England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BIRMINGHAM CIVIL JUSTICE CENTRE
(HER HONOUR JUDGE HINDLEY)

		Royal Courts of Justice Strand, London, WC2A 2LL
		19th May 2009

Lord Justice Thorpe:

1. I will refer to the parties to this appeal as husband and wife despite the fact that they have been divorced for some time. The appeal concerns the separation of their financial affairs following their divorce, and it is a terrible warning to others who might be travelling this road as to how not to settle finances following divorce. There was a four-day hearing before the District Judge estimated, but it over-ran. I think in the end the District Judge heard six days of evidence; reserved and then, on 24 April, delivered her considered judgment. That judgment was then reflected in an order made on the date of judgment, but amended on 14 June.
2. The District Judge took a robust view of the parties and their respective contributions to a case which the District Judge described as chaotic. The District Judge was firmly of the view that the responsibility for that chaos and want of full, frank and clear disclosure was the applicant wife's. Anyway the bare end result was that the wife was to keep the most valuable of the three properties in play, worth about £320,000 gross, with a mortgage of £140,000, and in compensation the husband should receive a lump sum of £40,000. She condemned the wife in the costs from 24 November 2004, the date upon which the Calderbank offer had been advanced by the husband's solicitors, an offer that closely matched the result imposed by the judge.
3. Now the wife was dissatisfied with that outcome and exercised her right of appeal to the circuit judge. Because there is no circuit judge with an ancillary relief ticket in Leicester it had to go across to Birmingham, where the appeal was taken by HHJ Hindley QC, who delivered her reasoned judgment on 23 December 2008.
4. The husband and the wife are both doctors. The wife is a consultant and the husband is a general practitioner, so not surprisingly they were both represented by counsel at the hearing before the District Judge. The wife was similarly represented on the appeal to HHJ Hindley, but by then the husband went in person. HHJ Hindley described the appeal as having "a very unfortunate and prolix history which has worked to the disadvantage of the parties…by virtue of the escalation in costs" which had made "enormous inroads into the modest matrimonial assets".
5. HHJ Hindley delivered a full and careful judgment extending to some 51 paragraphs, in which she considered one by one the various grounds of appeal advanced on the wife's behalf. Her final order was clear. The wife was granted permission to appeal out of time, but the resulting appeal was dismissed and perhaps the wife was fortunate in that no order was made in respect of costs.
6. The wife was dissatisfied with that second hearing and applied to this court for permission to appeal. The application came before Wilson LJ on 19 March. Of course this was an application caught by section 55 of the Access to Justice Act and Wilson LJ was very well aware of the huge hurdle that the wife faced in her application for yet another appeal.
7. There were two aspects of the outcome below that troubled him. In paragraph 14 of his judgment he explained that the costs order was potentially vulnerable since on 24 November Form E affidavits had not been exchanged. That was not achieved until 2 December, a week or so later, and so he queried how the wife could be criticised for refusing a proposal at a time when she had not received full disclosure.
8. The second point that worried the judge was the affordability of the outcome. Wilson LJ noted that, in addition to the lump sum, the wife had been condemned in the husband's costs, probably about £45,000; she had her own costs, thought to be about £65,000, and she had a liability for school fees in arrears, probably about £15,000; overall with the lump sum £165,000 in debt against an equity from the property of only £190,000. Of course what concerned Wilson LJ is that to siphon out liquid capital to meet debts would threaten the security of the home for the two younger children. And so he concluded that there was a sufficient reason, indeed a compelling reason, to send the case for hearing before a full court.
9. We heard the wife in person advance her appeal, the husband in person respond and the wife reply, and these oral submissions reveal the passion that still burns in any return to these fraught areas of dispute. The documentation before us is voluminous. We have six bundles: four bundles from the county court, then an appeal bundle and a supplemental bundle. So finding our way through all this documentation has not been easy, but in the end we have undoubtedly a full record of the judgment of the District Judge and of HHJ Hindley. We also have a transcript of the judgment of Wilson LJ.
10. So on that material I reach the following conclusions. As to costs, the judge's discretionary conclusion is reasoned in a short judgment given after further submissions and is to be found at page 20 of the transcript. The District Judge referred to the obligation on the parties to endeavour to resolve their differences. She categorised any proposals advanced by the wife as being "totally and utterly unrealistic". She commended the husband's efforts, and in particular a proposal he had advanced in November 2004 and then improved in November 2005. She then said:

"My view is that this case has been a nightmare insofar as the parties personally are concerned, insofar as the counsel and solicitors, and a very difficult case for any judge, myself included, to deal with. It has been a nightmare scenario largely because of the wife's approach: she has been unrealistic; she has failed to produce what has been required to produce at various stages; the case has had to go off at several stages, there is already outstanding an order for her to pay £900 in respect of the proceedings in July..."

11. Then counsel interrupted to show that that had been balanced out and the judge continued:

"Insofar as the matter generally is concerned, I am satisfied the wife has been the one that has largely caused this to get to this stage, because of the two offers made by her husband, both of which were entirely reasonable. I see no reasonable offer from the wife at all and, therefore, in my view, she should pay his costs, and I will [make] an order from 24 November 2004, which was the date when a very realistic proposal was put forward…"

12. The question of whether that order was premature in its commencement was put to HHJ Hindley by counsel for the wife and it was dealt with at paragraph 49 of the judgment and found no favour with HHJ Hindley. I of course see the force of Wilson LJ's observation, but against that, the offer only preceded the Forms E by a matter of days. In my view it was open to the District Judge to take that early date given the very strong line she took on responsibility for the chaotic litigation.
13. The second point raised by Wilson LJ as to affordability has to be measured not in the context of the wife's legal liabilities so much as her practical liabilities. Of the £65,000 of debt that is owed to her own solicitors for past work done, they did that work on credit without security and they must recognise that they do not have a very good chance of recovery. In relation to the husband's entitlement to just over £100,000 he says that he has already offered a compromise to accept £60,000 and so, he says, it is affordable and the wife can increase her mortgage by £60,000. The borrowing on an interest-only basis would be affordable and the equity in the house would not preclude a marketplace lender from advancing the additional sum.
14. It would be rare indeed for this court to interfere with the quantum of an order made by a district judge who had heard six days of evidence, an order then upheld by the circuit judge on appeal. It seems to me that on the profounder information that is available to us there is no basis for interfering. Wilson LJ was obviously doing his best on an oral submission from a litigant in person. He did not have as much information as we have. In reliance on the fuller information, I reach the clear conclusion that there is no basis upon which this court could, in a principled way, interfere with the detailed outcome achieved in Leicester and then confirmed in Birmingham.
15. So I would dismiss the appeal.

Lord Justice Wall:

16. I agree.

Lord Justice Elias:

17. I agree also.

Order: Appeal dismissed