Lazaros Panagiotis Xanthopoulos v Alla Aleksandrovna Rakshina
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mostyn |
| Judgment Date | 12 April 2022 |
| Neutral Citation | [2022] EWFC 30 |
| Docket Number | Case No: ZZ20D49528 |
| Court | Family Court |
[2022] EWFC 30
Mr Justice Mostyn
Case No: ZZ20D49528
IN THE FAMILY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The applicant husband appeared in person
Simon Calhaem (instructed by Family Law in Partnership) for the respondent wife
Hearing date: 30 March 2022
This judgment was delivered in private. The judge hereby gives permission – if permission is needed – for it to be published. The judge has made a reporting restriction order which provides that in no report of, or commentary on, the proceedings or this judgment may the children be named or their schools or address identified. Failure to comply with that order will be a contempt of court.
I have before me:
i) the husband's application for a further legal services payment order; and
ii) the wife's application to be released from an undertaking given on 15 June 2021 that pending determination of the husband's financial claims she would preserve and not deal with, charge or in any way diminish an account with Coutts (“the Coutts account”) and all sums contained therein (“the undertaking”). The Coutts account holds approximately £11 million.
Preliminary comments
The preparation for this hearing can only be described as shocking:
i) Paragraph 15 of the High Court Statement of Efficient Conduct of Financial Remedy Proceedings provides that skeleton arguments for interim hearings must not exceed 10 pages. The husband's skeleton argument ran to 24 pages and the wife's skeleton argument ran to 14 pages.
ii) Skeleton arguments were due by 11:00 on the working day before this hearing. Both parties filed late. The husband's skeleton argument was filed only on the morning of the hearing. The wife's skeleton argument was filed at around 17:30 the day before the hearing.
iii) Paragraph 18 of Sir Jonathan Cohen's order dated 15 March 2022 provided that the husband's statement was to be filed and served by 12:00 on 21 March 2022. The husband's statement is dated 22 March 2022. I do not know when it was filed, but I am told by the wife's representatives that it was only served on her on 24 March 2022.
iv) Paragraph 20 of that same order provided that the parties' statements to be filed and served for this hearing would be limited to 6 pages each with any exhibit accompanying the same limited to 10 pages (a total of 16 pages). The husband's statement ran to 11 pages and its exhibit ran to 15 pages (a total of 26 pages). The wife's statement also ran to 11 pages and its exhibit ran to 28 pages (a total of 39 pages).
v) FPR PD 27A paragraph 5.1 provides that unless the court has specifically directed otherwise that there shall be one bundle limited to 350 pages of text. I have been provided with four bundles respectively containing 579 pages, 279 pages, 666 pages, and 354 pages (a total of 1,878 pages).
This utter disregard for the relevant guidance, procedure, and indeed orders is totally unacceptable. I struggle to understand the mentality of litigants and their advisers who still seem to think that guidance, procedure, and orders can be blithely ignored. In Re W (A Child) (Adoption Order: Leave to Oppose) [2013] EWCA Civ 1177, [2014] 1 WLR 1993, paras 50–51, Sir James Munby P, having referred to “a deeply rooted culture in the family courts which, however long established, will no longer be tolerated”, continued:
“I refer to the slapdash, lackadaisical and on occasions almost contumelious attitude which still far too frequently characterises the response to orders made by family courts. There is simply no excuse for this. Orders, including interlocutory orders, must be obeyed and complied with to the letter and on time. Too often they are not. They are not preferences, requests or mere indications; they are orders.”
That was nine years ago. But nothing seems to change. In the very recent decision of WC v HC (Financial Remedies Agreements) [2022] EWFC 22 Peel J astutely pointed out at [1(i)]:
“Court Orders, Practice Directions and Statements of Efficient Conduct are there to be complied with, not ignored. The purpose of the restriction on statement length is partly to focus the parties' minds on relevant evidence, and partly to ensure a level playing field. Why is it fair for one party to follow the rules, but the other party to ignore them? Why is it fair for the complying party to be left with the feeling that the non-complying party has been able to adduce more evidence to his/her apparent advantage?”
It should be understood that the deliberate flouting of orders, guidance and procedure is a form of forensic cheating, and should be treated as such. Advisers should clearly understand that such non-compliance may well be regarded by the court as professional misconduct leading to a report to their regulatory body.
