Lauren Belinda Simon v Paul Mark Simon [2025] EWFC 89

[2025] EWFC 89Case No LV16D01012
IN THE FAMILY COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 7 April 2025
Before
MR JUSTICE PEEL
Between
Lauren Belinda SimonApplicantPaul Mark SimonRespondentIntegro Funding Ltd. (“Level”)Intervener
Nicholas Bacon KC (instructed by Ozon Solicitors) for RespondentJonathan Southgate KC (instructed by AFP Bloom LLP) for IntervenerHearing Hearing date: 25 March 2025
Approved JudgmentThis judgment was handed down remotely at 10.30am on 7 April 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................MR JUSTICE PEEL

Introduction

[1]In these long running financial remedy proceedings, I shall continue to refer to the Wife as “W”, to the Husband as “H” and to the Intervener, a litigation loan provider, as “Level”. The issue before me now is what orders to make in respect of legal costs arising out of Level’s intervention. This has not been straightforward; the costs date back to February 2021; some of the costs orders are not entirely clear; there have been numerous applications (some of which have not been formally disposed of by court order) and hearings since the intervention (at least nine, by my reckoning); five different High Court judges have made orders; the Court of Appeal has delivered a substantive judgment. The litigation history has been tortuous; not for nothing did King LJ describe it as a procedural quagmire. The bundles for this costs hearing alone comprise nearly 600 pages and I have received a total of 35 pages of skeleton arguments.[2]The background is set out at paragraphs 5 to 11 of my judgment dated 2 July 2024, reported as Simon v(1) Simon(2) Integro Funding Limited (‘Level’) [2024] EWFC 160, which in turn reproduced paragraphs 7 to 37 of the Court of Appeal judgment reported as Simon v (1) Simon (2) Integro Funding Limited (‘Level’) [2023] EWCA Civ 1048.[3]To avoid the need to refer back to those judgments, and to assist the reader, I will incorporate that narrative in the “Background” section of this judgment, as modified to reflect matters which are or may be relevant specifically to costs. Each party’s position on costs not already determined[4]Level seek all of their costs of their intervention from H on the indemnity basis, to be subject to detailed assessment if not agreed. Although I have not been provided with a detailed schedule, I am told that their total costs are £687,170, which is broadly consistent with the N260s filed for the many hearings which have taken place. Of that, a significant proportion (about £260,000) represents sums claimed by Level under two costs orders already made in their favour during the proceedings.[5]H seeks no order as to costs, save that Level should pay his costs of an unsuccessful application made by Level for disclosure of privileged FDR material. H’s total costs relating to Level’s intervention, I am told, exceed £600,000. Background[6]Financial remedy proceedings were issued on 12 February 2016. Disclosure was ordered in relation to a trust of which H was trustee as well as a beneficiary. Income and capital from the trust had been routinely used to support the family’s lifestyle including a loan from the trust which had funded and was secured against the family home.[7]The final contested financial remedy hearing came before Parker J in July 2018. H’s case was that the trust assets were not available for distribution. Parker J held that the husband had been guilty of ‘misrepresentation’, ‘obfuscation’ and ‘distraction’ and made an order for payment of £3m to the wife on a needs’ basis. She assessed the assets as amounting to at least £9m, this included the husband’s interest in the trust assets which she held to be an available resource.[8]H appealed: he asserted that Parker J was in error as the trust assets were not available for distribution and that, as a consequence, W had been awarded all the available assets. King LJ granted permission to appeal. In December 2018, in advance of the hearing of the appeal, W had applied to Level for a loan to enable her to clear her outstanding costs due to her former solicitors under a ‘Sears Tooth’ agreement and which would also allow her to be represented in both the appeal and in the ongoing contested proceedings in relation to the children. In the usual way, prior to lending W the sums she needed, Level obtained a written opinion from W’s then Queen’s Counsel (‘QC’) seeking advice as to the likely outcome of future financial remedy proceedings in the event that the appeal was allowed.[9]On 14 December 2018, W and Level made the first of three loan agreements, the first being for £500,000 which sum was substantially used to meet the costs incurred under the Sears Tooth agreement. Subsequently on 20 June 2019, Level advanced a further £100,000 and, on 27 September 2019, an additional £30,000 was advanced to enable W to make an application for a legal services provision order. Altogether this amounted to a total of £630,000. By February 2021 the figure with interest was £865,828. Interest has continued to accrue in the intervening two plus years at 19%. The total now exceeds £1m.[10]The appeal from Parker J’s order was adjourned until the final determination of parallel children’s proceedings. H was subsequently granted residence of the children and that appeal was allowed by consent and a retrial ordered.[11]Mr Cusworth QC (now Cusworth J) became the allocated judge in respect of the retrial and on 2 December 2020, dealt with the application made by W under s22ZA Matrimonial Causes Act 1973 (‘MCA 1973’) for legal services provision. H agreed to provide £45,000 to cover the costs of a private Financial Dispute Resolution Appointment (‘the FDR’). The £45,000 was provided by H withdrawing the funds from the trust.[12]The private FDR took place on 12 February 2021. During the course of negotiations, W’s QC and legal team became conflicted and withdrew. W continued unrepresented and has remained so ever since.