BAILII
British and Irish Legal Information Institute


Freely Available British and Irish Public Legal Information

[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

England and Wales Family Court Decisions (other Judges)


You are here: BAILII >> Databases >> England and Wales Family Court Decisions (other Judges) >> JMD v SPD [2025] EWFC 154 (B) (11 April 2025)
URL: http://www.bailii.org/ew/cases/EWFC/OJ/2025/154.html
Cite as: [2025] EWFC 154 (B)

[New search] [Printable PDF version] [Help]
WARNING: This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.
Neutral Citation Number: [2025] EWFC 154 (B)
Ref. 1699-9840-5741-3634

IN THE FAMILY COURT AT BIRMINGHAM

33 Bull Street
Birmingham
11th April 2025

B e f o r e :

DISTRICT JUDGE STEPHEN PARKER
____________________

Between:
JMD
(Applicant)
- and -

SPD
(Respondent)

____________________

Transcribed from the official recording by eScribers Ltd
Ludgate House, 107-111 Fleet Street, London EC4A 2AB
Tel: 0330 100 5223 | Email: uk.transcripts@escribers.net | uk.escribers.net

____________________

MR H CAMPBELL appeared on behalf of the Applicant
MR A DAY appeared on behalf of the Respondent

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    JUDGE PARKER:

  1. This matter proceeds before me today following a hearing last year before Rowland HHJ when various directions were given following the making of a maintenance pending suitable order and legal services payments order and the referral for a private FDR that was to take place in October 2024.
  2. The matter was to come back following the private financial dispute resolution hearing for directions to consider listing for a final hearing and a pre-hearing review, and also to consider the continuance of the legal services payments order.
  3. The legal services payments order made previously provided a lump sum in relation to outstanding legal costs payable in four monthly instalments of £12,000, being £48,000, up until the private FDR, , to include in addition £12,000 capped for counsel's brief fee.
  4. One observation I would make is that no provision in the order has been made in relation to who the directions hearing should be before, neither has the case been reserved. This matter has come before me at District Judge level but by any stretch of the imagination this is very much a Circuit Judge case and given the complexity and assets involved may potentially justify involvement of a Section 9 Judge sitting in the Family Court, based upon the efficiency statement. Henceforward, having spoken to Rowland HHJ, this matter will be case managed and reserved to Rowland HHJ going forward.
  5. There are two applications for me to consider today. The first application is the husband's application to rely upon a critique of the forensic accountancy report obtained by way of a single joint expert as part of Rowland HHJ's directions in April 2024. The application basically seeks for the husband to have his own expert report in relation to the business because, effectively, he does not agree with the single joint expert's valuation and other assumptions in relation to the business, for example the value of that business, the ability to replace capital and the income tax consequences in relation to that.
  6. I have seen the single joint expert's report, the voluminous questions asked following the single joint expert's report and the critique analysis provided by the husband's chosen expert.
  7. The key issues clearly in this case, as far as the business is concerned, is the value, its income and its liquidity. The single joint expert, so the husband says, does not adopt the separate valuations of property which were also directed in relation to the husband's business. The husband owns and is sole director of a property development business and it contains a number of projects for development sites which, on the face of it, have a number of properties of significant value for which property valuations have been provided.
  8. However, rather than accepting the valuations as provided from the property expert, the single joint expert who undertook the forensic valuation has departed from it and the reason that they have departed from it is, effectively, the valuations of the properties themselves have been completed on the basis that some of the developments have not themselves yet been completed. They are part completed.
  9. It appears that the single joint expert, in essence, has chosen not to accept the property values on that basis and has therefore arrived at a figure based upon the value that they would get if they were to be completed. The rationale for that is that effectively it is unlikely that this business will proceed as a forced sale and therefore that is the appropriate approach to adopt.
  10. The husband's expert disagrees with that. That, of course, is the crux but there are other disagreements as well. Originally there was the choice between a low-end value of the business and a high-end value of the business, although the high end valuation has now been discarded.
  11. Further concessions have also been made. The husband effectively says through their proposed expert that those concessions themselves have not filtered through to an impact statement with regard to the overall figures that the single joint expert has provided.
  12. Wife's counsel makes the point that this can be dealt with adequately in any event through cross-examination of the expert.
  13. The long and the short of it is this: the husband says that by departing from the property valuer's own valuation as ascribed to the various developments means that the valuation of the business is exaggerated and has been put at a figure far in excess of the reality (18.2 million), whereas if the property values were factored in as provided for by the valuations, the value of the business would be significantly less. In fact, I have seen figures in relation to either zero or a minus figure which he maintains effectively means that the single joint expert report which the wife relies upon is undermined and the undermining of that is sufficiently serious to warrant a further expert.
  14. That is, in essence, the husband's case.
  15. This is not accepted by the wife.
  16. I have read the forensic accountant's report provided by the single joint expert. It provides confirmation that the properties have been valued significantly less than they believe they should be on the basis of then being partially completed which would only occur in a sale scenario and provides a rationale for undertaking their own augmentation reflecting that.
  17. The critique of that approach indicates that before undertaking such a task, the single joint expert should at the very least have raised those issues with the person who undertook the valuation itself.
  18. With regard to expert evidence in the context of these proceedings, I have been referred to Daniels v Walker [2000] EWCA Civ 508 which states that:
  19. "If, having obtained a joint expert's report, a party, for reasons which are not fanciful, wishes to obtain further information before making a decision as to whether or not there is a particular part (or indeed the whole) of the expert's report which he or she may wish to challenge, then they should, subject to the discretion of the court, be permitted to obtain that evidence."

