England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PRINCIPAL REGISTRY
FAMILY DIVISION
(MR NICHOLAS FRANCIS QC)

		Royal Courts of Justice Strand London WC2A 2LL
		13 June 2013

Lord Justice Thorpe:

1. We are asked to rule upon disputes that have broken out between the parties following the delivery of our judgment on the appeal, which was given I think on 15 April. There are three issues: one is as to the form of the order; the second is as to whether we should require the unsuccessful respondent to repay to the successful appellant sums which he paid to her solicitors pursuant to the order of Mr Nicholas Francis QC, which stood only until it was set aside by this court.
2. The order made by Mr Francis was for the payment of £125,000 to meet the wife's costs as incurred to the date of the hearing before Mr Francis and as were estimated to the conclusion of the trial of her ancillary relief claim, which was fixed for April. That fixture was subsequently vacated to enable this court to review Mr Francis's order well before the completion of the trial process in the Family Division.
3. The fact is that Mishcon de Reya had funded the wife up to the point that Mr Francis made his order. So, of the £125,000, roughly half went to satisfy past costs and roughly half went to provide for future costs. So, to that extent, the risks that Mishcon de Reya had taken in giving credit to the impecunious applicant wife were removed by Mr Francis' order.
4. The timetable is of some importance. Judgment was given by Mr Francis on the 18th. On the following day leading counsel then representing the respondent husband (respondent in the court below) applied for permission by letter. Mr Francis, on the following day, refused permission but extended time for the filing of the Appellant's Notice to reflect the intervening Christmas and New Year holidays. The Appellant's Notice was filed on 17 January.
5. Papers were brought to me, and on 25 February I made a paper order in the form that I often adopt, "Application adjourned to oral hearing on notice with appeal to follow, one day time estimate". I did not order any particular expedition. I did not have my eye on the fact that the order in the court below provided for staged payments of the £125,000 by four equal instalments. On the day that I made my paper order, the March and April instalments were future instalments. So the day I wrote the order, two had been paid and two were yet to be paid. Of course, on the date of the application for permission refused by Mr Francis none had been paid and on the date of the filing of the Appellant's Notice only one had been paid. So that is the timetable.
6. Mr Pointer says, well plainly this money should come back. The wife's claim to any substantive order has been dismissed. The Recorder's ample order for past and future costs is now demonstrated to have been wrong, and accordingly it is only right that the money paid under a wrong order should be returned.
7. Mr Cayford says, no, no, no, that would be quite unprincipled. Look at the authorities in this court, namely Moses-Taiga v Taiga [2005] EWCA Civ 1013. Look at the way the husband presented his case in this court, always emphasising the vulnerability of the husband to injustice if he provided for the pursuit of what was an application liable to be shown unmeritorious. He points out that the money that Mishcon de Reya has received has all been properly applied to the discharge of their costs and disbursements. There remains, or did on 1 May remain, only the sum of £2,538, which he accepts that they owed to the husband's order. There is no magic in that date other than it is the date of a letter from Mishcon de Reya in which they acknowledge that that sum was unspent on legal costs and was conditionally held to the husband's order.
8. Mr Pointer, in reply, says that the previous authorities in this court are clearly distinguishable and that it would be bizarre if the appellant husband, having succeeded in this court so completely, should get nothing back from his punctilious performance of the order below and that Mishcon de Reya, who had taken a big risk in advancing the wife's claims on credit up to the hearing before Mr Francis, would be, as it were, indemnified in costs in respect of which they had put themselves on risk.
9. In my view, Mr Pointer's submission on the authorities is correct. This case is plainly distinguishable from Moses-Taiga v Taiga in that what we are concentrating on is not the failure of the wife at trial but the failure of the wife on a challenge to the A v A order itself. Plainly, if the challenge had been determined earlier in time, if there had been an order for expeditious hearing shortly, say seven days, after 25 February, the March and April payments would have been unpaid and would never have flown into the Mishcon de Reya pocket.
10. So it seems to me that we have to look at the situation realistically and see that the relevant date is not 1 May but the date upon which Mishcon de Reya were put on notice that the instalment payments were conditional upon the wife successfully resisting the appeal. It is a question as to when the date should be drawn. Obviously they knew from the outset that an appeal was under way, intended and planned. That was plain from the application to the judge below for permission. It was plain from the fact that time was extended and it was completely plain from the date that the Appellant's Notice was filed. It was in red neon lights from 25 February when I made the order recognising the merit of the application for permission.
11. So it seems to me that, from a pretty early stage, Mishcon de Reya had to ask themselves whether the future conduct of the litigation on behalf of the wife was, as it were, risk-free or whether there was still an element of risk which they could either take or refuse at their will. This point was in part dealt with in our judgments on the appeal, and the question of whether Mishcon de Reya would have funded the future had the A v A application been refused by the judge was to be the subject of a partners' meeting. The possibility of them continuing to extend credit to litigate was still open.
12. So it does seem to me that the only point that can be forcefully taken against Mr Pointer's presentation is that there was not an application for stay, nor was there any flagging up of the need for an expedited hearing. It does seem to me that ideally those acting for the husband would have sought a stay very clearly in the Appellant's Notice and would also have sought, either within the notice or separately, expedition, certainly once the oral hearing had been directed. But it does not seem to me that that goes to the point of principle. In all probability the application for a stay would have been refused given the very unusual function of the maintenance pending suit order. It seems to me that the probable outcome would have been refusal of stay but a provision for expedition.
13. So drawing all those threads together, it seems to me that the husband is entitled to an order for return of monies paid to fund future litigation or to fund the wife's costs from the date when it was apparent that the security provided by Mr Francis was vulnerable to appeal. The order goes against the wife. No order is sought by Mr Pointer, and it will then be for Mishcon de Reya to consider their position and act with proper professional responsibility. The amount repayable to the husband depends upon the state of the account between the wife and Mishcon de Reya at the relevant date, and, if that figure cannot be agreed, then it can be determined by a costs judge.
14. As to the form of order, I would approve the form proffered by Mr Pointer, subject to the small amendments which we have agreed this morning. As to Mr Cayford's application for permission to appeal to the Supreme Court, I would refuse that. It is clearly better to leave the decision to the Supreme Court since Mr Cayford has already initiated that process by way of petition or is about to initiate the process by way of petition.
15. I should have said that the date at which the account must be taken as between the wife and her solicitors is 17 January.

Lord Justice Jackson:

16. I agree.

Lord Justice Tomlinson:

17. I too agree.

Order: Appeal allowed