Baker v Rowe

Claims by third-party interveners to beneficial interests in property remain part of family proceedings when determined within existing ancillary relief proceedings. An appeal from a district judge’s resulting order is therefore governed by the Family Proceedings Rules 1991 and requires no permission.

The special rule that ordinarily precludes inter partes costs orders in ancillary relief proceedings does not govern a dispute between interveners over beneficial ownership. Its purpose requires a narrow construction. The civil rule that costs follow the event is also excluded because the proceedings remain family proceedings. The costs judge consequently begins with no presumption either way. The failure of a claim, and the unsuccessful party’s responsibility for generating the successful party’s costs, may nevertheless carry decisive weight in the discretionary assessment.

Two interveners joined divorce-related ancillary relief proceedings to advance competing claims to the beneficial ownership of a property. The district judge rejected Mr Baker’s claim, declared Mrs Rowe the sole beneficial owner subject to an existing right of occupation, and ordered Mr Baker to pay her costs.

His Honour Judge Vincent dismissed Mr Baker’s appeal, although he mistakenly treated permission to appeal as necessary and purported both to refuse permission and dismiss the appeal. Mr Baker sought permission for a second appeal.

The Court of Appeal had to determine whether the interveners’ dispute remained family proceedings, which appellate route applied, and which costs principles governed a dispute connected with, but not itself for, ancillary relief.

1. Permission to appeal was granted, but the appeal was dismissed. The interveners had made their beneficial-ownership claims within the existing family proceedings. The nature of those claims did not convert the proceedings into separate civil proceedings or into proceedings which were partly family and partly civil proceedings. Rule 8.1 of the Family Proceedings Rules 1991 therefore governed the first appeal, and permission to appeal to the circuit judge had not been required.

2. The circuit judge’s purported refusal of permission was a nullity. It consequently did not engage the prohibition in section 54(4) of the Access to Justice Act 1999. The proposed appeal to the Court of Appeal was nevertheless a second appeal. The court granted permission because, by a narrow margin, it raised an important point of principle or practice.

3. The general rule in rule 2.71(4)(a) of the Family Proceedings Rules 1991 did not govern costs between the interveners. That rule protects substantive financial arrangements between spouses from being destabilised by costs and reflects the treatment of matrimonial costs as liabilities borne from the available matrimonial resources. A dispute between third parties concerning beneficial ownership was connected with ancillary relief, but was not itself for ancillary relief. The rule therefore required a narrow, purposive construction.

4. The opposing rule in rule 44.3(2)(a) of the Civil Procedure Rules 1998, under which costs ordinarily follow the event, was also inapplicable. The proceedings remained family proceedings, so rule 10.27(1)(b) of the Family Proceedings Rules 1991 disapplied that civil costs rule. The district judge accordingly began with a clean sheet and no presumption in either direction.

5. A clean sheet did not prevent the judge from giving substantial, and sometimes decisive, weight to the fact that one party had failed and had generated the successful party’s costs. Mr Baker’s failed claim was especially significant because he had previously agreed not to claim an interest in the property. The district judge’s costs order was therefore unimpeachable. Public funding did not protect Mr Baker because the statutory costs protection did not extend to legal representation in family proceedings.

1. Court of Appeal (Civil Division): Granted permission for the second appeal but dismissed the appeal, holding that the district judge’s costs order was unimpeachable: [2009] EWCA Civ 1162.
2. Truro County Court, circuit judge: His Honour Judge Vincent dismissed Mr Baker’s appeal on 22 January 2009, but mistakenly treated permission as necessary and purported also to refuse it.
3. Truro County Court, district judge: District Judge Mitchell rejected Mr Baker’s beneficial-interest claim on 19 November 2008, declared Mrs Rowe the sole beneficial owner subject to the husband’s occupation rights, and ordered Mr Baker to pay Mrs Rowe’s costs.