  20. Daniels v Walker suggested the following steps before instructing a second expert: First of all, there should be expert instruction, which there is in this case, and then separate written questions in relation to any party who is discontent with the report for reasonable reasons. That has also been provided for.
  21. If the answers to those questions remain unsatisfactory, then a party could apply for further expert evidence which would be considered on the basis for proportionality. Of course, it is abundantly clear from the family jurisdiction that there is an obligation to seek permission from the court before instructing a fresh expert.
  22. Of course, a party may not be permitted to instruct a new expert if the court is satisfied that the issue could be satisfactorily explored by cross-examination of the expert themselves.
  23. Parking that aside for a second, it would be worth perhaps considering counsel's submissions at the hearing before me today. On behalf of the husband, he quite rightly emphasises the issue is the expert's departure from the property values and the fact that he dispenses with the high-end value of the assessment in lieu of the low end value.
  24. Although there are a number of concessions, it is counsel for the husband's view that there are so many such concessions as to make cross-examination extremely onerous and inappropriate. The matter needs to be looked at afresh. As far as the husband is concerned, the critique that they have extracted is a hook to hang on the cloak of necessity for the purposes of an expert report.
  25. The consensus, of course, between the experts may produce further costs and shorten the hearing. Of course, it may well prolong it if the experts disagree, but that is a double-edged sword. I have been given a timescale of eight weeks and costs of £18,000.
  26. In essence they argue, such an application is clearly merited and goes to the heart of the case in relation to the differential values of the company and indeed liquidity and profit thereafter.
  27. Wife's counsel quite naturally points to the increase of costs and the fact that the wife would need more funding in relation to that which obviously dovetails to her application to reconsider a further legal services payments order, increased complexity by further expert involvement and an increased time estimate for the final hearing if the experts disagree.
  28. I was referred to the husband's own Form E which indicates that his valuation is not dissimilar to that of the expert, although now he indicates that the value is substantially lower than that. Of course, he says so on the basis of the critique that he himself has obtained.
  29. The single joint expert is extremely experienced. He explained his valuation method and it is a thorough report. He has answered numerous questions which go above and beyond FPR 25 and indeed he did so notwithstanding that it falls outside the 10-day period.
  30. It is contended that the husband has clearly taken advice from a shadow expert in forming the questions and raises questions as to whether the expert is partisan or not.
  31. In dealing with an application to appoint a second expert generally, the key issue is this: is the evidence required relevant to the core or principle issues or critical importance such that such evidence, by its very nature, is difficult to challenge in the absence of a further expert report? Or in the alternative, will there be an understandable sense of grievance for the applicant judged objectively were permission to be refused or would there be a more understandable sense of grievance for the respondent if permission were to be granted? See Daniels v Walker and Cosgrove & Anor v Pattison [2001] CPLR 177 and GW & Anor v Oldham Metropolitan Borough Council & Anor [2006] 1 FLR 543.
  32. The critical question will be whether the report is necessary to enable the judge to do justice with the case and what the additional expert would add to it. There has to be good reason for justifying the report. It is a discretionary exercise, but the following factors are relevant:
  33. a. The nature of the issue or issues being addressed by the expert;
    b. the number of issues between the parties;
    c. the reason the new expert is wanted;
    d. the nature of the issues at stake and their importance;
    e. the effect of permitting one party to call further expert evidence on the conduct of proceedings;
    f. the delay of making such an application;
    g. the delay that the instructing and calling of a new expert will cause;
    h. any other special features of the case; and
    i. the overall justice to the parties within the context of the proceedings.
  34. Of course, there has to be a point at which the gathering of evidence is sufficiently full and thorough to enable the court to arrive at a conclusion even on the elevated balance of probabilities and standard of proof.
  35. A party might be permitted to adduce evidence from a further expert in circumstances where the original expert has modified their opinion. However, such a change of opinion does not in itself establish that further evidence is necessary since the change of opinion is not binding on the instructing party. However, further expert evidence may be permitted if it is added after the instructed expert has stepped outside their expertise or brief or has displayed incompetence.
  36. In the case of GA v EL [2023] EWFC 187, Peel J made the following comments in relation to an application for a second expert:
  37. "i) The party seeking to adduce expert evidence of their own, notwithstanding the fact that a single joint expert has already reported, must advance reasons which are not fanciful for doing so.
    ii) It will then be for the court to decide, in the exercise of its discretion, whether to permit the party to adduce such further evidence.
    iii) When considering whether to permit the application, the following non-exhaustive list of factors adumbrated in Cosgrove & Anor v Pattison (supra) may fall for consideration.
    […]
    iv) For my own part, I would draw particular attention to the words 'the overall justice to the parties in the context of the litigation' which seems to me to encapsulate neatly the court's task."

