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PG v TW (No 1) (Child: Financial Provision: Legal Funding) [2012] EWHC 1892 (Fam)

Mother’s application for interim costs in Schedule 1 to the Children Act 1989 case.

The mother applied for orders under Schedule 1 to the Children Act 1989 against the father who is a professional footballer.  At an interim stage the mother made an application for her legal costs to be paid by the father.  The father had paid £35,000 towards the mother's legal costs but did not agree to pay any further sums.

The proceedings in this jurisdiction were clouded by proceedings underway in the mother's home country in Africa, an application to stay and a striking out application again, in this jurisdiction.

Despite initial skirmishes as to the court's jurisdiction to make an order against the father, it was agreed that the court had jurisdiction and that the conditions necessary to demonstrate the mother could not obtain assistance from other sources had been met.

Making an order for the father to make a further contribution to the mother's costs and for such to be by way of instalments and conditional on terms, Theis J noted the extraordinarily high costs (£270,000 of both parties) that the parties had incurred and that on the basis of the sums sought by the mother would in fact equate to 25% of the overall costs should the proceedings continue to a final conclusion.

The judge provides a helpful breakdown of her approach to quantifying legal costs to be paid by the father by analysis in stages of the proceedings to date and comparing and contrasting the sums spent by each party on their costs schedule.

Summary by Richard Tambling, barrister, 1 Garden Court


__________________



IN THE HIGH COURT OF JUSTICE No. FD11P04008
FAMILY DIVISION
[2012] EWHC 1892 (Fam)

Royal Courts of Justice
Friday, 4th May 2012

Before:

MRS. JUSTICE THEIS

B E T W E E N :

PG Applicant

- and -

TW Respondent

 
__________

Transcribed by BEVERLEY F. NUNNERY & CO
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__________


MR. CAYFORD QC and MR. TOD (instructed by Brookman) appeared on behalf of the Applicant.

MR. FRANCIS QC (instructed by OGR Stock Denton) appeared on behalf of the Respondent.

__________

By separate Order of HHJ Horowitz Q.C. dated 8th February 2013, the Court has given the parties permission to report this judgment in anonymised form.  It shall be reported as PG v TW (No.1) (Child: Financial Provision: Legal Funding) [2012]

J U D G M E N T
(As approved by the Judgment)

MRS. JUSTICE THEIS:
1. I am giving this short judgment extempore, which is not ideal.  But, given the circumstances of this case, it is the best option.
 
2. This application is made by the mother applicant, PG (who I shall hereafter refer to as "the mother"), who is the mother of a child, who I shall call 'Z', born in 2008.  This application is for what is known colloquially as an A v A order for the respondent father to fund, or contribute to, her legal costs, both historical and going forward.  The respondent is TW (and I shall refer to him hereafter as "the father"). 

3. The application is made in the context of an application under Schedule 1 Children Act 1989 ("Schedule 1 Application") that has been issued by the mother.  There are in fact two applications. One was issued in May 2011 and a second in March 2012.  Both applications claim all forms of relief, both in terms of maintenance, a lump sum and secure provision. 

4. A first directions hearing took place before District Judge Hess on 5th September 2011 in relation to the May 2011 application and an FDR took place before District Judge Walker on 12th December 2011 in relation to that earlier application.  No agreement was reached and District Judge Walker made a number of directions in relation to that application, which included setting the matter down for a main hearing in October, and this hearing in May with the specific purpose of dealing with the A v A application.  Directions were made and tightly drafted in relation to what statements should be filed, with specific provision that no further statements should be filed without the leave of the court.  For those reasons, the mother's statement that she did file included a section dealing with the evidential basis for this application.  So, I reject the submissions made by Mr Francis QC that there was no evidential basis for this application.  

5. I have had the benefit of reading the bundle, reading the detailed position statements and hearing the oral submissions from both Mr Cayford QC, who leads Mr Tod and Mr. Francis QC on behalf of the respondent. 

