S v S

Permission to appeal should be granted only where the proposed appeal has a real prospect of success or there is another compelling reason for hearing it. The latter limb generally concerns an important point of law. An appellate court should not interfere with a discretionary financial remedy unless the decision is plainly wrong. In financial proceedings, unpaid costs will ordinarily be taken off the top of the assets. Where there is a striking disparity in costs, the court may calculate the true net payment between the parties and make a liquidated adjustment so that the costs burden reflects the principal division. Where the existing division has already produced a substantial net transfer towards one party’s costs, exceptionally poor conduct is required before a further costs adjustment is justified.

The wife sought permission to appeal from a financial remedy decision of District Judge Malik, whose judgment was dated 27 May 2011 and whose order was made on 28 July 2011. The parties had substantial assets, significant unequal litigation costs and competing claims concerning the retention of BFD Farm and the effect of the husband’s litigation conduct.

The proposed appeal principally challenged the refusal to transfer BFD Farm to the wife and the sum awarded towards her costs. The central questions were whether either ground had a real prospect of success and whether there was another compelling reason for the appeal to be heard.

1. Permission refused. Neither proposed ground had a real prospect of success. The alternative basis for permission, requiring another compelling reason, was not engaged because the case raised no important point of law.
2. The decision not to transfer BFD Farm fell squarely within the district judge’s legitimate discretion. The judge had found that the husband was better placed to retain and develop the property. That conclusion was not plainly wrong and there was no realistic prospect of disturbing it.
3. The conventional approach is that unpaid costs are taken off the top as liabilities of the parties. The approach in Leadbeater v Leadbeater [1985] FLR 789, involving the adding back of costs already paid, was described as outmoded. The court noted that RH v RH [2008] 2 FLR 2142 illustrated a possible response where costs were markedly unequal, but suggested that calculating the true net costs payment and making a liquidated adjustment could provide an alternative.
4. On the facts, the existing 55:45 division already required a substantial net payment by the husband towards the wife’s costs. A further award would therefore require conduct of a very high degree before it could be justified. The district judge’s £100,000 contribution could not be characterised as unreasonable, even though another first-instance judge might have taken a different view.

• High Court (Family Division): The application for permission to appeal was refused.
• District Judge Malik: Judgment dated 27 May 2011, with the order made on 28 July 2011. The proposed appeal challenged the financial remedy decision.
• High Court: Holman J’s order of 6 July 2011 permitted additional grounds of appeal to be added.