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Home > Judgments > 2008 archive

SW v RC [2008] EWHC 73 (Fam)

Appeals by father in Schedule 1 Children Act claim concerning an application to vary the payments and a costs order. Appeals dismissed.

A consent order agreeing a lump sum and periodical payments, index linked for inflation, was agreed in 2001. In 2003 the mother sought to increase the payments as the costs of bringing up the child had increased. The father refused and an application was made to court. In 2004 a cross application was made by the father to reduce the periodical payments. Eventually a hearing took place in 2005 in which both applications were refused but no costs order was made. No appeals were made at this stage but both parties made applications for costs which were heard on 26 June 2006 by a different district judge who ordered that the father pay £17,250. On 2 July 2006 the father served notice to appeal the costs and the variation decisions. Throughout the proceedings the father was late, or even refused, to dislcose evidence as required, though the mother's conduct was not blameless.

In this judgment Singer J had to consider three issues: 1) whether to allow the substantive appeal against the order; 2) whether the appeal was out of time and; 3) decide the appeal on costs. He concluded that the District Judge had been able to reach the conclusions she had as she was not plainly wrong. He also concluded that the appeal was out of time as it should have been lodged after the 2005 hearing. Finally, given the conduct of the father during the litigation, the appeal against the costs order failed.

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Neutral Citation Number: [2008] EWHC 73 (Fam)

Case No: FD01P00303
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 24/01/2008
Before :

MR JUSTICE SINGER
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Between :

SW (Appellant father)

- and -


RC (Respondent mother)

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Mr Richard Todd (instructed by Messrs Mishcon de Reya) for the Appellant
Mr Christopher Pocock (instructed by TWM Solicitors) for the Respondent

Hearing dates: 25, 26 and 27 June 2007
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Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.


.............................

MR JUSTICE SINGER

This judgment is being handed down in private on 24 January 2008. It consists of 68 paragraphs and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.

The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the child must be strictly preserved.

Mr Justice Singer:

The procedural history in outline
1. These two appeals are brought by the father (F) of a child (C) aged seven. Her father and the mother (M), the respondent to the appeal, were never married. F lives with his wife and their two much older children. M has another child who is now adult but at the dates of the relevant hearings she lived alone with C.

2. The appeals relate to two hearings 16 months apart before different district judges, the first the substantive hearing of cross-applications to vary brought under paragraphs 1(4) and 6 of Schedule 1 to the Children Act 1989, and the second as to the costs order following that decision. The parents expended about £89,500 in costs to that point, and since then some £38,000 in response to F's pursuit of these appeals. The total costs irrevocably lost to their joint economies would have met C's grown and growing needs for many years.

3. The variation applications related to an order made by consent on 19th March 2001. The provisions of that order were for F to pay a lump sum of £25,000 for C's benefit, that payment to be in full and final settlement of all claims for lump sum and property adjustment orders which M might make against F on C's behalf; and for F to make periodical payments to M for C at the rate of £7,200 per annum 'until such time as she shall attain the age of 17 years or shall cease secondary education whichever shall be the later or further order'. The order included an index-linking provision to take effect annually commencing from 1st April 2001. The order also recited F's undertaking to the court 'to pay or cause to be paid ... periodical payments of an amount equivalent to the school fees (but not the extras on the school bill unless mutually agreed in writing in advance) …'. None ever were.

4. In the summer of 2003 F through his solicitors point-blank refused to enter into discussions for a maintenance increase initiated by M's then solicitors, and refused to produce his 2002 tax returns. So, as long ago as 4th November 2003, M issued an application for an increase in C's maintenance. F's application to reduce periodical payments was not issued until September 2004, after a number of intervening directions orders, and indeed after M's application had twice been listed for final hearing but then necessarily adjourned. The substantive hearing (involving consideration of over 1,000 pages of documentation and two days of oral evidence and submissions in February 2005) resulted in a written judgment handed down by DJ Green on 21st March 2005. In the course of its 17 closely-typed pages she reviewed the evidence and the parties' contentions and submissions, made findings of fact and gave reasons for her conclusions. She decided to dismiss both applications, and adjourned for hearing before her any application either parent might make in relation to costs. The index-linking provision had not (or not fully) been complied with, so that there were arrears of £620 which she directed F to pay at the rate £50 per month, in addition to continuing maintenance at the rate of £600 per month in accordance with the original order. M has not sought to challenge the dismissal of her application.

5. Mystifyingly, no court order was then or ever has been drawn or perfected to reflect those decisions. The terms of such an order would have been simple enough. More to the point, however, neither party filed any appeal at that stage, nor indeed intimated to the other any intention to pursue an appeal. Instead, nearly two months later on 13th May 2005, F lodged an application for M to pay his costs arising out of the cross-applications. On the 9th January 2006 M issued her own application for costs. DJ Green at some stage in the intervening period had unfortunately become unwell and remained so for a substantial period. Eventually the costs applications came before DJ Million on 26th June 2006. By agreement, he swept up all existing interlocutory costs orders and ordered F to pay M a balance of £17,250 (to include the costs of the costs application before him). F was to pay that sum by 24th July 2006.

6. At that hearing F's counsel made an oral application to extend if necessary his time for appealing against DJ Green's dismissal of his variation application. DJ Million dismissed that application at that stage without expressing any clear or concluded view whether time had indeed expired: indeed the question was raised without prior notice on behalf of F and could not be fully argued.

