Indemnity Costs and the "Pay as You Go" Principle: Manek v Sintl Ventures Ltd [2026] EWHC 600 (Ch)
Solicitor & Client — 2026-01-15
HHJ Hodge KC awards indemnity costs of £109,577 summarily assessed, endorsing the Pay as You Go principle for interim application costs where defendants delayed then failed to attend.
Overview
Date: 15 January 2026
Judge: HHJ Hodge KC (sitting as a Judge of the Chancery Division)
Nature of Proceedings: Summary judgment in property sale dispute; costs
Key Issues:
- Indemnity costs for unreasonable conduct "falling outside the norm"
- The "Pay as you Go" principle for interim application costs
- Summary assessment of £109,577 despite defendants' absence
- Whether costs should be reserved to final determination
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The Facts
The claimant, Mrs Niranjali Manek, owned a property at 227 Western Road, London SW19. On 3 March 2025, she contracted to sell it to the first defendant, Sintl Ventures Ltd, a special purpose vehicle controlled by the second defendant, Muhammad Haroon Saeed. The buyer failed to complete because it could not raise the necessary funds. Mrs Manek served a valid notice to complete, time was made of the essence, and when the first defendant still failed to complete, she accepted the repudiation and rescinded the contract.
Despite the rescission, the first defendant applied for three unilateral notices against the property's title at HM Land Registry, preventing Mrs Manek from selling. She had already lost one sale and an associated investment opportunity. A further sale to SK Hub Limited, with a longstop completion date of 19 May 2026, was at risk.
On 14 August 2025, the claimant offered to place the deposit into an escrow account pending resolution of the dispute, provided the defendants withdrew the unilateral notice applications. The defendants refused and, four days later, applied for a third unilateral notice.
The claimant issued a summary judgment application on 21 August 2025. The defendants, through their solicitors Fladgate, delayed the hearing until January 2026. Then, on Monday 12 January — just two working days before the hearing — Fladgate wrote to the court confirming the defendants would not attend, would not be represented, and would not make submissions. They did not concede the application.
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The Summary Judgment
HHJ Hodge KC granted summary judgment. He was satisfied that the first defendant had no real prospect of defending the claim in relation to the unilateral notices, and there was no compelling reason for a trial on that issue.
The defendants had advanced two arguments for why the claimant had repudiated the contract:
First, that Mrs Manek repudiated by entering the property into auction. The judge rejected this. Mr Manek had made clear to the second defendant that if the first defendant completed, the property could be withdrawn from auction. Applying the test from Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168, there was no clear intention to abandon and altogether refuse to perform the contract. The defendants had in any event not accepted the alleged repudiation, instead seeking to negotiate extensions — a point reinforced by the authority of Cantt Pak Ltd v Pak Southern China Property Investment Ltd [2018] EWHC 2564 (Ch).
Second, that the notice of rescission was served prematurely. The judge found the defendants were "cherry-picking dates" — relying on postal deemed service for the notice to complete but fax/email service for the notice of rescission. On any consistent analysis, the claimant's rescission was valid.
The judge also confirmed, following Combe v Lord Swaythling [1947] Ch 625, that where a deposit is paid to a stakeholder (not the seller or seller's agent), the purchaser has no equitable lien over the property. The first defendant therefore had no proprietary interest capable of supporting a unilateral notice.
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Indemnity Costs: Conduct "Falling Outside the Norm"
The real interest for costs practitioners lies in HHJ Hodge KC's approach to costs. He was invited to assess costs on the indemnity rather than the standard basis, and agreed.
The judge identified a series of aggravating factors:
1. Spinning out the proceedings — The summary judgment application was issued on 21 August 2025. The defendants succeeded in delaying the hearing until 15 January 2026, a period of nearly five months.
2. Serious allegations against solicitors — Through Fladgate, the defendants made allegations of professional misconduct against both the claimant's conveyancing solicitors and her litigation solicitors, including reporting them to the Solicitors Regulation Authority over the release of the stakeholder deposit.
3. Refusing the escrow offer — Despite the claimant's offer to place the disputed deposit into escrow, the defendants refused and instead applied for a third unilateral notice.
4. Last-minute non-attendance — Having delayed the hearing for months, the defendants waited until Monday 12 January to inform the court they would not attend or make submissions on Wednesday 15 January. They did not concede the application. The judge noted they gave no explanation beyond vague references to "procedural, financial and wider commercial considerations."
The judge found this conduct was:
> "unreasonable to a high degree, and... falls outside the norm for commercial litigation of this kind."
The consequence was that issues of proportionality did not fall to be considered on the assessment, and any doubt as to entitlement to costs was resolved in favour of the claimant as receiving party.
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Summary Assessment: £109,577
The claimant submitted two costs statements: £4,525.50 for the extension application and £106,751.50 for the summary judgment application, both exclusive of VAT.
Hourly Rates
The claimant's solicitors, ARMA Litigation Ltd (based in Leeds), charged rates in excess of the recently uplifted guideline hourly rates for National 1 solicitors. The judge noted that the guideline rates are exactly that — a guideline:
> "Sitting, as I do, mainly in Manchester, which also attracts National 1 rate, the hourly rates claimed are not unusual for hard-fought commercial litigation of the present kind."
