Photobooth Props Limited & Anor. v NEPBH Ltd & Ors.
[2023] EWHC 755 (IPEC)
J Robbins Capital Partners Limited v Zamsort Limited & Ors
31 July 2024
[2024] EWHC 1990 (Comm)
High Court
A company owed money for court costs couldn't pay and said that forcing them to pay would stop them from continuing their lawsuit. The judge agreed that they couldn't pay and let them continue their case, even though they still owed the money.
Key Facts
- •Claim issued in February 2021, but pleadings not yet closed.
- •Claimant seeks to amend particulars of claim; defendants don't oppose amendments but seek conditions (costs payment) and a stay.
- •Claimant owes over £60,000 in unpaid costs orders.
- •Claim alleges claimant acted as introducer, was frozen out, and seeks £24 million in damages.
- •Claimant argues it lacks funds to pay costs orders, a stay would stifle the claim.
- •Judge considers various case laws on enforcing costs orders and the right to access to justice (Article 6 ECHR).
Legal Principles
Importance of immediate payment of costs orders to encourage responsible litigation.
Crystal Decisions UK Ltd v Vedatech Corp [2008] EWCA Civ 848
Costs orders in High Court generally follow the event, not necessarily a sanction for irresponsible conduct.
CPR 44.2(2) and (4)
Costs rules serve to concentrate minds, deter frivolous applications, and ensure fair cost allocation.
Sections 10 and 11
Court has inherent jurisdiction to secure compliance with costs orders; various enforcement options exist.
Crystal Decisions UK Limited v Vedatech Corp [2006] EWHC 3500 (Ch); Musion Systems v Activ8-3D [2012] EWPCC 5; Siddiqi v Aidiniantz [2020] EWHC 699 (QB); Michael Wilson Partners Ltd v Sinclair [2017] EWHC 2424 (Comm)
While non-payment may lead to sanctions, the court exercises discretion; 'stifling' a claim due to impecuniosity is a significant countervailing factor under Article 6 ECHR.
Article 6 ECHR; Crystal Decisions UK Ltd v Vedatech Corp [2008] EWCA Civ 848; Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm); Siddiqi v Aidiniantz [2020] EWHC 699 (QB); Musion Systems v Activ8-3D [2012] EWPCC 5
Assessing 'means' includes considering ability to raise funds, not just present resources.
MV Yorke Motors v Edwards [1982] 1 WLR 444; Goldtrail Travel Ltd v Onur Air Taşimacilik AŞ [2017] UKSC 15
Party claiming stifling must prove it on the balance of probabilities, providing detailed, cogent evidence.
Goldtrail Travel Ltd v Onur Air Taşimacilik AŞ [2017] UKSC 15; Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm)
Outcomes
Claimant's application to amend particulars of claim is allowed without conditions.
Claimant demonstrated on the balance of probabilities that it lacks the funds to pay outstanding costs orders and that enforcing payment would stifle the claim, violating Article 6 ECHR.
Defendants' application to stay the action is dismissed.
Imposing a stay would likely stifle the claim given the claimant's financial situation and the length of time the claim has been pending. The court balanced the need to enforce cost orders with the right to access to justice.
Defendants awarded standard costs for the amendment application.
The amendment itself was unobjectionable; the dispute stemmed from the stay application. An indemnity costs order was deemed disproportionate.
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