SITTING IN ROYAL COURTS OF JUSTICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Before:
THE HONOURABLE MR JUSTICE CUSWORTH
Between:
LP | Applicant |
- and - | |
MP | Respondent |
Katie Cowton KC (instructed by Gumersalls) for the Applicant
The Respondent appeared in person
Cusworth J :
This short judgment follows my substantive judgment in these proceedings, in which I made serious findings against the respondent wife in respect of her conduct during the parties’ marriage. Her conduct of the proceedings has been little better. Ms Cowton KC for the applicant husband argues that the respondent wife has ‘treated the High Court with contempt throughout the financial proceedings (just as she did in the children proceedings)’. I agree with her. She cites a number of significant examples:
The wife failed to attend the First Appointment on 2 May 2025, or the PTR on 24 October 2025, although she was fully aware of them. The first hearing she attended was the final hearing. Her excuse given that she had medical reasons for her non-attendance at the PTR were unconvincing, given that she had been sent a remote hearing link at her request, and could have accessed the hearing even if she was receiving medical care. Because of the wife’s lack of engagement with the proceedings there was no FDR, nor any prospect of non-court dispute resolution, or any settlement other than after the conclusion of a trial. The husband therefore had no choice but to proceed to a contested final hearing.
The wife did not serve her Form E in advance of the First Appointment. She sent her Form E to the court on 20 May 2025 (18 days later), but did not send a copy to the husband’s solicitors until 27 June, even though she was in touch with his solicitors on the day that she sent the document to court - about a meter reading for North Farm. This was a litigant who was attempting to play games. Instead of providing clear and accurate disclosure, she used her Form E as a platform to run a false conduct case against the husband, including blaming him for her own criminal fraud convictions. Her failure to serve her Form E led to the husband seeking and obtaining Third Party Disclosure Orders against Lloyds Bankand the Land Registry. When the wife served her responses to questionnaire, they came without a single piece of documentation in support of the answers. In her oral evidence, she then acknowledged that many of the narrative answers she had given were untrue.
The wife’s s.25 statement was not served until 31 October 2025 and much of it again was deliberately untrue. Similarly, her response to the husband’s conduct pleading served on the same day. Her first open proposal was served at the same time, and sought £4.25m for housing (or North Farm, plus land, plus barns plus £1m), and £6m for a lifetime income fund (£250k p.a.). She also sought 50% of the value of Park Street and 35% of the husband’s pensions, all totalling 62% of H’s assets, or £14.16m.
Having received Ms Cowton KC’s written costs application on 16 December 2025, I gave the wife 7 days to submit her reply. She failed to do so, I then gave her a further opportunity to respond until 21 January 2026. On that day, rather than put in any substantive response she responded by email to the following effect:
‘I categorically deny any and all allegations that I have distorted, perverted, or otherwise interfered with the course of justice. I do not accept that I have acted improperly, dishonestly, or in bad faith in these proceedings. I strongly oppose any application for costs against me. I am currently struggling with financial resources of any kind. I am entirely without means and would not be in a position to satisfy any costs order, even if one were made. I further note that [H] has primary care of our child, while I remain without stable resources. These circumstances have significantly affected my ability to participate fully in these proceedings and to obtain legal representation. If [H] continues to maintain the allegations referred to, I respectfully request that they be clearly and properly particularised so that I may understand the case I am said to meet. I also respectfully seek additional time to respond in full once I am able to obtain legal advice or other appropriate assistance. I ask the Court to take my circumstances into account when considering any issue of costs or further procedural directions.’
In circumstances where the husband’s original application for costs was filed as indicated on 16 December 2025, so that the wife has had more than five weeks to respond, and where she has acted in person throughout these proceedings, and given the above referred to history, I consider that is neither appropriate nor fair to the applicant to grant the wife a further adjournment with a view to her seeking representation before determining this application. The matters complained of by Ms Cowton are either matters of fact, or matters about which I have made clear findings in my substantive judgment, having heard the wife’s oral evidence and considered her disclosure. She does not anywhere explain why she has taken no steps already to respond if she considered it important. She also does not explain why she feels the need to be represented on the question of costs, when she chose to act in person throughout the proceedings. I am satisfied that the wife has quite deliberately chosen to remain disengaged from these proceedings, and in the process has caused the husband to expend very significant amounts on costs, choosing to attend only at the final hearing and to there represent herself. She has done this tactically, and not by accident. I will therefore now proceed to determine the husband’s application, taking her remarks recorded above to be her response.
