Young v Young
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE THORPE,LORD JUSTICE CHADWICK,LADY JUSTICE BUTLER-SLOSS |
| Judgment Date | 14 July 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0714-6 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 July 1998 |
| Docket Number | CCFMI 97/0698/2 |
[1998] EWCA Civ J0714-6
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM PORTSMOUTH COUNTY COURT
(HER HONOUR JUDGE LINDA DAVIS)
Royal Courts of Justice
Strand, London WC2A 2LL
Lady Justice Butler-Sloss
Lord Justice Thorpe
and
Lord Justice Chadwick
CCFMI 97/0698/2
MR NICHOLAS MOSTYN QC (instructed by Messrs Phillip Skerrett & Co of Plymouth PL4 OAU) appeared on behalf of the appellant.
MR MARK JOHNSTONE (instructed by Messrs Paris Smith & Randall of Southampton) appeared on behalf of the respondent.
The history of this case is predominantly one of muddle and mismanagement. The unravelling of the relevant facts has proved to be a laborious and vexing exercise. At its conclusion the relevant circumstances appear to be these.
The husband is a 68 years old accountant. The wife is 42. They married in 1976 and had three children, a son who is now 20 and twins of 18. In 1980 the final matrimonial home was purchased, effectively in joint names. Ten months later the husband transferred his half share to the wife. In 1985 the husband received a brief sentence of imprisonment for tax and dishonesty offences. In 1989 the Inland Revenue obtained a judgment against him for £123,000 with the consequence that in 1991 he was made bankrupt. He petitioned for divorce in May 1991. The proceedings were defended and a decree nisi was granted in May 1992 on the prayer of the wife's answer. At that stage the husband was not legally aided and he was ordered to pay the costs of the suit. In July 1992 the wife applied for all forms of ancillary relief. In September 1992 the husband applied for lump sum and/or property adjustment order. In the circumstances as they then were the only substantial capital was the final matrimonial home with an equity of about £110,000. The husband's earning capacity was in the order of £10,000 per annum. Thus effectively the only live application was the husband's claim to a share of the proceeds of sale of the final matrimonial home, the wife accepting that sale was inevitable. In July 1993 the husband made his disclosure by answering a questionnaire and annexing documents. In January 1994 he was discharged from bankruptcy and the decree was made absolute. In March 1994 a consent order was made for the sale of the final matrimonial home. As well as the contested ancillary relief proceedings there were contested Children Act proceedings and an order was made for a single trial of all issues before Judge Linda Davis in the Portsmouth County Court. The trial was fixed for 18th July and it apparently lasted 6 days of which 3 1/2 were devoted to ancillary relief. On 13th July the wife, who was of course effectively the respondent, delivered a Calderbank offer of 25% of the net proceeds of the sale at the price then anticipated. She reserved to herself any excess. The value to the husband of that offer was the certain sum of £27,050 assuming that a sale at the anticipated figure could be achieved. The letter proposed no order as to costs. The offer was rejected. Plainly that rejection only caused the wife to incur extra costs at trial.
A reserved judgment was handed down on 1st August and apparently an order was made on the same date. The order might be criticised in a number of respects but for present purposes it is enough to record that paragraph one awarded the husband a lump sum of £20,000 on the sale of the final matrimonial home on a clean break basis. Paragraph seven 'certified for the purpose of the Civil Legal Aid (General) Regulations 1989 that the lump sum of £20,000 has been ordered to be paid to enable the husband to purchase a home for himself and that the balance of the proceeds of sale have been ordered to be retained by the wife to enable her to purchase a home for herself and the children'. Paragraph eight was intended to say no order for costs save legal aid taxation but paragraph nine gave a liberty to apply as to costs and implementation. Those two paragraphs reflected the final passage of the judgment which was in these terms:
"I assume that both parties will be able to charge any future property with their outstanding legal aid bill. In the light of the indication given to me by counsel on behalf of the husband that his total costs bill would be in excess of £14,000, on balance I have concluded that the only practical course is to order that there be no order for costs save legal aid taxation of both parties' costs. However as I have not heard submissions in this respect there will be liberty to apply to the parties in respect of costs."
