The background to the matter is summarised in our previous blog which considered the court’s extensive powers. These powers include the power to debar a party from making representations or otherwise participating in the proceedings pending compliance with an order for interim payment on account of costs.

In this case, the defaulting party, Oscar Trustee, had failed to comply with an order for interim payment on account of costs for over a year. As a result, MBS, having obtained a debarring order in the lower court, applied to the Court of Appeal for a similar order to debar Oscar Trustee from participating in the proceedings until it complied with the interim payment order.

The principles behind debarring orders were explained by the English Court of Appeal in Crystal Decisions (UK) Ltd v Vedatech Corp  and then subsequently in Michael Wilson & Partners Ltd v Sinclair et al. These principles were also recently relied upon in this jurisdiction in the lower court proceedings before Jack J wherein he debarred Oscar Trustee.

1. That the imposition of a sanction for non-payment of costs is a discretionary power.
2. That costs orders made payable within a specified time before the end of litigation serve to discourage irresponsible interlocutory applications or resistance to successful interlocutory applications.
3. All the relevant circumstances of the case including the availability of alternative means of enforcing the costs order.
4. Whether the defaulting party lacks the means to pay such that a debarring order would be a denial of justice.
5. Whether the defaulting party appears to have no or insufficient assets within the jurisdiction and has not adduced proper and sufficient evidence of impecuniosity.

1. Was in breach of the interim payment order for over a year and had proffered no reason for non-compliance.
2. Failed to provide detailed, cogent and proper evidence of its financial position.
3. Had no assets against which the interim payment order could be enforced.
4. Did not argue that it was inappropriate for the interim payment order to be made.
5. Had already been debarred from the lower court proceedings. The Court of Appeal held that Oscar Trustee’s conduct was egregious, contumacious and it was just and appropriate in the circumstances to make a debarring order.

This decision confirms that the court has extensive powers which it will exercise in appropriate circumstances to ensure compliance with its orders.

Harneys acts for the successful applicant, MBS.