7. Finally on 7th July 2006 F filed and thereafter served Notice of Appeal to set aside both decisions, and for permission (if required) to appeal out of time against DJ Green's disposal of his variation application. His appeal was of course in time so far as it related to the 26th June 2006 hearing before District Judge Million. On 11th October 2006 Sumner J directed that the question whether the appeal in relation to events before DJ Green was out of time and required leave should be dealt with as a preliminary issue. He listed the appeal for two days of which he envisaged that the first was to be used for submissions, and the second for preparation and delivery of judgment. This luxury was not however to materialise, through no fault of the parties or their advocates, Mr Richard Todd for F and Mr Christopher Pocock (who was not instructed for the substantive hearing before DJ Green) for M. Their submissions occupied the whole of the time allocated. But they had only received the 80-page transcript of the entire hearing before DJ Million at the end of the previous week, so that the skeleton arguments were inevitably prepared and delivered last-minute.

8. I heard the appeal against this order on its merits, and will deal with that first. I also heard argument as to whether the time for F to bring this appeal had expired by July 2006, and whether (if so) time should be extended. I have reached a conclusion on those two questions and will give my reasons, but in the event they are of academic interest in view of the conclusion I have reached that the substantive appeal fails. I will then address the issues raised on F's appeal against the costs order made by DJ Million in June 2006.

The substantive appeal against DJ Green's March 2005 decision
9. DJ Green held that M's estimate of £15,200 p.a. for C's own outgoings (excluding basic school fees) was a not unreasonable figure, and one that was little challenged by Mr Todd in cross-examination. She concluded that the amount payable by F under the 2001 order/agreement of £13,368 p.a. (including indexation to that date and school fees but no extras) was 'not far from half' the total of £25,840 which she calculated as C's reasonable needs in 2005 by adding the school fees (then £5,640 annually) and a 'not unreasonable carer's allowance' of £5,000 p.a. I note in passing that this proportion is less rather than more than 50 per cent if, as seems logical, the carer's allowance should in principle be paid in full (if affordable) by the non-resident parent.

10. Before the district judge F contended that his maintenance liabilities should be decreased by more than half to a figure of about £3,750 p.a., broadly what might be appropriate as the Child Support Agency assessment for a parent earning £31,200 p.a. Moreover he asked to be released from his liability to pay the basic school fees, an objective he openly persisted in up to the hearing before me, when it was abandoned.

11. A major reason why the district judge dismissed F's application for downward variation (which she described in forthright terms as 'unfair, abhorrent even' in the light of his lifestyle: words Mr Todd described as 'intemperate') was that it was unreasonable for him, in the absence of any recent profit-making property venture, to continue to adopt for himself and his family an affluent lifestyle on the basis of capital reserves combined with borrowings, and at the same time to plead poverty when it came to this child's maintenance.

12. The 2001 consent order had been agreed against the background that in a Form E filed on 14th March 2001 (five days before the consent order was made) he put his prospective partnership income for the trading year to 31st May 2001 at £50,000, whereas when it came to his 2002 tax return covering that same period his own profits from that source were shown as £190,985. His equal partner is his wife, who would have made the same profit. Admittedly, and as DJ Green noted, the partnership accounts for the succeeding years 2002-2004 show losses allocated to F's share totalling some £312,000. The same accounts show his drawings as £153,431 to the end of the first period, £124,896 in the second, and £278,246 in the third: a total of some £556,000. His wife's drawings for the same three years totalled £480,775. It seems that these drawings were used in part to purchase a property from the partnership itself, now owned and occupied by F and his family, and that the funds to do so derived from such of the £4.4 million proceeds of sale of their previous house as were not at that stage used to repay borrowings. The sale of F's previous home and the purchase of his existing one from the partnership took place in November 2003. But that is not how he appears to have described his use of the drawings, at least in his affidavit evidence, and at least for the period ending May 2003. In his July 2004 Answers to Questionnaire H stated, specifically in relation to the £496,000 partnership drawings made by him and his wife in the first two of these years, that 'the drawings are used for living expenses and to service debt'.

13. I believe that the essence of DJ Green's decision may be found in a number of passages from page 11 onwards of her judgment, from which I will quote extensively:


F though has been less than clear about his financial position and I am not surprised that M has been misled into thinking and suspecting that he is earning and/or has access to very substantial funds. This is not just because of his great reluctance to disclose necessary paperwork but also because of the way in which he has been shown to spend substantially in spite of pleading poverty. The way F presents to the outside world would lead anyone to believe that he is a man of substantial means. He and his family live between two homes each worth in excess of £1 million. He and his wife drive top-of-the-range/market cars. His two older children go to private schools. He is a member of a world-renowned golf club. He is a member of the gym. He takes several nice holidays a year. He eats in top-class restaurants. He food shops at Harrods and he buys clothes from Armani. Had he been up front and clear with his financial disclosure from the very beginning M would have been able to see a fuller and clearer picture much earlier. He does not present like a man pegged at income of £31,200 per annum as suggested in his affidavit. His golf club membership alone costs about £2,750 per annum. The gym membership costs about £1,100 per annum. In six months between July and December 2004 F has spent approximately £3,500 on clothes and £7,500 on flights and/or holidays.

