A v A (Costs Order: Appeal)
| Jurisdiction | England & Wales |
| Judgment Date | 1996 |
| Year | 1996 |
| Date | 1996 |
| Court | Family Division |
SINGER, J
Costs – ancillary relief proceedings – order as to costs by district judge – whether wife could appeal to Judge against district judge's decision as to costs – proper approach to be adopted by party when Calderbank offer made – failure by party to respond – whether that party should be made liable for costs.
The parties were married in 1979. There were no children of the marriage. The parties separated in 1986 and lived apart until 1990. There was then a resumption of cohabitation but in 1992 they were divorced.
The matrimonial home was purchased in 1979 in the wife's sole name for £125,000. The wife was considerably wealthier than the husband both in terms of capital and income. After the divorce the husband sought a financial provision order against the wife. Having regard to the circumstances, on the face of it the appropriate lump sum award to the husband would reflect his financial contribution to the matrimonial home.
In April 1993 the wife sent a Calderbank letter offering £75,000 plus costs in full and final settlement of all the husband's claims. There was no response until three days before the hearing set down in 1995 when the husband offered to settle at £80,000 plus costs. At the hearing the district judge ordered that the wife should pay to the husband the lump sum of £75,280.
The district judge ordered that the wife should pay the costs up to 6 May 1993 which was 21 days after the wife's Calderbank offer was made, but made no order as to costs after that date.
The wife appealed against the district judge's decision to make no order as to costs after 6 May 1993 and sought leave to have her costs of £27,500 paid by the husband.
Held – allowing the appeal: (1) By r 8.1 of the Family Proceedings Rules 1991 it was clear that an appeal from a district judge was a rehearing by the Judge who had to exercise his own discretion. On such an appeal the Judge had power to vary the order or any part of it. It followed that an appeal as to costs alone should not be any more sacrosanct a part of the district judge's decision than his discretionary decision on the main issues.
(2) This was a contribution case as both the husband and the wife approached it. In making his order as to costs the district judge lost sight of the reality that the case was about contribution and not needs. The district judge was wrong when he went on to say that needs being so significant it would deflect the basis of his judgment regarding the husband's needs if he made the costs order sought by the wife. Further, the district judge had failed to take into account the fact that the husband had assets in the form of paintings
worth about £60,000 and a mortgage capacity that would not preclude him from buying a home. The district judge was in error regarding each side's liability for costs. He overlooked the fact that the husband would not be left homeless by a costs order being made. Also the district judge had been in error in taking into account the wife's liability to her solicitors of £25,000 as that would prejudge the costs issue.
(3) In this case the husband should have accepted the wife's Calderbank offer. The real gravamen of the costs issue which the district judge did not take into account was that the husband's Calderbank counter-offer was made almost two years after the original offer and on the eve of the hearing when it became apparent that the issue between the parties was only £5,000 and some chattels. A spouse who did not respond constructively to a Calderbank offer, whether a good offer as in this case or only one that was bad or indifferent, stymied whatever chance there was of settlement. The husband's delay meant that only over two years and £60,000 costs later, on the eve of the hearing, did the narrowness of the parties' original differences emerge. The critical point was that to slam the door through inactivity, lack of objectivity, indecision, or whatever other reason, made potentially avoidable litigation inevitable. In these circumstances the wife's appeal would be allowed and the district judge's order varied by an order that the husband should pay the wife's costs of the ancillary relief application. This was a clear case where the sanction of costs should bite to bring liability of them home to the person whose failure to follow the established route had led to them.
Per curiam: Litigants and lawyers alike must recognize and give effect to the lesson of this case which was that just because ancillary relief had to be conducted and prepared in the fraught emotional atmosphere that so often and understandably existed after marriage and its breakdown, nevertheless that did not mean that common sense and commercial realities could be allowed to fly out of the window.
Statutory provisions referred to:CCR Ord 37, r 6.
