X v Y (repayment of overpaid maintenance) [2012] EW Misc 5 (CC) (22 February 2012) [2012] EW Misc 5 (CC)

EWMISC

X v Y (repayment of overpaid maintenance) [2012] EW Misc 5 (CC) (22 February 2012)

[2012] EW Misc 5 (CC) · 2012-02-22

[57]‘57. For H to be relieved of that amount of maintenance will call, as I have described, for the grossed up sum which would have produced €55,000 net in her hands to be calculated, and that will be what W should repay H in a manner to be fixed when the implications of this order have been considered by both H and W, and for that matter LT.’ 14. The husband is faced with an immediate difficulty. Although it may be the case that Singer J had in mind the powers given to the court by s.33 when he ordered repayment of the overpayment of spousal maintenance, he does not refer to that section explicitly. Neither did he consider the approach to be taken when exercising the powers given to the court under s.33. His analysis was limited to calculating the amount of the overpayment, the whole of which he then ordered to be repaid. I do not read that case as being authority for the proposition that where there has been an overpayment of spousal maintenance the paying party is automatically entitled to repayment of the whole of the overpayment. 15. In my judgment the power given by s.33 is a discretionary power. That is plain from the wording of the statute. Section.33(1) provides that ‘the court may order the respondent to the application to pay to the applicant such sum, not exceeding the amount of the excess , as the court thinks just’ (emphasis supplied). That the power to order repayment is discretionary was confirmed by the Court of Appeal in Moore v Moore

[2009] EWCA Civ 1427

. In that case, referring to the submissions made by counsel for the payer, Thorpe LJ said (para. 14) that, ‘Mr Khan’s fourth submission is that there is a statutory power to remit to be found in Section 33 of the Matrimonial Causes Act 1973, as amended. That is undoubtedly correct, but it carries Mr Khan nowhere since it is only a discretionary power…’ 16. Although that case confirms the discretionary nature of the power given by s.33 it does not give any guidance on how that discretion should be exercised. Counsel have been unable to find any authority addressing that question. 17. When the court is called upon to exercise a discretion it is normally necessary for the court to balance a number of different factors. It is often helpful to prepare a balance sheet as an aid to determining where the balance falls. That is the approach I propose to take in this case. 18. In support of an argument for repayment the following factors seem to me to be of particular relevance:(1) The order for periodical payments, an order made by consent, set out clearly the triggering events that would lead to the order coming to an end. The wife agreed that her cohabitation for a period of six months in a twelve month period should be a fact triggering the dismissal of her entitlement to periodical payments.

(2) That order provided that once the order for periodical payments had come to an end the wife should not be entitled to make any further application for spousal maintenance.

(3) The husband therefore had a reasonable expectation that once the relevant period of cohabitation was admitted or proved his obligation to provide spousal maintenance would end permanently at that point.

(4) The husband has complied with the orders for periodical payments (those for the wife and those for the children) since the original order was made in May 2007 and continues to comply with the order for periodical payments for the children.

(5) The husband has also complied fully with the Justices’ order of 3 rd October 2011 even though he considered it to be wrong and appealed against it.

