Costs News

17 September 2015
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Judge casts doubt on decision to offset maintenance payments against costs liability

A High Court judge has expressed his doubts over an order which offset a divorced woman’s maintenance against her costs liability to her husband.

Mr Justice Holman said that “the entangled complexities” of the relationship between the parties in Welch v Welch [2015] EWHC 2622 (Fam), and the litigation that has come out of their divorce, “could be the subject matter of a book”.

In a ruling from 30 July published this week, he quoted District Judge Hess as describing the wife as “obstinate, unrealistic and obsessive” in her pursuit of financial remedies and ruled against her in relation to her appeals against various of DJ Hess’s orders. Holman J also agreed to put in place an extended civil restraint order in relation to any further litigation she might want to bring against the husband.

But he made an exception to allow for the wife to make an application to discharge a “somewhat unusual order” by DJ Hess. This said: “On the basis that the applicant [the wife] will have a significant liability to pay the respondent's costs as set out in paragraphs 9 to 11 of this order, and on the basis that the amounts of costs sought (subject to detailed assessment) is in excess of the total liability the respondent has to the applicant under the term periodical payments order of 9 September 2014, the respondent's liability to pay periodical payments to the applicant under paragraph six of the order made on 9 September 2014 shall be suspended until such time as District Judge Hess shall further consider the matter following the outcome of the detailed assessments of the costs ordered at paragraphs 9 to 11 of this order and such other costs orders made from time to time hereafter.”

Holman J continued: “As I understand the thinking behind it, the maintenance order was made at the rate of £12,000 a year for a fixed term (having regard to the age of the husband) of six years. In other words, the total amount payable by the husband until the ultimate termination of the maintenance order would have started out as £72,000.

“However, pursuant to costs orders already made, it was being asserted that (subject to detailed assessment) the wife already owed the husband costs of around £70,000. Therefore, District Judge Hess obviously took the view that it was wrong and unjust that on the one hand there should be an unsatisfied debt by the wife to the husband for costs of the order of £70,000, and on the other hand that the husband should continue to be expected to pay, month in, month out, £1,000 a month to an ultimate total of about £70,000.”

While Holman J said he understood “the rough justice and thinking behind that approach”, on the flip side the purpose of the maintenance in this case was to meet the wife’s basic needs, rather than a more generous standard of living.

“It is not completely clear to me how, if the wife had a 'basic need' for the necessities of life of £2,000 a month, of which she herself could at best only contribute half by her own earnings, that 'basic need' could be justifiably put on hold in that way because of the outstanding amounts owed by way of costs… I have some reservations (I put it no higher) about the appropriateness of the order… on the facts and in the circumstances of this case.”

Later in the ruling, he said the wife’s present financial circumstances were such that “It may be that there simply is not room in this case to suspend the maintenance any longer, leaving her on the breadline, however great her costs debt to her former husband”.

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