[13]An agreement was reached at the private FDR. Under the terms of the agreement, W was to receive a life interest in a residential property to be purchased for a figure of £1m by H’s trust which trust would thereafter own the property absolutely; W was to receive no free capital or income in settlement of her claim. Given that W had and has no capital of her own, it followed that a consequence of the agreement was that she would have no funds with which to repay any part of the Level loan. A draft consent order reflecting the agreement was signed by H and W.[14]Shortly after the private FDR, W contacted Level and told them that she would not be repaying the loan. Level, on learning of the proposed settlement, wrote to the court on 15 February 2021 copying in W’s solicitors, H’s solicitors and Mr Todd KC, who represented H. In their communication to the court Level said that they urgently requested being joined to the proceedings prior to the approval of any order. They continued: ‘A formal application will follow, but in the meantime, we urgently request that no order is sealed in relation to this case and that we are heard in relation to any order which is presented’.[15]Two days later on 17 February 2021, without informing Level or copying them in, H’s solicitors wrote to the barristers’ clerk at the chambers from which Mr Cusworth QC then practised as a specialist matrimonial finance barrister, attaching the signed draft order reflecting the agreement reached at the Private FDR together with a Statement of Information for a Consent Order in relation to a Financial Remedy D81 (‘D81’) which is required by the Family Procedure Rules 2010 (‘FPR’) rule 9.26, together with a schedule of assets, neither of which disclose H’s interest in the trust. The court was not sent a copy and no formal application was made nor fee paid. Mr Cusworth QC was not informed of the letter Level had written two days earlier asking that the proposed order not be made.[16]The following day on 18 February 2021, Level’s solicitors, unaware of the direct communication which had taken place with Mr Cusworth QC, wrote to the court in proper form attaching an application seeking joinder in the financial remedy proceedings with a witness statement in support. Although Level had not specifically sought an ex parte hearing, Newton J dealt with the matter on paper the same day and granted the application. W, H and his solicitors were each notified of the terms of the order.[17]The receipt of Newton J’s order provoked a letter from H’s solicitors to the court the following day (19 February 2021) asking why the order had been made ex parte and seeking the inclusion of a provision for liberty to apply and a return date. The letter indicated that a stay of Newton J’s order would be sought pending an application to set aside the order joining Level to the proceedings. Unhappily, H’s solicitors did not notify Mr Cusworth QC or his barrister’s clerk of these developments, nor did they inform the court that a draft order had been sent to Mr Cusworth QC at his chambers to approve rather than by way of formal application through the court.[18]On 22 February 2021, in refusing to agree to a stay of the order which had joined them as a party to the financial remedy proceedings, Level’s solicitors wrote that:
“My client is deeply concerned that your client and Ms Simon entered into a collusive agreement (seeking to exclude our client’s interests) against which you might seek court approval without further notification to them. You have now been prevented from taking that step…”
[19]The same day, the court notified the parties that Newton J had amended his order to add a liberty to apply provision and to provide for there to be an ‘on notice’ hearing on the first open date after 11 March 2021. Mr Todd’s clerk offered only a date towards the end of July 2021.[20]Despite repeated requests, Level were not provided with the correspondence which H’s solicitors had had with the court. On 26 February 2021, Level’s solicitors wrote to H’s solicitors and to W expressing their concern that notwithstanding that they were now a party, H’s solicitors had refused to inform them of the status of the proceedings and asking whether they had had ‘any communications with the court since the private FDR or provide a draft order which I presume to be in existence. Please do so by return’.[21]There was no substantive reply to the request nor was Mr Cusworth QC informed of it; rather, four days later on 2 March 2021, his barrister’s clerk received what was referred to as a ‘a very polite enquiry/chaser’ in relation to the approval of the draft order which had been sent to him two weeks earlier. Mr Cusworth QC judge was neither informed of the correspondence which had passed between the solicitors and the court nor that Level had been joined as a party by Newton J. Absent any of that information, Mr Cusworth QC, understandably, made no further enquiries. He approved the draft order that day and returned it to the court office for sealing.[22]On 5 March 2021, having had no response from H’s solicitors, Level issued an application seeking(i) disclosure from H and W;(ii) that the matter be listed for case management directions; and(iii) seeking an order that no substantive orders should be made prior to that hearing. On 10 March, the application was put before Holman J who offered to deal with an urgent oral hearing.[23]Also on 10 March 2021, H’s solicitors asked what order Level sought. They did not tell Level that the order had been approved and sent to the court for sealing. Level responded by telling H’s solicitors that they were unable to identify the order they sought until there had been disclosure. The next day, H’s solicitors replied stating that the ‘matter has now concluded’. On 12 March, Level asked whether, in the light of that comment, H had ‘succeeded in attaining an approved consent order notwithstanding our join(d)er to the proceedings’. H was invited to undertake not to apply without 14 days’ notice for the approval of any consent order.