Mills v Birchall & Anor

Mills v Birchall & Anor

The Court of Appeal held that the Chancellor correctly exercised his discretion in refusing to make a non-party costs order against the Receivers. The case was not outside the ordinary run of cases, there was no impropriety or unreasonableness, the Receivers were not the real parties, and Mr Mills should have sought security for costs if concerned about the Company's insolvency. The normal expectation is that a defendant in such circumstances will seek security for costs, not a non-party costs order against receivers.

Parties
Appellant/applicant: Peter Mills; Respondent: Robert William Birchall; Respondent: Barry Gordon Gilbertson
Jurisdiction
England and Wales
Judgment Date
18 April 2008
Procedural Posture
Civil Appeal / Appeal From Chancery Division Judgment on Non Party Costs Order Application
Outcome
Appeal dismissed
Legal Topics
Non Party Costs Orders, Receivership, Security for Costs, Agency of Receivers, Discretion in Awarding Costs
Civil Procedure Insolvency Costs Non Party Costs Orders Receivership Security for Costs Agency of Receivers Discretion in Awarding Costs

Case Brief

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Parties

Peter Mills

Appellant/applicant

Robert William Birchall

Respondent

Barry Gordon Gilbertson

Respondent

Procedural Posture

Civil Appeal / Appeal From Chancery Division Judgment on Non Party Costs Order Application

Legal Issues

  1. 1 Whether a receiver appointed under a bank charge can be ordered to pay costs to a successful defendant when the company is insolvent and the receiver caused the company to sue
  2. 2 Whether impropriety or unreasonableness is required for a non-party costs order against receivers
  3. 3 The relevance of the availability of security for costs in exercising discretion for non-party costs orders

Ratio Decidendi

The Court of Appeal held that the Chancellor correctly exercised his discretion in refusing to make a non-party costs order against the Receivers. The case was not outside the ordinary run of cases, there was no impropriety or unreasonableness, the Receivers were not the real parties, and Mr Mills should have sought security for costs if concerned about the Company's insolvency. The normal expectation is that a defendant in such circumstances will seek security for costs, not a non-party costs order against receivers.

Court Disposition

Appeal dismissed

Orders

  • No order for costs against the Receivers; Mr Mills remains an unsecured creditor of the Company for his costs