(6) The husband has financial obligations towards his new family (including a two year old son) as well as towards the wife. The money which represents the overpayment of spousal maintenance could have been used to support his new family. 19. In addition to those factors counsel also makes the point that the Court should be ‘only too well aware of the constrictions in income experienced by the Criminal Bar in recent years’. Although I am, indeed, aware of those difficulties there is no evidence before me of the husband’s current income and expenditure. I am therefore in no position to make any finding of financial hardship either generally or as a result of the husband’s compliance with the Justices’ order. 20. The following is a list of the factors which, it seems to me, should be placed in the other side of the balance: (1) The husband complied with the order made by the Justices, making the first payment of £1,600 on 20 th October as required. It was not until 16 th November that the wife became aware of the husband’s appeal. Until that point she had no reason to believe that there was any risk to that sums paid by the husband in compliance with that order may have to be repaid. (2) Rule 30.8 Family Procedure Rules 2010 makes it clear that an appeal does not operate as a stay of the order of the lower court. Although the husband is a criminal practitioner he had ready access to colleagues in chambers who could have advised him of his right to apply for a stay. He did not apply for a stay. (3) In the parallel Children Act proceedings a hearing was listed before Mrs Justice Eleanor King on 16 th November with a time estimate of three days. The parties were represented by the same counsel as those who appear in this appeal. The Children Act proceedings went short. Counsel for the husband tried to persuade the judge to use the time to hear the husband’s appeal. Because the court file could not be found there were no papers available for the Judge and, in any event, the notice of appeal had not then been served. Not surprisingly, the Judge declined to hear the appeal. However, at the very least an application could have been made for a stay of the Justices’ order. No such application was made. (4) The wife says that she has spent the money paid by the husband in compliance with the Justice’s order. Although there is no evidence to support this it seems to me that it would be unreasonable to expect that the wife should have been saving that money against the contingency of the outcome of this appeal. (5) The wife says that she cannot afford to repay the overpayment. Although there is no evidence before the court of her current financial position the figures accepted by the Justices do not suggest an ability to make an immediate repayment from her own resources. (6) Although the Justices ordered the husband to pay £1,800 towards the wife’s costs the total of the wife’s costs at that stage, according to the schedule of costs put before the Justices, amounted to £3,591.75. The wife was responsible for meeting the shortfall between the costs ordered and the costs incurred (though there is no evidence before the court to show that that sum has in fact been paid). 21. I find the factors for and against repayment to be evenly balanced. In my judgment it would be an injustice to the husband not to order any repayment at all. It would be equally unjust to the wife to order repayment of the full amount. I shall order repayment of the sum of £2,000. 22. As for the Justices’ order requiring the husband to pay £1,800 towards the wife’s costs, that is a separate issue. I have allowed the husband’s appeal. The whole of the Justices’ order will be set aside, including the order for costs. The husband has complied with that order in full. The whole of that sum must now be repaid. Costs 23. The husband seeks an order for payment of his costs. I consider, firstly, the issue of whether an order for costs should be made and, if so, against whom. 24. Rule

28.1 of the Family Procedure Rules 2010 provides that ‘The court may at any time make such order as to costs as it thinks just’. FPR Rule

28.2 provides that, subject to certain exceptions, Parts 43, 44, 47 and 48 and rule 45.6 Civil Procedure Rules 1998 (‘the CPR’) applies to the costs of proceedings governed by the Family Procedure Rules. 25. Although in civil proceedings CPR rule 44.3(2) provides that ‘the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party’, that rule is expressly excluded from family proceedings (FPR rule 28.2(1)). 26. FPR rule

28.3 is headed ‘Costs in financial remedy proceedings’. Rule 28.3(5) provides that, ‘Subject to paragraph (6), 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.’ 27. The expression ‘financial remedy proceedings’ is defined in rule 28.3(4)(b). So far as is relevant, this provides that ‘financial remedy proceedings’ means proceedings for, ‘(i) a financial order except an order for maintenance pending suit, an order for maintenance pending outcome of proceedings, an interim periodical payments order or any other form of interim order for the purposes of rule 9.7(1)(a), (b), (c) and (e)…’ The expression ‘financial order’ is defined in FPR rule 2.3(1). It does not include proceedings to enforce a financial order. 28. I am satisfied that FPR rule 28.3(5) does not extend to enforcement proceedings. 29. In appeal proceedings such as these there is no general rule that the unsuccessful party should pay the successful party’s costs. There is also no general rule that the unsuccessful party should not normally be required to pay the successful party’s costs. Costs are at large. In determining whether to make a costs order I have in mind not only that the husband has succeeded on his appeal but also the facts and matters set out in my principal judgment which led me to the conclusion that the appeal should be allowed. I can see no reason why the wife should not pay the husband’s costs of this appeal. 30. The husband contends that he should also be awarded his costs of the proceedings in the FPC. His submission is superficially attractive on the basis that having succeeded in the FPC the wife sought and obtained a substantial costs order. However, in my judgment the ‘sauce for the goose, sauce for the gander’ approach would not be a principled basis upon which to determine such an issue. As a result of my order the wife will have to pay not only the husband’s costs of the appeal but her own costs in respect of both the appeal and the proceedings before the FPC. In contrast, although he no doubt lost income as a result of his attendance at court on 27 th September and 3 rd October, the husband’s immediate out of pocket loss related only to the costs of obtaining the tracker evidence. The Justices were not convinced by that evidence. Though I have disagreed with the Justices on other issues I have not disagreed with their approach to that evidence. I come to the conclusion, on balance, that the costs order I propose to make should be limited to the costs of the appeal. 31. The husband also seeks an order for costs against Mr A. So far as is material, s.51 of the Senior Courts Act 1981 provides that:

‘(1) subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in – (a) the civil division of the Court of Appeal; (b) the High Court; and (c) any county court shall be in the discretion of the court… (3) The court shall have full power to determine by whom and to what extent the costs are to be paid.’