Family Proceedings Rules 1991, rr 8.1(2) and (3).
Matrimonial and Family Proceedings Act 1984, s 17.
Cases referred to in judgment:Bellenden v Satterthwaite [1948] 1 All ER 343.
[Calderbank v Calderbank [1976] Fam 93; [1975] 3 WLR 586; [1975] 3 All ER 333.]
G v G (Minors: Custody Appeal) [1985] 1 WLR 647; [1985] 2 All ER 225.
Gojkovic v Gojkovic (No 2) [1991] FCR 911; [1992] Fam 54.
Hoddle v CCF Construction Ltd [1992] 2 All ER 551.
Leadbeater v Leadbeater [1985] FLR 789.
Marsh v Marsh[1993] 2 FCR 371; [1993] 1 WLR 744; [1993] 2 All ER 794.
Bruce Blair, QC and Philip Moor for the petitioner.
Judith Hughes, QC for the respondent.
MR JUSTICE SINGER.This appeal arises out of a decision of District Judge Artro-Morris which he reached on 6 April 1995 at the conclusion of a four-day hearing. The appeal relates to one part only of the order, as to costs. The question has been raised: what is the basis upon which such an appeal should be determined?
Before I consider that I perhaps should put it into context. The estimate is that
the £27,5000 or thereabouts may turn upon the result of this appeal. That estimate is on the standard basis and it therefore reflects a cost of almost £40,000 to the party, in this case the wife, who incurred those costs. This is her appeal and she seeks to have those £27,500 worth of costs paid by the husband. It is in that context that these proceedings have to be seen. It is in the context that such substantial sums represented only part of one side's costs. That expenditure resulted in a clean-break order made by the district judge (not the subject of appeal) for the wife to pay the husband £75,280, and it is also related to the allocation to one or other of them of the ownership of 55 chattels of a range of value and significance from a bronze perhaps worth up to £5,000 to two plastic chairs and two clock radios.
This was an application for ancillary relief. Certainly it is in relation to the ancillary relief part of the application that the costs appeal arises. Rule 8.1(2) of the Family Proceedings Rules 1991 makes it clear that it is a rehearing. Rule 8.1(3) makes it clear that the Judge has to exercise his own discretion on appeal from the district judge. Those provisions specifically apply to ancillary relief hearings and to applications in relation to failure to maintain. In so far as it is necessary to seek to perceive the reasoning behind the distinction made by the appellate rules in relation to that sort of application, it seems to me an obvious reason may be that ancillary relief is in itself discretionary so that unless the Judge on appeal can exercise the discretion afresh, as on a rehearing, an appellant would only be able to succeed if he or she could show wrongful exercise of discretion as per G v G (Minors: Custody Appeal) [1985] 1 WLR 647 and Bellenden v Satterthwaite [1948] 1 All ER 343 that is to say on Court of Appeal principles. The appellate Judge could not interfere therefore just because he would have reached a different conclusion if left to his own discretion and devices.
These matters were resolved as a matter of interpretation of the Family Proceedings Rules by the Court of Appeal in the case of Marsh v Marsh[1993] 2 FCR 371, and in that case it was decided that the Court of Appeal principles do not apply to a rehearing of an ancillary relief case on appeal from a district judge.
The question is raised by Miss Hughes for the husband, the respondent to this appeal, whether a different approach or the same approach should apply where the appeal is only as to costs. In relation to ancillary relief proceedings CCR Ord 37, r 6 is not disapplied. That rule gives the right to appeal from a district judge's order to a Judge who, inter alia, is able to vary the order or any part of it. In ancillary relief cases costs are often critical to the outcome and have a significant impact on the practical effect of the order.
So approaching the question raised by Miss Hughes, with Marsh as my guide, I would not conclude that an appeal in ancillary relief from a district judge as to costs alone should be any more sacrosanct a part of the district judge's decision than this discretionary decision on the main issues. I have to exercise my own discretion giving such weight as I think fit to...
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