F suggested that his own outgoings are £7,700 per month but then conceded in cross-examination that many of the figures included in the Schedule had to be halved to take account of his wife's income. F's disclosure of business accounts revealed that in 2004 he drew from the business approximately £278,000 and his wife drew approximately £262,000. Those sums are not income but drawings but they have enabled F to live a very good lifestyle indeed leading M to believe that he had substantial resources at his disposal enabling him therefore to pay much more than he has been paying.

On closer inspection one finds that what on the surface looks like a very comfortable lifestyle indeed is actually not quite so because of heavy borrowing.

For example, the £1.1 million house F and his family live in in Windsor is subject to a mortgage of some £825,000 so that the post-sale equity value of that property is only about £240,000 of which F owns half, therefore £120,000. That property is currently on the market for sale at £1.15 million. It is the only property equity that F has. The other substantial house in which F and his family reside during the week in London is actually not F's property. It was purchased in 1993 and belongs to a trust that F had set up in 1989 years before he even met M and in order to benefit only his older children. That trust has lent approximately £650,000 to F's business in connection with a property venture in Barbados to which I will return later. The loan has not yet been repaid by the business to the trust. To raise the money lent by the trust to the business the London property was mortgaged. It does remain the case that F, his wife and his older children live in the trust property rent-free during the week. They live in the Windsor property at the weekend. The older children go to school in London and so this arrangement suits F and his family very well. Accordingly, as I have said, his position on the surface looks very good but both properties are substantially mortgaged and the trust property does not belong to F in any event. If F and his family did not live in the London property it could be rented out and produce income for the trust.

F also has substantial credit card debts, over £80,000 of them, and he has a bank overdraft that more than wipes out any accounts in credit. He has few other assets, about £1,000 of shares and £4,000 of stocks.

He has already traded down substantially in respect to his accommodation. In November 2003 F sold the family home he and his wife and older children had been living in up till then for £4.50 million and the family moved to the current home in Windsor.

14. Then, after dealing with the further details which led her to the conclusion that F 'has been drawing down capital to live on', DJ Green continued:

On the other hand whilst apparently so strapped for income and/or other resources F has assisted his sister by loaning her £10,400 over a period of 10 months in 2004 which he says she is now paying back in dribs and drabs. Also he has shown to the court and the outside world generally that he obviously has great confidence in his business and income potential for the future because during the period of these business losses he has continued to live a very nice lifestyle indeed such as I have already described.

15. The July 2006 Notice of Appeal makes three criticisms of DJ Green's judgment which were adopted, with only minor additional comment, in Mr Todd's skeleton argument for the appeal.

16. One was that, on F's case, the district judge was wrong to conclude that the final hearing had to be adjourned twice as a consequence of F's failure to provide full, frank and clear disclosure of his financial circumstances. Certainly, on any view, F contributed very significantly to the delay in the case being heard by the piecemeal fashion in which he provided disclosure, often delayed and some of it only shortly before the relevant hearings. If the district judge was in error in making quite so positive an assertion about F's responsibility for the aborted hearings, that did not in my view infect her assessment of the case overall on the evidence by then before her.

17. A major complaint is that the district judge ordered F to continue to pay at a rate far in excess of that which would have been fixed by a Child Support Agency assessment based on the annual income of £31,200 declared by F. The Notice of Appeal suggests that in so doing the judge did not attach any or any sufficient weight to observations of Nicholas Mostyn QC, sitting as a Deputy High Court judge, in GW v RW [2003] 2 FLR 108 at [74]. He said:

When dealing with this aspect of the case I identify three principles. First, I am of the view that the appropriate starting point for a child maintenance award should almost invariably be the figure thrown up by the new child support rules. The Government's express policy in making awards of child maintenance susceptible to abrogation and replacement by a maintenance calculation by the CSA (see s 4(10)(aa) of the Child Support Act 1991) was that child maintenance orders should be negotiated:

'… in the shadow of the CSA. All parties will know that either parent can turn to the CSA in future, and that it will therefore be sensible to determine child maintenance broadly in line with CSA assessment rates.' (see para 25 of the White Paper, A New Contract for Welfare: Children's Rights and Parent's Responsibilities, Cmnd 4349 (1989))

If a child maintenance order, whether made by consent or after a contest, is markedly at variance with the calculation under the new regime then there will be a high temptation for one or other party after the order has been in force for a year, and after giving 2 months' notice, to approach the CSA for a calculation. Quite apart from the obvious acrimony that this would engender, a calculation in a different amount to the figure originally negotiated or awarded may cast doubt on the fairness of the original ancillary relief settlement between the parties, leading to further litigation. These spectres should be avoided at all costs.

18. It is to be observed however that in that very case (albeit upon very different facts) the Deputy Judge expressed himself [at 77] as satisfied that there should be some increase over the starting-point of the maximum Child Support Agency calculation for two children (then about £20,800 p.a.). His order (converted from Australian dollars at the then prevailing exchange rate) was for a total of £29,600 plus the whole of the children's school fees and extras and the whole of their travel costs in connection with contact. I have no doubt that broad regard is frequently paid by courts to child support rates, and that they can be a useful rule of thumb in many routine cases where courts are allowed to fix child maintenance. This was never a routine case, nor had notional CSA assessments played much part (I venture to guess) in the negotiations which led to the 2001 order.

