The general rule as to costs in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of the other party. The court may, however, depart from this rule where it considers it appropriate to do so on the basis of one party’s conduct before or during the proceedings. Unlike in other types of civil proceedings, there is no rule that the unsuccessful party should pay the successful party’s costs, but one would still expect most costs orders to be made against the unsuccessful party.
That, however, was not the case in Lemmens v Barbara Brouwers, decided by the Court of Appeal last November. Lemmens concerned a husband’s application for the downward variation of a maintenance order. His application was successful (the amount of the maintenance order was reduced, because his financial circumstances had changed), but he was still ordered to pay £30,000 towards the wife’s costs. The husband appealed against this costs order, to the Court of Appeal.
So if the husband won his case, why was the costs order made? The answer is that the judge had found that, right up to the commencement of the hearing, the husband had failed to explain his financial situation to the wife or her advisers. His Form E financial statement was found to be “deliberately misleading”. As a result, the wife incurred significant additional costs, as she sought to understand how the husband justified continuing with his application, despite the fact that his income appeared not to have altered since before the original maintenance order had been made.
The husband advanced two grounds for his appeal. Firstly, that the process was unjust due to serious procedural irregularities, including that the wife filed her Form H costs estimate late, and that the court should not have summarily assessed the costs or his liability for costs, but should have provided for a detailed assessment. Secondly, that the judge’s determination was flawed – he had provided information regarding his finances in a timely fashion, and even if his disclosure was insufficient, the order made by the judge bore no relationship to the actual additional costs caused by this.
Giving the leading judgment of the Court of Appeal Lord Justice Moylan dealt first with the alleged procedural irregularities. He found, quite simply, that the husband had not been prejudiced by the late filing of the wife’s Form H, and that the judge was entitled to decide to assess the costs summarily.
As to the exercise by the judge of his discretion to make the costs order, Lord Justice Moylan found that the judge was clearly entitled to decide that the sum of £30,000 reflected the extent to which the husband’s conduct had increased the wife’s costs. The husband had referred to the effect of his Form E as ‘de minimis’, i.e. too trivial to be taken into account. Lord Justice Moylan disagreed. He said:
“I do not find it surprising that the judge attributed significant weight to the fact that the husband’s Form E was deliberately misleading. This cannot be lightly dismissed as de minimis. Even if, as the husband submits, the inaccuracy was corrected within a relatively short space of time, the failure to give full and frank disclosure at the outset of proceedings can have continuing consequences. The judge further identified that the husband had not provided the wife with a “fully intelligible explanation” until the final hearing. These are findings which the husband cannot sensibly dislodge.”
The judge, he said, had sufficiently explained his summary assessment of the costs. None of the husband’s arguments persuaded him that the judge’s decision had exceeded his discretion. Accordingly, the appeal should be dismissed.
Lord Justice David Richards gave a concurring judgment.
An interesting little case, and a warning to litigants (particularly those who, like the husband in this case, are not legally represented) of the need to provide the court and the other party with full, clear and honest information, in a timely fashion. Here, the husband’s failure to do so turned a ‘victory’ into something more akin to a ‘defeat’.
You can read the full judgment here.