A v A (No. 2) (Costs), (St George's Trustees Ltd (Intervening))
| Jurisdiction | England & Wales |
| Judge | Mr Justice Munby |
| Judgment Date | 13 July 2007 |
| Neutral Citation | [2007] EWHC 1810 (Fam) |
| Court | Family Division |
| Docket Number | Case No: FD03D06116 |
| Date | 13 July 2007 |
[2007] EWHC 1810 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
(In Private)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Munby
Case No: FD03D06116
Mr Philip Moor QC and Mr Christopher Wood (instructed by Messrs Tallents) for the petitioner (wife)
Mr Charles Howard QC (instructed by Messrs Simon Bennett) for the respondent (husband)
Mr Christopher Wagstaffe (instructed by Messrs Simon Bennett) for the interveners (the trustees)
Hearing date: 19 June 2007
181. On 29 January 2007 I handed down judgment in these ancillary relief proceedings: A v A (St George Trustees Ltd and others, interveners) [2007] EWHC 99 (Fam). I take that judgment as read and use (without further explanation) the same abbreviations. Unless otherwise indicated references to paragraphs are to the paragraphs of that judgment.
182. I now give judgment on the issue of costs.
The context
183. I found the matrimonial assets to be worth a total of £2,669,715 (paragraph [163]). Even if the wife's case in relation to the ownership of HDC had succeeded – which it did not – the matrimonial assets would still have been worth only £4,290,315. It is therefore with considerable dismay, though I have to confess without any surprise, that I have to record that the costs incurred in this litigation amount to no less than £1,104,347.46 (inclusive of VAT). That is 41.36% of the matrimonial assets. Even if one strips out for this purpose the costs –£109,073.40 – incurred by the trustees, the combined costs of the wife and the husband –£995,274.06 – amount to 37.28% of the matrimonial assets.
184. Another way of illustrating the ruinous cost of this litigation is to quantify the impact on the parties of the costs they have incurred. I awarded the wife a total of £1,339,650. Her costs amount to no less than £510,531.10. So even before facing the claims being made against her by the husband and the trustees she is left with only £829,118.90 (61.89%) of her award. Were I to accede in full to the husband's and the trustees' applications, she would be left with very much less. Similar calculations could be made in relation to the impact of this litigation on the husband.
185. It will be recalled that the wife served her Form A on 10 July 2003. The trial started on 12 December 2005. I handed down judgment on 29 January 2007 (the long delay is explained in paragraphs [178]-[179]). The order was eventually finalised on 4 April 2007 though not made until 16 April 2007. The following Table shows the costs incurred by each party (i) prior to the commencement of the trial (but excluding counsel's brief fees), (ii) during the trial (including counsel's brief fees) and down to judgment, (iii) from judgment to finalisation of the order and (iv) since the order was finalised – ie., in preparing for and arguing the question of costs.
| Wife | Husband | Trusts | Total | |
| Until 11.12.05 | 242,273.24 | *223,447.97 | 29,833.90 | 495,555.11 |
| 12.12.05–28.1.07 | 242,906.42 | 223,904.71 | #66,261.26 | 533,072.39 |
| 29.1.07–4.4.07 | 10,747.19 | 17,118.78 | 5,112.74 | 32,978.71 |
| 5.4.07–4.6.07 | 14,604.25 | 20,271.50 | 7,865.50 | 42,741.25 |
| Total | 510,531.10 | 484,742.96 | 109,073.40 | 1,104,347.46 |
Notes:
* The husband's costs for the period until 11 December 2005 are divided into (i) £203,649.50 for the period before 22 July 2005 (see below) and (ii) £19,798.47 for the period from then until 11 December 2005
# The trustees' costs for the period from 12 December 2005 to 28 January 2007 are divided into (i) £25,624 for the period until 16 December 2005 (see below) and (ii) £40,637.26 for the period from then until 28 January 2007.
186. It will be seen that, between them, the parties managed to spend £495,555.11 before the trial, £533,072.39 during the trial, and no less than £32,978.71 in the course of squabbling over the form of the order. The additional costs incurred in arguing about the ultimate incidence of these costs come to a further £42,741.25. Thus, the grand total of £1,104,347.46. And on top of this, as if this family has not suffered enough, there has to be added the further sum of £8,859.83, being the costs incurred by FHP and MA in attending a hearing on 3 May 2005 (see below) – all in all a grand total of £1,113,207.29.