19. It is true that DJ Green did not refer to that authority expressly, but it is difficult to imagine she did not have it in mind as Mr Todd had cited it in the skeleton which was before her. In my view she dealt with the point in a way which was plainly right in the circumstances of this case when she wrote the opening three paragraphs of the lengthy passage from the judgment which I have incorporated above.

20. The next point raised in the Notice of Appeal and the skeleton is based upon the proposition, which I accept, that F would have to pay this child maintenance from capital. It is asserted that:
The ineluctable logic of the district judge's order was that F would have to pay the child maintenance from capital. This was contrary to the express bargain which the parties had entered into at the earlier hearing on 19th March 2001. There was a Minton v Minton type of agreement whereby M agreed not to make any further claims of a capital nature.... In effect M was obtaining further capital despite her earlier agreement.

21. The complaint is that DJ Green did not refer to this at all in her judgment. She no doubt thought it unnecessary specifically to refer to it. The point has no substance. As stated, she found that F (and his wife) were maintaining their lifestyle from their capital and borrowings, and from capital and income used by them held by a trust for their children. There is no reason in principle why maintenance, which cannot be paid out of income, should not be paid at all (or only at a much reduced rate) for one child when the payer continues to maintain a high rate of expenditure on himself and his family. Maintenance paid from accumulated or borrowed money (both resources of a capital nature) is maintenance in the form of income in the hands of the mother for C, and not a lump sum or other capital resource.

22. There was, as I was told, no evidence from F at the hearing that he could not continue these borrowings, nor that he could not increase them. I agree with Mr Pocock that, consistent with the decision in Newton v Newton [1990] 1 FLR 33, it would have been for F to demonstrate that his credit-raising abilities (which clearly had involved a degree of borrowing from Peter to pay Paul) had reached their limit whether as to duration or as to amount.

23. Another strand of the Notice of Appeal and of Mr Todd's skeleton is reference to the lack of clarity and frank disclosure in M's affidavit and oral evidence. The individual points relied upon do not seem to me to affect the central issue in the case, the extent of F's ability to maintain his daughter towards what the district judge found to be a reasonable level for her needs. That M may have understated her profit on some one-off property transaction with a third party partner with whom she was in continuing dispute over the extent of the profit seems not to me to be of direct relevance to that issue. That M had apparently understated some state benefits, which she was likely in whole, or in part to be obliged to repay was regrettable, but fell into the same band of relevance. So does the fact that she had not disclosed any (if indeed there were any) Premium Bond wins which (as Mr Todd fairly conceded) could vary between nothing and £1,000 per month (but I suspect at or nearer the bottom of the bracket rather than reliably towards the top). Complaint has also been made that at the time of the original order she had failed to clarify her position about redundancy money she at that stage expected to receive but (as the district judge accepted) in the event did not. She had understated the amount she owed on successive mortgages of her home. Apparently she did not answer some questions posed in the course of her evidence to DJ Green, and was recalled to supplement or to correct the first round of that evidence.

24. I have not been blessed or burdened with notes of the evidence of the February 2005 hearing (contrary to the requirements of rule 4.22) so it is impossible for me fully to appreciate the impact of this last complaint, nor of the cumulative effect of these shortcomings. But DJ Green's judgment made it clear that she had them in mind for she details them at pages 9 and 10. She observed that 'neither party comes out of this litigation with very much credit' and concluded that 'both have lived beyond their income needs and have dipped into capital to finance their expenditure'.

25. She however observed that, whatever M's aspirations had been, fuelled by what she had learned of the standard of living of F and his family and the available means which that implied, 'in the end one has to live within one's means'. She also suggested that M should maximise her earning potential and obtain paid employment to achieve greater security.

26. Given that there was no substantial dispute about M's budget for C's needs and school fees (save that one of F's objectives was to be relieved of the obligation to pay school fees for this one of his children), nor any challenge raised in the appeal to the district judge's objective, if she could, of providing £5,000 p.a. as an appropriate carer's allowance, the focus of the case was rightly identified as the contribution which it would be reasonable for F to make in the light of his circumstances as she found them. I therefore, without seeking to condone deficiencies in M's presentation and evidence, do not see how they could or should impact on F's argument that the maintenance burden on him should be reduced, which is of course the objective of his appeal against the refusal of his application for such a reduction.

27. The issue on the appeal is firmly to do with whether in the light of her findings DJ Green was wrong, on the principles established in G v G (Minors: Custody Appeal) [1985] FLR 984, as summarised by Thorpe LJ in Cordle v Cordle [2002] 1 WLR 1441 at 1447. On the Cordle test, F has failed to demonstrate that there has been some procedural irregularity or that in conducting the necessary balancing exercise the district judge has taken into account matters which were irrelevant, or ignored matters which were relevant, or has otherwise arrived at a conclusion that is plainly wrong.

Whether permission to appeal the 2005 outcome out of time is required?
28. These were cross-applications under paragraph 6 of Schedule 1 to the Children Act to vary child periodical payments. On 21st March 2005 DJ Green handed down a written judgment. No written court order was drawn to reflect her decisions.

29. The time for appeal as of right from an order of this kind made by a district judge of the county court (which was DJ Green's capacity in this case) is 14 days: that much is agreed. But from what point in the proceedings does the fortnight commence? That is the first issue on this part of the case, for Mr Todd says that the appeal was brought in time (although launched 15 months after the District Judge's reserved written judgment was delivered); and that if that is wrong then it is manifest that justice requires permission should be granted to F to appeal out of time. Mr Pocock argues that time for appeal expired a fortnight after the judgment was received; and that discretion should not be exercised to allow it to proceed.

