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Bad behaviour not good grounds to stay costs order: Raja v Van Hoogstraten and others

The High Court’s decision in Raja v Hoogstraten and others, and in particular the claimant’s application to set aside a previous costs order made in favour of the defendants pursuant to CPR 40.8A, highlights the circumstances and grounds required to set aside an order under CPR 40.8A, yet fails to provide real clarity for the profession.

CPR 40.8(A) says:

“Without prejudice to rule 83.7(1), a party against whom a judgment has been given or an order made may apply to the court for-
(a) a stay of execution of the judgment or order; or
(b) other relief
on the ground of matters which have occurred since the date of the judgment or order, and the court may grant such relief, and on such terms, as it thinks just”.

The court, within the same judgment, had dismissed applications from the defendants seeking three orders. Practitioners may want to read paragraphs 1-52 to obtain the background and, in particular, references to the defendants’ “bad behaviour”.

It should also be noted that the court had no previous authorities before it on the application of this brief rule, which is surprising considering what the intention of the rule is.

By order dated 26 February 2018, the defendants had obtained an order for costs against the claimant. At paragraph 2, the claimants were ordered to pay one third of the defendants’ costs, with paragraph 3 providing that the claimant paid £35,000 on account of those costs by 26 March 2018. At the time of the claimant`s application on 29 August 2018, nothing had been paid to the defendants.

On 25 June 2018 and 20 July 2018, the court ordered interim stays of the orders for costs on the grounds that it appeared that the second to seventh defendants wished to take steps to enforce orders in their favour, while at the same time flouting orders which had been made against them.

The claimant applied for a permanent, not temporary, stay. The court took the view that, absent an appeal against the costs orders, this was akin to an application to set aside the costs orders made. There was some consideration of the court’s power to set aside an order because of new events, but it was not argued by the claimant that this was applicable here.

Having ordered an interim stay on the grounds that the defendants “regard themselves as beyond the reach of the court when it came to adverse orders” (paragraph 61), the court concluded that it would not grant a stay of the costs orders under CPR 40.8(A) on the grounds that the defendants “have to date failed to comply with orders binding upon them”. The court lifted the interim stays.

A major factor in this decision appears to be that the claimant had not suffered any loss and there was no intent to injure the claimant.

This case shows that each case will be determined on its own facts and it appears that the reasons must be very exceptional in nature. The decision clearly leaves open the question as to what constitutes good grounds to persuade the court to set aside an order.

Just because, as here, the defendants have had their conduct criticised to the extent that the court has applied an interim stay does not necessarily mean that the test is satisfied.

Paul Bracewell is a costs lawyer, a council member of the Association of Costs Lawyers, and accredited civil and commercial mediator with Bracewell Costs.

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