[24]H’s solicitors finally informed Level on 15 March 2021 that the agreement had been reduced to a consent order ‘which should have been sealed by the court by now’. In the event it was not until the next day that the order was in fact sealed.[25]Also on 15 March 2021, H made an application for the order permitting Level to intervene to be discharged and for an order to be made that Level be enjoined from using any information they had obtained by virtue of having provided W with the loans in any collateral proceedings.[26]On 17 March 2021, Holman J ordered a stay of the consent order.[27]On 18 March 2021 Level applied to set aside the consent order and for freezing orders against H and W.[28]At a further hearing on 19 March 2021, Holman J made a freezing order in respect of the former matrimonial home and a property in Israel. As a condition of the freezing order, Level gave an undertaking not to use the information they had other than in the financial remedy proceedings. Holman J ordered Level to plead their civil claim against H by 16 April 2021. Holman J subsequently clarified that he was not prepared to require Level to particularise precisely what orders they would be seeking in the set aside proceedings saying:
‘In general the answer to that is obvious: that W receives a sufficient sum to at least equal the amount that she owes to the interveners. Above that they have no interest’
. Holman J also provided that the freezing order would cease to have effect if H paid £950,000 into court.[29]On 16 April 2021, three weeks after the sealing of the consent order, Level issued their civil claim which alleged repudiatory breach on the part of W, procuring a breach of contract by H, procuring a court order by fraud and unlawful means conspiracy. They relied on ss423-425 Insolvency Act 1986 (‘IA 1986’):
‘Transactions Defrauding Creditors’
. The transaction relied upon was the consent order approved by Mr Cusworth QC on 2 March 2021 and sealed on 16 March 2021.[30]In the defence filed in response to Level’s particulars of claim and again in his oral submissions, Mr Todd laid heavy emphasis on the fact that ‘unconditional permission to appeal had been given’ against the order of Parker J which had made provision for W to receive a lump sum of £3m. The defence significantly overstates the significance of the grant of permission to appeal which simply said:
‘the appeal has a real prospect of success for the reasons set out in the skeleton argument’
. Contrary to paragraph 15.4.1 of the defence, it is not correct to say that such permission is ‘very rarely given’. Permission to appeal is not given unless there is a real prospect of success and to grant it by reference to the skeleton argument is a convenient shorthand commonly used. Further it is absolutely not the case, as stated at paragraph 18 of the defence, that the Court of Appeal had ‘already indicated that the appeal would succeed’.[31]This submission was made by Mr Todd before the Court of Appeal in order to support his submission that the fact that an earlier order had erroneously given W £3m should be ignored and should not infect the court’s approach when considering whether to approve the proposed consent order once again put before the court which order would give W no free-standing capital of her own.[32]H applied on 9 July 2021 to set aside the freezing injunction.[33]On 25 October 2021 Level applied for an increase in the payment into court provision under the freezing injunction from £950,000 to £1m,[34]On 12 November 2021, Roberts J continued the injunction. She did not increase the payment into court provision which was clearly somewhat academic as neither party had evidenced any intention of paying into court any sum.[35]On 24 November 2021, Level applied for disclosure of privileged material relating to the private FDR, and for the civil claims to be transferred to the Family Division.[36]On 29 November 2021, Roberts J heard the application by Level for permission to disclose material and information in its possession but which was subject to ‘without prejudice’ privilege. Level wished to be able to use without prejudice offers and materials, including counsel’s position statements from the FDR, in support of its application to set aside the consent order by establishing, for the purposes of the engagement of s423 IA 1986, that the result of the transaction within the financial remedy proceedings was to defeat Level’s claims as a creditor of W.[37]In her judgment dated 23 December 2021 (LS v PS [2021] EWFC 108), Roberts J between [70] and [74] said that Level did not stand in the same position as a third-party unsecured creditor. Different policy considerations, she said, are engaged where, as here, one is concerned with ‘a professional corporate lender which offers bespoke services designed for the specific purposes of enabling a litigant to participate fully and effectively in litigation flowing from matrimonial breakdown’.[38]Roberts J said at [77] that on the facts of the case, Level had been entitled to ‘seek and secure’ party status as an intervener in the financial remedy proceedings ‘when it became aware of the steps which had been taken to conclude a settlement which, on the face of it at least, had the appearance of defeating it[s] ability to recover its debt in whole or in part, from [W]’. Roberts J however refused the application considering that a court had ‘ample evidence available to it in the absence of the privileged material to form a view as to whether or not this order should be set aside’.[39]Level appealed against that order.[40]On 6 January 2022 H applied for an order that Level pay his costs of the disclosure of privileged material application. Roberts J instead reserved the costs.