, human-rights considerations and the claimants’ delay in progressing detailed assessment and seeking sale. The court had to determine whether the interim payment was enforceable by charging order and, if so, whether an order for sale should be made.

1. Enforceability of interim payment. The court rejected the argument that an interim payment on account of costs remains contingent until detailed assessment. Under Civil Procedure Rules 1998, r 44.2(8), the court determines a reasonable sum after considering the parties’ evidence and submissions. That determination is final and binding as to the interim sum, although the eventual detailed assessment may show that the sum was too high.
2. The interim payment became due on the date specified in the order. If no date is specified, the applicable rule, practice direction or statute determines when it is due. Once unpaid after that date, it is enforceable as a judgment debt. The risks of overpayment, repayment and delay in detailed assessment are matters to be raised when the interim payment is being determined, or through the safeguards in CPR 47.8. They do not prevent enforcement after the order has been made.
3. Charging order. Unassessed costs are a contingent liability and cannot be secured under s 1 of the Charging Orders Act 1979. An interim payment is different because it is an ascertained sum due for payment. CPR 70.1 and 70.2 and PD 70A permit enforcement of an order for payment of costs by charging order. The charging order was therefore valid.
4. Order for sale. The court balanced the claimants’ right to enforce their long-outstanding debt against the defendants’ and their adult children’s interests in remaining in the home. The evidence of health conditions, disability, finances and proposed refinancing was limited and unsupported. The prospect of waiting three years for voluntary sale was not a reasonable repayment proposal, particularly as the property’s value and the prospects of recovery appeared to be deteriorating.
5. The court exercised its discretion to make an order for sale, but allowed three months from the hearing for payment or possession. The parties were invited to agree the consequential order.

First-instance determination of a Part 8 claim. No earlier appellate decision was stated.