Interim Payment and Security for Costs (Syllabus 16)

Question 1

Who can apply for an order for interim payment?

Answer 1

the claimant

Question 2

When can a claimant apply for an order of interim payment?

Answer 2

after the period for filing an acknowledgment of service has finished

Question 3

What is the procedure for applying for interim costs?

Answer 3

(1) a copy of an application notice for an order of interim payment must be served at least 14 days before the hearing of the application; and
(2) be supported by evidence

Question 4

What must the respondent do if he wishes to rely on written evidence?

Answer 4

(1) file the written evidence; and

(2) serve copies on every other party to the application at least 7 days before the hearing of the application.

Question 5

If the applicant wishes to rely on evidence in reply to the respondent’s evidence what must he do?

Answer 5

(1) file the written evidence; and
(2) serve a copy on the respondent
at least 3 days before the hearing of the application

Question 6

What form can interim payments take?

Answer 6

one sum or instalments

Question 7

What conditions need to be satisfied for an order of interim payment to be made?

Answer 7

(1) the defendant has admitted liability to pay damages or some other sum of money
(2) the claimant has obtained judgment against that defendant for damages
(3) it is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money
(4) the following conditions are satisfied:
(a) the claimant is seeking an order for possession of land; and
(b) the court is satisfied that the defendant would be held liable to pay a sum of money for the defendant’s occupation and use of the land
(5) in a claim in which there are two or more defendants:
(a) the court os satisfied that if the claim went to trial, the claimant would obtain judgment for a substantial sum of money.
(b) a defendant whose liability will be met by an insurer
(c) a defendant that is a public body.

Question 8

What must the sum of interim payment be?

Answer 8

the court must not order interim payment of more than a reasonable proportion of the likely amount of the final judgment

Question 9

What must the court take into account when ordering interim payment?

Answer 9

(1) contributory negligence; and

(2) any relevant set-off or counterclaim

Question 10

What powers does the court have once an interim payment has been ordered?

Answer 10

(1) the court can make an order to adjust the interim payment
(2) the court may order all or part of the interim payment to be repaid, vary or discharge the order for the interim payment, order a defendant to reimburse another defendant who made an interim payment.

Question 11

Do the party’s have to apply for an order to vary the interim payment?

Answer 11

No the court can make an order without an application by any party when it disposes of the claim or any part of it

Question 12

What happens where the court makes an interim payment and the amount is more than the parties total liability?

Answer 12

the court may award him interest on the overpaid amount from the date when he made the interim payment

Question 13

What are the restrictions on disclosure of an interim payment?

Answer 13

the fact that a defendant has made an interim payment, whether voluntarily or by court order shall not be disclosed to the trial judge until, all questions of liability and the amount of money to be awarded have been decided unless the defendant agrees.

Question 14

Who can apply for security for costs?

Answer 14

a defendant

Question 15

What must support an application for security for costs?

Answer 15

written evidence

Question 16

What will the court do when it makes an order for security of costs?

Answer 16

(1) determine the amount of security; and

(2) direct the manner in which and the time within which the security must be given

Question 17

What conditions must be satisfied for an order for security for costs?

Answer 17

(1) the court must be satisfied having regard to all the circumstances of the case that it is just to make an order; and
(2) one or more of the other conditions applies

Question 18

What are the other conditions that must be satisfied for security for costs?

Answer 18

(1) the claimant is resident out of the jurisdiction but not resident in a State bound by The Hague Convention
(2) the claimant is a company or other body and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so
(3) the claimant has changed his address since the claim was commenced with a view to evading the consequences of litigation
(4) the claimant failed to give his address in the claim form or gave an incorrect address in that form.
(5) the claimant is acting as a nominal claimant and there is reason to believe that he will be able to pay D’s costs
(6) the claimant has take in steps in relation to his assets that would make it difficult to enforce an order for costs against him

Question 19

What are the two pre-requisites for an order of security of costs?

Answer 19

(1) that having regard to all the circumstances of the case, it is just to make an order; and
(2) one or more fo the conditions in r.25.13 applies, or an enactment permits the court to require security for costs.

Question 20

If the same issues arise on a counterclaim and claim in the same proceedings what might the court do?

Answer 20

exercise their discretion and refuse to order security for costs

Question 21

What propositions are well established when determining whether an order for security of costs should be made against a counterclaiming defendant?

Answer 21

(1) an order for costs against a counterclaiming defendant should not ordinarily be made if all the defendant is doing is to defend himself
(2) the question is to ask “whether in the particular case the counterclaim is a cross-action or operates as a defence”
(3) an order for security against a counterclaiming defendant is not precluded because the counterclaim arises out of the same transaction as the claim.

Question 22

When can security for costs be ordered against a company or other incorporated body?

Answer 22

where there is reason to believe that it will be unable to pay the applicant’s costs if ordered to do so.

Question 23

What must be shown to establish condition c?

Answer 23

there is reason to believe that it will be unable to pay the defendants costs if ordered to do so, applicants will fail to establish ground c is they cannot adduce sufficient evidence to give the court reason to believe this statement.

Question 24

What discretionary factors might the court take into account when condition (c) is relied on?

Answer 24

(1) whether the claimant’s claim is bona fide and not a sham
(2) whether the claimant has a reasonably good prospect of success
(3) whether there is an admission by the defendants inter defence or elsewhere that money us due
(4) whether there is a substantial payment into court or an open offer of a substituted amount.
(5) whether the application for security was being used oppressively
(6) whether the claimant’s want of means has been Brough about by any conduct bu the defendant
(7) whether the application for security is made at a late stage of the proceedings.

Question 25

What is the threshold of the test for condition (c)?

Answer 25

it is lower than the balance of probabilities- the court does not have to reach a conclusion as to whether or not the company will be able to pay.

Question 26

Who can condition (g) apply to?

Answer 26

claimants but also defendants in Part 20 claims.

Question 27

What is the purpose of condition (g)?

Answer 27

to prevent injustice to a defendant where the assets available to enforce any order for costs they obtain have been or are being put beyond the reach of enforcement.

Question 28

What evidence must support an application for interim payment?

Answer 28

(1) the sum of money sought
(2) the items or matters for which interim payment is sought
(3) the sum of money for which final judgment is likely to be given
(4) the reasons for believing that the conditions set out in rule 25.7 are satisfied
(5) any other relevant matters