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February - Case Law Update 2

February 12, 2024

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February - Case Law Update 2

February 12, 2024

H v GH [2023] EWFC 235 

Simon Colton KC, sitting as a Deputy High Court Judge, dealt with an application to vary the date for payment of a lump sum order and considered the use of guideline hourly rates within family proceedings in the context of applications for costs.

Background

The parties agreed on a consent order, which was made by Roberts J on 10/12/18. That contained an order for H to pay W a lump sum of £1.1 million on 19/06/23. The lumpsum was secured by a mortgage over a flat, which was H’s home. It was not paid, and W eventually issued a claim for possession in reliance on the mortgage. On 06/10/23, DJ Sterlini, in Clerkenwell County Court, ordered H to give W possession of the flat and gave judgment in the sum of £1.1 million. H sought permission to appeal that order. On 3/10/23, H made an application to vary the date for payment of the lump sum, firstly to 30/06/24, which was then amended to seek an extension to 30/06/25. On 22/11/23, W cross-applied to strike out the variation application on the grounds that:

  1. a) The court lacked jurisdiction to extend the time for payment of a lump sum for a period of 2 years and
  2. b) the variation application was a collateral attack on the Sterlini order.

Issues

Variation under s 31(2) (dd) MCA 1973

H’s counsel argued that the order for the lump sum fell within this section of the MCA, and thus, the court had statutory jurisdiction to vary it. The judge rejected this argument, finding that the section is limited to those lump sum orders that include provisions with respect to pension rights or pension compensation rights only.

Variation under the court’s inherent jurisdiction

The judge considered various cases dealing with the court’s inherent jurisdiction to direct a “modest extension” of time for payment of a lump sum, which was confirmed by the Supreme Court in Birch v Birch [2017] UKSC 53 (at [26]). In Hamilton v Hamilton, Baron J in the Court of Appeal at [31]-[33] approved as a statement of the law that if there was no power to vary under section 31, then the court could not extend the time for payment of a lump sum under section 23(1)(c) by “any significant period”

In BT v CU [2021] EWFC 81, [2022] 1 WLR 1349, Mostyn J at [37] held:

“Clearly, an application for a modest extension of time to pay an individual lump sum would not strike at the heart of the order and would be, if granted, of no great importance, particularly if compensatory tapering periodical payments are being made in the meantime”.

Simon Colton KC held the 2-year extension sought was not a slight or modest delay and that it did indeed go to the heart of the order and would significantly hinder W’s ability to put the dispute behind her both financially and emotionally. He, therefore, concluded that he lacked jurisdiction to grant the variation application and struck it out. He went on to explain that even if he were wrong that he lacked jurisdiction to grant an extension of 2 years to pay the lump sum, he would not make such an order in any event on the basis that it would not be inequitable to refuse to grant H the extension, in all the circumstances.

He did not accept W’s argument that H’s purpose in making the variation application was to obtain some illegitimate collateral advantage in the county court possession proceedings and, therefore, explained that he would not have struck out the variation application on the second limb of W’s strike-out application.

In considering W’s costs application, the judge raised the question as to the relevance in the Family Court of the guideline hourly rates published as part of the “Guide to the Summary Assessment of Costs” and said that whilst the guideline rates do not strictly speaking apply in the Family Court, it would be a very odd result if hourly rates which, in civil proceedings, could not be recovered absent a “clear and compelling justification” can readily be recovered in family proceedings. It would be undesirable if the benefits of guideline hourly rates should be lost in the assessment of costs in family proceedings. Thus, he conducted the summary assessment of costs on the basis that the level of the guideline rates provided a good indicator of what costs were proportionate for W to recover in the absence of some clear justification why those rates should be exceeded.

NB: The Guideline Hourly Rates were uplifted for inflation from 01/01/24 and are set out here: https://www.gov.uk/guidance/solicitors-guideline-hourly-rates#guideline-hourly-rates

 

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