30. There was dispute before me as to which of the provisions of the Family Proceedings Rules 1991 as amended is operative to produce that consequence. Mr Todd contends that both rule 8.1 and rule 4.22 apply, whereas Mr Pocock argues that only Part IV and specifically rule 4.22 is relevant to an appeal against an order made by a district judge under Schedule 1. He points out that rule 4.1(d) provides that:
Except where the contrary intention appears, the provisions of this Part apply to proceedings in the High Court and county courts ... (d) under Schedule 1 [of the Children Act 1989], except where financial relief is also sought by or on behalf of an adult.

31. Here no relief is sought by an adult, and (says Mr Pocock) rule 8.1 evinces no 'contrary intention': rather the contrary, as rule 8.1 by its terms applies to appeals other than those specifically provided for elsewhere in the Rules.

32. I agree with Mr Pocock that it is inherently improbable that two procedural rules should govern the route for a Schedule 1 appeal, and that here it is the Part IV appeal procedures contained in rule 4.22 which apply. Under rule 4.22(3) the notice of appeal (setting out the grounds relied upon) is to be served 'within 14 days after the determination against which the appeal is brought' unless an extended time is subsequently permitted by the appellate judge. Rule 8.1(4) (if it applies) requires that 'any notice [of appeal] must be issued within 14 days of the order or decision appealed against', unless the District Judge at the time of the order or decision extends time, or the appellate judge extends time once the period has elapsed.

33. The question is when time begins to run: what for this purpose constitutes a 'determination', and an 'order or decision'. The distinction may turn out to create no difference, and it would make matters simpler (by which I mean primarily for litigants and their advisers, but also judges) if the same meaning can legitimately be ascribed to both governing events, but that is beyond the scope of this judgment as I am satisfied that rule 8 does not apply.

34. Counsel had found no helpful authority on what constitutes a 'determination' in this context. I subsequently invited their written submissions on two cases which I thought might be an aid to construction: but I accept the view that they are not.

35. Mr Todd argues that so long as the question of costs remained undecided the applications had not been determined. The cross-applications before DJ Green were to vary the child maintenance order. She determined them by her judgment: they both failed. Mr Todd suggests that 'the determination' must cover both the substantive application and any costs order as they are intricately interwoven. He submits that there is such a close and intimate relationship between the substantive decision made in March 2005 and the outcome and effect of the costs order made in June 2006 that F would need to assess their combined effect when considering an appeal, and that he should not be expected to do so before then.

36. I disagree. The court could have issued a written order reflecting DJ Green's decision in March 2005 (including the liberty to apply as to costs). For whatever reason that was not done, but one can state with some confidence that if either party had contemplated an appeal and had thought a written order was necessary, the court should on request have provided one. Whatever the reason why no written order dismissing each party's application was then drawn, its absence cannot seriously be regarded as a bar to an appeal.

37. The position is somewhat analogous to that which arose in the case (not referred to at the hearing) of Re B (Split Hearing: Jurisdiction) [2000] 1 FLR 334, where the Court of Appeal entertained an appeal against findings of fact made at the first stage of a care application but without the judge making any declarations or specific order. The court pointed out that (as summarised in the headnote):

The determination of the preliminary issues was crucial to the final decision where K should live, in the same way that a determination on limitation matters might be crucial in another case. Issues determined as a preliminary part of the case which are crucial to the final determination can be treated as a determination for the purpose of allowing the Court of Appeal to hear the appeal without waiting for the second part of the split trial. To refuse to intervene at this stage, to allow the case to continue for another 3 days and for there then to be an appeal would be contrary to common sense and to the new civil procedure approach.

38. In the same way, if there was to be an appeal against the dismissal of F's application the result of which might well affect the costs outcome, it would have been economical to proceed forthwith to the substantive appeal and then invite the appellate judge to deal with the overall question of costs.

39. I regard Mr Todd's argument that while the question of costs remained undecided the applications had not been determined as unsustainable in the circumstances of this case. It was open to F to launch his appeal against what I hold to be DJ Green's March 2005 determination not only despite the absence of a written order reciting the dismissal, but also without waiting to resolve the costs issue. Moreover in my view it was incumbent upon F either immediately to ask DJ Green to extend his time for appealing her substantive dismissal until after costs had been decided, or to file at least a protective notice of appeal within time.

40. Mr Pocock points out that one logical if absurd consequence of the position adopted by F would be that, if neither party had restored the cost issue (even for an order by consent to be made, if that had been agreed, that there be no order as to costs), then the 14 days to lodge an appeal would never commence to run, so that either could appeal without permission at any subsequent date.

41. It is to be noted that indeed it was not until nearly two months after the district judge had notified the parties that she had decided to dismiss their applications that F put costs in issue by making an application under what was in effect the 'liberty to apply for costs' provision prescribed by DJ Green. And (although I have not been supplied with the whole of the correspondence for the intervening period) it does not appear that F had indicated any intention to appeal the substantive order before Mr Todd raised the issue, to Mr Pocock's evident surprise, towards the conclusion of the costs hearing before DJ Million in June 2006.

