Baker v Rowe

Factual and Procedural Background

This opinion concerns a complex dispute over costs orders between interveners in ancillary relief proceedings following a divorce. The primary parties to the divorce are the wife and the husband, elderly individuals married since 1972. The daughter, from the wife's previous marriage, and her former husband, the son-in-law, intervened in the ancillary relief proceedings between the wife and husband to assert beneficial interests in a property jointly owned by the wife and husband.

The son-in-law sought permission to appeal against a costs order made against him in favour of the daughter by a district judge. The circuit judge dismissed the son-in-law's appeal and purported to refuse permission to appeal, although this raised procedural errors. The son-in-law now applies for permission to appeal to this court against the dismissal of his appeal. Neither the wife nor the husband participates in these appellate proceedings.

The property at issue was originally a council house purchased by the wife and husband under a right to buy scheme, with mortgage payments substantially discharged by the daughter and son-in-law during their marriage. The wife and husband made wills leaving the property to the daughter and executed a declaration of trust in her favour. The daughter and son-in-law intervened in the ancillary relief proceedings to assert their beneficial interests, but acknowledged the wife's and husband's rights of occupation.

At the substantive hearing, the district judge found that, despite the son-in-law's indirect contributions, the common intention was that the daughter was the sole beneficial owner subject to the husband's occupation rights, and that the son-in-law had agreed in 1996 to make no claim on the property. Costs were ordered against the son-in-law in favour of the daughter.

Legal Issues Presented

1. Whether the son-in-law required permission to appeal against the district judge's costs order.
2. Whether the proceedings between the daughter and son-in-law constituted "family proceedings" or civil proceedings under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).
3. The applicability of the general rule in ancillary relief proceedings that no order for costs is made between parties, as per Rule 2.71(4)(a) of the Family Proceedings Rules 1991.
4. The applicability of the general rule that the unsuccessful party pays costs under Rule 44.3(2)(a) of the Civil Procedure Rules 1998 to these proceedings.
5. Whether the circuit judge's refusal of permission to appeal was valid and the procedural consequences thereof.

Arguments of the Parties

Respondent's Arguments (Daughter's Counsel)

• The claims before the district judge were made under TOLATA and thus were not family proceedings but civil proceedings assigned to the Chancery Division.
• Accordingly, permission to appeal was required under Rule 52.3(1) of the Civil Procedure Rules 1998.
• The proceedings were partly family proceedings and partly non-family proceedings due to the ancillary relief aspect.

Appellant's Arguments (Son-in-Law's Counsel)

• The son-in-law did not concede that permission to appeal was required.
• The appeal was properly brought without permission under Rule 8.1(1) of the Family Proceedings Rules 1991, as the proceedings were family proceedings.
• The costs order was appropriate given the son-in-law's unsuccessful claim and the agreement not to assert any claim on the property.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first addressed the procedural error by the circuit judge who incorrectly stated that permission to appeal was required from him. Under Rule 8.1(1) of the Family Proceedings Rules 1991, appeals from district judges to circuit judges in family proceedings are as of right and do not require permission. The respondent's argument that the proceedings were civil rather than family proceedings was rejected because the daughter and son-in-law intervened within ongoing family ancillary relief proceedings rather than instituting separate TOLATA proceedings.

The court emphasized that the nature of the claims did not transform the proceedings into non-family proceedings. The court relied on statutory definitions and prior case law to hold that these were family proceedings, making the circuit judge's refusal of permission invalid and a nullity.

Regarding the costs issue, the court examined the interplay between Rule 2.71(4)(a) of the Family Proceedings Rules 1991, which generally prohibits orders for costs in ancillary relief proceedings, and Rule 44.3(2)(a) of the Civil Procedure Rules 1998, which provides that the unsuccessful party pays costs. The court held that the general rule in family ancillary relief proceedings did not apply to costs between interveners asserting beneficial interests because the proceedings were not "ancillary relief proceedings" for the purpose of that rule. Equally, the general civil rule that costs follow the event was disapplied by Rule 10.27(1)(b) of the Family Proceedings Rules 1991.

Thus, no general rule applied, leaving the district judge with a "clean sheet" and a broad discretion. The district judge's decision to order the son-in-law to pay the daughter's costs was supported by the fact that the son-in-law was the unsuccessful party and had expressly agreed not to claim an interest in the property. The court also noted that public funding protections for costs orders do not apply in family proceedings.

The court concluded that the appeal raised an important point of principle and granted permission to appeal but proceeded to dismiss the appeal on its merits.

Holding and Implications

The court's final decision was to GRANT PERMISSION TO APPEAL but then DISMISS THE APPEAL.

The direct effect is that the district judge's costs order in favour of the daughter against the son-in-law stands. The court clarified that the proceedings between interveners in ancillary relief cases are family proceedings, appeals from district judges to circuit judges do not require permission, and the general rules on costs in ancillary relief and civil proceedings do not apply straightforwardly to such interveners. The district judge retains a wide discretion on costs in these circumstances. No broader precedent altering family costs principles was established beyond the application of existing rules and prior authorities to the facts.