Sherrington & Anor v Sherrington

In a costs appeal, the court must assess substantive success, rather than merely the formal result. A claimant whose application fails only because the opponent’s late concessions and undertakings provide substantial relief has achieved a partial substantive victory.

An appellate court will interfere with a discretionary costs order only where the judge has plainly erred. It cannot revisit the merits of an unappealed substantive judgment through a respondent’s alternative case on a costs appeal.

Gloria Sherrington, the deceased’s former wife, and Ramon Sherrington, his son, sought permission to bring claims out of time under the Inheritance (Provision for Family and Dependants) Act 1975. Gloria also pursued a separate contractual claim based on a divorce consent order.

The deputy judge refused permission under the 1975 Act after Yvonne Sherrington made late concessions and undertakings concerning pension and death-benefit-trust funds. He struck out the contractual claim and ordered Gloria and Ramon to pay 25% of Yvonne’s overall costs. The claimants appealed only the costs order. The central issue was whether they were substantively successful in the 1975 Act proceedings despite their formal failure to obtain permission.

1. Appeal allowed. The costs order was founded on a material error. Although appellate intervention in discretionary costs orders is exceptional, the judge had wrongly treated Gloria and Ramon as the substantive losers of the 1975 Act application.

2. The substantive judgment was not under appeal and had to be accepted as the basis for deciding costs. Yvonne could not seek to uphold the costs order by rearguing the substantive merits on an alternative basis. That was unlike an appeal on the merits, where a respondent may support the judgment on additional grounds: Cie Noga d’Importation et d’Exportation SA v Australia and New Zealand Banking Group Ltd [2002] EWCA Civ 1142.

3. The judge had found that, but for Yvonne’s late concessions, permission to bring the claim under the Inheritance (Provision for Family and Dependants) Act 1975 would have been granted. The concessions, embodied in undertakings, gave Gloria and Ramon substantial financial benefits and removed the need for permission. The formal refusal of permission therefore did not make them substantive losers. Their preliminary application had achieved a substantial, though incomplete, victory.

4. That success did not justify full recovery of costs. The delay in commencing the claim was inexcusable, the claims had been advanced more broadly than their ultimate success, and a narrower focus might have avoided the litigation. The court therefore exercised the discretion afresh.

5. Gloria and Ramon were awarded 40% of their costs of the 1975 Act application. Yvonne was awarded the whole of her costs of Gloria’s contractual claim. The court urged the parties not to generate further assessment litigation.

• Court of Appeal (Civil Division): Allowed the costs appeal and substituted an order awarding Gloria and Ramon 40% of their costs of the 1975 Act application: [2006] EWCA Civ 1784.
• Family Division, Principal Registry: The deputy High Court judge refused permission to bring the 1975 Act claim out of time, struck out Gloria’s contractual claim, and ordered Gloria and Ramon to pay 25% of Yvonne’s overall costs.