[41]On 3 February 2022, Level applied for: i) An order transferring the civil claim to the Family Division (which appears to have already been sought by the application dated 24 November 2021). ii) Relief under s423-425 of the Insolvency Act 1986. iii) An order that they be entitled to rely upon material disclosed in the financial remedy proceedings for the purpose of the civil claim. iv) Further directions.[42]It was not until 22 February 2022 that H conceded in correspondence that the consent order should be set aside ‘to permit Level to make representations as to whether the order should be approved’.[43]W, in two brief emails to H’s solicitors on 14 March 2022, said that she wanted no part in the proceedings and in the event of the consent order being set aside, she did not intend to take any further steps ‘other than asking the court to approve the consent order’. She concluded by saying: ‘To be clear I do not want to be involved in further damaging, expensive and time consuming litigation’.[44]On 21 March 2022, the first day of the trial listed for three days to determine the set aside issue, H agreed to the consent order being set aside. This represented a delay of a year in the litigation which had, by now, been going on for over five years and which prevarication inevitably resulted in an order for indemnity costs being made by Mr Cusworth QC against H.[45]At the March 2022 hearing, Mr Cusworth QC gave two judgments and made a number of orders. H, having agreed to the consent order being set aside, then applied for it to be made (or remade). The judge refused. The judge upheld the order which had joined Level to the proceedings as Intervener. The judge made a number of conventional directions for exchange of Forms E, provision of specific disclosure and replies to questionnaire. He provided for(i) a 2-day case management hearing and(ii) a 5-day final hearing. Finally, he directed that the civil claims be transferred to the family court, to be heard after conclusion of the financial remedy proceedings.[46]H appealed those orders.[47]On 5 May 2022, I granted on paper an extension of time for Level to provide a statement which had been ordered by Mr Cusworth QC. I provided that there should be no order as to costs.[48]On 9 August 2022, the Court of Appeal refused on paper Level’s application for permission to appeal against the order of Roberts J which had dismissed the application for disclosure of privileged material.[49]On 11 August 2022, H applied for an order adjourning the PTR pending the outcome of his appeal.[50]On 13 September 2022, Mr Cusworth QC ordered H to pay Level’s costs of the set aside application on the indemnity basis. He made no order for costs on the PTR adjournment application (it is not clear what substantive order, if any, was made on the adjournment application). In his judgment he said the following, which I interpret as reserving all outstanding costs issues:
“I have therefore indicated that the wider costs of the intervention are not to be determined at this stage, nor the other incidental costs which have been occasioned on both sides since the Intervener’s application was first made. The determination of those costs must await the final hearing in this matter, which is now to be listed for a 5 day hearing.”
[51]On 28 December 2022, Mr Cusworth QC made a further directions order on the papers, and reserved costs.[52]On 27 February 2023, the Court of Appeal granted H permission to appeal against the orders of Mr Cusworth QC of March 2022. Mr Cusworth QC adjourned the listed PTR and final hearing of the financial remedies claims.[53]The judgment of the Court of Appeal on the substantive appeal was handed down on 15 September 2023, and the court’s order was made on 18 October 2023. The appeal was refused on the substantive grounds (in particular joinder of Level as Intervener, and refusal to make the consent order), but allowed only to the limited extent that(i) the judge should not have transferred the civil claims to the family court and(ii) the judge should not have timetabled towards a full scale final hearing; rather, he should have listed an intermediate hearing to consider whether the case could be dealt with summarily and/or what further steps would be required to dispose of the proceedings.[54]The Court of Appeal ordered that the matter be listed before me for directions. H was ordered to pay the costs of the appeal. King LJ noted as follows at paragraphs 61 and 62:
“61. At such a hearing, the wife would have the opportunity to tell the judge exactly what her intentions are. She would understand that if she wishes the protection of an order, then the court will need to consider whether the draft agreed order is appropriate and, if not, only then to consider what further directions or order to make. If the wife made clear that she did not wish to pursue her financial remedy application, and the husband did not seek the continuation of the proceedings, a court cannot require her to do so. This was acknowledged by Mr Southgate KC, as referred to below. That is one reason why I consider that the judge was wrong to make the directions which he did. 62. Mr Southgate accepts that no matter how unattractive the withdrawal by the wife of her application for financial remedies would be as an outcome so far as Level are concerned, if the wife, who is the applicant in the financial remedy proceedings, does withdraw her application for financial remedies there will be little they can do about that other than making her bankrupt and they would be unable to recoup any of the debt she owes to them. Level, Mr Southgate says, would simply be left with having to be vigilant in order to see if her circumstances changed and whether, after the dust has settled, she and the husband tried to ‘slip through’ an order at a later date.”