6. There is, broadly speaking, no issue in relation to the law. It is accepted the court has jurisdiction to deal with this type of application within the context of a Schedule 1 Application.  There had been some earlier decisions that questioned that jurisdiction, but that has now been resolved and is not an issue before the court. 

7. The figures and positions taken by the parties in this case are stark.  The mother, to date, has incurred costs in excess of £180,000, excluding VAT.  The father's are half that, about £90,000.  On any view, it is extraordinary that a total of £270,000 has been spent to date on what both counsel agree (as do I) is a relatively simple case on the facts. 

8. The father already has made a contribution to the mother's costs in an agreed sum of £35,000.  The mother seeks an order to cover historical court costs and to take the matter forward to trial.  She sets out the breakdown that she wants in her statement as to how much she seeks in relation to the historical costs, and what she seeks going forward. 

9. The father's position is that he accepts the court has jurisdiction, but what he says is that the court should make no provision at all over and above the £35,000 that has already been made because of the way this case has been conducted by the mother.  He also complains, as a fall-back position, about the level of hours that have been spent on the case by the solicitors instructed by the mother, so makes no proposals in relation to any funding going forward. 

10. It is a worrying feature of this case that it has generated such a level of costs and statements being filed by the parties' solicitors that uses language (to put it in its most neutral form) that I consider to be thoroughly unhelpful.  All it has done is generate more heat than light in relation to what are the real issues in this case, and has served to increase the costs on both sides. 

11. The background in relation to this matter can be summarised relatively simply.  The father is aged thirty; he is a high earning professional footballer.  The mother is aged twenty-five.  They commenced their relationship in 2007 and, in 2008, Z was born.  Sadly, the relationship ended in March 2009.  The father remained in this country and continues to play football in the Premier Division.  The mother returned back to the African Country which was her home with Z and lives with her parents. 

12. The finances, in headline terms, are also stark.  The mother's income is put in Mr. Cayford QC's position statement, in general terms, as about £13,000 sterling per annum (that includes the assistance that she gets from the father).  It may be a little bit more now, because there has been an increased payment made by the father since December 2011.  However, it makes little difference when looked at in the context of the contrasting picture on the other side.  The father's admitted income net is in the region of £2.25million, plus he accepts that he has capital in the region of £5.25million. 

13. The mother's case is, in very broad terms, put under five heads of claim:

• A housing cost in the region of £385,000 sterling (the range, I think, is £360,000 to £400,000). 
• Equipment costs in the region of £91,000.
• A budget of about £11,000 a month (it is unclear how much of that is Z's and a carer's or whether the whole of it is put forward as Z's and a carer's, but it does not matter for the purposes of this hearing).
• A car fund, either by way of a lump sum in the region of £87,000 or a recurring annual figure of just over £4,000.
• School fees.

14. The father has not filed a statement as he was directed to, pursuant to the orders made.  It should have been filed by 12th March 2012. 

15. Procedurally I have already outlined the position in relation to the application that was issued in May 2011.  The second application was issued in March 2012.  It appears that the rationale behind the issue of that application is that it became apparent to the mother's legal team (I am told some time at the end of 2011) that, as a result of amendments to para.14 of schedule 1 by the EU Maintenance Regulation 2011 (Regulation no.4/2009 of 18th December 2008), the mother became entitled, as from 18th June 2011, to bring a lump sum and property settlement application within the United Kingdom which resulted in her second application. That is the subject of a separate application that I shall come to in a moment. 

16. It was conceded on behalf of the father that the Currey criteria (from the decision of Currey v. Currey (2) [2006] EWCA Civ 1338, [2007] 1 FLR 946) had been met. In effect, the mother had no other effective source with which to fund her legal costs in this case.  However, that was slightly altered when Mr. Francis had had the opportunity to be able to see the retainer letter that had been sent to the mother by her solicitors. The letter is signed off by Henry Brookman on 8th September 2010.  The relevant part that I am taken to by Mr. Francis is on p.4 of that letter, where it says under (a) that:

"By signing these terms you irrevocably authorise us to be paid from any past, present or future award of capital and/or maintenance, whether in these contemplated proceedings or otherwise."

