Another victory for BPS in the Divorce Courts
Mr Harry Lipson, BPS Senior Partner sucessfully represented Mrs Ezair at the Court of Appeal. The case has since been reported and has hit the headlines. Another victory for BPS in the Court of Appeal.
| SHEILA EZAIR v JACOB EZAIR (2012) |
| CA (Civ Div) (Thorpe LJ, Rimer LJ, Black LJ) 31/05/2012 |
| FAMILY LAW – CIVIL PROCEDURE – COSTS (LTL) |
| COSTS : FINANCIAL ORDERS : LUMP SUM ORDERS : WASTED COSTS ORDERS : PROCEDURE FOR COMPENSATING PARTY FOR WASTED COSTS AT CONCLUSION OF ANCILLARY RELIEF PROCEEDINGS : ANCILLARY RELIEF : MATRIMONIAL CAUSES ACT 1973 s.25 : FAMILY PROCEDURE RULES 2010 r.28.3 |
| It was unorthodox and inappropriate to inflate a lump sum awarded in ancillary relief proceedings to compensate a party for wasted costs incurred as a result of the other party’s litigation conduct. The safe and orthodox procedure was to assess the lump sum in accordance with the criteria under the Matrimonial Causes Act 1973 s.25 and then to make a distinct costs order pursuant to the Family Procedure Rules 2010 r.28.3. |
| The appellant husband (H) appealed against the final order in ancillary relief proceedings brought by the respondent wife (W).H and W had been married for over 30 years. H was a successful businessman, involved mainly in property investment and management. When the marriage broke down, W applied for ancillary relief. The case was unusual in that the parties’ expert forensic accountants had agreed the value of their assets. The business assets, held by companies or trusts under H’s direction, were valued at £2.637 million. The family assets outside corporate ownership, mainly property owned equally by H and W, were valued at £2.04 million. The parties had agreed that they should share the net worth of those assets equally. The judge’s sole task was therefore to decide how to redistribute the assets to achieve an equal share for each party. H contended that the privately owned assets should be sold and the proceeds divided, and that 50 per cent of the shares in the business assets should be transferred to W. W submitted that she should receive all the privately owned properties together with a lump sum of £322,000 to equalise the assets. She also complained that H’s conduct, albeit as a litigant in person, had inflated her legal costs way above what it otherwise would have been. The judge, having found that H had forged W’s signature on a remortgage application, concluded that H could not be trusted to act fairly towards W in the future so that it would be dangerous for W’s financial security to rest in substantial part on her equal ownership of company shares. He therefore awarded W the whole beneficial interest in the family assets. The judge acknowledged that the lump sum required to provide equality was £322,000 but stated that, in order to reflect other matters and H’s misconduct in relation to the proceedings, H should pay W a lump sum of £500,000.H contended that (1) the judge had erred in awarding W all the “copper-bottomed” and liquid assets, leaving him with only the risk-laden and illiquid assets; (2) the uplift of £178,000 had not been explained.HELD: (1) H’s first ground of appeal failed simply because the view the judge had taken on the division of assets was justified on the agreed evidence of the two experts as to the value of the business assets. (2) The judge had, however, fallen into error in quantifying the lump sum as he had. He had undoubtedly been fully entitled to have had regard to W’s strong submissions that H’s conduct in the case had inflated her legal costs. It was open to the judge, under theFamily Procedure Rules 2010 r.28.3 , to have concluded that the instant case was not one that fitted comfortably within the general rule that there should be no order for costs at the conclusion of an ancillary relief trial and to have penalised H by making an order for costs so as to compensate W for that element of wasted costs. It was, however, unorthodox simply to inflate a lump sum in the way that he had. That produced the mathematical consequence that the sum for wasted costs was £178,000, but that was not a considered or reasoned quantification. The safe and orthodox procedure was to assess the lump sum in accordance with the criteria under the Matrimonial Causes Act 1973 s.25and then to make a distinct costs order. The lump sum ordered by the judge was impossible to support as a matter of principle and for want of reasons. The order would, accordingly, be rewritten to award W a lump sum of £322,000, together with an order that H pay W the costs she had unnecessarily incurred in consequence of his misconduct. That matter would be remitted to the trial judge, asking him to have regard to the fact that H had been a litigant in person in complex ancillary relief proceedings and that at various interlocutory hearings he had been condemned to pay the costs incurred by W. That latter step was necessary to ensure that there was no double penalty in combining the interlocutory and final orders. The trial judge was also to have regard to the fact that W’s legal bill had not been subject to any summary or detailed assessment by a costs judge, and it was therefore likely that the full extent of her claimed costs bill would shrink when subjected to a process of assessment.Appeals allowed in part |
| Counsel: For the appellant: Simon Charles For the respondent: Paul IsaacsSolicitors: For the appellant: CGW Law For the respondent: Betesh Partnership |
| LTL 31/5/2012 EXTEMPORE |
| AC9601547 |
Represented by Mr Harry Lipson. Contact Harry.
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