  38. In this particular case, having considered what each party says, the evidence in support of the application and the law, it appears to me that the expert has, for reasons that they themselves have set out, decided to depart from the property valuations which another single joint expert instructed by the court had been asked to undertake. That causes me great concern, whatever the justification for it.
  39. Rowland HHJ clearly set out quite sensibly that there be two single joint experts, one for the business and one for the properties which comprise within the business. The one should feed into the other. The property valuations clearly provide a baseline to assist the forensic accountancy exercise. If there were difficulties in relation to doing that, then the first port of call would be for the forensic accountant to have reverted to the property expert to seek clarification so that they have a similar mind because, as I say, the one report feeds into the other. To completely discard it for reasons which, however valid they may be, without reference creates concern.
  40. We are then left with a situation whereby potentially the foundation of the report in relation to other matters which it refers to, being the gross value of the business, the income which it potentially could generate and the liquidity, raises concerning questions, all of which of course the single joint expert bases their report upon and upon which the wife relies.
  41. Therefore, it is my decision that in the exercise of my discretion, I will allow a further expert report as put forward pursuant to the husband's C2 application. I regard such report as necessary in the circumstances of this case and, having regard to the rest of necessity under Part 25, I will grant the application accordingly.
  42. There will be the usual provision in relation to there being a joint meeting between the experts and an agenda and for areas of agreement and disagreement, and thereafter the matter will have to come back to court. The costs of this exercise should be borne wholly by the husband in relation to the experts.
  43. I am now required to deal with the second application which was envisaged by the order of 19 April 2024 which is, in essence, to consider the continuance or a further legal services payments order in favour of the wife.
  44. Just to reiterate, the previous order of 19 April 2024, which was aimed to bring the matter up to a private FDR, provided for four monthly instalments of £12,000 giving a grand total of £48,000 and a cap in relation to counsel's brief of £12,000 as well as payment towars all the single joint expert costs and a lump sum of £30,000 in relation to outstanding legal costs.
  45. The wife renews her application insofar as today's hearing is concerned.
  46. I have had the opportunity of reading the statement which she has filed in relation to the previous legal services payment order and indeed the statement in relation to this hearing and also similarly with regard to the husband.
  47. She refers to the fact that she has incurred additional fees over that which was envisaged by Rowland HHJ due to delays in setting up the private FDR hearing which was to be held in October 2024 but did take place until February 2025. She indicates that the husband has liquified some of the assets in relation to the yacht and a Jeep wagon which he says has been necessary in order for him to continue funding the ongoing costs of these proceedings and she makes the point that, as far as she is concerned – and I am not making any findings in regards to this – the husband's lifestyle continues and he is well able to continue to fund her.
  48. The husband disagrees. He says that he is unable to afford not only the legal services payments order but also to continue with the maintenance pending suit order which was also made by Rowland HHJ, although there is no application before the court as to a variation to that order.
  49. He points to the fact that even the single joint expert accepts that his business is facing challenges, that that in turn will impede cash flow and his ability to fund future products and general property which then cycles down into his ability to obtain appropriate income and dividends.
  50. He says that he sold the assets that I have referred to to negate his negative cash balance in his director's loan account to enable him to continue the payments that have been ordered as well as making reasonable provision for himself.
  51. He regards the wife's legal costs as being extortionate, wholly disproportionate and that the sums that the wife is seeking – though that of course has now been significantly curtailed due to the fact that this matter is not going to be listed to a final hearing – would in essence mean the liquidation of the assets comprising the business and that the current level of support cannot be sustained.
  52. As indicated, the current outstanding costs insofar as the wife is concerned is £87,325 and there is a budget to the final hearing. The wife seeks, until the next hearing, a continuance of payments to enable her to fund her legal costs at the same rate as Rowland HHJ has directed.
  53. I have read the parties' position statements. Effectively, the husband says he cannot afford to pay the current maintenance, let alone any legal services payment order, so there is no formal proposal on the table. As I have indicated, I regard such an approach undesirable given the circumstances of this case. They also raise the point that the matter perhaps should have been recalled to court earlier when the expenditure was increasing, the wife indicates that proposals were put forward to try and resolve matters and proceedings had been adjourned for the purposes of a private FDR.
  54. I make no criticism in relation to that. As I say, the application has now been made following the failure of the private FDR. One would have thought one would not want to muddy the waters with regards to this issue and also there is the question of how soon the matter could have been listed in any event. But be that as it may, the hearing has taken place today.
