High Court of Justice in Northern Ireland Family Division Decisions

The law

"(1) Subject to the provisions of these Rules and of any statutory provision, the Rules of the Supreme Court (Northern Ireland) 1980 and the County Court Rules (Northern Ireland) 1981 other than C.C.R. Order 25, rule 20 (which deals with a new hearing and rehearing) shall apply with the necessary modifications to the commencement of family proceedings in, and to the practice and procedure in the family proceedings pending in, the High Court and a County Court respectively."

Order 62 r. 3 of the Rules of the Supreme Court (Northern Ireland) 1980 provides as follows:

"(1) This rule shall have effect subject only to the following provisions of this order.

(2) No party to any proceedings shall be entitled to recover any of the costs of those proceedings from any other party to those proceedings except under an order of the court.

(3) If the court in the exercise of its discretion see fit to make any order as to costs of any proceedings, the court should order the costs to follow the event, except when it appears to the court that in the circumstances of the case some other order should be made as to the whole or any part of the costs."

"The lesson of this case, which litigants and lawyers alike must recognise and give effect to, is that just because ancillary relief applications have to be conducted and prepared in the fraught emotional atmosphere that so often and understandably exists after marriage and its breakdown, nevertheless that does not mean that commonsense and commercial realities can be allowed to fly out of the window. A spouse who does not respond constructively to a Calderbank offer, whether a good offer as in this case or only one that is bad or indifferent, stymies whatever chance there is of settlement. Such a spouse cannot with impunity expect immunity from responsibility for that ….."

I went on to add at paragraph 9 of Graham:

"Accordingly the courts will be wary to ensure that no encouragement is given to a party to misbehave in litigation safe in the knowledge that the starting point will be no order as to costs. The courts will be watchful in order to discern those cases where exorbitant demands for disclosure, inordinate demands in correspondence, disproportionate attention to the minutiae of the case and tactical posturing have all contributed unreasonably to the costs of the case. Such an approach will be characterised as unreasonable and the guilty party will be penalised."

In Gojkovic v Gojkovic (No. 2) (1992) 1 AER 267 Butler-Sloss J (as she then was) set out principles governing the conventional approach to costs as follows:

"There are many reasons which may affect the court in considering costs, such as culpability in the conduct of the litigation, or (as I have already indicated earlier) material non-disclosure of documents. Delay or excessive zeal in seeking disclosure are other examples. The absence of an offer or of a counter offer may well be reflected in costs, or an offer made too late to be effective. The need to use all the available money to house the spouse and children of the family may also affect the exercise of the court's discretion. It would, however, be inappropriate, and indeed unhelpful, to seek to enumerate and possibly be thought to constrain in any way that wide exercise of discretion. But the starting point in a case where there has been an offer is that, prima facie, if the applicant receives no more or less than the offer made, she/he is at risk not only of not being awarded costs but also of paying the costs of the other party after communication of the offer and a reasonable time to consider it. That seems clear from the decided cases and is in accord with the Supreme Court and County Court Rules requiring the court to have regard to the offer. I cannot, for my part, see why there is any difference in principle between the position of a party who fails to obtain an order equal to the offer made and pays the costs, and a party who fails by the offer to meet the award made by the court. In the latter case, prima facie costs should follow the event, as they would do in a payment into court, with a proviso that other factors in the Family Division may alter that prima facie position."

"I am of the view that the overarching objective of fairness must also apply to cost orders in cases such as this. …. The issue of costs therefore can have a disproportionate effect on the order that has been made. I am of the view that the proper order for costs in big money cases where there is a minimum departure from equality is that the parties goes back to back in costs. In cases where there is a very significant departure from equality as there was in this case, where the petitioner's Calderbank offer fell well short of the order that was made, and where there is an allegation that some of the estate has been dissipated in breach of an undertaking then the situation can be quite different."

(i) I consider there are three aspects to costs in this case. First, the divorce proceedings between the parties, resulting in cross decrees being granted in May 2006 resulted in the trial judge leaving the matter of the costs in that suit to be determined by me. Secondly, in the ancillary relief which I have now determined, part of those proceedings was an unsuccessful application under Article 29 of the Matrimonial Causes (Northern Ireland) Order 1978 by the wife albeit she was successful in her application for a clean break/lump sum award. Thirdly, the ancillary relief proceedings as a whole.

(ii) Dealing first with the costs on the ancillary relief/Article 29 application, I consider that the costs incurred in the ancillary relief, but not those costs incurred in the application under Article 29 of the 1978 Order, should be awarded to the wife for the following reasons:

(a) Although the assets involved in this case were substantial, I concluded that this was a case that merited departure from the equality principle because of a number of factors including the short marriage and the fact that the majority of the assets were acquired before the marriage commenced. Essentially therefore I determined this case on the basis that the wife's claim was specifically needs based. This was not a case where there was an identifiable pool of assets the creation of which was referable to the contributions both financial and domestic of each of the parties. Accordingly I do not consider that this is a case where the approach that I adopted in Graham's case is appropriate where I decided that each party should bear their own costs. In the instant case I consider that the wife can be more closely compared to an ordinary civil litigant and therefore the orthodox approach hitherto developed whereby under Order 62 rule 3 of the Rules of the Supreme Court (Northern Ireland) 1980 the court should order the costs to follow the event should apply. Order 62 r. 3(3) does provide an exception when it appears to the court that in the circumstances of the case some other order should be made as to the whole or any part of the costs. In my view that exception applies to the application brought by the wife under Article 29 of the 1978 Order. This aspect of the case was unsuccessful, was not ever pursued at the hearing and in my view was always doomed to failure given the nature of this case. Accordingly I award all the costs of the ancillary relief to the wife save for those costs engendered in the prosecution of the application under Article 29 of the 1978 Order, with reference to which I make no orders of costs. I do not consider it appropriate to award H the costs of that aspect because it was merely one of many issues in the case and it was not pursued before me in any manner that contributed to an increase in costs.

