Srendarjit Kaur Jassal v Sajad Ali Shah & Anor

In proceedings under the Inheritance (Provision for Family and Dependants) Act 1975, litigation costs must ordinarily be dealt with under the Civil Procedure Rules 1998, separately from and after the substantive award. The court should therefore determine substantive relief without including contingent liability for the claimant’s litigation costs, and then decide costs. The different approach used in financial remedy proceedings under the Matrimonial Causes Act 1973 does not apply. A point of law may be raised for the first time on appeal where it requires no new evidence, the opposing party has adequate opportunity to respond, and no material prejudice results.

The respondent brought a claim under the Inheritance (Provision for Family and Dependants) Act 1975, asserting that she had lived with the deceased as if married and was therefore entitled to reasonable financial provision. Following a four-day trial, the Deputy Master granted her a beneficial interest in property and a lump sum which included £140,000 plus VAT for her litigation costs.

The appellants obtained permission to appeal on the issue whether those costs could lawfully be included in the substantive award. They also argued that the point was new and should not be entertained on appeal. The central issues were the correct relationship between the 1975 Act and the Civil Procedure Rules 1998, and whether the costs argument could be raised at the appellate stage.

1. Appeal allowed. The Deputy Master’s order was varied so that the substantive lump sum excluded the respondent’s litigation costs and VAT.
2. Claims under the Inheritance (Provision for Family and Dependants) Act 1975 are governed by the Civil Procedure Rules 1998. Under CPR 44.2(1), the usual approach is to determine the substantive claim first and then decide whether, and in what manner, to make a costs order.
3. Although litigation costs may constitute a financial need for the purposes of section 3 of the 1975 Act, that does not permit the court to adopt the costs approach used in financial remedy proceedings under the Matrimonial Causes Act 1973. The court must determine substantive relief without taking contingent costs liability into account, and must deal with costs separately and subsequently.
4. The approach in Lilleyman v Lilleyman was correct. Hirachand v Hirachand, although concerned principally with a CFA success fee, confirmed the distinction between the CPR and FPR regimes. Including litigation costs in the substantive award could undermine the Part 36 regime by creating uncertainty about the effect of later costs consequences.
5. The appellants were entitled to raise the point on appeal. The authorities establish caution in permitting new points, particularly where new evidence or a different trial would be required. Here the issue was a point of law, the unusual treatment of costs had not been clearly identified at trial, and the respondent suffered little or no material prejudice.
6. The appellants were ordered to pay the respondent’s costs of the proceedings below, subject to detailed assessment on the standard basis if not agreed. The judge indicated provisionally that the respondent should pay the appellants’ costs of the appeal.

• High Court (Property, Trusts and Probate List): Appeal allowed on the single permitted ground. The Deputy Master’s order was varied to exclude litigation costs from the substantive award, and costs below were ordered in favour of the respondent.
• Deputy Master Marsh: Following trial, granted the respondent relief under the Inheritance (Provision for Family and Dependants) Act 1975, including a lump sum incorporating litigation costs.