Anthony James Broom v Maria Del Pilar Molina Aguilar (Costs)
[2024] EWHC 1961 (Ch)
Christian Mark Richard Evans v Andrew McTeare & Ors
10 November 2023
[2023] EWHC 2828 (Ch)
High Court
Someone appealed a debt rejection, but settled for a tiny amount, giving up the fight. The other side, who fought hard, won and will get their legal costs paid by the appellant, even though the appellant says he's broke.
Key Facts
- •Mr. Evans appealed the rejection of his proof of debt.
- •He settled with the liquidators but not with PVE Capital Limited (Third Respondent).
- •The appeal was dismissed against the Third Respondent.
- •Mr. Evans initiated Part 7 proceedings against the Third Respondent.
- •The Third Respondent had a financial interest due to an indemnity obligation to the liquidators.
- •The settlement involved a nominal payment (£10,000) to Mr. Evans.
- •The factual issues in the appeal and Part 7 claim largely overlapped.
- •The parties had consent orders with reserved costs.
- •There was a dispute over the Third Respondent's role (interested party vs. active respondent).
- •The Third Respondent's costs were over £100,000.
Legal Principles
Costs orders in insolvency appeals should consider the roles of parties and avoid duplication.
Inherent powers of the court in insolvency proceedings, CPR, Insolvency Rules.
The court should distinguish between the question of who should pay costs and whether claimed costs are reasonable and proportionate.
CPR Part 44
In determining costs orders, the court considers whether the respondent was advancing a positive case necessary due to the liquidator's neutral approach.
White Book commentary at 44.2.33
Impecuniosity is not a good reason to refuse a payment on account of costs.
CPR Part 44, Rule 44.2(8); Bank St Petersburg PJSC v Arkhangelsky [2018] EWHC 2817 (Ch)
When assessing a reasonable sum on account of costs, the court considers various factors, including the likelihood of recovery, the parties' means, and potential for duplication.
Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm)
Outcomes
Mr. Evans must pay the Third Respondent's costs, to be assessed if not agreed.
The Third Respondent was an active respondent, and Mr. Evans's settlement effectively abandoned his claim.
Detailed assessment of costs is ordered, with a payment on account of £40,000.
The court lacked sufficient information to summarily assess costs; Mr Evans’s claim of impecuniosity was insufficient to avoid an interim payment.
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