Photobooth Props Limited & Anor. v NEPBH Ltd & Ors.
[2023] EWHC 755 (IPEC)
Northern Powerhouse Developments Limited & Ors v Gavin Lee Woodhouse
6 June 2023
[2023] EWHC 1331 (Ch)
High Court
Someone didn't pay their court costs. They said they were broke. The judge looked at their money situation carefully, even though they'd made mistakes before. The judge decided letting them keep fighting the case was more important than forcing them to pay now, and let them continue with their defense.
Key Facts
- •Claimants sought to strike out the defendant's defense and enter judgment for £5.2 million plus interest unless he paid £59,258.30 in costs.
- •The case involves alleged breaches of director's duties by the defendant, the sole director of the claimant companies (in liquidation).
- •The defendant denies most allegations but admits liability for director's loans.
- •The costs order was made after the defendant failed to comply with previous orders, including asset disclosure and spending orders.
- •The defendant claims impecuniosity, stating he cannot pay the costs or raise funds.
- •The claimants argue the defendant has not fully disclosed his assets and ability to raise funds, citing previous breaches of court orders and inconsistencies in his evidence.
- •The defendant's evidence includes a detailed asset list, bank statements, and attempts to secure funding against property (Barkisland Hall).
- •The claimants dispute the defendant's ownership of Barkisland Hall.
Legal Principles
Court's jurisdiction to strike out a statement of case for non-payment of costs.
Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (QB)
Balancing the need to enforce court orders with the right to access justice (Article 6 ECHR).
Crystal Decisions (UK) Ltd v Vedatech Corp [2008] EWCA Civ 848; Goldtrail Travel Ltd (in liq.) v Onur Air Taşimacilik AŞ [2017] 1 WLR 3014
Onus on the defaulting party to demonstrate inability to pay, supported by cogent evidence.
MV Yorke Motors v Edwards (cited in Goldtrail)
Whether an unless order would likely stifle the defence.
Goldtrail Travel Ltd (in liq.) v Onur Air Taşimacilik AŞ [2017] 1 WLR 3014
Outcomes
The claimants' application to strike out the defendant's defense was dismissed.
The judge found that the defendant had established on the balance of probabilities that an unless order would stifle his defense due to impecuniosity. While acknowledging inconsistencies and previous breaches, the judge deemed the evidence sufficient to demonstrate the defendant's inability to raise the funds, despite the claimants' arguments to the contrary.