DDJ Harrop. Decision on costs after an MPS application with no clear winner. The court was dismayed by what had been incurred in legal fees contesting the MPS application. W incurred £27,000 in a little over a month and H nearly £12,000. The sums could have paid for the disputed holiday nearly twice over or, as the husband points out, met a term’s school fees. The MPS costs were the context of W having already incurred £100,000 in legal fees up to the FDA, and H’s £26,000.

Summary

W’s application for MPS was dated 28 May 2024. After the FDA on 10 May 2024, H unilaterally emptied the joint accounts and informed W how he would manage the finances going forward, including how much he would provide W in ‘maintenance payments’. W responded through her solicitors, setting out her position. This included a counteroffer on the ‘maintenance payments’ and a demand for a holiday fund. H’s earnings were £350,000 pa (around £18,000 per month net) plus bonuses. In 2023, bonuses added £175,000 net to H’s income.

Application

W made an application for MPS dated 28 May 2024. There was an exchange of open proposals.

At the MPS hearing on 25 June 2024, in line with W’s application, the DDJ restructured the mechanics of the global maintenance payments and the rent and utilities payments from H to W. The DDJ also refused W’s holiday fund as (i) there was no jurisdiction to make an interim lump sum order, and (ii) even if it could, it was unaffordable. The DDJ explained that W’s calculations erroneously relied on the annual income, including the bonuses. This failed to consider the reality and actual cash flow. The DDJ calculated there was a real risk of the family running out of money before February’s bonuses arrived, even without having to find an extra £22,150 (or even £16,000 as openly offered by H) for a holiday. Both parties saw themselves as the victor and sought their costs.

Costs

FPR 28.1 does not apply to MPS applications. The court starts with a clean sheet. This is because CPR 44.2(2), which specifies that the loser pays the winner’s costs, is explicitly excluded. The clean sheet approach has been described as being a ‘soft-costs-follow-the-event’ regime, although the authorities vary on whether a parties’ success leads to a ‘starting point’ that they are entitled to their costs (e.g. Judge v Judge [2008] EWCA Civ 1458, per Wilson LJ) or whether, as Ward LJ said in Baker v Rowe [2009] EWCA Civ 1162 at [35], a judge ‘could not properly ignore the fact that one side had won and the other had lost but that is not determinative nor even his starting point. It is simply a fact to weigh’; [26].

Held

1. It was not clear which party was the winner and which was the loser.
2. Both parties bear responsibility for the application reaching a contested hearing.
3. Both failed to make reasonable concessions.
4. Neither was more significantly culpable than the other.

Outcome

No order for costs.