Reserved Judgments and timing of applications for costs

The recent case of Preston v Beaumont [2022] EWHC 440 (Ch), is an example of the court adopting a strict approach to the mandatory requirements of a practice direction. In this case the court was concerned with the interpretation of paragraph 4.4 of Practice Direction 40E when faced with a late application for costs following a reserved judgment and a failure to seek relief from sanctions.

The court had dismissed an appeal against the Orders of DDJ Mackenzie dated 25 February 2021 and 5 March 2021. The First Judgement was provided to the parties in draft on 2 February 2022, and minor corrections were received on 4 February 2022. Neither party requested a further hearing, and no applications were made. The first judgement was handed down on 8 February 2022.

The parties sought to agree costs, however, they were unable to do so. This meant that the terms of the Order had not been agreed and no sealed Order had been issued. The Appellant’s position was that no application for costs was made ahead of the handing down on 8 February 2022 and, under the terms of paragraph 4.4 of Practice Direction 40E, it was too late to do so.

The Respondent relied on three arguments: (1) in the case of Re Barrell Enterprises [1973] 1 WLR 19, a judge remained seised of a case until the order disposing of it is drawn up and sealed, and so continues to have the power to make orders on consequential matters;(2) the Respondent also stated that when the court asked whether a hearing was required to address consequential matters, no time frame was specified for a response; and (3) the Respondent acknowledged that “an application for a consequential order should be made by 12 noon the day before judgement is to be handed down”. However, because the court retained jurisdiction, the Respondent’s failure to comply with the time limits in paragraph 4.4 of Practice Direction 40E in making his application for costs was not fatal and the court could still deal with his application.

None of the Respondent’s arguments found favour with the judge who ruled that paragraph 4.4 is not framed in terms on what parties “should” do, it addressed what parties “must” do. The judge agreed with the Appellant that this was properly a question for a relief from sanctions and the Respondent had failed to make an application.  

Moreover, the Judge clarified that if the Respondent wanted to seek his costs, then an application should have been made within time permitted. As he had not done so, relief from sanctions was required, and he needed to explain the failure to comply with the practice direction, which was not done.

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