[55]The application for financial remedies (to which Level remained a party as Intervener), was re-allocated to me. On 21 December 2023, I made an order on the papers that “(i) H and W shall by 21 days before the hearing set out what, if any orders, they invite the court to make and (ii) Level shall by 14 days before the hearing set out what, if any, orders they invite the court to make”. A directions hearing was fixed on 5 June 2024.[56]In April 2024 H parted company with the legal team who had represented him throughout, and instructed new solicitors and counsel.[57]H produced a document in advance of the hearing on 5 June 2024 stating that he was not inviting the court either to make the previous consent order or to make any other orders in the financial remedy proceedings. W did not produce any such document. Level produced a document saying that they were not able to state their position until W did so.[58]At the hearing on 5 June 2024, W did not attend. I adjourned to 20 June 2024 and made an order for her attendance, and for her to set out before the adjourned hearing “her position in relation to any orders she seeks in relation to her application for financial remedies in these proceedings”.[59]On 10 June 2024 W sent an email saying that she did not want to continue the court proceedings and/or her financial remedies application. On 20 June 2024, she attended remotely and confirmed her position. H maintained the same stance.[60]I said this in my judgment arising out of that hearing: i) At paragraph 24:
“At the hearing on 20 June 2024, W confirmed to me directly that she wanted the proceedings to come to an end, and sought no order. She was crystal clear in not wanting any further litigation which she said had destroyed her and her family. H again pressed for no order to be made. Level, through Mr Southgate KC, realistically accepted that they could not seek any substantive relief and all that remained (other than costs) was to bring the proceedings to an end as appropriate.” ii) At paragraph 31: “Since neither H nor W invite me to make a consent order, or any other substantive order, I am not asked to exercise my oversight duties under s33A of the Matrimonial Causes Act 1973, or to undertake any evaluative exercise under s25. In that sense, Level has succeeded in their intervention in that (i) the consent order was eventually set aside and (ii) no further consent order, or relief, is being sought. No further “measure of protection” is required.”
[61]I made no order on the financial remedies application, which W withdrew.[62]I adjourned all issues of costs to this hearing before me. “Troubling history”[63]I said this in my judgment on 2 July 2024: i) At paragraph 9:
“The history which I have repeated above was described by the Court of Appeal as “troubling”
. Mr Southgate KC, on behalf of Level, is, with on the face of it some justification, highly critical of H and his former legal team. At the hearing before me on 5 June 2024, H’s leading counsel, Ms Harrison KC, who had had no previous involvement, told me that H distances himself from the actions of his previous legal team, deflecting blame and responsibility on to them. I reject that submission, which seems to me to be unsustainable unless and until he waives the privilege between himself and his previous lawyers and substantiates the assertion.” ii) At paragraph 12:
“I confess to being troubled about the involvement of H’s previous lawyers (all of whom, of course, have a duty to the court) in the events of February/March 2021 leading to the approval of the consent order. Who was responsible for the communications sent to Mr Cusworth QC, and who was aware of the contents of those communications? Who knew that when those communications were sent, Level were involved in the litigation, including intervening in the proceedings? Why did H’s legal team not draw this to the attention of Mr Cusworth QC? However, I am acutely conscious that none of H’s previous legal team appeared before me, and I have not had the benefit of any observations they might have on these matters. It would therefore be wrong of me to say any more on the subject.”
[64]In H’s skeleton argument for this hearing at paragraph 18(i) it is said that “There is no question that the approach on behalf of[H] in relation to the dealings with the court over the February order was fundamentally wrong” (emphasis added). At paragraph 30, the skeleton argument refers to “the deplorable conduct on behalf of [H]” (emphasis added). This careful wording attempts to throw blame for H’s litigation behaviour on his then lawyers. I reiterate what was said by me at paragraph 9 of my judgment on 2 July 2024. The relevant law on costs[65]Rule 28.2 of the Family Procedure Rules 2010 (“FPR 2010”) applies Part 44 of the CPR 1998 to family proceedings, save (so far as relevant to this case), rule 44.2(2)(a) which provides that “the general rule is that the unsuccessful party will be ordered to party the costs of the successful party”.[66]Rule 28.3(2) of the FPR 2010, which applies specifically to financial remedy proceedings by rule 28.3(1), expressly excludes (so far as relevant to this case) CPR 1998 rules 44.2 (4) and (5) which set out relevant considerations under the CPR for making a costs order.[67]Rule 28.3(5) states that “the general rule in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of another party”, and the previous paragraph (28.4(b)) defines “financial remedy proceedings”.[68]Rule 28.3(6) states that, notwithstanding the “general rule” in financial remedy proceedings:
“The court may make an order requiring one party to pay the costs of another party at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them)”
[69]Rule 28.3(7) states that: “In deciding what order (if any) to make under paragraph (6), the court must have regard to – (aa) any failure by a party, without good reason, to—(i) attend a MIAM (as defined in rule 3.1); or(ii) attend non-court dispute resolution; (a) any failure by a party to comply with these rules, any order of the court or any practice direction which the court considers relevant; (b) any open offer to settle made by a party; (c) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (d) the manner in which a party has pursued or responded to the application or a particular allegation or issue; (e) any other aspect of a party’s conduct in relation to proceedings which the court considers relevant; and (f) the financial effect on the parties of any costs order.[70]It is common ground that, in accordance with Baker v Rowe [2010] 1 FLR 761 the costs incurred in connection with an intervention by a third party are not “in financial remedy proceedings” where the starting point is no order as to costs. Such cases are, however, “family proceedings” such that the CPR general rule that costs follow the event does not apply. Thus, the court starts with what has been commonly termed a “clean sheet”, as Wilson LJ (as he then was) described it in Baker v Rowe at paragraph 24, whereby there is no starting point when deciding whether or not to make a costs order. However, as Wilson LJ said at paragraph 25 of Baker v Rowe: “Even where the judge starts with a clean sheet, the fact that one party has been unsuccessful, and must therefore usually be regarded as responsible for the generation of the successful party’s costs, will often properly count as the decisive factor in the exercise of the judge’s discretion”.[71]The lack of a starting point in the rules does not mean there is no procedural guidance as to what factors should be taken into account. Because these are “family proceedings”, albeit not “financial remedy proceedings”, CPR 44.2(4) and (5) apply rather than FPR 28.3(7):
“(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including— (a) the conduct of all the parties; (b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and (c) any payment into court or admissible offer to settle made by a party which is drawn to the court’s attention (whether or not made in accordance with Part 36). (5) The conduct of the parties includes— (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed any relevant pre-action protocol; (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended his case or a particular allegation or issue; and (d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim.”
