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England and Wales High Court (Family Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> GS v L [2011] EWHC 2116 (Fam) (29 July 2011) URL: http://www.bailii.org/ew/cases/EWHC/Fam/2011/2116.html Cite as: [2011] EWHC 2116 (Fam) |
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This judgment is being handed down in private on 29th July 2011. It consists of 14 pages and has been signed and dated by the judge. The judge does not give leave for it to be reported.
The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.
FAMILY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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GS |
Applicant |
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- and - |
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L |
Respondent |
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Mr. Edward Boydell (instructed by Wilsons ) for the Respondent
Hearing dates: 28th, 29th, 30th, 31st March 2011, 14th June 2011, 23rd March 2011
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Crown Copyright ©
Mrs. Justice Eleanor King :
i) The wife sought an initial equal division of the assets but, given the uncertain state of the job market in Spain, sought an enhanced share of those assets by way of a lump sum to equate to 10 years of spousal maintenance. In the alternative she sought a joint lives maintenance order for herself. Further it was the wife's case that the husband's approach to the litigation had led to unnecessary costs being run up as a direct consequence of his alleged litigation misconduct and she sought to reclaim the following sums:
a) "Add backs" of £56,000 in relation to alleged overspending by the husband since separation together with a further £30,000 in relation to costs incurred by the wife in relation to "leave to remove" proceedings
b) An issue based costs order in relation to the alleged litigation misconduct on the part of the husband.
a) Having heard the two Spanish experts give evidence that the legal consequences of the CM were unclear and were likely to be controversial
b) In any event there was no evidence whatsoever, nor was it suggested by either party that the CM was entered into in circumstances where the parties intended the divorce court to give effect to the agreement
c) There was no mutual understanding between husband and wife in relation to the agreement: the husband believed it ring fenced his pre acquired assets the wife did not.
d) The CM provided the court with little or no assistance in carrying out the section 25 exercise
e) These were English proceedings taking place in England under English law
f) This was first and foremost a case about the proper provision or needs of the wife and children.
g) and taken from paragraph 7 of the judgment that : " unhappily as a consequence of the polarised position of the parties the matter has been heard over a period of five days in the High Court and evidence on Spanish law has been filed by no less than four experts (with the husbands expert flying over from Spain to give oral evidence). In addition the husband has had both English and Spanish lawyers to advise him. The costs are now in excess of £300,000".
The wife's application
a) The divorce proceedings: £274.00
b) In relation to the removal by the husband of the £1.25m from the Coutts joint account costs of £1,306.00
c) The maintenance pending suit hearings £15,258
d) The husband's failure to provide proper evidence of income: £8,270
e) The stay proceedings £3,10
f) H's approach to this litigation generally whereby the wife seeks an additional 50% of her costs
The Law
a) The costs regime:
(a)……….
(b) Whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) The manner in which the party has pursued or responded to the application or a particular allegation or issue.
(d)………..
(5) Subject to paragraph (6) the general rule in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of another party.
(6) The court may make an order requiring one party to pay the costs of another party at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them)
(7) In deciding what order (if any) to make under paragraph (6), the court must have regard to—
(a) any failure by a party to comply with these Rules, any order of the court or any practice direction which the court considers relevant;
(b) any open offer to settle made by a party;
(c) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(d) the manner in which a party has pursued or responded to the application or a particular allegation or issue;
(e) any other aspect of a party's conduct in relation to the proceedings which the court considers relevant; and
(f) the financial effect on the parties of any costs order.
b) The overriding objective
The overriding objective
1.1
(1) These rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly, having regard to any welfare issues involved.
(2) Dealing with a case justly includes, so far as is practicable –
(a) ensuring that it is dealt with expeditiously and fairly;
(b) dealing with the case in ways which are proportionate to the nature, importance and complexity of the issues;
(c) ensuring that the parties are on an equal footing;
(d) saving expense; and
(e) allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases.