  55. The wife's proposed costs in relation to funding for a final hearing are not insignificant and, in the same way as I say that the husband's position in relation to offering nothing is extremely unattractive, the amount of costs that the wife is incurring in this matter also, I have to say, raises eyebrows. Whatever one may say about the husband's anticipated costs, there is a significant differential, for example, between the hourly charge out rates between the respective firms.
  56. In regard to the submissions today, the wife's counsel asks the question, how does the court ensure that the wife has sufficient funds to move forward and to remain represented in this case? Her counsel points to the fact that the husband, notwithstanding what he says, is still able to fund a shadow expert. He is still able to propose a further expert to come on board and the increase in costs necessitated by that.
  57. I am referred to various documentation in relation to how these funds can be realised, both in reference to the single joint expert and in relation to the critique, in relation to dividends, although the critique raises queries as to how a dividend of £303,000 net can be afforded.
  58. Of course, there is also the issue of the ability to sell property, although I would have to say that in such a case of this, that may well be a last resort in relation to funding, particularly with regards to the fact that there needs to be expert involvement with the company and the issues of liquidity and raising funds is still in dispute.
  59. The wife's counsel says that nothing really has changed since the last hearing. There are significant outstanding costs of £87,000 and in essence the legal services payments order was designed to take the parties to a private FDR in October 2024 which did not take place until February 2025. The wife has tried to negotiate ongoing payments but with a flat refusal and as opposed to the sums that have now been set out in the application to lead to a final hearing, it is proposed that a funding regime is put in place between now and the next case management hearing post the experts report.
  60. The husband's counsel effectively says that the wife's solicitors have caused the wife (or the wife herself) to overspend the budget that Rowland HHJ has allowed. Reference is made to the significant charge out rate in this matter and the fact that they have incurred costs at their own risk.
  61. It is said that Rowland HHJ was clear, when he made the order, and was appreciative of the fact that not all the wife's costs would be covered. I am reminded that as far as such outstanding costs are concerned that they should only be provided for where the solicitors will down tool,s and there is no evidence in this case that they will do so; indeed, significant credit has been extended.
  62. The sums claimed, it is said, are unjustifiable. It is accepted that there is a need as far as the wife is concerned but the question as far as the husband's point of view of course is that of affordability. There is a different landscape now in relation to the company post the single joint experts report than there was and the company itself needs a certain amount of working capital.
  63. The single joint expert is criticised in relation to many of the assessments they have made in relation to the fact that there has been a significant reduction in property in 2024 and I am referred to various documentation in relation to profit and loss accounts which affects the husband's ability to pay. Effectively it is maintained that there is a real issue of affordability.
  64. In closing, wife's counsel retorts that despite what the husband says, he is still able to afford the application for further expert evidence which I have permitted.
  65. There are a number of applications being made at the last minute and, in any event, this is an interim application where the court has to do the best it can where there is a sea of evidence before it.
  66. In relation to this matter, the power to make a legal services payments order is restricted to cases where the court is satisfied that without the amount, the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings. I am satisfied that that test is met in this case; indeed, that is clearly the case given the order made by Rowland HHJ.
  67. There is a checklist of factors set out in Section 22(z)(b)(i). I am not going to rehearse them. I have read them, I am aware of them, I apply them in this case and they are well known to counsel who appear before me.
  68. Of course, I must also have regard to the overriding objective. I am aware that further avenues of funding must also be explored. Again, I do not run through those well-known points because it is accepted that they are not available in this case, and nobody suggests otherwise.
  69. I am also referred to the seminal case of Rubin v Rubin [2014] EWHC 611 (Fam). It sets out a number of principles. Again, I am fully aware of those principles. I am not going to rehearse it and indeed they were elaborated and substantiated by Peel J in HAT v LAT [2023] EWFC 162, a judgment eloquently expressed which again I am fully aware of.
  70. Although it does not really concern me today, there is a variation in judicial approaches as to the budget for future costs. Sometimes the budget is accepted; other times, the budget is given detailed consideration similar to a cost budget. Sometimes a broad-brush approach is taken and at times costs are limited to the respondent's costs, but allowance is made for investigation into the respondent's circumstances.
  71. However, I do not need to go through that approach because a baseline has been provided for by Rowland HHJ and I am not required to consider a substantive request for payments up to a final hearing. That is going to be for another day and another judge.
  72. As set out in HAT v LAT, Peel J observed that:
  73. "The approach to quantum […] is simply whether the costs sought are reasonable, in the context of the nature of the litigation, the issues, the resources, and how each party is approaching the proceedings."