[72]CPR 44.3 is retained in family proceedings. This empowers the court to order costs on the standard or indemnity basis.[73]As to the principles on which the court should make an order for indemnity costs, in Excelsior Commercial and Industrial Holdings Ltd. [2002] EWCA Civ 879 the Court of Appeal held at paragraph 39 that where something takes the case “out of the norm”, indemnity costs may be justified. In Esure Services Ltd v Quarcoo [2009] EWCA Civ 595 at paragraph 25 the Court of Appeal held that “out of the norm” reflects “something outside the ordinary and reasonable conduct of proceedings”.[74]CPR 44.6(1) is retained in family proceedings. This empowers the court to order summary assessment or detailed assessment.[75]By CPR 44 PD 9.2: “The general rule is that the court should make a summary assessment of the costs – (b) at the conclusion of any other hearing, which has lasted not more than one day… Unless there is good reason not to do so, for example where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily”.[76]Only the judge making the costs order has the power to assess them summarily: R (Isah) v Secretary of State of the Home Department [2023] 1 WLR 3000.[77]By CPR 44 PD 8.2 an order for costs will be treated as an order for the amount of costs to be decided by detailed assessment unless the order otherwise provides.[78]CPR 44.2(8) provides that: “Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so”.[79]It is, at least in theory, open to a later court (i.e not the court which made a costs order subject to detailed assessment) to make an order for an interim payment on account, although such instances are rare and most commonly arise in the context of costs orders automatically arising under the rules, such as in respect of a Part 36 offer or a notice of discontinuance: paragraph 25 of Global Assets Advisory Services Ltd and another v Grandlane Developments Ltd and others [2020] 1 WLR 128.[80]A subsidiary issue, which arises here, is whether a judge below the Court of Appeal has the power to make an order for interim payment in respect of a costs order made by the Court of Appeal. I was not referred to any direct authority which assists me, nor even any example of this having taken place. I will not make a finding on the point since, as I will explain, in my judgment it would be inappropriate as a matter of merit for me to make such an order, regardless of whether I have the power to do so. Determination Costs from 16 February 2021 to 18 October 2023[81]I turn, after this lengthy introduction, to my determinations on the various costs issues.[82]I am satisfied that all the costs sought by Level as an Intervener are “in connection with” financial remedies, and not “for” financial remedies. Therefore, per paragraph 23 of Baker v Rowe, there is no starting point either way. I am not persuaded by leading counsel for H that part of the costs are “for” financial remedies, as would be the case between a husband and wife, which would lead to no order as to costs being the default position. The clean sheet therefore applies to the starting point.[83]In my judgment, the history which I have outline demonstrates that H’s conduct of the litigation involving Level until at least the Court of Appeal order dated 18 October 2023, was deplorable. As I said at paragraph 10 of my judgment dated 2 July 2024:
“True, there have been no direct factual findings, based on tested evidence, but it is not difficult to reach a number of provisional conclusions (which, for the avoidance of doubt, are not intended to be binding on a future court, including in any civil litigation): i) That H and W entered into an agreement at the Private FDR which included as one of its objectives an outcome to avoid repayment to Level of its loan. Other factors may have come into play, but it is probable, in my view, that preventing Level from recouping its monies was part of the motivation, and it was certainly one of the consequences. ii) H sought the making of a consent order without notifying Mr Cusworth QC of the involvement of Level, and the order of Newton J. iii) Thereafter H fought tooth and nail to (a) retain the consent order, until he had no realistic option but to agree to it being set aside and (b) resist any involvement by Level in the proceedings enabling them to take steps to protect their interests.”