But it does then go on to say at the end of that section:

"If you do not place us in funds when requested to do so, you do not pay a bill within 7 days, then we are entitled to cease acting for you from that time."

It is submitted by Mr. Francis that that is a Sears Tooth order.  I am not sure that it actually meets that criteria because, if it is, it would not have that sentence at the end of that section entitling the solicitors to make a demand for a bill and then cease to act.  The reality is, on any view, this mother does not have any other effective sources of finance with which to fund this litigation. 

17. The authorities, and it is accepted, give the court a wide discretion in reaching its decision in relation to making an order in this sort of application.  I take into account the following matters in reaching my decision: 

(1) There has been no issue until very recently that this court should exercise its jurisdiction in relation to schedule 1 of the Children Act 1989, certainly in relation to the position regarding maintenance and secured position.  That was expressly conceded in correspondence by counsel then instructed by the father at the first directions appointment before District Judge Hess. This was in the full knowledge of the father having issued the proceedings in Africa in July 2011 in circumstances where he was, in these proceedings, asking for an adjournment; and, unbeknown to those advising the parties in this jurisdiction, that application was being issued.  The letters that Mr. Cayford QC has taken me to leading up to the first dispute appointment and the transcript of that hearing make that abundantly clear. 

(2) The second application issued by the mother was issued in March 2012 because of the awareness by her legal team of a change in the law effective from June 2011 (as I have just outlined) that would enable this court to hear a lump sum application in relation to a child who lives outside of the jurisdiction.  It is accepted that that awareness came late in the day to the mother's legal team. 

The father seeks to challenge that application being issued in the way that it was, namely without notice.  Mr. Francis QC, in his submissions to me, had made it clear that that application to strike out is made on the basis that he states the effect of it is that the mother is abandoning her earlier application and they should, as a result, have their costs in relation to that earlier application.  He confirmed that that was his sole ground upon which he has issued the application to strike out the March 2012 application, in addition to the procedural point that the matter should not have been dealt with ex parte.

It is accepted that, in any event, even if that application was successful the mother could then issue fresh proceedings for another lump sum.  It is likely that there may be some reflection in relation to the merits of pursuing that application.  The father's position statement by Mr. Francis is ambiguous in places as to whether he is actually saying that the mother has abandoned her application.  What has been made clear by the mother's solicitors, in correspondence sent a few days after issuing the second application, is that they were only relying on the lump sum provision parts of the second application; so they have made it quite clear that they are not abandoning the previous application in relation to maintenance and secured provision. 

(3) The father has stated very recently that he wishes to issue a stay application asking this court to exercise its discretion on a de Dampierre basis and, looking at the principles set out in that case, to stay these proceedings.  As is set out at para.2 of the father's position statement, it is submitted that there is a legitimate forum dispute.  That position, I was told in submissions, is being taken because the African court made an order on 12th April 2012 and the court has given a judgment.  This position is said by Mr. Cayford QC to be wholly inconsistent with the position taken by the father and in the correspondence, at the first directions hearing on 5th September.  In any event, it really makes no difference because the judgment of the African judge, Mr. Justice M in para.16 makes it quite clear when he says: 

"I am of the view that the fact that a court of competent jurisdiction in England may make a maintenance order in time to come does not warrant a suspension on the part of the relief claimed in these proceedings wherein this court is called upon to determine all the elements of parental responsibilities and rights pertaining to and in the best interests of Z and that included financial maintenance for Z."

That position was foreshadowed by the father's legal representatives in their submissions before District Judge Hess on 5th September 2011, because they were effectively asking for an adjournment to await the outcome of an order in the African proceedings, so that this court could take that order into account in exercising its jurisdiction and determining what was the appropriate order under the Schedule 1 application. 

(4) Apart from the current maintenance, following the December 2011 hearing, of £1,300 per month, no offer or proposals have been made.  The mother has set out her position in her Form E and in her statement.  As I have said, the father was directed to file a statement by 12th March 2012 which he has not done so.  There was no explanation in the documentation before me for the complete failure by the father to comply with that court direction. 

