Sunil Gupta & Anor v Olgun Halil Shah & Ors

An unless order for unpaid costs rests on the court’s inherent discretion; it is not an automatic pay-to-play rule. While proceedings remain live, such an order will usually be made unless the respondent cannot pay or the order would probably stifle the claim or defence. Where the applicant’s claims have ended and the order would impede enforcement against other defendants, the court must assess all the circumstances, including the relationship between the claims, reciprocal costs liabilities and available enforcement. Unresolved cross-costs awaiting assessment may make an order inappropriate. The court left open whether an unless order can ever be made after a final order.

The fourth and sixth defendants applied to debar the claimants from further participation in the proceedings until they paid £130,000 plus interest under costs orders and returned £20,000 mistakenly paid out of court. Their claims against the claimants had already been dismissed by reverse summary judgment, and the substantive proceedings had ended against the other defendants.

The claimants relied on costs orders in their favour against the fourth, fifth and sixth defendants, which remained to be assessed. The central question was whether an unless order should be used to secure payment of costs after the applicants’ claims had concluded, where it would prevent the claimants from pursuing enforcement against other defendants.

1. Application dismissed. The court also directed the claimants to pay the £20,000 to the fourth and sixth defendants, giving effect to the earlier order that the money be paid out of court to them.
2. An order debarring a party for non-payment of costs is an exercise of the court’s discretion under its inherent jurisdiction. In the ordinary case, where proceedings remain ongoing, an order will usually be made unless the respondent shows that they cannot meet it from their own funds or elsewhere. The court will usually decline an order that would probably stifle the prosecution or defence of the claim. Those principles, including the discretionary nature of the power, were drawn from Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm).
3. Tonstate Group Limited v Wojakovski [2020] EWHC 1004 (Ch) concerned connected proceedings. It showed that a court may consider extending an unless order across proceedings before it, taking account of the degree of connection between the parties and proceedings and all the circumstances. It did not establish a general power to bar a party from pursuing claims against other parties for different causes of action, or determine whether such an order may be made after final orders. The court expressly left that latter question open.
4. Here, the applicants’ claims had concluded. They accepted that the purpose of the application was to obtain leverage for payment, rather than to secure compliance needed for ongoing proceedings. The requested order would have prevented the claimants from enforcing final judgments against other defendants. Although the claims shared an underlying factual background, the claims against the applicants concerned receipt of money, while the claims against other defendants concerned direct misappropriation. In those circumstances, it was inappropriate to make the order.
5. There were also costs orders in both directions, with the outstanding sums yet to be determined on detailed assessment. The potential costs payable by the applicants might approach those payable to them. Similar circumstances had made an unless order inappropriate in Hasbro Consumer Products Licensing Limited & Anor v Cong Ty Tnhh Dau Tu Cong Nghe Va Dich Vu Sconnect Viet Nam & Ors [2025] EWHC 3450 (Ch). The size of the judgment debt against the third defendant also formed part of the court’s assessment.
6. The court rejected the argument that the claimants’ failure to raise the reciprocal costs orders at the earlier payment-on-account hearing amounted to a Henderson v Henderson (1843) 3 Hare 100 abuse. A failure to raise such points earlier could be relevant to the discretion, as explained in Michael Wilson & Partners Ltd v Sinclair, but was not significant here. The applicants were free to enforce their costs order, and had not explained why they had not first pursued that course.

1. Court of Appeal — The application for permission to appeal Mr Andrew Twigger KC’s order of 17 October 2025 was dismissed; no date or citation is stated.
2. High Court (Chancery Division) — Sir Anthony Mann made costs orders on 31 March 2023, and Mr Nicholas Thompsell made further orders in 2024. On 17 October 2025, Mr Andrew Twigger KC, sitting as a Deputy Judge, granted reverse summary judgment to the fourth and sixth defendants. The present application before Master Brightwell was dismissed.