Application of the overriding objective
i) In Charman v Charman [2006] 2 FLR 422 CA para [51], the Court of Appeal emphasised in particular FPR rule2.51D(2)(c) and the importance of 'proportionality' in cases of financial relief
ii) In Crossley v Crossley [2008] 1 FLR 1467 Thorpe LJ said
[13] ……I would particularly stress the overriding objectives that govern all these rules, carefully and fully drafted in r 2.51D. It is easy to attach this case on its facts to a number of the objectives there articulated. It is very important that the judge in dealing with the case should seek to save expense. It is very important that he should seek to deal with the case in ways proportionate to the financial position of the parties. It is very important, more so today than it was when these rules were drafted, that he should allot to each case an appropriate share of the court's resources, taking into account the need to allot resources to other cases. In his general duty of case management he is required to identify the issues at an early date and particularly to regulate the extent of the disclosure of documents and expert evidence so that they are proportionate to the issues in question.
"Under the new rules the court will only have power to make a costs order in ancillary relief proceedings when this is justified by the litigation conduct of one of the parties (see new rule 2.71 of the Family Proceedings Rules 1991.) When determining whether and how to exercise this power the court will be required to take into account the list of factors set out in the rules. The court will no longer be able to take into account any offers to settle expressed to be "without prejudice" or "without prejudice save as to costs" in deciding what, if any, costs orders to make.
3………………….
4 Parties who intend to seek a costs order against the other party in the proceedings to which rule 2.712 of the Family Proceedings Rules 1991 applies should ordinarily make this plain in open correspondence or in a skeleton argument before the date of the hearing".
In the present case the wife has made her intention to seek an order for costs abundantly clear from an early stage.
c) Issue based costs orders
Rule 44.3(6) to (9) of the CPR apply to an order made under this rule as they apply to an order made under rule 44.3 of the CPR.
(6) The orders which the court may make under this rule include an order that a party must pay –
a) A proportion of another parties cost;
b) A stated amount in respect of another parties cost;
c) Costs from or until a certain date only;
d) Cost before proceedings have begun;
e) Costs relating to particular steps taken in the proceedings;
f) Costs relating only to a distinct part of the proceedings;
g) Interest on costs from or until a certain date, including a date for judgment.
(7) Where the court would otherwise consider making an order under Paragraph 6 (f) it must instead if practicable, make an order under paragraph 6 (a) or (c)
"19. I must reflect that time taken upon a particular issue in oral evidence does not necessarily affect the time and money spent upon it in research and in preparation and I have in mind too that if I make an order issue by issue there will undoubtedly be disproportionate time taken up at the assessment stage in arguing as to whether this or that preparation or evidence went wholly, in part or not at all to one issue or another. I prefer to mark the degree, which I have accepted, to which time and money was spent unnecessarily or disproportionately by awarding the claimants only a proportion of their costs of the liability hearing. I hold the appropriate proportion to be 75%."
[13]. On the other hand if the party raises a discrete issue which involves very substantial costs, and upon which he fails, justice may require that he bear his costs and pay those of his opponent on the issue……
[14]. …..in this respect there is the practical problem that it may be very difficult for the costs judge to work out what costs are properly attributable to an issue. Such difficulty may well mean that the appropriate order is one under CPR 44.3 (6)(a)-(c). CPR 44.3(7) enjoins the court when considering making and order for payment of the costs of an issue to make an order under one of the sub paragraphs a – c of 44.3 (6) if practicable [16] even if in relation to a particular issue, it is appropriate to order the overall winning party to bear some of its costs or pay the overall loser some of his, the issue in question, such as quantum, may itself have contained a number of sub issues, in respect of which the proper incidence of costs is not straightforward. One sub issue on which the overall winner lost may have had significant monetary value but taken little time to determine; another may be one which was of a much lesser value but took more time. Another sub issue may be one on which the overall winner won."
[20] So the judge came to the conclusion that the right approach was to make an order based on the separate issues in the case: an order which he described as a split costs order or an issue-based order. That course was plainly open to him in an appropriate case; as appears from CPR 44.3(6) paragraph (f):
"(6) The orders which the court may make under this rule [rule 44.3] include an order that a party must pay –
(f) costs relating only to a distinct part of the proceedings."
[21] The first question, therefore, is whether the judge was entitled to proceed on the basis that this was a case which called for an issue based costs order. In my view, this case cried out for such an order. The issues which were fought and lost by Mr Kotonou included issues which, in the judge's view, should never have been raised at all: including issues on which the allegation of representation was dismissed on the basis that the representation had simply not been made. I would have been surprised if a judge, hearing a trial of this nature, had not reached a conclusion that this was an appropriate case for an issue based order. At the least, it is impossible to hold that this judge's conclusion that that was the correct approach was flawed in principle.