42. I conclude therefore that F was obliged to initiate the appeal within 14 days of the March 2005 determination. It falls to me therefore to exercise a discretion whether or not to permit him to do so 15 months out of time.

Should permission to appeal out of time be granted?
43. Mr Todd submits that it would be manifestly unjust for F to be deprived of his entitlement to challenge DJ Green's order. As I have said, Mr Todd raised the question, apparently out of the blue, on appeal towards the end of the costs hearing before DJ Million, and sought by way of oral application to persuade him to extend the time for appeal if indeed that was required. The point was not fully argued, Mr Pocock making it clear that he had not anticipated such an application. The district judge considered whether or not he should extend time and initially said that he would not deal with the matter. Nevertheless (and without reaching a conclusion on the initial question whether time had indeed began to run from the date of DJ Green's judgment) he purported to hold (and his written order records) that 'on F's oral application to extend if necessary the time in which to appeal the dismissal of his variation application dated 13th February 2004, that application is dismissed'. However, rule 4.22(3)(c) provides that the power to permit 'such other [than 14 days] time as that court or judge made direct' is specifically given to 'the court to which, or judge to whom, the appeal is to be brought.' Furthermore, the application was procedurally inept as it should have been made on notice, and at least preferably (if not indeed necessarily) supported by affidavit. So I do not regard DJ Million's refusal of leave in these circumstances as effective, and consider the question afresh.

44. Mr Todd asserts that it is manifest that justice requires that permission should be granted to F to appeal out of time. Justice to F however involves striking a balance with potential injustice to M. She would be significantly prejudiced by such a delayed appeal, notwithstanding that nobody could have anticipated that because of the difficulties arising from DJ Green's absence the costs issue was not resolved for over a year. During the pendency of the appeal F, to his credit, maintained child maintenance payments the entitlement to which (of M for C) would be put at risk, with the threat that if the appeal were allowed she might be required to give credit, even if only over a period, for overpayments. Meanwhile she would have been entitled to, and no doubt did, use what was paid towards C's day-to-day living costs.

45. As against that, on the appeal there was no evidence of whatever changes, for better or for worse, may have occurred in F's financial circumstances (or W's for that matter) from February 2005 until the hearing of the appeal. Neither party invited me to consider a rehearing and neither party had prepared the evidence of their up-to-date means which would have been necessary for a rehearing to take place without further lengthy adjournment.

46. Moreover the staleness of the appeal would make it unrealistic and potentially unfair to M. The case was dealt with by DJ Green on the basis of C's needs and F's ability to contribute towards them. DJ Green concluded on the evidence that F's payment should not increase (save by the agreed indexation factor) notwithstanding that since the original order was made by consent in March 2001 four years had elapsed during which, between the age of one and five years, the overall cost of maintaining their daughter had significantly increased.

47. When considering how to exercise my discretion whether to permit F to appeal the substantive decision out of time, I would also have regard to his prospects of success. I have dealt with those already, but would not at the outset have regarded them as strong, and would have refused permission to appeal out of time.

The costs appeal
48. By his May 2005 notice of application and in the Notice of Appeal F sought orders that M should pay the entirety of his costs in respect of the cross-applications. When M riposted in January 2006 she too asked for the moon. The unreality of F's position is betrayed by 2 sentences from the skeleton Mr Todd prepared for the hearing before DJ Million: 'This is a clear case for an order for costs in F's favour. The [i.e. M's] application completely failed; it should never have been brought.' What option did she have faced with F's pre-application obduracy, but to issue?

49. I have available to me and have read the transcript of the hearing including the judgments. DJ Million dealt with costs under three headings. He ordered F to pay M £15,000 in respect of the Schedule 1 applications; and £4,500 in respect of their costs. He ordered M to pay F £2,250 costs in relation to an interlocutory application on 31st January 2005.

50. By agreement, he assessed the costs on the basis of the material before him. No issue is taken on this appeal as to the quantum of the costs ordered. F's liability includes costs already ordered on two occasions in relation to disclosure issues. The net effect was that F was to pay M £17,250.

51. DJ Million based his assessment of the costs of the substantive hearing upon the proposition, as he found, that F should bear responsibility for M's costs until 28 days after the second of the aborted final hearings on 4th October 2004, when DJ Berry conducted an impromptu and informal financial dispute resolution hearing. He held (at paragraph 18 of his judgment) that:

Even if the case at that stage [4th October 2004] had been dealt with by the dismissal of each party's application to vary the financial order, there would, as it seems to me, be a strong case for M to have her costs, or at least much of her costs up until that date because it had taken her that long and that effort to obtain the necessary information to decide whether or not pursuing a variation was justified.... At that point F has conducted litigation both by pursuing his own application and resisting M's application in a way which has necessitated costs on M's side.

52. No-one of course can know what views DJ Berry may have expressed during the course of the financial dispute resolution hearing. But it is clear that in the week preceding that hearing a substantial quantity of documents had been disclosed by F. DJ Green in her judgment subsequently referred to conclusions she drew from his credit card statements, and so it is worth mentioning, by way of example of F's unsatisfactory disclosure record, that when on 20th July 2004 Answers were produced on his behalf to a questionnaire dated 5th March 2004 requesting, amongst other things, credit card statements for a three-month period, his response was to decline production, apparently upon the basis that 'his only sources of income are as set out in his tax returns and the manner in which he spends his income will not assist the determination of this application.' He was then ordered to produce credit card statements but when he first did so he supplied only monthly summaries in relation to 10 credit and store cards but without any transaction details. This defect was not remedied until a week before the hearing before District Judge Berry when full statements (including those relating to an eleventh account) were supplied. There is therefore ample justification for the conclusion that until that point, at earliest, there were significant defects in F's disclosure. DJ Million cannot be criticised for taking the view that until then M was at a disadvantage in any negotiations for settlement.

