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High Court rejects couple’s costs appeal

A South Yorkshire couple have lost the latest round in a complex dispute over legal costs and property ownership.

In 2011, the wife launched a claim against another woman who, she claimed, was in breach of contract regarding the sale of a pony.

Before the claim reached court, the respondent applied to court for the wife to provide security against the legal costs that would be incurred. In response to this, the wife provided a statement in which she declared that she had an interest in the property where she lived, “by virtue of marriage [and] my contribution to the marriage”. As a result no order for security was made.

The claim then proceeded to court and was dismissed. The wife was ordered to pay the other woman’s legal costs, with an initial payment of £30,000. This was not paid, so the woman, by now a judgement creditor, then applied for a charge on the couple’s home to cover the costs due, on the basis of the statement the wife had previously provided. A charging order was granted.

By this point however, the husband had disputed the wife’s earlier claim that she had an interest in the matrimonial home. The couple were therefore ordered to submit new witness statements on the issue.

Sitting in the Chancery Division of the High Court, Mr Justice Snowden noted

“It was apparent from [the wife]’s statement that she had fundamentally altered her stance in relation to the question of whether she had an interest in the Property.”

He statement declared:

“I accept that I did not have in interest in [the matrimonial home] either on a legal or an equitable basis. I further confirm that I have never had such an interest”.

As a result, a hearing was held into the true nature of the wife’s interest in the property. The couple did not provide a number of requested documents for this and at the hearing the wife declined to give evidence, claiming to be suffering from stress. A Judge dismissed the couple’s claims and ordered the charge on the couple’s home to proceed. The couple were also ordered to pay further costs of more than £12,000.

They did not do so, but instead sought and were granted permission to appeal. This was to be in the form of a retrial. The couple were ordered to produce a range of documents and details relating to the property, including bank statements and financial documents, but supplied only some. In the end bank statements were only provided a week before the appeal was due to be heard.

As a result, the Judge ruled that the couple had failed to comply with the earlier court order for disclosure, so their appeal was struck out. The Judge also dismissed an application that the court be given some relief from the legal sanctions imposed.

The couple appealed this refusal to grant sanctions. But Mr Justice Snowden was not persuaded, saying:

“At this stage of the enquiry it should be borne in mind that this is a dispute over an appeal against a charging order in respect of what was initially an order for payment of £30,000 of costs. At the time of [the earlier] ruling, the outstanding amount of costs outstanding had increased to over £42,000. The defaults in disclosure inevitably resulted in further costs being wasted that would also have been ordered to be paid by [the couple] in any event. None of the costs outstanding have been paid. Those factors must tell heavily against permitting relief from sanctions so as to require yet more costs to be spent on the issue of the charging order.”

The charging order on the couple’s property could proceed, even without a precise determination of the wife’s interest in the property, the Judge also declared.

The case can be read in full here.

The blog team at Stowe is a group of writers based across our family law offices who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. As well as pieces from our family law solicitors, guest contributors also regularly contribute to share their knowledge.

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