Factual and Procedural Background
This judgment is the third reserved decision in a case concerning the appropriate cost regime following the dismissal of the Applicant's request for leave under Part III of the Matrimonial and Family Proceedings Act 1984. The court had to determine whether the "no order" presumption under Family Procedure Rules (FPR) 28.3 or the "clean sheet" methodology should apply to costs in such cases. The Applicant and Respondent were represented by counsel, and the court had previously handed down a Costs Judgment addressing preliminary issues related to costs. The current judgment focuses on whether a costs order should be made at all, and if so, the assessment and basis of those costs.
Legal Issues Presented
- Whether a costs award should be made following the dismissal of the Applicant’s request for leave under Part III Matrimonial and Family Proceedings Act 1984.
- If a costs award is appropriate, whether it should be assessed on a standard or indemnity basis.
- The application and interpretation of FPR 28.1, 28.2, and 28.3 in relation to costs in family proceedings, specifically the interaction with Civil Procedure Rules (CPR) 44.
- The impact of the "clean sheet" approach versus the "no order" presumption on costs awards in this context.
- The relevance and weight of Calderbank offers and parties’ conduct in determining costs.
- Whether contested applications for leave under Part III should be treated differently for costs purposes compared to those dealt with administratively.
Arguments of the Parties
Applicant's Arguments
- The Applicant’s counsel accepted a "soft starting point" that costs generally follow the event but emphasised the court’s wide discretion in family law to depart from this principle.
- Argued that the Applicant was at risk of costs due to the unusual nature of contested leave applications, which are typically dealt with administratively without respondent involvement.
- Submitted that the Respondent’s conditional Calderbank offer indicated some merit in the Applicant’s case and that it was reasonable for the Applicant to run her case.
- Contended that the Applicant was not given critical information about costs incurred prior to considering the Calderbank offer, which was relevant to her response.
- Raised concerns about the proportionality and reasonableness of the Respondent’s costs, highlighting differences in rates charged and the use of high-cost London lawyers for a straightforward Part III application.
- Argued that the Applicant’s financial position and the impact of a costs order on her housing fund should be considered.
Respondent's Arguments
- The Respondent’s counsel submitted that the Respondent should be entitled to his costs, given his outright success in opposing the Applicant’s application.
- Relied on the court’s discretion and binding cases to support a prima facie presumption that costs follow the event despite the general disapplication of CPR 44.2(2) in family proceedings.
- Invited the court to consider the conduct of the parties, highlighting the Applicant’s unreasonable conduct in the Malaysian proceedings and the unsustainable nature of her arguments.
- Submitted that the Respondent achieved a better outcome than his Calderbank offer and the Applicant’s open response, justifying an award of costs.
- Argued that the Applicant’s refusal to provide full exhibits to an updated Form E was reasonable given prior disclosure in Malaysian proceedings.
- Maintained that the Respondent’s use of higher-cost lawyers was a matter for him and that the court should focus on proportionality and reasonableness in assessing costs.