(b) A second reason for adopting this approach lies in the tactics adopted by H in this matter. To have raised the issue of conduct in light of the recent decisions in the House of Lords was always a hopeless quest on his part and one that was likely to constitute an impediment to resolution. There could have been no compromise by the wife on this issue. Moreover I regard his attempt to argue that K was not a child of the family was similarly hopeless and once again provided an impediment to resolution since I could not envisage circumstances in which the wife could have made any concession on this aspect. Not only did I find against the husband on these two matters, as was inevitable in my opinion, but I consider that their presence must have inevitably presented a quite unsustainable barrier to resolution of this case. That in itself would have militated towards my granting the costs of this application for ancillary relief to W irrespective of the matters I have raised in "(a) above".

(c) In a needs based approach, the court must be wary to ensure that an award of costs does not become disproportionate to the effect of the order made. If this wife was to bear her own costs, I believe it would have a disproportionate effect on the award that I have made and would render her needs inappropriately provided for. That in itself would have pointed towards an award of costs to her on the basis that I have determined.

(d) I have read the pre-hearing correspondence in this case. Calderbank letters were invoked by each party. It is clear to me that each party realised the consequence of invoking such an approach. For example in a letter of 30 November 2005, the solicitors then acting on behalf of H concluded:

"We make this offer in the terms of Calderbank v Calderbank and the case law that follows therefrom. In the event of your client rejecting this offer and pursuing any further litigation against our client in court arising out of the parties' marriage, we reserve the right to draw the terms of this letter to the attention of the judge at the conclusion of that litigation and to seek an order that your client should pay our clients costs in respect of same. We consider that in particular, in view of the length of this marriage, our client's offer is reasonable."

After a fairly lengthy exchange of correspondence, on 13 October 2006 solicitors for the wife suggested settlement on the following terms:

(i) Husband to pay a lump sum of £470,000 to W.

(ii) W to retain K.

(iii) W withdraw her application for maintenance under Article 29 of the 1978 Order.

(iv) No orders of cost.

Costs of the divorce proceedings

(i) The parties began to live separate lives in either January or February of 2005.

(ii) In June 2005 W commenced proceedings for maintenance under Article 29 of the 1978 Order.

(iii) On 9 September 2005 H petitioned for divorce citing misconduct by W.

(iv) On 24 October 2005 W filed her answer and cross-petition. It contained serious allegations of misbehaviour by H. Both parties thus relied on the unreasonable behaviour of the other.

(v) The hearing of the divorce suit was originally fixed for December 2005 and subsequently for February 2006. The matter was adjourned on both occasions. Mr Blair asserted that in February 2006 a lengthy negotiation ensured between counsel in an attempt to facilitate avoidance of publicity and save a substantial part of the potential cost of the prospective trial of the defended divorce which was then fixed for 23 May 2006. I was furnished with a copy of a document headed "A Draft Agreement: Without Prejudice Save as to Costs and Subject to Contract". In terms this was a proposed agreement whereby the parties would file and serve an amended petition and an amended answer and cross-petition to facilitate the granting of cross-decrees of dissolution founded upon the pleadings as amended. The proposed agreement indicated that thereafter a series of steps would be taken leading towards the financial resolution of their differences. At that stage the proposition was there should be no order as to the costs of the defended divorce suit, although each party could rely upon his or her liability for the costs as a relevant liability in the context of the courts quantification of any financial award. It was Mr Blair's submission that H refused to accede to this proposition insisting that he was entitled to a decree nisi and that his wife was not. He refused to settle on the proposed terms or any terms which did not recognise that proposition. Accordingly the matter proceeded towards trial on the basis of a fully defended divorce suit and Mr Bruce submits that unnecessary costs were thereby incurred. In the event on the date of the hearing in May 2006 the parties did agree to amend their petitions in the manner previously suggested and cross-decrees were granted. It is Mr Bruce's submission that the position that was available in February 2006, and which was rejected outright by H, became the accepted position after an unnecessary escalation of costs on 4 May 2006 when the trial judge granted cross-decrees on the basis of the amended petitions. On that date McLaughlin J referred the question of costs to be determined by judge trying the ancillary relief.

"There is one ground, and one ground only now, on which the court has power to dissolve a marriage, and that is now set in s. 1 of the 1973 Act. The ground is that the marriage has broken down irretrievably. Parliament went on s. 1(2) to prescribe five separate facts, one of which has to be established in order to prove that the marriage is broken down irretrievably. …. On proof of any one of the five facts, there is a presumption, rebuttable it is true, of irretrievable breakdown and ….."

His Lordship continued at p. 566j:

"There is no point, as I see it, in a case like this in conducting an enquiry into behaviour merely to satisfy feelings, however genuinely and sincerely held by one or other of the parties. To do so would be a waste of time of the court and, in any event, would be running, as I think, counter to the general policy or philosophy of the divorce legislation as it stands now. The purpose of Parliament was to ensure that where a marriage is irretrievably broken down, it shall be dissolved as quickly and as painlessly as possible under the Act, and attempts to recriminate in the manner in which the wife in this case appears to wish to do so should be, in my judgment, firmly discouraged."

On the occasion of the handing down of the main judgment Mr Blair asserted that there had been an inaccuracy contained therein insofar as I had taken into account a widowed mother's allowance as part of W's income in the Duxbury calculation. His assertion was that this would end when the child of the family became eighteen. No evidence was presented before me to this effect but in any event the sum involved was not such as would have affected my overall decision in arriving at the broad brush final figure after invoking the various discounting factors and exercising my discretion.