I was told by Mr Francis QC in his submissions that this was because of his playing commitments and the need, he said, for him to focus on his game:

"He has not been able to have the time or the necessary focus to be able to give the instructions for any document that was directed to be served and filed some time ago". 

Whilst, of course, I accept that it does appear, on the face of it, that he requires and needs to concentrate on the professional responsibilities that come with his job, but it does not appear to have stopped him having the time to instruct his legal team (no doubt, first, having been advised of the merits of such an application) to issue a strike out application dated 26th March 2012; also separately ( no doubt after being advised in relation to the merits of the application) to give instructions to his solicitors to issue a stay application, which I was told was sent off yesterday.  In addition, during the relevant period of time, he has also been available to give whatever instructions have been necessary to enable the proceedings to continue in Africa.  I am told there was a hearing in December and the hearing that resulted in the judgment in April 2012.  So it does appear that, if that time is being made available by the father, it is being made available on a selective basis to engage and give instructions in relation to matters that he wishes to rather than complying with directions of this court to file a statement. 

18. Taking all these matters into account, I have reached the very clear conclusion that the court should exercise its discretion to make an A v A order.  I do not find that the mother's conduct is such that she should be precluded from having any payments made available to her at all over and above the £35,000 that has already been made.  Whilst there may be some criticism of the way she pitches her case, and that is not unusual in the court's experience in relation to these applications, those are matters to be dealt with by engaging in constructive discussion about the parties' respective position and make what are considered to be realistic proposals.  That has not taken place.  It may be that the father's position is that there should be no more maintenance paid or any other provision apart from that.  His position remains entirely unclear. 

19. The position taken by the father in these proceedings have increased the costs, he has chosen to issue and continue with proceedings in Africa during the currency of certainly one of these applications, one of which was issued before the African proceedings.  This has caused an increase in costs here, because there has been a need to find out what has been happening in the African proceedings.  He has chosen, as I have said, to make no proposals other than those for maintenance, which of course he is entitled to.  But a court is entitled to take that into account when looking at the picture in the round and also in exercising its discretion. It looks like (as I have already said) he has instructed his legal team to issue two fresh procedural applications that the court is going to need to determine, if they are proceeded with. 

20. The mother needs to be in a position to pay some of her historical costs and likely future costs to deal with the procedural applications, if they are proceeded with, and the main hearing.  Whilst the father makes no proposals for the mother's costs, he does take a great deal of time - not only the evidence that has been filed by him, but also in his position statement - of criticising the hours spent by the solicitors instructed by the mother on this case.  On the face of the information I have, I agree with some of those criticisms: 

(1) The number of hours. Firstly, in relation to a comparison between the hours incurred by the father's solicitors and the hours incurred by the mother's solicitors during the breakdown of the bills.  During the first period, the mother's solicitors incurred approximately 63 hours at senior partner or partner level, whereas the father is said to have incurred 40 hours.  At the next stage leading up to the FDR, the figures become more stark.  The mother's team incurred 101 hours, whereas the father's team incurred 58 hours.  Secondly, the point made by Mr Francis QC is when you look at the difference between the costs schedule that was prepared on behalf of the mother's team on 19th February 2012 and the one that was distributed on 1st May 2012 in relation to the estimate of a partner's hours dealing with this application the difference is notable.  The estimate was 35 hours in the estimate on 19th February, but it is said that the actual hours incurred were 93 hours, nearly three times the original estimate, which seems to be excessively high. 

(2) The second matter is whether all of these hours needed to be incurred at partner or senior partner level.  There had been some criticism in relation to the use of counsel, whether it has been one counsel or two counsel, but, in fact, I do not think that criticism is necessarily sustained. If you look at the overall figures in relation to historical costs there is very little difference between the two sides (I think about £5,000 or £6,000 looking at the total figure).  I, of course, acknowledge that, generally speaking, those acting for the applicant have to do a bit more of the running around in order to be able to get the application formulated and to provide the evidential basis for the case.  But the worry in this case is that, despite having spent (as I have said) nearly £270,000 in total, it is agreed that this is a relatively simple factual case.  As I have said, it is a staggering amount of money. 