- Contended that contested leave applications do not constitute a unique category exempt from costs orders, as the Applicant had control over the progression of the case.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Judge v Judge [2009] 1 FLR 1287 |
Supports application of the "clean sheet" approach to costs in family proceedings under FPR 28.2 and CPR 44.2. |
The court took this as a starting point for applying the general rule on costs, rejecting the applicability of FPR 28.3 in this case. |
| Baker v Rowe [2010] 1 FLR 761 |
Reinforces the "clean sheet" methodology and the court’s discretion in costs awards in family proceedings. |
Used alongside Judge v Judge to frame the costs regime applicable here. |
| Solomon v Solomon [2013] EWCA Civ 1095 |
Supports the wide discretion of the court in family law to depart from the general rule that costs follow the event. |
Cited by Respondent’s counsel; the court tempered its application given it was not referred to earlier key authorities. |
| Gojkovic v Gojkovic (No 2) [1991] 2 FLR 233 |
Supports a prima facie presumption that costs follow the event in family proceedings. |
Invoked to support the Respondent’s position on costs liability. |
| LM v DM 2021 EWFC |
Confirms routine application of the "soft starting point" that costs follow the event in family law. |
Used to reinforce the accepted approach to costs in this jurisdiction. |
| Reid Minty v Taylor [2001] EWCA Civ 1723 |
Sets the high threshold for awarding indemnity costs, requiring conduct to be unreasonable to a high degree. |
Assisted the Applicant in resisting an indemnity costs award. |
| Epsom College v Pierse Contracting Southern Limited [2011] EWCA Civ 1449 |
Describes indemnity costs awards as "rare" and requiring exceptional circumstances. |
Supported the court’s view that indemnity costs were not appropriate here. |
| F & C Alternative Investments (Holdings) Ltd v Berthelemy (2012) |
Reinforces the high standard required for indemnity costs. |
Considered in the court’s reasoning on the basis of costs assessment. |
| VV v VV (No 2) [2023] 1 FLR |
Shows that costs orders may be made despite adverse impact on a party’s needs, reflecting court’s dissatisfaction with conduct. |
Referenced regarding the impact of costs orders on the Applicant’s financial position. |
| HD v WD [2023] 2 FLR |
Similar to VV v VV (No 2), supports making costs orders despite hardship. |
Used to justify costs award despite Applicant’s hardship. |
| Potanina v Potanin [2024] UKSC |
Emphasises proportionality and condign cost penalties for protracted litigation. |
The court found no reason to revisit its decision based on this judgment, but noted it supports the possibility of costs orders. |
Court's Reasoning and Analysis
The court began by reaffirming the universal jurisdiction under FPR 28.1 to make costs orders as it thinks just, applying the "clean sheet" approach per FPR 28.2 and CPR 44.2, as established in Judge v Judge and Baker v Rowe. It acknowledged the tension and inconsistencies created by the cross-referencing between FPR and CPR rules, particularly noting the exclusion of CPR 44.2(2) (costs follow the event) in family proceedings but the mandatory consideration of CPR 44.2(4) factors including party conduct and partial success.
The Respondent was wholly successful, having secured dismissal of the Applicant's claims, and the Applicant did not succeed on any part of her case. The court considered the conduct of the parties, finding the Applicant’s arguments and conduct unreasonable, including her approach in the Malaysian proceedings and criticisms of the foreign judge, which were rejected. The court gave weight to the Respondent’s Calderbank offer and the Applicant’s open response, both deemed genuine attempts to settle, with the Respondent achieving a better outcome than his offer.
The court rejected the Applicant’s argument that the Respondent’s conditional Calderbank offer conceded merit, explaining the conditions aimed to minimize costs and litigation. The court also found the Applicant’s refusal to provide full exhibits reasonable given prior disclosure.
Regarding the unusual nature of contested leave applications, the court held that the Applicant had full control over continuing the case after it was listed on notice and chose to proceed, thus not warranting special treatment for costs purposes.
The court rejected an indemnity costs award, applying a high threshold for such awards and finding the Applicant’s conduct did not meet that standard. It acknowledged the Applicant’s financial position and the potential hardship caused by a costs order but balanced this against the Respondent’s stronger financial position and ability to meet costs.
On quantum, the court found the Respondent’s costs disproportionate due to higher rates and use of London lawyers for a straightforward local application. It concluded that a reasonable and proportionate costs award would be a stated sum of £10,000, balancing the outcome, proportionality, and the Applicant’s financial impact while leaving sufficient funds for her housing needs.
The court reserved consideration on publication of the judgment and earlier decisions, subject to submissions from the parties.
Holding and Implications
The court ORDERED that the Applicant pay the Respondent costs on a standard basis in the sum of £10,000 as a stated amount of the Respondent’s costs in respect of the dismissed application for leave.
The decision confirms that contested applications for leave under Part III of the Matrimonial and Family Proceedings Act 1984 are not exempt from costs orders despite their rarity and the usual administrative handling of such applications. The judgment reinforces the application of the "clean sheet" approach to costs in family proceedings and the court’s wide discretion to consider party conduct, offers to settle, and proportionality. Although the Applicant’s financial hardship was acknowledged, it did not preclude a costs award, which was adjusted to a reasonable stated sum to balance fairness and proportionality. No new precedent was established beyond the court’s reasoned application of established principles and rules.