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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Musst Holdings Ltd v Astra Asset Management UK Ltd & Anor [2025] EWHC 689 (Ch) (20 March 2025) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2025/689.html Cite as: [2025] EWHC 689 (Ch)

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IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
Business List (ChD)

		Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL
		20 March 2025

This judgment was handed down remotely by circulation to the parties or their representatives by email. The date and time for hand-down is deemed to be 2pm on 20 March 2025.

MASTER PESTER :

1. By application dated 24 January 2024, the Defendants (Astra Asset Management UK Limited and Astra Asset Management LLP, which I will refer to collectively as "Astra"), applied for security for costs. The Claimant, Musst Holdings Limited ("Musst") is a BVI company. Musst accepted that in principle the gateway for an award of security for costs was established, because it was resident out of the jurisdiction and not resident in a state bound by the 2005 Convention or a Regulation State. Musst had, however, obtained a litigation insurance policy ("the Policy") which it submitted provided a complete answer to the security for costs application. Astra raised a number of objections with regard to the Policy.
2. In a reserved judgment reported at [2024] EWHC 2310 (Ch) I rejected most of Astra's objections. I do not need to set out all the points decided in that judgment, although I refer to it here by way of background. There has been no appeal against that judgment. However, my judgment left outstanding two inter-related issues. The first was the quantum of any security to be provided to Astra, taking into account the existence of the Policy. The second was what should happen with the sum of £180,000 presently held in Court to the credit of Musst. These funds represent part of the amount ordered to be paid by Astra to Musst in previous litigation between the parties, Mr Justice Freedman having held that the £180,000 currently standing in Court to the credit of Musst should stand as security for costs in this action "up to and including the costs and case management conference".
3. The parties' rival submissions were as follows. Musst submits that, as the Court determined that the Policy provides protection to Astra in the context of the application for security, the sum of £180,000 should now be paid out to Musst. The sum of £180,000 was intended to take Astra up to hearing of the Costs and Case Management Conference ("the CCMC"), when costs would be budgeted and the matter could be reviewed. The CCMC took place in October 2024, but the question of costs budgeting was deferred to a further hearing held on 19 December 2024. At that hearing, I budgeted Astra's future costs in the sum of £871,706.80; and Astra's incurred costs, as at that hearing in December 2024, were £550,274. This makes for a total of £1,421,981.80. Musst has since confirmed in correspondence that the limit of indemnity in the Policy "is increased to £1,245,000".
4. On the other hand, Astra says it is entitled to ask for 100% of its approved budget (of £1,421,981.50) by way of security for its costs. The revised Policy fails to provide cover for this amount. Instead, it provides for roughly 87.5% of the approved costs budget.
5. In response, Musst says that one must take into account the reality of the situation, which is that Astra's costs would inevitably be reduced following detailed assessment. It was submitted that, in relation to Astra's incurred costs of £550,000, the Court should proceed on the basis that, even if Astra turns out to be successful following trial, a working hypothesis would be that about 65% of those costs would be recovered following detailed assessment on the standard basis, or about £357,500; and in relation to the budgeted costs of £871,706.80 perhaps 90% of that figure would be recovered at trial, or about £785,000. If those two figures are added together one comes to a sum of about £1,142,500. The revised figure in the endorsement to the Policy is £1,245,000, in excess of the amount which Astra is likely to recover, assuming it is successful at trial and assuming that costs would be reduced in line with the deductions set out above. The £180,000 is money which belongs to Musst. It was only to be held in Court as in effect a stop-gap measure up to the time of the CCMC.
6. Neither party cited any authorities to me as bearing directly on my decision. The notes to the White Book, vol. 1 at 25.12.7, provide that the amount of security awarded is in the discretion of the Court, which will fix such sums as it thinks just, having regard to all the circumstances of the case. In a case in which a costs management order has been made, the defendant's approved or agreed costs budget "… will be a strong guide as to the likely costs order to be made after trial, if the claim fails; this budget should be used as the relevant reference point …" (citing Sarpd Oil International Ltd v Addax Energy SA [2016] EWCA Civ 120, at [52]).
7. The following factors are at play:

(1) Astra complained that Musst has issued no formal application for the release of the £180,000. I do not think that this is a strong objection, in the circumstances where there have now been several hearings at which the question of the payment out of the £180,000 has been raised, and where the order of Mr Justice Freedman originally provided that the £180,000 was to be held in Court up to the CCMC.

(2) Turning to the substance of the issue, on the one hand Astra must not be over-secured. The £180,000 represent Musst's monies, to which it is prima facie entitled. However, Musst is a BVI incorporated company which has provided no evidence that it has any assets (apart from the speculative value of the claim which it is bringing in this litigation). As recorded in my earlier judgment, at [43(1)], Musst was content to accept for the purposes of the application for security that there was a risk of insolvency. Musst is also involved in separate litigation with another party, Matrix Receivables Limited, so there is clearly a risk of there being other adverse costs orders made against it. Astra stressed that the only way it is likely to be able to recover costs from Musst is by way of the Policy coupled with whatever remains in Court.

(3) In deciding the amount of security, I should take into account what is sometimes described as the "balance of prejudice": see Pisante v Logothetis [2020] EWHC 3332 (Comm) where Henshaw J explained that the Court can carry out a comparison between the harm the applicant (here Astra) would suffer if too little security is given and the harm the claimant would suffer if the amount secured is too high. The balance "usually" favours the applicant, because an under-secured applicant will be unable to recover the balance of the costs which is unsecured whereas, if the applicant is not subsequently awarded costs, or if too much security is given, the claimant may suffer only the cost of having to put up the security, or the excess amount of security, as the case may be.

(4) In this case, Musst has not evidenced that it has any immediate and pressing need for the monies in Court (for example to pay ongoing legal fees).

(5) Costs budgeting is not an exact science. There may need to be further steps in the litigation which were not envisaged when the budgets were prepared. Further, the percentages of the costs which Astra might recover following a detailed assessment, which I set out above, at paragraph 5, can only be rough indicators, rather than hard and fast rules. In particular, the suggested figure of 65% for incurred costs following a detailed assessment seems to me, if anything, to be on the low side.

(6) Finally, I take into account the fact that, as noted in my earlier judgment, at [55(4)] and [56], there remains the possibility that Astra could incur further costs which might not be covered under the Policy. Musst has explained, in a letter dated 24 October 2024, that any uncertainties had been comprehensively addressed. It seems to me that there remains at least the possibility of Astra's incurring further costs, not covered by the terms of the Policy, if the Policy were terminated, and Astra's application for further or alternative security was not disposed of within a 60 day period. Astra has suggested that those costs might be as high as £100,000. This seems to me an over-estimate, but I cannot entirely discount the possibility that, should the insurer terminate the policy, and Astra has to re-apply to Court, it is possible that there may be some further additional costs involved.

8. Taking all these factors into account, I rule that the sum of £75,000 should remain in Court to be available as security for costs, in addition to the existence of the Policy. The balance should now be paid out to Musst.
9. I would be grateful if the parties could prepare a minute of order reflecting the conclusion in this judgment.