[84]It seems to me that the costs arising out of the intervention arise within an overarching context, namely;(i) the duplicitous endeavour by H to ensure that the consent order was made before effective steps could be taken by Level to prevent such a course of action;(ii) H’s determination to resist the setting aside of the consent order, and to oppose joinder, for as long as possible; and(iii) H’s subsequent attempt, after finally agreeing to the set aside, to have the order remade. As King LJ said in the Court of Appeal: “[H’s] conduct has, as Level submitted, been the axis around which this litigation has turned”.[85]If one considers the matter from the point of view of outcome, Level plainly succeeded in the period to 18 October 2023 both at first instance and in the Court of Appeal in that they were joined to the proceedings, obtained a set aside, and successfully resisted any further attempt to remake the consent order. The soft “costs follow the event” referred to at paragraph 35 of Baker v Rowe is, in my judgment, a factor of considerable weight. So, too, the undeniable fact that H’s actions generated the litigation.[86]In my judgment this was litigation conduct by H which was unreasonable (and in some respects downright duplicitous) to a significant degree, justifying an order for costs in Level’s favour on the indemnity basis from 16 February 2021 to 18 October 2023, save for one specific matter referred to below.[87]In reaching these conclusions, I take into account, in addition to the general observations I have made, that: i) Level succeeded in its joinder application which was bound up with the set aside application. H failed in his attempt to have the joinder set aside. Mr Cusworth QC was required to consider the matter at length, and delivered a full judgment. ii) Level’s applications for general disclosure and case management in the period to October 2023 were at the time of H’s egregious conduct and bound up with the set aside application, and H’s subsequent attempt to have the consent order remade. That includes the multi-faceted application of 3 February 2022 for transfer of civil claims to the Family Division, relief under the Insolvency Act, disclosure and further directions. True, Mr Cusworth QC acceded to the transfer applications, and gave detailed directions for the further progress of the case, both of which were overturned by the Court of Appeal, but it seems to me that these were not unreasonable applications, and were made before H agreed to the set aside, which had been Level’s primary aim. Had H agreed to the set aside at the outset, these applications would not have been contemplated. The same applies to the Insolvency Act application. In short, these applications were part of the warp and weft of litigation brought successfully by Level to secure the set aside, but opposed to the hilt by H until the last moment. iii) Level succeeded in its application for injunctive relief (the application to increase payment into court security from £950,000 to £1m seems to have been wrapped up in the eventual agreed order for continuation of the injunctive relief) and H failed in his attempt to set the freezing order aside. The injunction was obtained in the context of H’s deplorable conduct at the time. This was not a misguided application for injunctive relief. It was made, and continued by the court, and not criticised by the Court of Appeal. H latterly agreed to its extension. In the circumstances which I have outlined, it is wholly unsurprising that the order was made by the court.[88]I reject the submission by H that much of the costs expenditure incurred by Level was designed to assist in its civil claims against H. On the contrary, as I have indicated, Level was fully entitled to make the applications in order to be heard on whether the consent order should be made. Nothing in the judgment of the Court of Appeal (or first instance judges) indicates otherwise. As I said at paragraph 26 of my judgment of 2 July 2024:
“Level’s involvement in the case has been principally to oppose the making of a consent order which would (on their case) be a court approved mechanism under which they would be deprived of their entitlement under the litigation loan; hence its participation to give it a platform to seek a “measure of protection” as the Court of Appeal indicated. Its opposition to the making of a consent order was, after all, precisely the relief sought when they first applied to intervene.”
