Brake & Anor v Guy & Ors [2022] EWHC 1911 (Ch)

Charlotte Pope-Williams for the Third Party

HHJ Paul Matthews :

Introduction

• This is my judgment on consequential matters (including costs) in relation to a third-party debt order (“TPDO”) made originally on an interim basis by Lewison LJ on 4 April 2022, and made final by me on 11 July 2022. The Court of Appeal on 2 March 2022 dismissed an appeal by the claimants/appellants (“the Brakes”) against a decision of my own: see [2022] EWCA Civ 235. The court ordered that the Brakes pay the costs of the appeal of the defendants/respondents (“the Guy Parties”), and ordered an interim payment on account of £70,000, which, as I understand it, has not been paid.

• The TPDO was sought in relation to a pension fund held by the third party for the benefit of the second claimant, Mr Brake. On 20 May 2022, the Guy Parties made a further application by notice, seeking an injunction under section 37 of the Senior Courts Act 1981 requiring Mr Brake to seek payment from the third party of the whole fund then remaining to him. (It also sought to change the name of the third party, which the third party agreed to, and which the Brakes did not oppose.) In my written decision of 11 July 2022, I acceded to this application: see [2022] EWHC 1746 (Ch). I then invited written submissions from the parties as to consequential matters (including costs). I have received and considered such submissions from all parties.

The form of the order

• So far as the court order itself is concerned, I understand that the Guy Parties and the third party have agreed a form of order between them. Mr Brake has not made any submissions about the form of the order. Mrs Brake originally confirmed on behalf of her husband that the timetable provided for was acceptable, but on Sunday 17 July 2022 she wrote directly to me to ask if the timetable could be delayed by three weeks, because of her husband’s health. This is opposed by the Guy Parties. The third party is neutral about the dates being moved.

• In support of her application, Mrs Brake says that her husband has taken my decision very badly and that his medication has had to be changed. He is therefore not now able to comply with the timetable which she originally agreed on his behalf. Moreover, she is unable to speak to their counsel (Mr Colclough) until Tuesday 19 July 2022. She suggests a delay of three weeks “to allow me to see if I can take over the process for him”. She does not however say that Mr Brake no longer has mental capacity. Nor does she explain what steps she would be taking in the three extra weeks which would enable her to “take over the process”. She has however provided a copy of a letter from Dr Suzanne Jeffries, a consultant in old age psychiatry in the Bridport Older Persons Community Mental Health Team. This states that Mr Brake is exhibiting symptoms of severe depression, which “directly impact on his ability to attend, concentrate and process information and as such significantly impairs his ability to be an appropriate and active participant in the court process”. She goes on to say that this is likely to persist in the short to medium term.

• The Guy Parties say that all that Mr Brake is required to do is (i) to obtain relevant information about his pension (which ought to be in his possession) and his applicable tax code (which can be obtained by telephoning HMRC), and (ii) to provide this information to the Guy Parties and to the third party. In fact, on the basis of the current proposed timetable, Mr Brake would not be required to provide any information to the Guy Parties or the third party until 28 July 2022. So, there is already sufficient time for these things to be done. To add a further three weeks would be simply disproportionate and unnecessary. In any event, the Guy Parties suggest that Mrs Brake could do these things for him.

• I agree with the Guy Parties. I accept that Mr Brake is in poor health and finds even simple tasks difficult. But to suggest that he could not obtain the relevant information from his own files and his own tax code from HMRC by 28 July 2022, but could do so three weeks later is frankly ridiculous. If he had lost capacity, that would raise different considerations, but there is no suggestion of that, and certainly no evidence to support any such suggestion. If, however, Mr Brake wished to be relieved of the obligation to contact HMRC, and assuming no sufficient objection from the Guy Parties, then I would be willing to make an order requiring HMRC to disclose the information directly to the Guy Parties. But, in the meantime, I dismiss the application on the part of Mr Brake to extend the timetable by three weeks.

Costs: liability

• So far as costs are concerned, the Guy Parties seek their costs of the TPDO and the further application of 20 May from the third party, and on the indemnity basis. Alternatively, the Guy Parties seek their costs from Mr Brake, on the standard basis, in light of the formal opposition by him, and also in light of communications between the Brakes and the third party which I shall refer to later on. Mr Brake seeks an order that the Guy Parties pay his (and the third party’s) costs. The third party submits that there should be no order as to costs. As all the parties to this litigation know, costs are in the discretion of the court (CPR rule 44.2(1)). However, if the court decides to make an order about costs, the general rule is that the unsuccessful party in the proceedings pays the costs of the successful party: CPR rule 44.2(2)(a). But the court may make a different order: CPR rule 44.2(2)(b). In deciding whether to make an order and if so what, the court will have regard to all the circumstances, including the conduct of all the parties: CPR rule 44.2(4).

• The only costs rule expressly applicable to a TPDO is that contained in CPR rule 72.11, which provides:

“If the judgment creditor is awarded costs on an application for an order under rule 72.2 or 72.10 –

(a) he shall, unless the court otherwise directs, retain those costs out of the money recovered by him under the order; and

(b) the costs shall be deemed to be paid first out of the money he recovers, in priority to the judgment debt.”

But that rule tells me nothing about when costs should be paid by the judgment debtor or the third party.

• I am satisfied that the court should make an order about the costs of these applications. The general rule under rule 44.2(2)(a) requires the court to ascertain which is the “successful party”. In this context, it is clear that the court is normally not looking for the successful party on each of the issues which the court has dealt with. Issue-based costs orders are exceptional. Indeed, the rules make clear that, before considering any issue-based costs order, the court must first consider the practicability of making a proportion of costs order or a time-limited order: CPR rule 44.2(7). In the present case, there are in fact two separate applications, that of 17 March 2022 and that of 20 May 2022. But in my judgment they form part of a single enforcement proceeding, directed at satisfying the Court of Appeal costs liability by taking the remainder of Mr Brake’s pension fund. The second application was not made at the same time as the first application because it was a response to an objection subsequently made by the third party. In the first instance, therefore, I am looking for the successful party overall.

Who is the successful party?

• Here the Guy Parties say that they are the successful parties. They succeeded in obtaining an order that Mr Brake seek payment to him of the rest of his pension fund, and that a final TPDO be made in respect of that pension entitlement once liquidated. Mrs Brake on behalf of her husband accepts that the Guy Parties were the “winner”. The third party says that Mr Brake was the unsuccessful party, and that the Guy Parties obtained the relief which they sought. Accordingly, I infer that the third party accepts that the Guy Parties were the successful parties. However, the third party also says that it was “not an unsuccessful party”, and did not deny the Guy Parties the relief that they sought.

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