What costs rules apply to an application for permission/leave pursuant to the Matrimonial and Family Proceedings Act 1984 (‘MFPA 1984’) s 13?

This was the discrete question asked – and answered – in AS v RS (Costs: Clean Sheet/General Rule) [2023] EWFC 284 (B) by District Judge Troy (which followed his earlier decision in AS v RS (Matrimonial and Family Proceedings Act: Part III Application) [2023] EWFC 283 (B) in which he refused the application for leave).

Surprisingly, there appears to have been no previous authority on the point.

The judge’s analysis was as follows:

i) The starting point is FPR 28.1 which provides a general unfettered discretion to make an order for costs as the court ‘thinks just’ informed only by the overriding objective which, pursuant to r 1.2, is engaged whenever the court exercises any power given to it by the rules or interprets any rule.

ii) The starting point is ‘not restricted or qualified by the more detailed provisions’ that follow. The other costs rules ‘provide clarity as to how that discretion should be applied’.

iii) FPR 28.3 provides specific rules for ‘costs in financial remedy proceedings’.

iv) FPR 2.3(1) provides a definition of a ‘financial remedy’ which, although it includes an order under MFPA 1984 Part III, expressly excludes an application pursuant to MFPA 1984 s 13 for permission to apply for a financial remedy.

v) However, PD 28A para 4.1 states that, for the purposes of r 28(3), financial remedy proceedings are defined in accordance with r 28.3(4)(b) which defines ‘financial remedy proceedings’ as meaning proceedings for inter alia ‘an application for an order under Part 3 of the Matrimonial and Family Proceedings Act 1984’ and an application for leave under s 13 is clearly ‘an application for an order’ under Part III.

vi) PD 28A para 4.1 states that the definition in r 28.3(4)(b) ‘is more limited than the principal definition in rule 2.3(1)’ which could be said to support the proposition that the definition under r 28.3(4)(b) is to be preferred to the definition in r 2.3 when specifically considering r 28.3, with the definition in r 2.3 to be used for other parts of the rules.

vii) Therefore, per District Judge Troy, there is a mistake in the rules which creates a conflict, and the drafters could never have intended to create such uncertainty. However, as the drafters intended expressly to exclude applications pursuant to s 13 from the definition of a financial remedy (r. 2.3(1)), the definition at r 28.3(4) must be an error as the drafters could not have intended to have included an application pursuant to s 13 sitting in conflict with the exemption in r 2.3(1).

viii) The legislature intends the court to apply a construction which rectifies any error where required to give effect to the legislative intention and the Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 (HL) test should be applied. Applying the three-stage test to r 28.3(4), the court held that:

1. the intended purpose of the provision in question was to exclude leave applications;
2. the drafter inadvertently failed to give effect to that purpose (or at least caused the ambiguity) when drafting FPR 28.3(4)(b)(ii); and
3. the substance of the provision the legislature would have made is simply to have repeated the exception made for applications under s 13 MFPA 1984 when drafting FPR 28.3(4)(b)(ii).

ix) As FPR 28.3 does not apply, costs on an application for leave pursuant to MFPA 1984 s 13 are subject to r 28.2 (the so-called ‘clean sheet’ rule – as so described by Wilson LJ (as he then was) in Judge v Judge [2009] 1 FLR 1287 and Baker v Rowe [2010] 1 FLR 761) – as neither the 'no order for costs' presumption nor the 'costs prima facie follow the event' presumption apply.

As part of his analysis (which included consideration of At a Glance, Bennion, Bailey and Norbury on Statutory Interpretation, Dictionary of Financial Remedies, Duckworth’s Matrimonial Property and Finance, Family Court Practice, Financial Remedies Handbook, Financial Remedies Practice, Jackson's Matrimonial Finance and Rayden & Jackson) the judge referred to CW v CH (MFPA 1984 Part III: Interim Applications) [2022] EWFC B1, a decision of Recorder Allen KC.

Noting that CW v CH (MFPA 1984 Part III: Interim Applications) concerned interim applications under MFPA 1984 Part III rather than the question of leave, the District Judge disagreed with the Recorder’s analysis of the exercise of the general discretion where he said at [140] such applications were ‘governed’ by the costs rules set out in r 28.2. His concern was the use of the word ‘governed’ given that if the starting point in r 28.1 was to be displaced and ‘governed’ by the other rules then this would have been made clear. In the judge’s view the other provisions of Part 28 will ‘inform’ the approach to the exercise of the discretion but will not ‘govern’ as the discretion is unfettered.

The District Judge’s concern with the Recorder’s use of the word ‘governed’ is an interesting one. This word has often been used to describe which costs rules apply to particular applications. For example, in the same judge’s later judgment (AS v RS [2024] EWFC 32 (B)) when he dealt with the substantive application for costs, he said that r 28.1 was ‘to be read in conjunction’ with r 28.2 (perhaps a synonym for ‘inform’) but also referred to LM v DM (Costs Ruling) [2022] 1 FLR 393 where Mostyn J used the word ‘governed’ twice in the first paragraph of his judgment relating to the costs of interim financial remedy applications (‘[t]hese proceedings … are not governed by the no-order-for-costs general rule in FPR r 28.3(5). They are governed instead by a soft costs-follow-the-event principle’). By way of another example, in AB v CD (No. 2) (Costs) [2016] EWHC 2482 (Fam) Roberts J stated (at [11]) that ‘[I]t is trite law that the usual order now in financial remedy proceedings is governed by the 'no order' principle’. It will be interesting to see if, encouraged by District Judge Troy, judges prefer to use the word ‘inform’ (or similar) in future.