Anna Anatolyevna Timokhina v Alexander Valeryevich Timokhin

On an appeal concerning costs, the appellate court will interfere with a first-instance costs decision only where the judge erred in principle, disregarded a material factor, or considered an immaterial factor. Where a claim is amended because it was defectively framed, the appropriate costs order may include both the costs of and occasioned by the amendment and reasonable costs thrown away. The latter include work which would not have been needed had the claim been correctly framed. A payment on account must be a reasonable estimate of likely recovery, allowing for uncertainty and the risk of overpayment. Where an application became necessary because both parties failed to articulate the proper form of order, the court may make no order as to the application’s costs.

The Defendant appealed orders made by Senior Master Cook on 18 December 2024 in proceedings brought to recognise and enforce Russian financial orders. The Master permitted the Claimant to amend his claim, ordered him to pay the Defendant’s costs of and occasioned by the amendments, directed a payment of £2,000 on account, and ordered the Defendant to pay the Claimant’s amendment-application costs on the indemnity basis.

The appeal concerned the scope of the costs order, the amount payable on account, the adequacy of the Master’s reasons, and the order for the application’s costs.

1. Appeal allowed in part. The Master’s order did not sufficiently provide for the Defendant’s reasonable costs of work done on and in relation to the letter of 9 August 2024, including counsel’s advice, to the extent that the work would not have been needed had the claim been correctly framed.

2. The appropriate order was in the nature of costs thrown away, in addition to costs of and occasioned by the amendment. The parties’ correspondence had failed to articulate that distinction clearly. The order was therefore substituted to prevent later misinterpretation at detailed assessment.

3. The challenge to the £2,000 payment on account failed. Under CPR 44.2(8), the sum must be reasonable in light of the uncertainty before detailed assessment, the likely level of recovery, the parties’ competing positions, the imminence of assessment, and the risk that an overpayment may need to be recovered. The Master had not erred in exercising his discretion.

4. The order requiring the Defendant to pay the Claimant’s amendment-application costs on the indemnity basis could not stand. The application had become necessary because both parties had failed to identify and explain the correct form of costs order. The appropriate order was that there be no order as to the costs of the application, with the Claimant bearing his own costs.

The parties were invited to agree a consequential order and timetable for brief written submissions.

• High Court (King’s Bench Division): appeal from orders made by Senior Master Cook on 18 December 2024. Appeal allowed to the limited extent stated.