Costs
In his decision in Crowther v Crowther & Ors (Financial Remedies) [2021] EWFC 88 Peel J described the litigation between those parties as “nihilistic”. There the parties had run up costs of £2.3m in just over 2 years. They had argued “about almost every imaginable issue, no matter how trivial.”
I have struggled to find the language that aptly describes the exorbitance of the litigious conduct of the parties in the case before me since it began on 21 September 2020 when the husband filed his petition.
In the ensuing 18 months the parties have incurred costs in the extraordinary sum of £5,401,503. But that is not the end of the story. There are vast amounts of future costs in the pipeline.
In his further application for a legal services payment order the husband claims around £250,000 for his outstanding costs with his most recent set of solicitors. He also seeks for future costs:
i) £79,585 for an appeal hearing against the recent children judgment referred to below of Sir Jonathan Cohen (assuming he gets permission to appeal);
ii) £285,095 for a rehearing of the child proceedings (assuming he wins the appeal). This does not include the cost of a prefigured renewed application to recuse Sir Jonathan Cohen from any further dealings with the case;
iii) £233,295 being the costs between today and the First Appointment (i.e. to draft a questionnaire and attend the appointment); and
iv) £75,533 to enable him to fund his defence to a claim mounted by his former solicitors in respect of unpaid bills.
A total of £673,508. And this would only take him up to the conclusion of the First Appointment.
The wife does not give figures for categories (i), (ii) and (iv). She estimates that she will spend £96,732 on the Part III claim to the First Appointment. It is reasonable to suppose that if the husband were to be granted permission to appeal the children judgment that the wife would incur costs of the same order as those anticipated by him for categories (i) and (ii).
The total future costs of both parties thus range between £330,000 (if permission to appeal is refused) and about £1,135,000 (if permission to appeal is granted, the appeal allowed and the children case reheard).
The cost of an FDR and a full trial of the Part III claim would probably not be less than £750,000 per side, given the extraordinary rate they have incurred costs at hitherto. So the total future costs are likely to be somewhere between £1.8m and £2.6m.
Thus, we are looking at the total cost of the litigation between these parties being somewhere between £7.2 million and £8 million, of which £5.4 million has already been incurred.
Figures like this are hard to accept even in a conflict between the uber-rich, but in this case the wife's Form E discloses two properties in London each worth about £5 million and a sum of about £11 million in the Coutts account. There are predictable disputes as to the true beneficial ownership of one of the properties and of the sum in the Coutts account. The wife also discloses properties in Siberia worth a little over £1 million. The husband, who has next to nothing in his name, says that this is an entirely false presentation and that the wife is correctly ranked by Forbes as the 75 th richest woman in Russia, with vastly valuable interests in supermarkets in Siberia. Even if this were true (and the suggestion is hotly contested) to run up in domestic litigation costs of between £7 million and £8 million is beyond nihilistic. The only word I can think of to describe it is apocalyptic.
It is difficult to know what to say or do when confronted with such extraordinary, self-harming conduct. Periodically the judges bemoan the heedless incurring by divorcing parties of huge costs. What was regarded in 1996 as gross costs inflation was the principal driver for the ancillary relief pilot scheme of 25 July 1996: Practice Direction [1996] 2 FLR 368. In 2014 in J v J [2014] EWHC 3654 (Fam), [2016] 1 FCR 3 I exploded with indignation at the rate and scale of costs incurred in that case and solemnly pronounced that “something must be done”. With the benefit of hindsight those costs – a total of £920,000 – now seem almost banal. The rules have been changed so that orders have to record the costs incurred and to be incurred (see FPR 9.27(7)). Para 4.4 of FPR PD 28A has been introduced to try to force parties to negotiate openly and reasonably in order to save costs. Yet costs continue to go up and up.
In my opinion the Lord Chancellor should consider whether statutory measures could be introduced which limit the scale and rate of costs run up in these cases. Alternatively, the matter should be considered further by the Family Procedure Rule Committee. Either way, steps must be taken.
Background facts
The husband is 42 and the wife is 41. The husband is Greek but was born, and has spent much of his life, in Russia. He describes himself as a homemaker. The wife is Russian. She holds a senior...
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