A FINAL COSTS ORDER IS JUST THAT

By Bronia Hartley

 

Clutterbuck & Anor v Al Amoudi Ch D (Murray Rosen QC) 15/2/2017

CPR r.3.1(7) gives the court a general power to vary or revoke an order, but does this extend to a final order?

In Roult v North West Strategic Health Authority [2010] 1 W.L.R. 487; [2009] EWCA Civ 444; [2009] P.I.Q.R. 18, the Court of Appeal gave guidance as to the court’s power to vary or revoke an order under CPR 3.1(7):

The grounds for invoking the power generally fall into one or other of two categories: (i) the original order was made on the basis of erroneous information (whether accidentally or deliberately given); and (ii) subsequent events, unforeseen at the time the order was made, have destroyed the basis on which is was made.  In the context of case management decisions, further developments as to information or events may well justify variations in any orders previously given.  However, proof of facts establishing either category may not justify any variation or revocation of a final order.  This is because r.3.1(7) does not give judges, in effect, power to hear an appeal from themselves in respect of a final order relating to the whole or part of a claim.

Though often cited as authority for the proposition that an order can be revoked or varied if there has been a material change of circumstances since the order was made, or where the facts had been misstated, Tibbles v SIG Plc (t/a Asphaltic Roofing Supplies) [2012] EWCA Civ 518 underlines the interest of justice of the finality of orders by suggesting that successful implementation of the rule was rare.

In so far as final orders are concerned, the grounds for variation or revocation without an appeal would have to be utterly exceptional. Indeed, in Enron (Thrace) Exploration & Production BV v Clapp (No.2) [2005] EWCA Civ 1511 it was held that once a judgment has been perfected it is final and can only be challenged by appeal or by an application to have it set aside.

In the case of Clutterbuck & Anor v Al Amoudi (2017) the court reaffirms that the power to vary or revoke an order under CPR r.3.1(7) does not extend to final orders.

The claimants applied under CPR r.3.1(7) to revoke an order requiring that they pay the defendant’s costs. The trial had concerned alleged joint ventures and other business dealings between the parties.  During the proceedings the defendant had made representations that she was from a wealthy background in Saudi Arabia, was married to a member of the Saudi royal family and had fled the country amidst allegations that her future wellbeing was in danger.  The claimants refuted this, claiming that the defendant was in fact from a humble Ethiopian background and had taken on the false background to deceive them.  The court found that there were no joint ventures as alleged by the claimants and that no transactions had been entered into in reliance on the defendant’s alleged representations. Permission to appeal was refused.

The claimants included in the application for an order under CPR r.3.1(7) further evidence as to the defendant’s misrepresentations. They argued that in those circumstances they did not need to challenge the court’s earlier decision on its merits.  On the basis of their contention that the court had been fundamentally misled at the time on matters relevant to costs, they invited the court to review the costs order and consider what order, if any, would have been appropriate had the true facts been known.

The court held that the claimants’ application was wholly without merit. The exercise being contended for would involve a wholly unrealistic degree of review and re-speculation as to what would and should have happened as regards the background allegations that had been made.  When the claimants appealed the earlier judgement, the court had concluded that there was no real prospect that they would succeed in their case.  Although the claimants stated that they had further evidence regarding the defendant’s allegations, it did not persuade the court that the case was one where one of the conventional orders for overturning a judgment on the grounds of fraud could be used.  On the contrary, it reinforced the importance of the finality of orders. Were it necessary to decide the question of jurisdiction, the court would have held that the power to vary or revoke orders under r.3.1(7) was not applicable in the case of final orders.