Xanthopoulos v Rakshina: LSPOs – Twelfth Time a Charm?
Published: 27/11/2023 13:59
It has long been the case that even where one party asserts that the court has no jurisdiction to bring a particular application a court can make an order for interim maintenance and/or a costs allowance (whether under statute or common law) – see for example Moses-Taiga v Taiga  1 FLR 1074 and MET v HAT (Interim Maintenance)  2 FLR 692 per Mostyn J.
The same principles apply where the claim for substantive relief appears doubtful having regard to its subject matter.
Specifically in the context of a costs allowance, in Rubin v Rubin  2 FLR 1018 (principles which Peel J subsequently endorsed in full in HAT v LAT  EWFC 162 at ), Mostyn J stated inter alia as follows:
‘ iii) Where the claim for substantive relief appears doubtful, whether by virtue of a challenge to the jurisdiction, or otherwise having regard to its subject matter, the court should judge the application with caution. The more doubtful it is, the more cautious it should be.’
In Xanthopoulos v Rakshina  EWFC 158 (26 September 2023), Peel J considered on paper the husband’s application for a LSPO to enable him to conduct his appeal against Sir Jonathan Cohen’s order under MFPA 1984 Part III dated 17 May 2023 (following a judgment on 4 April 2023 –  EWFC 50). Permission to appeal was granted by Moylan LJ on 31 July 2023 with the substantive appeal listed to be heard on 1 and 2 November 2023.
At  Peel J observed as follows:
‘As for the principles to be applied, there is a dearth of authority and of course, I have heard no oral submissions. Mostyn J stated at paras 48 to 52 of an earlier decision of this very case, reported at Xanthopoulos v Rakshina  EWFC , that the jurisdiction to make an order for legal funding in relation to an appeal in children’s proceedings should be exercised extremely cautiously, although of particular relevance to Mostyn J was the fact that (unlike the matter before me) Permission to Appeal had not been granted.’
Thereafter Peel J continued as follows:
‘ The principles set out by Mostyn J in Rubin v Rubin  EWHC 611 continue to govern LSPO applications. In the context of a LSPO for appellate proceedings, I would only add this. At para 13(iii), the following is included as a relevant factor:
“Where the claim for substantive relief appears doubtful, whether by virtue of a challenge to the jurisdiction, or otherwise having regard to its subject matter, the court should judge the application with caution. The more doubtful it is, the more cautious it should be.”
In my judgment, where Permission to Appeal has not yet been granted, the court will evaluate this factor with particular scrutiny. Where, as here, Permission to Appeal has been granted, the court may more readily consider that, for the purposes of a LSPO application, the claim does not fall into the category of appearing “doubtful”.’
The context of this case includes findings by Sir Jonathan Cohen that the husband’s litigation misconduct in the first instance proceedings had resulted in what at  he said had been a ‘horrendous haemorrhage of costs’ (he estimated the parties had spent c. £8.416m in costs of which £5.06m had been spent on finance and jurisdiction. The wife’s brother had also spent in excess of £300,000 in relation to a preliminary issue). The husband had changed lawyers on seven occasions and made 11 previous LSPO applications from which he received substantial sums. He did not attend the final hearing which took place between 15–22 March 2023 in person at any point. Shortly before the final hearing he had sought an adjournment which was refused. On the first day of the hearing following the reading days, the husband’s solicitors and (leading and junior) counsel withdrew from the case.
Despite this misconduct Peel J reached the conclusion that a LSPO should be made. His reasons included that permission to appeal had been granted which indicated at least some prospect of success (or put another way, that it could not be said at this stage that the appeal was hopeless). It had also been acknowledged on the wife’s behalf that the husband probably had no means of funding the appeal other than by her. This outweighed the wife’s argument that the appeal was wholly unmeritorious.
Peel J also stated (at 13(b)) that if the husband lost on appeal he might have to repay the LSPO award to the wife, as well as suffer a costs order in respect of the wife’s own legal fees. The LSPO would operate as in effect of a loan by the wife to the husband, and would be fully capable of readjustment once the appeal had been determined. He added that he saw no reason in principle why the husband should not, if unsuccessful, be required to repay the sums advanced, and (if applicable) the wife’s costs out of the sum of £252,500 which he was due to receive under the periodical payments order, and perhaps also out of the €60,000 furnishings lump sum. Although it might be said that this would interfere with the sums deemed by Sir Jonathan Cohen as appropriate for the husband’s needs, Peel J stated that the courts have repeatedly said that a party who is guilty of misconduct (including litigation misconduct) cannot be immune from the consequences of that misconduct even if that means invading a needs-based award (see for example Rothschild v de Souza  EWCA Civ 12151 to which Sir Johnathan Cohen also referred at paragraph  of the first instance judgment).
The sum sought on H’s behalf – a mix of fees incurred and expected to be incurred – was £231,179. The sum awarded (to be paid in two tranches) was £175,000.
In the earlier decision in Xanthopoulos v Rakshina  EWFC 30 – to which Peel J referred at  – Mostyn J noted at  that he had:
‘indicated during the hearing that I have personally never known of a case where a legal services payment order has been made to fund the costs of an application for permission to appeal or the substantive appeal to follow thereafter if permission is granted.’
He then acknowledged at  that in Re Al M  EWHC 303 (Fam) (one of the many Al Maktoum judgments) Sir Andrew McFarlane P had been concerned with the mother’s application for an additional payment under an LSPO to fund the costs of an appeal being heard in the Court of Appeal (and where permission to appeal had been granted by the time of that application).
There remains no reported judgment of an order being made to fund a permission application.
At first instance Sir Jonathan Cohen stated at  that:
‘consideration might be given to being far stricter about how legal services payments are to be utilised in a case of a litigant who repeatedly breaches court orders. I would suggest that the provision of funds should be firmly tied to compliance with court orders.’
It does not appear from Peel J’s judgment that he has made any such ties to the order made on this twelfth LSPO application. How the husband now behaves pending the hearing of his appeal remains to be seen.