BY v GC (No 3: Costs) [2026] EWFC 50

Judgment date: 3 March 2026

https://caselaw.nationalarchives.gov.uk/ewfc/2026/50

Mr Nicholas Allen KC (sitting as a deputy High Court judge).

Background

Costs hearing in Financial Remedy proceedings. W sought recovery from H of £621,932 in legal costs across a range of categories, including those of defending a Daniels v Walker application by H, experts’ costs, and 50% of her remaining legal costs. A costs order was made in favour of W, but limited to £79,000 (inclusive of VAT).

The parties’ costs totalled over £3.1m (in a case where the assets were valued at £89.5m). These related to BY v GC [2025] EWFC 226 (a Daniels v Walker application) and BY v GC (No 2) [2025] EWFC 397 (the substantive decision).

Application

W’s costs totalled £1.687 million and she sought recovery of £621,932.61 across a range of categories, including those of defending a Daniels v Walker application by H, experts’ costs, and 50% of her remaining legal costs.

Applicable law

As per FPR 28.1, the court may make such order as to costs as it thinks just. Applying also FPR 28.3, the general rule is that the court will not make an order requiring one party to pay the costs of another party. However, the court may make such an order where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings.

PD 28A 4.4 states that in considering rule 28.3 conduct, the court will take a ‘broad view’ and open refusal to negotiate reasonably and responsibly will amount to conduct in respect of which the court will consider making an order for costs.

The costs of H’s Daniels v Walker application were governed by FPR 28.2 (meaning CPR Part 44.2 was applied save that the general rule that costs follow the event was disapplied). The application was a ‘clean sheet’ application (there being no presumption of either no order as to costs, or that costs follow the event) as described in Judge v Judge by Wilson LJ.

Judgment

a. Daniels v Walker application

W was awarded costs. Despite the clean sheet, as H was responsible for the generation of costs of the failed application, the court started from the position that W was entitled to her costs, with the fact that H was unsuccessful counting as the decisive factor in similar reasoning to that in Baker v Rowe. £19,000 was awarded of £23,371 claimed.

However, there was no basis to award costs of the disbursements related to the application, as these were directed at the PTR and thus considered ‘necessary’.

b. Costs of experts’ (PwC and Survey Spain) attendance at final hearing/costs of W’s solicitors’ and counsel’s attendance at the 1.5 days of the final hearing used for their evidence

W argued that both experts’ attendance was only required in light of H’s serious challenge to their valuations. However, in respect of Survey Spain, W had the benefit of the uplift in their valuation because of their evidence and so H alone could not fairly bear the cost.

As to PwC, H had a reasonable and arguable case to put to the SJE in relation to the valuation of a company (called Company A) which he said should be valued at £11.493m rather than £24.833m. There was no basis for this to sound in costs. More widely, W’s solicitors had proposed the instruction of an SJE to value H’s business interests before they received his Form E. W had also resisted H’s proposal of a less expensive expert than PwC, and having successfully persuaded the court to maintain the instruction of the more expensive SJE, W was to bear the cost consequences of doing so.

c. Uplift in PwC’s fees caused by H’s delay and litigation conduct

No costs order. It was impossible to discern from a letter from PWC that H alone was responsible for some delay. Delays largely owed to third parties in the businesses.

d. Remaining legal costs

On W’s behalf, it was submitted that since H had ascribed Company A nil value in his Form E, applying OG v AG this was a deliberate non-disclosure ‘in the most serious category’ which should sound in costs.

A costs order was appropriate, given the knowingly inaccurate assessment of Company A’s value in H’s Form E, and noting Mostyn in W v W (Financial Provision: Form E) as to the ‘numinous status’ of the Form E, which suggested if ‘it is found that a party has deliberately filled in a Form E falsely … he must expect judicial censure and penalties in costs’.

The court did however also consider that there was force in H’s submission that W had not negotiated openly and reasonably once the financial landscape became clear.

Further, the eventual outcome on distribution was a 55/45 split in H’s favour (to reflect illiquidity/risk), with c.£49.2m to H and c.£40.3m to W – which was broadly halfway between both parties’ open positions, and so it could not be said the result was a ‘win’ or ‘loss’ for either side.

Conclusion

In the overall exercise of discretion, the factors in the case taken individually and collectively justified an order for costs in W’s favour. However, the quantum was far lower than that sought.

A £60,000 (£79,000 inclusive of VAT and disbursements) contribution to W’s costs by H was ordered. The figure reflected ‘in the main’ the finding that H had knowingly completed his Form E falsely in respect of Company A. Importantly it was noted that the duty of full, frank, and clear disclosure in the Form E is not abrogated even if a party expects (or even if it has already been agreed) that an SJE will subsequently be instructed.