21. In reaching the figures and the decision I am going to take the costs incurred by the father's team to date and going forward as a benchmark, but will not follow them in a precise like for like comparison due the points that I have already made about there being some additional work.  Due to the way the figures have been presented to me, there is going to be an element of a broad-brush approach.  I think that is the only thing this court is able to do on the information that it has. I am going to divide the costs up into four sections. 

22. The first section is the period from issue of proceedings prior to the costs incurred in relation to this application.  As I understand it, that period for the father's costs is £82,981.  That figure, broadly, save for one small amount of disbursements, includes VAT of 20% and if that is deducted one is left with a figure of £65,000.  The comparable time and figure for the mother's costs is £113,000, which is £41,000 for the period leading up to the first appointment and £72,000 leading up to the second appointment.  Using the father's figure as a benchmark (which is £65,000) and, making an allowance for the fact that there needed to be some extra work, I will make an allowance for the purposes of this application (but make it clear it leaves all options open at the end of the day) of £80,000 of which there has been a payment of £35,000.  Therefore, there will be a payment of £45,000 to cover what I term the historical costs. 

23. In relation to the costs of this application, I will hear submissions in relation to that.  The competing figures are:  The father's are about £26,000 (I have reached the figure as being the difference between £82,000 and £108,000).  There may need to be an adjustment to deal with the fact that those figures will include VAT.  The mother's costs estimate for this application was £39,688.  It says her costs incurred in fact have been £70,293.  I shall say no more about those figures and will hear submissions about, not only liability, but also quantum. 

24. The third period relates to what I termed the "strike out application" and the application that I am told has been issued for a stay.  They should be heard together, and I shall return to directions in relation to those in a moment.  The father estimates his costs in relation to that, including counsel, to be £27,000.  The mother's estimate is £47,250.  I am going to make an allowance for £27,000 in relation to that.  It seems to me that there is no enhancement needed for that because it is effectively going to be a matter of law and legal argument.  I will hear submissions as to how that is paid.  What I propose to do is to make that a contingent arrangement, because I want to give the father and those who advise him, an opportunity to consider whether that application should actually be pursued. I will give them a period of seven days to do that.

25. The fourth period of time is the costs to trial.  The father's estimate is £54,000, which is made up of £12,255 in relation to solicitors' costs (made up of a total of 43 hours) and an allowance for counsel's fees of £42,000.  The mother's estimate on her schedule dated 1st May 2012 is just over £88,000.  Bearing in mind that there will be some extra expenses that would be incurred by the mother, I am going to make an allowance for £60,000 in relation to that.  I consider that should be a sum paid by way of monthly instalments, so that there is encouragement - if the matter remains within this jurisdiction - to look seriously at trying to resolve and narrow the issues between the parties. 

26. As I have said during the hearing, I am very concerned about the proportionality of costs in this case, looking at the estimates in relation to total global figures if this went to a contested trial.  The best part of £500,000 would be spent by these parties, which, on the mother's case at its highest, is at least 25% of what she is seeking taking her claim at its highest.  If the question of strike out and the stay application is left to the start of the hearing in October it will, in my judgment, effectively prevent any active discussions in this case, if this court is to retain jurisdiction.  The battle lines will have been drawn up and that is why I think that issue needs to be resolved sooner rather than later if the court is to pay any kind of credence to the overriding objective set out in Rules 1.1 (2) and 1.4 (2) of the Family Procedure Rules 2010 in relation to proportionality and active case management by the court.  Therefore, I will keep judicial continuity with this matter and have made arrangements to list the hearing of the application to dismiss and the stay application on Friday 22nd June 2012 in the Brighton County Court at 10.30am with a time estimate of one and a half days.  The matter is to continue in the Medway County Court on the following Monday, 25th June 2012. 

27. As I have said, I will give the father's team an opportunity to reflect on whether they wish to pursue the procedural applications to dismiss and for a stay and they are to notify the mother's team and the court by 12 noon on 11th May 2012 if they are going to do so.