Bradley v Bradley

A court exercising ancillary relief jurisdiction cannot use a stay of a lump-sum payment to secure anticipated costs where it lacks jurisdiction to order security for costs. A capital sum due under an unappealed order remains payable. A general wish to manage difficult litigation or protect against future costs does not justify postponing payment. Any proper claim to deduct or set off unpaid costs must be made as a set-off application, with assessment if required. The appeal was allowed and the stay discharged.

Ancillary relief proceedings between a husband and wife produced a clean-break order requiring the wife to pay the husband £60,000 in return for his share of a surgery, together with a share of her pension. On appeal, the clean-break provision was set aside, opening the possibility of the husband seeking periodical payments.

The wife applied unsuccessfully for security for costs. The district judge nevertheless granted an oral application to stay payment of the £60,000 until the periodical payments proceedings and outstanding costs issues were resolved. A circuit judge upheld that decision on pragmatic grounds. The husband brought a second appeal concerning the legality of the stay.

Appeal allowed. The stay of payment of the £60,000 was discharged.

1. The district judge was right to conclude that there was no jurisdiction to order security for costs in an ancillary relief application. His subsequent decision to stay the lump-sum payment was nevertheless unsupportable. It was based solely on protecting the wife against costs orders that had not been paid or might arise, while failing to recognise that the husband was absolutely entitled to the capital sum and that payment was overdue.
2. The court could not achieve indirectly, by staying payment, a form of protection that could not lawfully be obtained directly by an order for security. The circuit judge’s reliance on the pragmatic management of bitterly contested litigation did not answer whether the stay was lawful or a proper exercise of discretion.
3. The wife had not appealed the capital provision. The setting aside of the clean-break provision exposed her to a possible claim for periodical payments; it did not suspend the separate obligation to pay the capital sum. If she wished to protect herself against undischarged costs orders, the appropriate course was to seek a set-off against the lump-sum liability. The court indicated that such an application, with assessment of the costs if necessary, remained open at the forthcoming directions hearing.
4. Lord Justice Wall agreed with Lord Justice Thorpe.

• Court of Appeal (Civil Division): Allowed the second appeal and discharged the stay of payment.
• Middlesbrough County Court: His Honour Judge Taylor dismissed the appeal against the district judge’s order, treating the stay as a pragmatic means of managing the litigation.
• Middlesbrough County Court: District Judge Mainwaring-Taylor dismissed the application for security for costs for want of jurisdiction but granted an oral alternative application staying payment of the £60,000.