53. Be that as it may, the watershed chosen by DJ Million was open to him, in my judgment, on the broad view of the case which he decided to take. He took that as 'a reasonable point at which both parties should review or ought to have reviewed their financial position in relation to the applications, the chances of success or failure and the cost consequences of pursuing their claims and at that date, or fairly shortly afterwards, to consider the result of any remarks and discussions that there were during the FDR style hearing.' He took the view that M should recover the costs of the application until 28 days after 4th October 2004, to give a reasonable period to consider the position. It was those costs for that period which he fixed at £15,000, subject to the set-off for costs awarded against M during that period.

54. The decision to condemn F in M's costs to that point appears to me to be an entirely proper exercise of DJ Million's discretion. As DJ Million said at the outset of his main judgment 'the question became one primarily of affordability' of M's budget. He had appreciated, as DJ Green had found, that the obligation was upon F to demonstrate clearly and from the outset that the aura of wealth within which he lived was based upon declining capital and increasing debt so that (on his case) he was a man on or approaching his uppers.

55. DJ Million had read in DJ Green's judgment her express findings, that M would have been able to see a fuller and clearer picture much earlier had F been upfront and clear with his financial disclosure; that he had shown a great reluctance to disclose necessary paperwork; that he had to be coerced to make disclosure; that he had been shown to spend substantially in spite of pleading poverty, and that he pleaded poverty but certainly does not live poverty; that the way he presents to the outside world would lead anyone to believe that he is a man of substantial means; and thus that it was not surprising that M had come to believe that he was earning and/or had access to very substantial funds.

56. Furthermore, F's obstructive reaction would have fuelled M's suspicions from the very outset: before launching her application F had refused point-blank to enter into negotiations for an increase, and to produce a copy of his 2002 tax return: the very document which when produced showed his share of partnership profits for the relevant period as £140,000 more than the £50,000 on which the original agreed order had been based. First requested in August 2002, the tax return was supplied only on 12 February 2004, 2 days after F's first Calderbank letter (referred to below) and only 4 working days before the first of the abortive 'final' hearings.

57. Mr Todd criticises DJ Million's adoption of DJ Green's comment that 'the formal hearing had to be adjourned twice' as a result of his actions, and asks me to conclude that that was a repetition of an error which infected DJ Million's approach. I take the same view as I have already expressed: that if indeed this was an error or over-simplification on the part of DJ Green which misled DJ Million, then it is an error which does not in any way detract from the effect of the other findings made by DJ Green which are recited above. The fact is that there was material upon which DJ Million was entitled to conclude that at least until the October 2004 hearing F's stated position remained subject to legitimate scrutiny in order to investigate whether his account of his dire circumstances was basically accurate notwithstanding his continuing affluent lifestyle.

58. In relation to the period between the beginning of November 2004 and the conclusion of the hearing before DJ Green, DJ Million decided to make no order, leaving each parent to bear their own costs. I will deal with that decision after looking at the basis upon which Mr Todd argued F's case against the cost orders. He did so on three principal grounds. They were that M's application for an increase had failed; that she had rejected his proposals in Calderbank letters that each should withdraw their variation application with no order as to costs; and that M was guilty of serious litigation misconduct which should be reflected in costs orders against her.

59. It is of course true that M no more persuaded DJ Green in the light of her findings that maintenance should be increased than did F persuade her to decrease it. The point is, as I have already stated, that an increase would have been appropriate, if affordable by F, on the basis of the increased expense attributable to the C's upbringing. In my view DJ Million was right to reject any suggestion that as M had failed in her application he should start from the position that an appropriate costs order would be to leave each to bear their own, again for the already stated reason that F's dilatory and unsatisfactory disclosure added very considerably to the cost on both sides and prolonged the investigation before the watershed selected by DJ Million could be reached.

60. Mr Todd's submissions concerning the Calderbank letters (or quasi-Calderbank letters, as Schedule 1 applications are not subject to the Ancillary Relief Rules contained within the Family Proceedings Rules) must be looked at in this light. The first two were written on 10th February 2004 and 20th July 2004. Each proposed that the cross-applications should both be dismissed with no order as to costs. F had not by either of those dates, on DJ Green's findings, made sufficient and sufficiently clear disclosure to enable M and her then advisers properly to evaluate them. I have already described the circumstances at the time of the first letter. As for the July letter, it was written on the same day that F delivered, four and a half months after the Request, deficient Answers to questionnaire.

61. The third letter was written on 30th September 2004, one working day before the intended final hearing, and was apparently to the same effect but clarifying that F would honour the indexation provision in the original order. The reality is that both thereafter continued to pursue their applications with unrestrained vigour. Neither was prepared to desist unless the other did. Logically, as was canvassed in argument and reflected in paragraphs 22 and 23 of DJ Million's judgment, each might fairly have obtained a costs order against the other arising from the failure of that other's application. That would have produced the broad result (on DJ Million's view of the matter) that neither would have been much better off from the exercise.