He was satisfied that the rates were reasonable given the nature of the litigation and the fact that the claimant's solicitors were "pitched against London-based solicitors charging at a far higher rate."
Hours and Conduct
The statement of costs showed substantial hours on attendance on opponents: over 19 hours at Grade A, 33 hours at Grade C, and over 25 hours at Grade D. The judge found this was a reasonable response to the defendants' conduct, which had included "lengthy correspondence addressing serious professional allegations of breach of the Solicitors Code of Conduct, and involving alleged ethical violations."
The Deduction
The only reduction was £1,700, representing the attendance and travel costs of a second Grade D fee earner at the hearing. The judge considered that where experienced specialist counsel had been instructed, one fee earner rather than two at the hearing was sufficient.
The total assessed figure: £109,577 (plus VAT if applicable).
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The "Pay as You Go" Principle
The defendants' solicitors wrote to the court on 14 January arguing that the "very significant levels of costs" justified reserving costs to the determination of the substantive claim. They raised no specific criticisms of the figures — only that they were "extraordinary" and would be "unchallenged" at the hearing.
HHJ Hodge KC rejected this in firm terms:
> "The philosophy of the Civil Procedure Rules, so far as interim applications are concerned, is one of 'Pay as you Go'."
He emphasised that the hearing was within the time allocation where summary assessment is "generally appropriate, and undertaken." The defendants could have attended to challenge costs but chose not to. It would be "entirely wrong" to defer assessment to a future occasion having regard to their conduct.
This is a valuable restatement of the principle that CPR policy favours prompt payment of interim application costs through summary assessment at the hearing, rather than reserving them to be swept up in a later detailed assessment or final determination. A party that elects not to attend cannot subsequently complain that costs were assessed in its absence.
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Procedural Interest: Summary Judgment Without a Defence
The judgment also addresses an interesting procedural question. Where summary judgment is sought on only part of a claim and no defence has been filed, what happens after the hearing?
Under CPR 24.4(4), a defendant need not file a defence before the hearing of a summary judgment application. But the judge held that this does not mean the claimant can immediately enter default judgment on the balance of the claim once the hearing concludes. Instead, under CPR 24.6(a), the court should give directions for the filing of a defence to the remaining claim. Without such directions, the claim is "left in limbo" with no prescribed time for a defence and therefore no default.
The judge directed the defendants to file any defence by 4pm on 30 January 2026 — 14 days plus one day to assimilate the order.
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Key Takeaways
Indemnity Costs Threshold
1. Unreasonable conduct must fall "outside the norm" — The court requires something beyond the ordinary run of hard-fought litigation. Here, the combination of delay, serious allegations, SRA complaints, rejection of a reasonable escrow offer, and last-minute non-attendance without concession collectively cleared the threshold.
2. Non-attendance is a choice with consequences — A party that elects not to attend a hearing cannot expect the court to defer assessment or reserve costs. The defendants' absence, after months of delay, reinforced the finding of unreasonable conduct.
3. No single factor is determinative — It was the cumulative effect of the defendants' conduct that justified the indemnity basis. Practitioners should catalogue each relevant factor when seeking indemnity costs.
Summary Assessment and "Pay as You Go"
4. Interim costs should be paid promptly — The CPR policy is clear: interim applications should be summarily assessed and paid. Reserving costs to a final determination undermines this policy and should not be permitted absent good reason.
5. Absence forfeits the right to challenge quantum — The defendants' letter raising concerns about "extraordinary" costs levels, without attending to argue the point, carried no weight. Practitioners who wish to challenge costs must attend.
6. Guideline hourly rates are a guide, not a cap — Rates exceeding the guideline can be justified by the nature and complexity of the litigation, particularly where the paying party's own solicitors were London-based and charging more.
Practical Points
7. Escrow offers matter — The claimant's willingness to place the deposit into escrow was a factor in the indemnity costs finding. Unreasonable refusal of a pragmatic solution weighs against the refusing party.
8. SRA complaints as a litigation tactic will be scrutinised — Making regulatory complaints about opposing solicitors during litigation, as part of a broader pattern of obstructive conduct, can contribute to an indemnity costs order.
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Conclusion
Manek v Sintl Ventures Ltd is a useful authority on the threshold for indemnity costs in commercial property litigation, and a clear endorsement of the "Pay as you Go" principle. The judgment illustrates that a party who delays proceedings for months, makes serious professional allegations, refuses pragmatic settlement proposals, and then declines to attend the hearing — without conceding — can expect to face indemnity costs, summarily assessed, with only the most modest reductions.
For costs lawyers advising on interim applications, the case reinforces the importance of attending hearings where costs are at stake. A letter raising generalised concerns about the level of costs, without specificity or attendance, will not persuade the court to defer assessment. The paying party must engage — or accept the consequences.
The summary assessment of £109,577, with only a £1,700 reduction from the claimed figure, also demonstrates that where indemnity costs are awarded and the receiving party's schedule is properly particularised and certified, the court will apply minimal scrutiny beyond basic reasonableness. This should focus minds on the costs risk of obstructive conduct at interim application stage.
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Citation: Manek v Sintl Ventures Ltd & Anor [2026] EWHC 600 (Ch)
Full judgment available at: BAILII
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