Singer (formerly Sharegin) v Sharegin
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CUMMING-BRUCE,LORD JUSTICE MAY |
| Judgment Date | 27 June 1983 |
| Judgment citation (vLex) | [1983] EWCA Civ J0627-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 83/0284 |
| Date | 27 June 1983 |
[1983] EWCA Civ J0627-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
(Mr. Justice Lincoln)
Royal Courts of Justice
Lord Justice Cumming-Bruce
and
Lord Justice May
83/0284
MR. NICHOLAS P. L. PRICE (instructed by Messrs Brecher & Co.) appeared on behalf of the Respondent/Petitioner.
MR. HOWARD SHAW (instructed by Messrs Howard Gross & Co., Hounslow) appeared on behalf of the Appellant/Respondent.
This is an appeal, by leave, from the order of Mr. Justice Lincoln made on 18th June 1982, when he ordered the petitioner to pay to the respondent the sum of £4,500, £3,000 of which was to be paid by 18th December 1982 and the balance, including the costs, to be paid by 18th June 1983, that the petitioner pay the respondent's costs of the application limited to the sum of £750 and that there be legal aid taxation of the respondent's costs.
The grounds of appeal are that the learned judge misdirected himself in that he failed to exercise his powers under s.25 (1) of the 1973 Act so as to place the parties, so far as practicable and just to do so in the financial position in which they would have been if the marriage had not broken down; that he took into account only the fact that the petitioner had been working and therefore made a greater contribution than the respondent and thus made an adjustment in the petitioner's favour; that he failed to take into account sufficiently or at all the fact that the petitioner has a substantial income, earning capacity, property and pension, whereas the respondent has not nor is likely to have any of those assets; he failed to take into account the standard of living enjoyed by the parties before the break-down of the marriage; that he misdirected himself in the way he referred to the equity in the house; that he was wrong in law to allow the husband's costs only to the limit of £750; and he misdirected himself by finding on the facts that the respondent was reckless in paying a business trip to Russia.
The facts of the case are very unusual, as the learned judge recognised, and gave rise in consequence, to an unusual problem.
The case has, however, an importance in relation to the judge's order for costs. He made an order that the wife should pay the husband's costs but he limited that obligation to £750 and it appears that he did so because he took the view that there was an enormous disparity between the costs incurred by the husband, litigating with the assistance of legal aid, and the costs of wife, which he seems to have thought would reasonably come to about £750. Insofar as the judge was wrong about that (and I have come to the conclusion that he was wrong) he fell into error because counsel failed to bring to his notice a reasonably accurate estimate of what the wife's costs would be. We have the discussion that took place after judgment which demonstrates that, when the learned judge arrived at the figure for a lump sum which he ordered, he had not then had any estimate of what the impact of costs on either side would be and, as the husband was legally aided, he had no indication as to what the breakdown between the party and solicitor and client costs would be, so that there was nothing before the judge at the date when he gave judgment to enable him to make a rational determination of the impact of costs upon a party against whom a lump sum was sought and nothing to enable him to appreciate the impact of the Law Society's charge upon the legally aided party. In the result, on this appeal the difficulties have been greatly exacerbated by reason of that failure of both counsel to give the learned judge what would inevitably only have been an estimate of costs on both sides so that he could take it into account, so far as just, when assessing the extent of the obligation of a party against whom a lump sum was sought.
I refer to this in the opening of my judgment because it is a point of general importance and the particular matters relevant to the assessment of a lump sum arise from a history so unusual that it is unlikely frequently, if at all, to recur.
I would begin by citing the observation of Lord Simon of Glaisdale reported in the case of Hanlon v. The Law Society [1981] A.C. 124 where at page 184 Lord Simon of Glaisdale made this observation:
"I venture to add two suggestions. First, I think any tribunal exercising jurisdiction under sections 23 and 24 of the Act of 1973 should bear in mind the possible effect of a charge arising under section 9(6) of the Act of 1974, if necessary calling on [counsel] for the Law Society. In particular, it will, it seems to me, generally be advantageous to adjudge the beneficial interests in property the subject of an order under section 24 of the Act of 1973."
Lord Scarman and Lord Lowry, in their speeches, agreed with the conclusions and reasoning of Lord Simon of Glaisdale.
By a practice direction published by the Senior Registrar dated 13th July 1982, a month after the judgment delivered by the learned judge, a report of which we have been shown in the All England Law Reports [1982] Vol. 1, 800, the following direction was given:
"The costs of lump sum applications are, in many cases, so high that the judge or registrar needs to have an estimate of what, approximately, they will amount to on each side before he can fix the amount of the lump sum to be awarded.
In future, in cases proceeding in the Principal Registry, those representing the parties will be expected to have made an estimate of the costs on their side, distinguishing in non-legal aid cases between party and party costs and the balance payable, and to be prepared to supply it on request by the court."
The learned judge had no information before he gave judgment relevant to the possible effect of a charge arising under section 9(6) of the Act of 1974, and after he had given judgment, when there was a discussion about costs, the figures that he was given led him to the view that, there having been no Calderbank letter, the wife should be liable for the husband's costs taxed on a party and party basis but, having regard to what he believed to be an extraordinary disparity between the costs on the husband's side and the wife's side, he should limit the husband's costs payable by the wife to £750. During that discussion the learned judge evidently had in mind the observation of Lord Simon of Glaisdale in the case of Hanlon v. The Law Society. He was given an estimated figure as to the probable total costs liability of the husband, or the Law Society financing him. He was told that the wife had already paid £500 on account of costs to her solicitors, she not being legally aided, and that there would be something more to pay. But he evidently did not appreciate what the impact of that "something more" was going to be, because we have had information, again, as there has been no taxation, estimates of solicitors on both sides, that at the end of the hearing below, the husband's costs were likely to be taxed at about £2,500 with party costs at about £2,160, and the wife's costs below were likely to be taxed somewhere between £2,600 and £3,000.
It is not uncommon, in cases in which a lump sum is sought by one spouse to be met by the other spouse out of the sale of the proceeds of the former matrimonial home or borrowings upon its security, to find that the costs that have accrued in the course of litigation culminating in the judge's judgment are, on any common sense view, disproportionate to the amounts that the parties have been arguing about. This was such a case.
There was an informal offer on behalf of the wife of £3,000 and an informal refusal on behalf of the husband, with an indication that the figure that he was seeking was about £6,000. That interchange never culminated in any letter of the kind that could be described as a Calderbank letter whereby the wife's solicitors made an offer in a letter stating that it was their intention that that offer should be brought to the notice of the judge when the question of costs in the proceedings was raised.
There are two common reasons for these lamentably high costs, which we frequently see in this court. One reason is where it has been necessary to obtain expensive expert advice on the valuation of the estate, the subject matter of the proceedings, and out of which the lump sum will be paid. Frequently such expert report is that of a valuer charging on a conventional rate related to the value of the estate and, where there are valuers on both sides, such expenses may equate. This was not such a case.
The other common reason for the build-up of costs is an allegation that the applicant's claim should be dismissed or diminished by reason of his conduct and that is the explanation of the build-up of costs in this case. Until conduct was raised, there was every reason to think that the costs on both sides would bear a sensible relation to the sums they were fighting about which, having regard to the informal exchanges to which I have referred, were a difference of £3,000. But when conduct was raised it evidently became necessary, for reasons which I understand, for both sides to make elaborate inquiries and investigations which would otherwise have been quite unnecessary. Its only consequence was this enormous build-up of costs. The parties were differing to the tune of £3,000 or so. By the time it had been fought out, the total costs incurred on both sides amounted to something between £5,000 and £6,000 on the estimates given to this court....
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