By a second order which we have not seen the husband was required to vacate the final matrimonial home forthwith. In the judgment the judge criticised the husband's selfish annexation of funds, even at a time when he was a bankrupt. She said:
"Whilst I accept that as a matter of fact those funds would not have been available to the family in the context of this matter it seems to me that the importance of what I find to be the husband's dishonest conduct is that it is impossible to accept anything that he says about the availability of funds to him either in the past or in the present. I am quite satisfied that this is financial conduct which I am entitled to consider in the context of section 25 in any event."
Later she said:
"It seems to me that it would be inequitable to disregard the husband's dishonest conduct in considering the needs of the parties in the light of their responsibilities and in my view the consequence of so doing is that the entitlement that the husband has to financial provision should be reduced to the bare minimum which will enable him to provide himself with some accommodation to which the children can come for contact visits."
Later again she said:
"Taking into consideration the property details which have been placed before me it seems to me that it is perfectly feasible to obtain a flat in the New Milton area for approximately £45,000. I have no doubt that with the assistance of his business colleagues, and the availability of a guarantor, the husband would be able to raise a mortgage in the sum of £25,000 if he required it. In those circumstances I am going to award the husband a lump sum of £20,000."
Where a judge makes what is effectively an order nisi in respect of costs it is incumbent upon any party that desires to take advantage of the liberty to apply to do so promptly whilst the case is fresh in the judge's mind. It requires no formality. The advocate who wishes to apply has only to arrange a date convenient to the judge and to his opponent. Regrettably the wife's advisors did nothing until 7th October when they issued a notice of application with a return date of 10th January 1995 seeking a costs order in the ancillary relief, a defined contact order and an order in respect of chattels. No notice was given either to the husband or to the court as to the grounds upon which the wife sought an order for costs in the ancillary relief. The January hearing was apparently adjourned to March and then adjourned over again to 2nd June. By that stage it was eleven months since trial.
On the eve of that hearing the wife's application received an unexpected boost. A letter from the husband's solicitors said:
"Because of our client's impecuniosity it has not been possible for him to raise a mortgage or make other financial arrangements to enable him to purchase a property with the aid of the £20,000 which he will receive from the net proceeds of sale of the property pursuant to the court order made and our client is unable to contemplate purchasing a property using this sum either now or in the foreseeable future. The whole of the £20,000 will have to be paid to the legal aid fund and will be absorbed in reimbursement of the costs expended by the legal aid fund in the matter. There will therefore be no real property, whether freehold or leasehold, upon which the Law Society can take their statutory charge."
Clearly if the lump sum was not to be the subject of deferred charge it would be largely exhausted in satisfying the husband's legal aid bill thus giving rise to the notion, if not the submission, that the wife and children would be better served by whatever costs order could be made against a legally aided litigant. For such an order would have the effect of reducing the amount of the deferred charge on the wife's future home.
At the hearing the husband was not present. It was said that he was ill but no medical certificate was produced. His solicitor instructed an agent. Counsel of his choice was not available and a replacement advanced the hopeless submission that the existence of the Law Society's charge precluded the judge from making any order inter parties. During the course of this hearing we have extracted from the parties a copy of the order of 2nd June, a note taken by the solicitor agent and a note of judgment from the wife's solicitor. The agent's note of the proceedings seems to establish that counsel for the wife simply relied upon the letter received on the previous day and sought such order as the judge deemed reasonable to make against a legally aided litigant under section 17 of the Legal Aid Act 1988. It seems clear that no reliance was placed upon the Calderbank letter still less upon the husband's conduct. Counsel for the wife did in developing his argument under section 17 refer to the decision of this court in McDonnell v McDonnell [1977] 1 WLR 34. From that he submitted that costs could be dealt with in two stages, first a decision in principle as to whether the husband should pay the wife's costs,...
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