[22]CPR 44.3(7) requires that, where the court would otherwise consider making an order under paragraph (6)(f), it must instead, if practicable, make an order under paragraphs (6)(a) or (c) instead. Paragraph (6)(f), as I have indicated, is the power to make an issue-based costs order. Paragraph (6)(a) enables the court to make an order that one party pay a proportion of another party's costs. It is unnecessary I think to refer to paragraph (6)(c) in detail. The thinking behind rules (6)(f) and (7) is not difficult to understand. Separate assessments of the costs relating to individual issues are likely to be complex and expensive: difficult to carry out in circumstances in which there are common factors which spread over a number of issues. How should the costs of those common elements be apportioned between the separate issues? A more convenient method, while keeping in mind the issue based approach, is to assess all the costs together and then apply a proportion which reflects the fact that one party has won on some issues and has lost on the other issues. That is what the Costs Rules require.
[23]At paragraph 21 of his judgment this judge recognised that it would be difficult accurately to identify the separate costs occasioned by the separate issues. That is exactly the sort of case which the rule making body had in mind when it provided in paragraph (7) that, if practicable, the court must make an order under paragraph (6)(a). The judge indicated, in the first two sentences of paragraph 22 of his judgment, that he had decided to make a split order -- which in context meant an issue-based order as appeared from the last sentence of paragraph 20 -- but, to translate that split into simple percentages of the overall costs. That would obviate the need for a detailed assessment of the separate costs of each issue. That, as it seems to me, is not only a proper approach: it is the approach which is positively required by the Rules.
[24]The third question, then, was what proportions should be adopted in order to reflect the fact that the bank had won on some issues and Mr Kotonou on one of the issues; while recognising that overall Mr Kotonou was successful. The judge said this at paragraph 22:
"I think that I am well placed to translate the contribution of the issues on which Mr Kotonou lost and that on which he succeeded into broad percentages."
A judge who had heard nine days of argument and delivered the substantive judgment at the trial can be expected to be well placed to translate issues into percentages. Indeed, that is why costs are best dealt with by the trial judge.
i) decide whether or not this is a case calling for an issue based costs order
and if so
ii) make the order for costs, if practical under CPR 344.3(6) (a) or (c) by expressing the order by way of a percentage or that the costs are to run to or from a particular date.
Is this a case for an Issue based Costs Order?
i) It is agreed between the parties that the matter was in the High Court only because of the issues of Spanish law raised by the husband
ii) Shortly before the trial the husband issued proceedings to stay the English proceedings. This was an application always doomed to failure and was rightly withdrawn before trial. It not only led to unnecessary costs being incurred but also demonstrates the intractable mindset on the part of the husband.
iii) No less that 4 Spanish lawyers were engaged, two of whom gave evidence. The evidence they gave did not assist the court on any single relevant topic.
iv) Whilst the early stages of the trial were conducted before the Supreme Court ruling in Radmacher very significant expenditure was incurred after the judgment. In the circumstances of this case it is hard to see what justification there could have been in pursuing the argument in relation to the CM or in calling the Spanish evidence following the Radmacher judgment.
v) The husband's open position at trial was formulated not by the husband's English lawyers but by his Spanish lawyers. His offer was, he said in evidence, made in terms of what a Spanish court would have ordered. That open offer wholly failed to provide for the needs of the wife and the children (whose welfare is the first consideration of the court).
vi) On the third day of the trial the husband accepted that his proposals were not just inadequate but 'unfair' and for the first time approached the resolution of the case from an English law perspective. Once that was done, maintenance for the children was agreed.
vii) Had the case proceeded as it should, essentially as a 'needs' case to be determined under English law, I have no doubt that it could have been heard over two days in the Principal Registry.
a) has there been misconduct by a party that caused significant extra cost to the other party?
b) Has such conduct increased the other party's costs above the natural level of costs in an identifiable way?
c) Is it just to order the 'guilty' party to pay the other party's costs so incurred or does such an order risk making the overall result unfair