The litigation
187. I do not need to rehearse the history of this litigation in detail but there are certain features of it which I must mention as they bear directly on the disputes in relation to costs.
188. I first draw attention to observations I made in my previous judgment. I remarked (paragraph [1]) that "the proceedings have become needlessly complicated and, as a result, quite inordinately protracted." I added (paragraph [9]):
"But for a number of issues raised by the wife, the case would be fairly straight-forward. It has been made much more complex because of the wife's allegations (i) that the trusts are shams – with the consequence, so the wife would say, that the husband is to be treated as owning not 1,150 (23%) of the shares in HDC but 3,850 shares (77%), (ii) that the shares in HDC held by the trusts are in any event to be treated as available to the husband in accordance with the principle in Thomas v Thomas [1995] 2 FLR 668, and (iii) that the value of HDC has been artificially reduced by the husband (a) skimming off substantial sums in cash and (b) diverting its business to FHP. To a much more limited extent the case has also been made more complex because of the husband's allegation that the wife still has an interest in CWM."
It will be recalled that the wife failed on each of the issues she had raised, as did the husband on the issue in relation to CWM.
The litigation – the freezing order
189. On 18 November 2003 Pauffley J granted the wife a freezing order against the husband, continued by an order made by Bennett J on 25 November 2003. That freezing order was continued, with certain variations, until after the conclusion of the trial, finally being discharged by an order I made on 30 March 2007.
190. At the same time as the wife was obtaining a freezing order against the husband in this jurisdiction, she was seeking a similar order against the husband and the trustees in Jersey. An order was made by the Deputy Bailiff sitting in the Samedi Division of the Royal Court of Jersey on 20 November 2003. The order is relevant only because it reveals the wife's case as being that "the assets in this case exceed £6.7 million," whilst the husband's case was recorded as being (much more realistically as events proved) that the assets were "no more than £2.5 million, divided broadly equally between the parties." I should add that at one stage during his submissions Mr Wagstaffe sought to place some reliance upon the cross-undertakings in damages and costs which the Royal Court of Jersey had taken from the wife. But this reliance, as Mr Moor was quick to point out, was wholly misconceived, the cross-undertakings extending only to loss caused to the husband or costs incurred by the trustees as a result of "this order" – the Jersey order – and thus not having any wider significance.
The litigation – disclosure
191. As I have observed (paragraph [104]), Mr Moor was able to "point, with justification, to the great difficulties the wife has had throughout much of the litigation in making the husband comply with his obligations of full and frank disclosure." I must elaborate that somewhat.
192. The wife's questionnaire was dated 20 November 2003. The husband responded on 27 February 2004. The wife replied with a schedule of deficiencies. The husband responded (pursuant to an order made by District Judge Bowman on 26 March 2004) with further answers on 12 May 2004 and again (in accordance with an order made by Ryder J on 20 May 2004) on 17 June 2004. The wife replied with a further schedule of deficiencies on 16 August 2004, which produced a response from the husband on 2 September 2004. A further schedule of deficiencies followed the next day on 3 September 2004, producing (under the spur of an order made by District Judge Bowman on 6 September 2004 to which a penal notice was attached) further answers from the husband on 29 September 2004. The wife returned to the attack on 16 December 2004 with both a further schedule of deficiencies and a supplemental questionnaire, to which the husband (under the compulsion of an order made by Holman J on 17 December 2004) responded on 17 and 19 January 2005 respectively. (I should note that Holman J's order contained a recital making it clear that in the event that the order was not fully complied with the wife would invite the court to draw inferences adverse to the husband.) There matters seem to have rested until, starting with a letter from the wife's solicitors dated 11 October 2005, there was correspondence relating to the production of HDC's accounts for the year ending 30 June 2005.
The litigation – joinder of the trustees
193. It will be recalled (paragraphs [84]-[86]) that the wife's case on sham necessarily collapsed once I accepted, as I did, the evidence of Mr St George. I observed (paragraph [87]) that:
"The wife's case on sham is and probably always was quite hopeless. In my judgment it should probably never have been brought. And even if it was properly brought it should not have been pursued. I cannot help thinking that it was always doomed to complete failure. Certainly…it was doomed the moment Mr St George's witness statement was filed and it became apparent that he was prepared to go into the witness box to defend himself. At that point the wife and her advisers were faced with a simple if stark choice: they could either accept Mr St George's evidence – which would...
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