62. The essence of DJ Million's judgment deciding that there should be no order for the final hearing, is to be found in paragraphs 25 and 26, which are in these terms:

As it seems to me, I cannot ignore the fact that M's application was ultimately not successful. Nor can I ignore the fact that F 's application was pursued in reality, in other words in open litigation, and was also not successful. It seems to me that what that means for costs in the light of the comments of [DJ Green] is that both parties during the final hearing were unsatisfactory and criticism can come from them. Just as F can be criticised for his failings on the financial side of presenting a case by way of his living standards and spending money which did not really represent his true position and misleading the mother, so the mother was not truthful entirely or frank in her disclosure, it seems even in respect of answers that she gave during that final hearing. If parties conduct litigation in that way they have only got themselves to blame if the costs of it are significantly higher than they would otherwise have been.

It seems to me, therefore, that the first decision I come to is that the costs of the final hearing are to fall where they lay, in other words that each party pays their own costs. Neither were successful at that point or each was equally successful and unsuccessful. Both parties were pursuing their respective claims for an increase and decrease. That led, no doubt so far as F's application was concerned, to cross-examining M to a greater extent than would otherwise have been the case if it was not his real case; and M's application for an increase, even in the light of the disclosure that she had, obviously meant that the hearing of that application was longer that it would otherwise have been. So I see no difficulty and, indeed, it seems consistent with the result, that the costs of the final hearing itself should not attract any costs order other than that there be no order for costs for that part.

63. He dealt with the intervening period, from 4th November 2004 until the beginning of the hearing, at paragraph 28, saying:

I do not see on either side a particularly persuasive argument that during that time there was any particular conduct or particular change or feature in the litigation which was not that which applied also to the period of the final hearing itself. A good deal of costs between that period from the beginning of November to the beginning of February would have been the parties gearing up for final hearing and would be progressively intimately connected with that final hearing. In those circumstances my general approach to the final hearing would, I consider, fairly apply to that period also, which is that there should be no order for costs from the beginning of November or thereabouts until the end of the final hearing and the judgment in March.

64. Criticism is made in the Notice of Appeal and in Mr Todd's submissions of DJ Million's reference to hardship in paragraph 31 of his judgment. In that paragraph he considers the effect of the September 2004 Calderbank letter. He said:

What I do is I take into account for that period in view of the conduct of the litigation up until that time that the offer in September, which on the findings was consistent with the outcome in February, does not raise such a strong presumption in relation to costs as is contended for by F. I take into account that applications under Schedule 1 are for the benefit of the child and in my judgment it would cause relative hardship on M's side to make her responsible for the costs between the beginning of November and the final hearing when during that period, notwithstanding the Calderbank offer, F was also pursuing his own case as I have already indicated that he did, including pursuing it fully during the final hearing for a reduction. Clearly on the passage that I have already referred to of DJ Green in which she referred to F's application as being unfair and abhorrent there is, or could be said to be, criticism of the pursuit of that case even in the light of the disclosure that there was. If F had abandoned his own application for a variation downwards in October or early November he would, as it seems to me, be potentially in a stronger position in relation to the costs thereafter than he is now. In any event, the effect of making M responsible for the costs during that period in the light of all the circumstances, including F's own pursuit of his application to reduce, would be to create hardship in her household when, on the district judge's findings, she is receiving less help than would otherwise be justified.

65. The overall effect of DJ Million's orders in relation to the proceedings up to DJ Green's judgment is that out of about £32,000 overall costs M is to recover £12,750, leaving her with a deficit of some £17,000. On a financial application legitimately brought and pursued (as is indicated by DJ Green's judgment) which is for the benefit of the parties' child, I cannot see how in the exercise of the discretion as to costs hardship would be an improper consideration. If Mr Todd's complaint is really against the district judge's use of the adjective 'relative' hardship, I understand DJ Million to mean that the effect of a costs order in F's favour for this period would have relatively greater effect upon M's economy than making no order would have upon F's. That is a conclusion which appears to me to be reasonable, and one which was fully justified in the circumstances of the parties as found by DJ Green.

66. Mr Todd's third main point relates to M's litigation misconduct. I have already commented upon the impact of that in the context of a case centred on what should be F's reasonable and affordable contribution to the increased expense of bringing up his child. F's litigation conduct, viewed overall, was in my judgment at the very least no better. DJ Million cannot be said to have acted unreasonably in disregarding the deficiencies in M's disclosure and evidence in the overall context of the case.

67. DJ Million applied appropriate considerations in exercising his discretion as to costs. No error of principle in my view is to be found in the approach he adopted and the result at which he arrived in relation to those of his conclusions which are challenged. He was not plainly wrong. The result at which he arrived was in my opinion well within the discretionary bracket. I might or might not have arrived at a different conclusion, but that is not a basis for rejecting either DJ Million's analysis or the result.

68. F's overall position and aspirations on both appeals were summarised by Mr Todd in the skeleton submitted to me as being:

This should have been a simple case of the court deciding that the starting-point should be a CSA assessment. Then deciding there was no good reason to depart from this (especially in the light of the capital agreement). Then costs following the event: i.e. the dismissal of M's application.

These opening objectives were wholly unrealistic. Both appeals fail.