Tonstate Group Ltd and others v Wojakovski and others  EWHC 1004 (Ch)
Although to debar a party from participating in litigation is a draconian sanction, Zacaroli J confirmed in a judgment handed down yesterday that it is nevertheless the “default” response to a party’s failure to pay an interim costs order. If the respondent to a debarring application wishes to argue that he cannot pay and thus the sanction is too severe then he must adduce “detailed cogent and proper evidence” both of his own financial position and any ability to raise money from elsewhere.
Zacaroli J found here that the “substantial gaps” in the disclosure of bank statements demonstrated a manifest failure to meet that requirement. There was also a failure to deal with other potential sources of funds. A debarring order was therefore made. However, the Judge narrowed the scope of the debarring order so that it was specific to the proceedings in which the unpaid costs had been incurred and did not extend to a related action, being case managed alongside, which is due for trial in June.
The urgent hearings of the substantive application and consequentials (at which indemnity costs were awarded) took place over video conferencing and the large and hastily assembled trial bundle was entirely electronic.