  74. Although it is not for me to deal with it at this hearing, albeit I refer to it because it is in the position statement of Mr Day on behalf of the husband, a judicial practice has developed whereby a deduction is made of a percentage from the applicant's costs incurred prior to the legal services payment order application and/or from their budget for future costs by way of a notional standard basis assessment.
  75. Cases in relation to that are BC v DE [2016] EWHC 1806 (Fam); Re Z (Schedule 1: Legal Costs Funding Order; Interim Financial Provision) [2020] EWFC 80; Re Z (No. 2) (Schedule 1: Further Legal Costs Funding Order; Further Interim Financial Provision) [2021] EWFC 72. Other decisions include MG v GM [2022] EWFC 8; Xanthopoulos v Rakshina [2023] EWFC 158 and JK v LM [2024] EWHC 1442 (Fam).
  76. However, in DR v ES [2022] EWFC 62 and HAT v LAT, the court deemed such a deduction inappropriate with Peel J stating that applying a notional deduction would be wrong because a legal services payment order is not an inter partes costs order, but a solicitor/client sum for the applicant to enable them to litigate. The approach to quantum, as I have indicated, he says is simply whether the costs sought are reasonable.
  77. This was recently revisited in KV v KV [2024] EWFC 165 in which it was said:
  78. "To apply a standard basis of assessment discount may be a useful approach or cross check against the reasonable overall figure in some cases, but I do not read any judge in the reported cases as saying that it should be a formula of universal and automatic application. In some cases, it would have the effect of leaving a payee to fund the shortfall out of his/her own resources which may not be possible, or may not be fair to the payee. It may also be unfair to the lawyers who find themselves having to provide legal services at a significant discount. On balance I prefer to look at the sums sought in the round, taking account of all relevant factors and assess an overall reasonable figure, rather than to adopt a standard assessment discount other than as a cross check."

