Hayes v Hayes

Factual and Procedural Background

This appeal concerns an order made by Deputy ICC Judge Middleton on 21 June 2018, which set aside a previous order by Deputy Registrar Jones dated 17 November 2017. The November 2017 order had stayed enforcement of a costs order originally made on 17 December 2013 related to a failed bankruptcy petition by the Appellant against the Appellee. The 2013 costs order, amounting to £35,959.91, arose from the bankruptcy petition which was dismissed due to a genuine and substantial dispute linked to ongoing harassment proceedings between the parties.

The litigation stems from a protracted and contentious history beginning with the Appellant making the Appellee bankrupt in 2005 over a debt connected to family proceedings. The Appellee initiated harassment proceedings in 2005, which were amended in 2011 and included counterclaims. The harassment trial was set for January 2019, with judgment imminent at the time of the opinion.

The Appellant presented a second bankruptcy petition in 2012 based on the same debt, now increased with interest. This petition was dismissed in December 2013, with costs awarded against the Appellant. Subsequent appeals against the dismissal and costs order were unsuccessful, and enforcement actions followed. The Appellant sought to set aside the costs order and to stay its enforcement pending resolution of the harassment claim, leading to the orders under appeal.

Legal Issues Presented

1. Whether the order setting aside the stay of enforcement of the 2013 costs order was appropriate.
2. Whether a stay of enforcement of the costs order pending determination of the harassment claim should be granted.
3. The effect of allegations of fraud and abuse of process on the enforcement of the costs order.
4. The extent of the Appellant's rights of appeal regarding the costs order.
5. The appropriateness of enforcement actions, including potential bankruptcy and charging orders, before the conclusion of the harassment proceedings.

Arguments of the Parties

Appellant's Arguments

• The Appellant alleged that the Appellee's claim for loss in the harassment proceedings was fraudulently inflated, asserting that fraud should override other considerations.
• Claimed abuse of process due to the Appellee's failure to pay correct court fees in the harassment claim.
• Contended that the Deputy Judge Middleton incorrectly stated that the Appellant had exhausted appeal rights against the costs order.
• Argued that the lifting of the stay undermined the previous adjournment order and that a stay was necessary pending the outcome of pending applications to amend pleadings to include fraud.

Appellee's Arguments

• Submitted that the decision to refuse the stay and enforce the costs order was a case management decision within the Judge's broad discretion.
• Argued that the historic costs award was justly enforceable and that waiting for the harassment claim outcome was not appropriate given the litigation history.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Hayes v Hayes [2014] EWHC 2694 (Ch)	Review of costs order on appeal and exhaustion of appeal rights.	The court referenced this judgment to confirm that the Appellant's rights of appeal against the costs order had been exhausted, and the costs award had been considered on appeal.

Court's Reasoning and Analysis

The court began by addressing the serious allegation of fraud, noting it had not been proven and remained contested. The court emphasized that such issues were properly for determination within the harassment proceedings, not at the bankruptcy petition stage or in the enforcement of costs. The court rejected reopening the bankruptcy petition decision on these grounds.

The court also found the abuse of process argument based on unpaid court fees irrelevant to the assessed costs order. It noted that the costs order had already been reviewed on appeal, and the Appellant's appeal rights were exhausted.

Regarding the stay of enforcement, the court acknowledged the lengthy and complex litigation history and the risk of protracted delay if the stay were granted until final resolution of the harassment claim, including quantum and appeals. Judge Middleton had reasonably exercised discretion to refuse a stay under these circumstances.

However, the court recognized recent developments: the trial of liability in the harassment claim had concluded with judgment imminent, and the Appellee had given undertakings not to enforce substantive orders until liability was determined. This mitigated the risk of irreparable harm to the Appellant, such as bankruptcy or forced sale of her home before the harassment claim's outcome.

Consequently, the court concluded that the appropriate course was to adjourn the appeal until after the County Court's liability judgment in the harassment proceedings, allowing reconsideration of the costs enforcement in light of that judgment.

Holding and Implications

The court ADJOURNED the appeal until after the determination of liability in the harassment proceedings.

This decision prevents immediate enforcement of the costs order in a manner that could cause irreparable harm to the Appellant pending the harassment claim's outcome. The Appellee's undertaking not to seek substantive enforcement orders until liability is determined protects the Appellant's interests in the interim. The appeal's final resolution will depend on the outcome of the harassment claim and any subsequent costs orders, with no new precedent established by this adjournment.