The High Court’s decision in Mannings Organisation Ltd v Joseph Henry Manning [2026] EWHC 1491 (KB) concerned the assessment of an interim payment on account of costs following an unsuccessful discharge application where overlapping issues with the main injunction application made it impossible to produce a statement confined to discharge costs alone.
Background
This judgment, handed down on 17 June 2026 by Andrew Kinnier KC sitting as a Deputy Judge of the High Court, dealt with a single issue: the assessment of the sum to be paid on account of costs by the defendant, Joseph Henry Manning (“Joseph Senior”), following the determination of a discharge application in proceedings brought by Mannings Organisation Limited and Mannings Amusements Limited (together, “the Claimants”).
The judgment should be read alongside two earlier decisions in the same proceedings: the judgment dated 14 May 2026 on the injunction and discharge applications ([2026] EWHC 1160 (KB)), and the consequential judgment dated 3 June 2026 ([2026] EWHC 1344 (KB)), which addressed costs, case management directions, and related matters. The costs order was made on 3 June 2026, following an earlier order on 18 May 2026.
By way of brief background, the proceedings involved an injunction application and a related discharge application brought by Joseph Senior. The discharge application was vigorously pursued and included serious allegations against the Claimants’ solicitors and counsel who had attended the hearing before Foster J on 2 December 2025. The discharge application was ultimately unsuccessful, and Joseph Senior was ordered to pay the Claimants’ costs of that application.
The Claimants were represented by Richard Power KC, instructed by Greenwoods Legal Services Limited. Joseph Senior was represented by Thomas Grant KC and Hugh Jeffery, instructed by Boodle Hatfield.
At the consequential hearing, the Claimants had not served a statement of costs dealing exclusively with the discharge application. They were therefore directed to file and serve such a statement by 4 p.m. on 3 June 2026, with Joseph Senior permitted to serve brief written submissions in response by 4 p.m. on 5 June 2026. Mr Power KC then sought and was granted permission to respond to Joseph Senior’s submissions, lodging his note on 8 June 2026. The statement of costs was re-sent on 9 June 2026, as it had not initially reached the judge. The matter was then determined on the papers.
Costs Issues Before the Court
The court was required to determine two related but distinct questions. First, what costs had the Claimants actually incurred in relation to the discharge application, given that those costs could not be cleanly separated from the broader costs of the litigation. Second, what reasonable sum should be ordered to be paid on account of those costs, in accordance with CPR 44.2(8).
The difficulty in answering the first question arose from the nature of the proceedings. The injunction and discharge applications, while formally distinct, shared a number of overlapping issues, particularly the heavily contested questions of whether there was a serious triable issue and whether full and frank disclosure had been given to Foster J at the without notice hearing on 2 December 2025. Because of this overlap, the Claimants’ solicitors took the view that it was not possible to produce a statement of costs dealing exclusively with the discharge application. Instead, they submitted a statement setting out the Claimants’ total costs of the proceedings (£165,355.84) and sought to apportion a percentage of those costs to the discharge application.
The second question required the court to apply the principles governing interim payments on account of costs, as set out in CPR 44.2(8) and elaborated upon in Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm). A further contextual factor was the imminence of the trial, which was listed in a window commencing 20 July 2026.
The Parties’ Positions
The Claimants’ position
The Claimants acknowledged that it was not possible to distinguish the costs of the discharge application from the other costs of the litigation. They submitted a statement of costs covering all costs incurred in the proceedings (£165,355.84) and put forward 40% of that total as a good faith estimate of the costs attributable to the discharge application, producing a figure of £66,142.34.
Mr Power KC provided a more granular breakdown in support of that estimate. He submitted that it was appropriate to allocate half of counsel’s brief fee (£16,250) and other fees for advice and documents (£8,000) to the discharge application, together with half of the solicitors’ attendance time (£6,000) and the full costs of preparing the witness statement of Mr Wallis (£11,160). That produced a sub-total of approximately £40,000, representing roughly one quarter of the total costs of the proceedings. When attendance costs and other items were factored in, the Claimants’ solicitors’ estimate of 40% was said to be fair.
On the question of the payment on account, the Claimants submitted that 75% of the incurred costs was a reasonable figure. It was said that the discharge application had been hard fought, that the Claimants’ solicitors had sought to delegate work where appropriate to non-Grade A fee earners, and that the costs of preparing Mr Wallis’ statement had been reasonably incurred given the need to respond to serious allegations. A discount of 25% was said to be more than sufficient to address any criticisms raised by Joseph Senior.
Joseph Senior’s position
On behalf of Joseph Senior, Mr Grant KC and Mr Jeffery submitted that the Claimants’ statement of costs was not confined to the discharge application and impermissibly covered all costs incurred between 3 December 2025 and 3 June 2026. The statement sought the application fee for continuation of the injunction application, which was said to be symptomatic of the Claimants’ deliberate decision not to assist the court by providing a statement confined to the discharge application but instead to claim all their costs of the proceedings.
Joseph Senior’s submissions identified the same two questions. On the applicable legal principles, reliance was placed on Christopher Clarke LJ’s review of the authorities in Excalibur, and in particular the proposition that where there is doubt, it should be resolved in the paying party’s favour. It was also submitted that the imminence of the trial reduced the prejudice to the Claimants of having to wait for a general reckoning on costs, and that this was therefore not a case where a generous interim payment was warranted.