That provision empowers the court to make an order for costs against Mr A. 32. In his skeleton argument on behalf of the husband counsel makes the point that, ‘22. …Mr A has played a full and active part in how the Wife’s case was advanced before the Justices and before the honourable (sic) Mrs Justice King in the Children Act proceedings. Without his active participation it would not have been possible for the Wife to knowingly lead the Justices into error in the way that she did.’ 33. Guidance on the exercise of the discretion to order costs against a non-party was given by the Court of Appeal in Symphony Group Plc v Hodgson [1993] 4 All E.R. 143 . At this stage I am not concerned with the question of whether an order for costs should be made against Mr A but only with the question of whether the husband has an arguable case. It is appropriate to have that guidance in mind in determining that issue. I am satisfied that in the circumstances of this case, and in particular in the light of the observations made in my principal judgment, the question of whether Mr A should be ordered to pay all or some of the husband’s costs is properly arguable. 34. Mr A is not a party to these proceedings. CPR rule 48.2 (1) provides that:

‘Where the court is considering whether to exercise its power under section 51 of the Senior Courts Act 1981…to make a costs order in favour of or against a person who is not a party to proceedings – (a) that party must be added as a party to the proceedings for the purposes of costs only; and (b) he must be given a reasonable opportunity to attend a hearing at which the court will consider the matter further.’ 35. I shall, therefore, make Mr A a party to these proceedings for the purposes of costs only. 36. The husband also seeks a wasted costs order against the wife’s solicitor. His primary reason for seeking such an order is his concern that in preparing Mr A’s witness statement for the Children Act proceedings the wife’s solicitor must have appreciated that so far as concerned the issue of cohabitation that statement was ‘materially different’ from and ‘inconsistent with’ the statement he made in the enforcement proceedings. If it be the case that prior to the hearing before the Justices the wife’s solicitor had taken instructions from Mr A for his Children Act statement and perhaps even prepared a draft statement for him, that raises questions about the solicitor’s presentation of the wife’s case to the Justices. If it be the case that she did not take instructions for that statement until shortly after the Justices had handed down their decision then the solicitor should, at the least, have recognised that she was professionally embarrassed in continuing to act for the wife. 37. Section 51 of the Senior Courts Act provides that: ‘(6) In any proceedings mentioned in subsection (1), the court may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with rules of court. (7) In subsection (6), “wasted costs” means any costs incurred by a party – (a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or (b) which, in the light of any such act or omission occurring after they were incurred, the court considers it unreasonable to expect that party to pay.’ 38. If it be the case that the wife’s solicitor did not take Mr A’s instructions for his Children Act statement until after 3 rd October then it seems to me that the question whether her solicitor should have been sufficiently ‘embarrassed’ to have made it professionally inappropriate for her to continue to act for the wife in those proceedings is of no relevance in determining whether there should be a wasted costs order in respect of the appeal proceedings. I can see no reasonable basis for considering the solicitor’s conduct after the date when the proceedings in the FPC concluded. 39. As for the husband’s suspicion that the wife’s solicitor may have taken Mr A’s instructions for his Children Act statement before the hearing in the FPC, two points arise. The first point is that this suspicion is just that – a suspicion. There is no evidence to support it. Even if evidence were available, the more important point is to consider whether Mr A’s second statement is in fact ‘materially different’ from and ‘inconsistent with’ his first statement as counsel contends. 40. In his first statement Mr A very emphatically states ‘I should make it absolutely clear that I have never co-habited with Y, we are not co-habiting at present and I have no intention of living with her in the future’

. Mr A does not expressly contradict that statement in his Children Act statement. What he does in his second statement is to provide additional detail about his domestic arrangements (for example, his statement that since August 2008 he has ‘spent a considerable amount of time with Y and R and T’). That additional detail adds colour to his earlier statement. It does not expressly contradict it. 41. In circumstances where two people spend a considerable amount of time together and cohabitation is alleged it is the court’s task, not the solicitor’s task, to weigh the evidence and come to a decision about whether or not it can properly be said that those two people are in fact cohabiting. 42. I reject the criticisms made of the wife’s solicitor. I can see no basis upon which it would be proper to require her to show cause why a wasted costs order should not be made against her. 43. As for the quantification of the husband’s costs, he has submitted a brief costs schedule. The total claimed on that schedule is a little over £3,500. Surprisingly, the schedule does not include a claim in respect of counsel’s fees. At the hearing on 13 th February counsel told me that that was an oversight. His fees for representing the husband on this appeal amount to £4,500. 44. The husband is a litigant in person. Counsel for the wife submits not only that the husband should not be entitled to an order for costs (an issue I have already dealt with) but that he has no costs that are properly claimable against the wife. In her skeleton argument counsel puts her case thus:

