Simon Colton KC. Strike out of an application to extend time for payment of a lump sum.

On 10 December 2018 Roberts J ordered (by consent) that H was to pay a lump sum of £1.1 million to W by 19 June 2023. The sum was secured by mortgage over a flat in which H resided. Following H’s non-payment, W issued successful possession proceedings in respect of the flat.

H then applied to vary the date for payment of the lump sum to 30 June 2024, but subsequently sought an extension of the date for payment to 30 June 2025. W issued a cross-application to strike out H’s application on two grounds:

i) The court lacked jurisdiction to extend the time for payment of a (single) lump sum; and

ii) H’s application should be struck out under FPR 4.4(1)(b) on the basis that H made his variation application to obtain some illegitimate collateral advantage over the order of possession.

H submitted that there was jurisdiction to extend time for payment of a (single) lump sum under s 31(2)(dd) MCA 1973 and/or the court’s inherent jurisdiction under Masefield v Alexander. The court agreed with W’s submission that s 31(2)(dd) MCA 1973 was limited to deferred lump sums which include provision in respect of pension rights or pension compensation and that the court’s jurisdiction under Masefield v Alexander was limited to ‘modest’ extensions. The order sought by H went beyond any ‘slight’ or ‘modest’ extension, would undermine the principle of finality, and went to the heart of the order of Roberts J; [25].

In case he was wrong in his decision that he lacked jurisdiction to extend the time for payment, the judge considered whether ‘it would be inequitable, in all the circumstances, to grant the extension sought’; [33]. He held that it was not inequitable to refuse to grant an extension because H had known since December 2018 that he was obliged to pay the lump sum in June 2023 but decided to take commercial risks, such lending amounts in excess of the lump sum to companies of which he was a 100% shareholder; that the securing of the lump sum was agreed with the benefit of legal advice; and that a lack of finality and ongoing legal and emotional cost constituted prejudice to W; [39].

The application would not have been struck out on the basis it was a collateral attack on the possession order because ([28]):

a) It was not H’s purpose in making his application to obtain an illegitimate collateral advantage; [30].

b) H hoped to extend the date for payment of the Lump Sum so he could contend in the county court that the debt secured by the mortgage was not yet due. It was not improper for H to seek an extension of time to pay the Lump Sum in the hope of allowing this argument to run; [30].

Costs and guideline hourly rates in the Family Court

Held that H’s application was not a ‘financial remedy proceeding’ and nor was the strike out application so FPR 28.3 did not apply; [45]. The question of liability for costs was approached in accordance with FPR 28.2 and H was ordered to pay costs on the standard basis by way of summary assessment; [46].

The judge raised the question of the relevance in the Family Court of the guideline hourly rates published as part of the ‘Guide to the Summary Assessment of Costs’; [47]. It was held that strictly speaking the guideline rates do not apply in the Family Court but it would be a very odd result if hourly rates, which, in civil proceedings, could not be recovered absent a ‘clear and compelling justification’, could readily be recovered in family proceedings; [51]. The judge conducted the summary assessment of costs on the basis that the guideline hourly rates provide a good indicator of what costs were proportionate for the receiving party to recover in the absence of some clear or compelling justification why those rates should be exceeded; [52].