Knowles J. Costs in relation to:

• dismissal of W’s contempt application against H and Mr Harrison, the owner of a company that provided management services to H and W;
• withdrawal by H of his application to debar W’s solicitor from acting for her.

The law

• FPR 28.1: the court may make any such costs order as it thinks just.
• CPR 44.2(2)(a): the unsuccessful party will be ordered to pay the costs of the successful party. CPR 44.2(2)(a) does not apply in family proceedings but it does in committal proceedings.
• CPR 38.6: where a party discontinues an application they should be expected to pay the costs wasted by the other side. Although this was not incorporated into FPR 28.2 the judge kept it in mind.

The debarring application

H withdrew his debarring application on September 5 before Arbuthnot J. He accepted he should pay W’s ‘reasonable costs’ but only up to August 26 as by this date he had written to W agreeing to pay. He also argued there should be deductions because the hearing was concerning W’s contempt application also.

W argued she had already incurred her costs for the hearing by August 26 and that ‘reasonable costs’ were inadequate.

Mrs Justice Knowles decided that H should pay his own costs as it was not possible to determine what costs were referrable to the debarring application and which costs were referrable to the committal application.

However, she did include a deduction in costs payable to W due to her conduct. In correspondence, W had insisted on a recital that the debarring application should never have been made and if this was not agreed she would start committal proceedings. H did not agree to the recital and committal proceedings were issued. The recital was deemed unnecessary and had it not been insisted upon there would have been settlement. Therefore, the costs to be paid to W were reduced by 60%.

Costs of the committal proceedings

The general rule is that CPR 44.2(2)(a) does apply to committal proceedings as they are civil proceedings and costs will generally be assessed on an indemnity basis. Without prejudice correspondence may be taken into account in this assessment.

Here, ‘The wife’s case was weak and evidentially flawed; and was improperly motivated and disproportionate.’ None of the wife’s without prejudice letters offered anything attractive on the issue of costs to either the husband or Mr Harrison.

However, costs will be disallowed where they are unreasonably incurred or are unreasonable in amount (FPR 28(2)). H’s and Mr Harrison’s costs were, on any analysis, manifestly excessive and unreasonable.

H’s costs were largely built up by having six solicitors on the case, therefore, three solicitors’ costs were removed. Counsel’s fees were also reduced by 50% for a vacated hearing. H’s costs to be paid by W were £116,603 (incl. VAT).

Mr Harrison’s disallowed costs were:

• any costs associated with expert evidence (an application for an expert was never before the court);
• the cost of junior counsel (a KC was instructed and well-remunerated already); and
• costs in relation to the highest grade A solicitor (there were three grade A solicitors and one at grade D).

The costs were decreased by another 10% as they were still seen as excessive. In total Mr Harrison’s costs were £189,815.40 (incl. VAT).

Even after this exercise the sums incurred by the husband and Mr Harrison remained extremely high, but were justifiable on an indemnity basis given the wife’s misconceived committal application.

As H owed W a lump sum of £18m and £800,000 in interest, the costs would be offset against that interest. The costs payable to Mr Harrison would not be payable until April 30 to allow time for W to recoup what is owed by H.