England and Wales High Court (Family Division) Decisions

IN THE HIGH COURT OF JUSTICE

		26 February 2013

Mr Justice Peter Jackson:

1. I am delivering this judgment in written form so that the husband, who is not represented, can be aware of my decision, which contains a somewhat novel element.
2. This is an application for permission to appeal a financial remedy order made by District Judge Malik on 18 January 2013. In it, he divided the parties' limited capital substantially in favour of the wife, made a modest pension sharing order and an order for child maintenance, and made (effectively) a nominal periodical payments order for a three-year period, followed by a bar on any extension.
3. The judge gave a structured, extempore judgment at the end of a three-day hearing.
4. The wife is aged 45 and the husband 43. They married in 1993 and finally separated in May 2012. They have three children aged between 14 and 9, who are in private education. The husband is a hedge fund manager, currently moving between jobs. The wife is an artist who has not sold her work for a number of years. Divorce proceedings began in 2011 and the husband left the family home in May 2012.
5. The only capital assets are the heavily mortgaged family home and the proceeds of sale of a property in the Mediterranean that was disposed of against the wife's wishes in January 2013. The family has heavy debts, so that from gross assets worth about £1.4 million there is a net amount for distribution estimated at £209,000 only. The district judge was rightly appalled at the parties' legal costs, which totalled over £150,000 at the time of the hearing before him, the husband having spent £93,000 and the wife £60,000. This reflected a large number of attritional interlocutory hearings, for which he held the wife largely responsible.
6. By way of capital order, the judge allocated the wife £150,000 plus half any surplus above that figure from the sale of the family home, thus notionally giving her about £180,000 and the husband £30,000. She will accordingly receive 6/7 of the available assets.
7. As to income, the judge ascribed an earning capacity of £120,000 per annum to the husband and £5000 per annum to the wife. He dealt with any possible bonuses by allocating a small share to the wife over the three-year period. He made an order for child maintenance. The overall net effect is to give the husband and wife about £3000 per month once the wife's benefits are taken to account, an equal division notwithstanding that she has the care of the children.
8. The key finding of the judge at paragraph 57 was that even if the wife had all the available capital, she would not buy housing for herself and the children in the way that she said she would, and that she will in future have to rent like the husband. He described her litigation conduct as being inequitable to disregard. He also found that private education for the children could no longer be afforded.
9. On this application, the wife argues that she should have had £200,000 reserved from the capital fund, and that she should have periodical payments of £500 a month for herself for joint lives.
10. The test on appeal (FPR 2010 rule 30.12(3)) is whether the decision of the lower court was (a) wrong, or (b) unjust because of a serious procedural or other irregularity. The test for permission to appeal is whether such an appeal would have a real prospect of success (FPR 2010 rule 30.3(1)).
11. In my judgement the wife has no real prospect of success in relation to the district judge's capital orders. His finding against this background that the wife would not in fact rehouse herself in a property worth little over £200,000 when she is presently living in a house worth £1.2 million cannot be challenged. In any event, any further argument about this family's remaining capital would be disproportionate and futile. The sums already spent on legal costs have lost the children the possibility of a better home and probably a private education.
12. In reaching this conclusion, I acknowledge that the judge differentiated between the parties in that he allowed the husband to draw his higher legal costs from the common pool while requiring the wife's lower costs to be assessed before they are taken into account. I also accept that the judge's reference to the wife's conduct as a factor is somewhat surprising, albeit he did not in his oral judgment explain how he took that into account. However, stepping back and looking at the overall capital division, I remain of the view that the wife has not demonstrated a real prospect of success in this respect.
13. I take a different view of the prospects of a wife in relation to periodical payments, both as to the amount and, most particularly, as to the three-year time bar. In comparison to the husband, the wife has no track record as an earner and in three years' time there will still be three minor children following an 18 year marriage. I think she should be allowed to argue that in that respect the judge did not make proper allowance for her reasonable needs.
14. I will therefore grant permission to appeal in relation to paragraphs 5 and 6 of the order but otherwise dismiss the application. I do not agree with the wife's submission that, since issues of capital and income are always interrelated to some extent, there is no harm in granting permission to appeal against the capital provision as well.
15. I shall however make the permission subject to a condition that the amount of legal costs that are to be recoverable from the other party in relation to the appeal itself shall not exceed £5000 on either side. In my view, the court has a responsibility to discourage profligate waste of costs, particularly in a case with a track record like this. It is a matter for each party to decide what they want to spend, but they cannot expect it to be recoverable if it exceeds that threshold.
16. In fact, I am informed that the wife's costs of this application, incurred in little over five weeks since the original hearing, already amount to £12,500, a sum that is completely disproportionate to the issues in the case. She has had grounds of appeal settled by one counsel (not the counsel who represented her at trial), a skeleton argument settled by leading counsel, and an appearance today from yet another junior counsel.
17. I recognise that the costs cap that I am imposing will mean that the wife already has unrecoverable costs, even if she obtains an award of £5000 + VAT at the end of the proceedings. If that is what it takes to prevent what the district judge described as a haemorrhaging of money, so be it. So far as I can tell, all the paperwork that she needs for the appeal is in place. There is no need for transcripts or further documentary preparation on her part.
18. I very much hope that these parties will now reach a negotiated solution in relation to the outstanding issue of periodical payments. In case that does not happen, I will now fix a date for the husband's skeleton argument and for a half day hearing of the appeal.

_________________