  79. As indicated, in the case of JK v LM, the court recognises the principle of reduction but took the view that:
  80. "in this case, as in others, that the […] solicitors should not be entitled at this stage to benefit from what would essentially be an indemnity against all their costs incurred which would be an unusual outcome."

  81. In the recent case of SM v BA [2025] EWFC 7, Mr Nicholas Allen KC observed that such deductions are less common in relation to future costs as opposed to incurred costs. Of course, he does note that there are also additional justifications for reduction, for example in the case of Re Z (the first judgment) where Cobb J used the opposing party's costs as a benchmark.
  82. I also note the warning set out in Re Z (No. 2) (Schedule 1: Further Legal Costs Funding Order; Further Interim Financial Provision), echoed subsequently in Xanthopoulos v Rakshina: it is not the job of the court to act as the insurers of solicitors and overshoot, let alone to actually overshoot, the sum provided by way of a legal services payment order because if solicitors run short of funds then it is their duty to apply to the court for a further order. If they choose to carry on their work and incur further costs, then they do so at their own risk.
  83. The question, of course, I have to ask myself, is whether the court is satisfied that without such a payment the applicant will not reasonably be able to obtain in the future appropriate legal services for the proceedings.
  84. In this case I answer that question in the affirmative.
  85. The legal services payment order by Rowland HHJ was designed on the basis that the private family dispute resolution hearing would take place in October 2024. It did not take place until February 2025.
  86. Whilst I appreciate that further work would have been necessitated by that delay, in my view the infrastructure and the trajectory to the private FDR was already in full flow and I do no believe it is appropriate that the husband should meet the entire costs in relation to what the wife has expended in the level that she clearly has, albeit I accept that some costs would reasonably have been incurred.
  87. Clearly, the costs that the wife has incurred over and above that which was envisaged by Rowland HHJ are significant and it is my view that the husband should not be responsible for a large proportion of those costs. I have particular regard to the charge out rates and the discrepancy of charge out rate between the two sets of firms. Clearly, a person can instruct whoever they wish and they can charge whatever they wish but when it comes to costs, that does not necessarily mean that those costs are automatically reimbursed to them by the other party. The issue is reasonableness.
  88. I accept also that the historic costs should only be payable when the solicitors could potentially down tools. I accept that there has been an extensive amount of credit incurred, presumably on the basis that hopefully the private FDR would be successful. Sadly, it has not. Whilst credit has been extended, I do not believe it would be appropriate, however, for the husband not to make some payment in relation to those costs.
  89. In relation to the costs between now and the next hearing, I am satisfied that the husband does have the ability to continue with payment. He clearly has the funds in which to fund the expert assessment which will generate further fees. He has liquified the assets in relation to the yacht and the Jeep wagon which alleviates the pressure, but I appreciate fully that the husband cannot be regarded as a blank cheque.
  90. So, striking the balance in this matter, this is the order that I am going to make.
  91. I take on board that there are letters in November 2024 and January 2025, I believe, where the wife sought, to assist with the cost's situation, a further three months of payments of £12,000 each which total £36,000, although she has actually incurred significantly more than that (more than double)
  92. So the order that I will make, which will last until the next hearing, is that by 2 May 2025 the husband will pay the sum of £20,000 towards the wife's outstanding costs. In relation to going forward, as from 2 June 2025, the husband will pay three payments of £9,000. 14 days prior to the next hearing, the husband will pay the wife's counsel's brief fee, capped at £6,000. I regard those figures reasonable in the context of this case and in the hope that that will hopefully focus minds on a potential settlement.
  93. That is my decision and the reason for it.
  94. ---------------

About BAILII - FAQ - Copyright Policy - Disclaimers - Privacy Policy amended on 25/11/2010