[89]However, there shall be no order for costs on Level’s application dated 5 March 2021 for disclosure of the private FDR material. Level did not succeed before Roberts J, after a contested hearing, which prompts H’s application for his own costs to be met by Level. Against that, Roberts J reserved costs on the basis that findings at the final hearing of the set aside application would cast some light on what costs orders should be made on the disclosure application. In the event, H conceded the set aside, and no findings were made. It seems to me that although Level did not succeed on the application, H’s litigation misconduct at the time must be taken into account. Further, had he conceded the set aside from the outset (as he should have done), Level would not have made the application which was intended to buttress the set aside claim. It seems to me that no order for costs is the just outcome in respect of this specific application. Costs from 18 October 2023 to date[90]The position after the Court of Appeal judgment seems to me to be different. Level’s primary targets of setting the consent order aside, and remaining joined so as to make representations in the financial proceedings between W and H, had been achieved. What remained was clarity as to what W and H sought, and for Level to decide its stance once that clarity had been obtained.[91]After the Court of Appeal judgment, neither H nor W were, so far as I am aware, seeking that the consent order be remade. Pursuant to my direction, of 21 December 2023, H indicated that he did not seek any financial remedies order, which was a significant change of tack from his previous stance. W did not comply with my direction; it required a second order made by me on 5 June 2024 before she said in writing on 10 June 2024 that she did not seek a financial remedies order.[92]I am not sure that H can be criticised for his litigation conduct in this period. He set out his position clearly. I do not accept that because he generated the original set aside litigation in February 2021, it follows that he is to be held responsible for Level’s costs once the set aside had been achieved. Level may accuse H of colluding with W to deprive Level of their contractual entitlement under the litigation loans, but costs orders are primarily a function of litigation conduct, and it seems to me that H’s litigation conduct after October 2023 is unremarkable. Likewise, Level cannot be said to have behaved unreasonably in this period. They had no real alternative but to continue to the hearings on 5 June 2024 and 20 June 2024. They were entitled to test the cases of both H and W, which were different from the case advanced previously that the consent order should be upheld or remade. Level were entitled to attend at the June hearings to(i) ensure that the position of H and W was unequivocal, and(ii) ensure that no substantive order (whether by consent or otherwise) was made contrary to their interests. The proceedings ended on that occasion with no further order being made. It is not easy to that anybody achieved a successful outcome. In my judgment, there should be no order as to costs for this period. Other costs orders made[93]Clearly my decision on costs does not affect costs orders already made by previous tribunals: i) The costs of the set aside application have already been provided for by Mr Cusworth QC. I would expect this, as Level’s primary target, to have accounted for a large proportion of Level’s costs. ii) So too, the costs of H’s appeal to the Court of Appeal which have been determined in Level’s favour. iii) No order for costs was made in respect of two relatively minor applications made on 5 May 2022 and 11 August 2022. Position of W[94]For the avoidance of doubt, I make no order either against W. None was sought by Level, sensibly in my view. Summary assessment[95]It is not open to me to assess summarily the costs ordered by Mr Cusworth QC on the set aside application, or the costs ordered by the Court of Appeal: i) The Court of Appeal order expressly provides for detailed assessment. ii) The order of Mr Cusworth QC makes no reference to summary assessment, and therefore by CPR 44PD 8.2 the amount of costs is to be decided by detailed assessment. iii) It is not appropriate for me to undertake summary assessment of costs orders made by other courts years ago and in any event both orders related to complex matters which do not lend themselves to summary assessment.[96]I will not proceed to summary assessment of the additional costs orders which I have made today. There may be an overlap between the various applications, and I consider the overall proceedings to be too tangled to be susceptible to the straightforward summary process envisaged by the rules. All the costs orders shall be subject to detailed assessment. Interim payment[97]It is, in my judgment, too late to order a payment on account for the costs orders made by Mr Cusworth QC and the Court of Appeal.[98]Mr Cusworth QC declined to make such an order at the time. He said:
“This is a case where the assessment of this element of the costs incurred by Level will be a complicated and contentious business, due to the need to separate out and then allocate costs to different strands of the litigation. I am clear that the full amount being sought by them in Ms Bloom’s schedule includes a large amount referable to other applications; I am simply unable now to determine what part relates solely to the set-aside, or what a reasonable proportion of such costs on the appropriate basis might be.”
Nothing has happened since then to enable me to carry out this task with any confidence.[99]Even if I have the power to make an order for interim payment in respect of the costs ordered by the Court of Appeal, I decline to do so. No application was made to the Court of Appeal. The costs order was made 18 months ago. It is not appropriate for me to embark on this exercise.[100]Nor shall I make any order for payment on account of the costs orders which I have made. I do not have any real sense of what would be a fair figure given the complexity of the proceedings, the costs orders already made on which I will not make any order for payment on account, and the likely challenge to figures which H will make. Level, however, is not without interim remedy, for they can apply for an interim certificate in the course of the detailed assessment. Conclusions[101]For the avoidance of doubt, I make no order in respect of costs orders already made: i) The indemnity costs order dated 10 September 2022 of Mr Cusworth QC. ii) The standard costs order made by the Court of Appeal on 18 October 2023. iii) No order for costs made on 5 May 2022 on Level’s application dated 4 May 2022 for an extension of time to file a statement. iv) No order for costs made on 10 September 2022 in respect of H’s adjournment application dated 11 August 2022[102]I order H to pay Level’s costs of the intervention from 16 February 2021 to 18 October 2023, to be subject to detailed assessment on the indemnity basis. This is subject to one exception, namely that there shall be no order as to costs of Level’s application dated 24 November 2021 for disclosure of privileged material.[103]From 19 October 2023 onwards there shall be no order as to costs of the intervention, save that I will receive written submissions on the costs of this costs hearing.[104]I decline to order any interim payments on account. Final comments[105]I note that the parties’ combined costs referable to Level’s intervention amount to around £1.3m. Level’s civil claim is about £1.35m inclusive of interest.[106]This has been a highly unusual case. It is perhaps unsurprising that the costs issues have been so involved. Nothing I have said in this judgment, nor the fact that I have devoted so many words to this issue, should in any way detract from the conventional practice in financial remedy proceedings, even in cases which are complex and involved and/or which involve interveners, of dealing with costs swiftly and efficiently. Costs judgments of this length should remain almost unheard of.