High Court Prioritizes Judicial Economy in Cost Determination Following Termination of Moratorium

Citation: [2023] EWHC 3179 (Ch)
Judgment on


In the case of Geoffrey William Guy & Ors v Nihal Mohammed Brake & Ors, the High Court was faced with the issue of determining costs following the termination of a mental health crisis moratorium, which had been a barrier to enforcing existing cost orders. The court grappled with the question of whether to delve into the substantive matters of the case merely to ascertain who should bear the costs after the substantive basis for the application had fallen away. This article analyses the legal principles invoked in this decision and the court’s reasoning in declining to award costs.

Key Facts

The litigation between the applicants and the first respondent arose from a breakdown in an employment relationship, leading to extensive and intense litigation over five years. The respondents failed in most of the litigation and were subjected to considerable costs orders. In August 2022, the first respondent entered a moratorium under the Debt Respite Scheme, which effectively prevented enforcement against her assets. However, it was subsequently determined that the criteria for the moratorium were no longer being met, which rendered the moratorium null from July 2023, and hence canceled the need for the substantive application to terminate the moratorium.

The court’s analysis rests on several legal principles:

  1. Discretion on Costs: Under section 51(1) of the Supreme Court Act 1981, determining the allocation of costs is at the discretion of the court, and Civil Procedure Rules (CPR) support this principle.

  2. Proceeding with Order for Costs: As per Chadwick LJ in BCT Software Solutions Ltd v C Brewer & Sons Ltd ([2003] EWCA Civ 939), before making an order on costs, the court should ensure it has a proper basis of agreed or determined facts.

  3. Deprivation of Substantive Outcome as Guide to Costs: In cases where there is no substantive outcome over which to rule, judges may find determining costs problematic as indicated by David Richards LJ in Powles v Reeves ([2016] EWCA Civ 1375).

  4. Assessment of Successful Parties: The “general rule” in allocating costs is typically that the unsuccessful party pays the successful party’s costs (CPR 44.3(2)(a)). However, the absence of a clear winner in the instant case renders this rule challenging to apply.

  5. Utilisation of Judicial and Court Resources: The court highlighted the importance of judicial economy and the unfeasibility of determining matters solely for costs. The court also expressed reluctance to allow further satellite litigation which would consume additional resources unnecessarily.


The court, after a careful analysis of the matter, decided against embarking on the substantive issues solely for determining costs, considering the excessive resources that would be required. Instead, it ruled that no order as to costs should be made. This decision was based heavily on the guidance provided by Chadwick LJ in BCT, with HHJ Paul Matthews concluding that it would be impractical and a waste of resources to pursue this further.


In Geoffrey William Guy & Ors v Nihal Mohammed Brake & Ors, the court demonstrated the prioritisation of practicality and judicial economy over the strict adherence to the general rule of cost allocation. By refraining from a substantiated investigation into which party should be responsible for costs, the court acknowledged the absence of a clear-cut successful party and the impracticality of further extending already lengthy and resource-intensive litigation. This exemplifies the court’s discretion in cost matters and reflects an enduring principle that legal battles must be efficient, practical, and just even when determining ancillary issues such as costs.