‘3.3 As to the costs of the appeal, the Respondent questions what costs these could be as there is no solicitor on record for the Appellant. Previously, the Appellant’s Counsel has acted pro bono and there is no suggestion that any legal costs have been incurred by the Appellant. In any event, the Appellant is put to strict proof of any such legal costs and it is denied that the Court has power to order that the Respondent should pay any such costs in the circumstances.’ 45. The rules relating to the costs of a litigant in person are to be found in CPR rule 48.6. I do not propose to set that rule out in full. In summary, a litigant in person is entitled to £9.25 per hour (£18.00 per hour since 1 st October 2011 – see the CPR Costs Practice Direction paragraph 52.4) for the time spent in preparing his case and appearing before the court unless he is able to prove that he has suffered financial loss in which case he is entitled to claim ‘the amount that he can prove he has lost for the time reasonably spent on doing the work’ (rule 48.6 (4)(a)). Those costs can also include ‘the payments reasonably made by him for legal services relating to the conduct of the proceedings’ (rule 48.6 (3)(b)). All of this is subject to the overriding limitation set out in rule 48.6(2) that ‘The costs allowed under this rule must not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.’ 46. The costs schedule filed by the husband goes nowhere near providing the level of information required to enable the court to determine whether he has suffered a financial loss as a result of the time spent in this litigation or to determine the basis upon which counsel has represented the husband and whether any, and if so what, sum should be allowed for counsel’s fees. In the circumstances of this case I am in no doubt that summary assessment of the husband’s costs is not appropriate. There should be a detailed assessment. I shall order accordingly. Permission to appeal 47. This issue can be dealt with very shortly. Section 55 Access to Justice Act 1999 provides that, ‘(1) where an appeal is made to a county court or the High Court in relation to any matter, and on hearing the appeal the court makes a decision in relation to that matter, no appeal may be made to the Court of Appeal from that decision unless the Court of Appeal considers that – (a) the appeal would raise an important point of principle or practice, or (b) there is some other compelling reason for the Court of Appeal to hear it.’ 48. That section is mirrored by the provisions of CPR rule 52.13 which provide that: ‘(1) Permission is required from the Court of Appeal for any appeal to that court from a decision of a county court or the High Court which was itself made on appeal.’ 49. The notes to the rule set out at paragraph 52.13.2 of the White Book Service 2011 state that, ‘For the purposes of s.55 of the 1999 Act and CPR r.52.13, the following are to be treated as appeals to the county court or High Court (i.e. as “first appeals”): (a) an appeal to the High Court on a point of law pursuant to s.11 of the Tribunals and Inquiries Act 1992; (b) any appeal to the High Court which can colloquially be categorised as an appeal by way of case stated; (c) an appeal to a county court on a point of law from a decision of a local housing authority pursuant to s.204 of the Housing Act 1996; (d) any other appeal to the High Court or to a county court from any tribunal or other body or person.’ 50. I am satisfied that the appeal with which I am concerned is a ‘first appeal’

. An appeal to the Court of Appeal would be a second appeal. It follows, therefore, that only the Court of Appeal has the power to grant permission for such appeal. I have no power to do so. 51. However, that does not dispose of the issue completely. Counsel for the wife submits that my order in respect of the husband’s application for repayment of the overpayment of periodical payments is not an order made within the appeal but an order made on the husband’s application following on from the appeal. If she is right then an appeal against that part of my decision would be a first appeal in respect of which I do have the power to consider an application for leave to appeal. 52. I am not attracted to that submission. The orders that flow from this second judgment all arise out of the primary conclusion arrived at in my principal judgment, namely that the husband’s appeal should be allowed. If that is so then an appeal to the Court of Appeal against my orders for repayment of overpaid periodical payments, repayment of the costs paid in compliance with the Justice’s order and for payment of the costs of the appeal are all orders made on the first appeal and an appeal to the Court of Appeal can only be made with the permission of that court. If I am wrong on that point it nonetheless seems to me appropriate that I should refuse permission to appeal against my order relating to repayment of the overpayment. It would be more appropriate, in my judgment, for that issue, too, to be the subject of a permission application to the Court of Appeal.