On the costs incurred, Joseph Senior’s primary submission was that the Claimants had done little to distinguish between the costs of the discharge application and the broader litigation costs. While some items could safely be attributed to the discharge application, such as the costs of preparing Mr Wallis’ statement (£11,160), others could not. It was submitted that 20% of the costs of the return hearing (assessed at £70,000) could reasonably be apportioned to the discharge application, producing a sub-total of £14,000. Adding the costs of Mr Wallis’ statement gave a best estimate of £25,160.
On the payment on account, Joseph Senior submitted that the Claimants’ costs were likely to be substantially reduced on assessment, with a recovery of between 50% and 60% being realistic. Taking the lower end of that range, the appropriate payment on account was said to be 50% of £25,160, namely £12,580 including VAT.
The Court’s Decision
Preliminary observations
The court addressed two preliminary points before turning to the substance. First, the suggestion that the Claimants had deliberately failed to assist the court by not providing a statement confined to the discharge application was rejected. As the Claimants’ solicitors had explained, the costs of the discharge application could not be satisfactorily separated from the other costs of the litigation. The decision to provide a statement of total costs with an apportionment was described as a pragmatic and reasoned one.
Second, the court noted the vigour with which the discharge application had been pursued on Joseph Senior’s behalf and the seriousness of the allegations made against the Claimants’ solicitors and counsel. Preparation of the Claimants’ response would necessarily have required their solicitors and counsel to review the documents in detail, to consider the draft witness statement and to give advice. Although the injunction and discharge applications were distinct, some points were inevitably relevant to both. That was especially so in relation to the heavily contested and linked questions whether there was a serious triable issue and whether full and frank disclosure had been given to Foster J.
Joseph Senior’s submission that only 20% of the Claimants’ total costs were properly attributable to the discharge application did not, in the court’s judgment, fairly reflect the seriousness of the allegation which he made, the substance of the work that would be required to respond, the nature of the issues arising in the discharge application or their connection with the substance of the injunction application. In these circumstances, Joseph Senior’s proposal that the allowed percentage of costs should be assessed by reference to the proportion of his skeleton argument that dealt with the discharge application was an unreliable way to assess the costs incurred.
Costs incurred
Having regard to the vigour with which Joseph Senior pursued the discharge application and the seriousness of the allegations which were made on his behalf, the court considered it reasonable to proceed on the basis that half of counsel’s fees (both for the return hearing and the associated work advising in conference and on documents) should be allocated to the discharge application. Similarly, half of the solicitors’ attendance time could be fairly assigned to that application. The costs of preparing Mr Wallis’ statement were exclusively concerned with the discharge application. Therefore, the costs incurred in respect of work which could be safely attributed to the discharge application was approximately £40,000, that is to say, very roughly 25% of the Claimants’ total costs of the litigation.
The costs of attendances on counsel and client, correspondence with the other side, work on the hearing bundles and work on counsel’s skeleton argument on the discharge application could not now be allocated between the discharge application and other litigation costs. In those circumstances, some caution should be exercised in reaching a view about how much of the Claimants’ total costs should be allocated to the discharge application. Doing the best it could and having regard to the nature and substance of the issues arising, the court allowed 10% of the total cost in relation to those items of work.
Therefore, 35% of the Claimants’ total costs were attributable to the discharge application, namely £57,874.44.
Payment on account
The court is required to determine a reasonable sum under CPR 44.2(8). As Christopher Clarke LJ found in Excalibur, a reasonable sum on account of costs will be an estimate dependent on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and so there is an element of uncertainty, the extent of which will differ widely from case to case as to what will be allowed on detailed assessment.
At paragraphs 23 and 24 of the Excalibur judgment, Christopher Clarke LJ explained that a reasonable sum would often be one that was an estimate of the likely level of recovery subject to an appropriate margin to allow for error in the estimation. That can be done by taking the lowest figure in a likely range or making a deduction from a single estimated figure or perhaps from the lowest figure in the range if the range itself is not very broad. In determining the amount, account needs to be taken of all the relevant factors including the likelihood, if it can be assessed, of the claimants being awarded the costs that they seek or a lesser and, if so, what proportion of them; the difficulty, if any, in recovering costs; the likelihood of a successful appeal; the parties’ means; the imminence of any assessment; any relevant delay and whether the paying party will have any difficulty in recovery if there is an overpayment.
There were, in the court’s judgment, two principal factors in assessing a reasonable sum in this case: the difficulty distinguishing the costs of the discharge application from the broader costs of the litigation and the imminence of the trial (to be heard in a window starting on 20 July 2026). As to the former, a balance needed to be struck between the difficulty identifying the costs that were truly attributable to the discharge application and the cautious approach already taken to determining the costs incurred in dealing with it. As to the latter, the expedited trial meant that the parties would not have to wait long for detailed assessment and some weight should be attached to that consideration.
For the sake of completeness, the court noted that Mr Grant KC and Mr Jeffery did not rely upon the likelihood of a successful appeal, any argument based on the parties’ financial resources or any potential difficulty recovering any overpayment from the Claimants as factors which may be relevant to increasing the discount that should be applied in assessing a reasonable sum to be paid on account.
Having regard to all the relevant circumstances (including the absence of any costs budgets), it was likely that the Claimants would recover between 65% and 75% of their costs of the discharge application. Bearing in mind that some allowance for error of estimation should be made, the payment on account should be calculated by reference to the lowest end of that range, namely 65% of the Claimants’ incurred costs. For the sake of convenience, the sum due was rounded down to £37,600.
Conclusion
Joseph Senior was ordered to pay the sum of £37,600 on account of the Claimants’ costs of the discharge application by 4 p.m. on 6 July 2026.
▶ Watch the case summary
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