• An appeal against a decision not to award the appellant’s costs in an application to set aside a statutory demand was granted by the High Court.
  • The Chief Registrar erred in restricting his discretion to whether the respondent was entitled to serve the demand, rather than considering the appropriateness of the respondent’s conduct.

At the time of the appeal, the respondent was claiming for fees owed by the appellant. The appellant was counter-claiming that advice provided amounted to professional negligence. On 11 May 2015, Arnold J awarded summary judgment for the respondent and ordered a stay. When permission to appeal was refused and the stay lifted by Rafferty J on 29 June 2015, the respondent served a statutory demand on the appellant.

On 16 November 2016 (the parties meanwhile agreeing to set aside the statutory demand) the Chief Registrar declined to order that the respondent pay the appellant’s costs. On 8 March 2017, the Court of Appeal allowed the appellant’s appeal against the summary judgment order.

The Decision

Barling J held that the Chief Registrar erred in not considering a material matter, namely whether the service of the statutory demand was “appropriate”. Consequently, the court considered the question of costs and exercised discretion afresh. In Barling J’s view, the respondent had acted unreasonably in serving a statutory demand before the oral permission application, and in not accepting the appellant’s offer to reserve costs until after her appeal. The appellant was awarded the costs of her application to set aside the statutory demand.

Dunhill v Hughmans (a firm) [2017] EWHC 2073 (Ch)