The husband’s original open offer to settle of a lump sum of £750,000, with Park Street and North Farm to be transferred to him and with him waiving the Leicester property and West Road loans (which was ultimately what I eventually ordered) was made on 4 June 2025, shortly after the First Appointment and before the significant expense of the following months, leading up to the fully contested trial. It was made nearly three weeks before she chose to serve her Form E on the husband’s solicitors, and about a fortnight after she had sent it to court. The offer was available for acceptance until 25 June 2025, but the wife effectively ignored it. She never engaged in any settlement discussions or made counter-proposals until 31 October 2025 as set out above, when she was a long way from making an offer in the right ball-park.
Ms Cowton KC tells me that the total costs incurred by the husband after the First Appointment on 2 May 2025 until the end of the trial were £284,875. The vast majority of these costs would have been incurred after he had made his open offer on 4 June. In addition she seeks a further £33,326 as reflective of the conduct aspect of the husband’s Form E preparation, which given the findings that I have made I consider wholly reasonable. There is then £1,151 for the divorce deemed service application and a further £5,000 costs of preparing her costs submissions; a total of £324,352. She acknowledges that on the basis that even on an indemnity assessment the court is likely to mark down the amount awarded by at least 10%, she then seeks the sum of £291,917 assessed on this basis, following Mostyn J in OG v AG(below). She also points out that, whilst no order for costs was made in the children’s proceedings, the wife’s conduct there was little better. I cannot however go beyond that determination now, as Ms Cowton accepts.
Given the wife’s response, and the rules, I am required to consider the financial effect on her of any costs order. By my judgment, I have determined that the wife should receive a sum which when added to the amounts which I have found that she has retained during the marriage, amounts to close to £2m. I also found, as Ms Cowton reminds me, at §53 to §54 of my substantive judgment: that “given the wife’s behaviour, there is no obvious reason for [her needs] assessment to be performed with generosity”; that “the wife is not entitled to be maintained at the marital standard any further”; and that “if at the age of just 60 she has a net wealth of just under £2m, the ‘At A Glance’ Duxbury Table suggests that she could employ half of that fund over a 24 year term to live at the overall net rate of £55,000pa, and she could then employ the rest as a housing fund. This would be well above and beyond any baseline needs calculation that might be performed.”
During the hearing, Ms Cowton produced a number of property particulars which she put to the wife as being suitable to meet her housing needs if she chose to remain living in Cornwall, which had been her case. Those showed a range of 3/4 bed properties with total acquisition costs of between £341,500 and £415,000. I also remind myself that the wife will retain her property in Leicester, which falls at the bottom of the same bracket. The wife produced no property particulars, indicating that she wished to retain North Farm. She gave evidence that she did not consider any of those properties to be suitable, although they met the broad criteria set on her behalf by her friend, a Mr P, who purported to be acting on her instructions when corresponding with the husband’s solicitors during the proceedings. It is therefore clear to me that, even if she were to meet a costs order of the full amount sought for the husband (which would simply be deducted from the payable lump sum), she could still house reasonably in the context of my findings, without impacting on the lump sum available to her for investment to produce an income.
In terms of the wife’s income needs, a Duxbury calculation for her life with a fund of £1m per Capitalise is £50,351pa (excluding the state pension) or £57,608pa (including a full state pension). The wife’s own Form E budget was £3,500pcm (increasing to £3,800pcm), so from £42,000pa. The husband has been paying £3,000pcm plus bills and expenses for North Farm, so the wife’s standard of living will remain fairly stable in any event. I am therefore satisfied that even if I were to award the husband 100% of the costs amount that he is seeking, the wife would still be able to meet her needs at a reasonable level in light of my findings and the appropriate basis upon which her needs should therefore be calculated. Whilst she must still too have some residual earning capacity, I do not expect by my assessment that she will be bound to exercise it until retirement age to meet those needs.
The law. The law that I have to consider in relation to this issue was set out in Azarmi-Movafagh v Bassiri-Dezfouli [2021] EWCA Civ 1184, in the Court of Appeal, where King LJ said, under the heading ‘Costs in Financial Remedy Cases’:
The current rule is found in the Family Procedure Rules 2010, r.28.3(5) ('FPR') which provides save in certain specified exceptions, that 'the general rule in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of another party'.
Whilst the 'no order' principle is the starting, and usually the end, point, the court does retain the jurisdiction to make costs orders in financial remedy proceedings pursuant to FPR r 28.3(6) 'because of the conduct of a party in relation to the proceedings (whether before or during them)'. The court is given assistance as to the proper approach to the making of such an order for costs in FPR 28.3(7) which provides:
In deciding what order (if any) to make under paragraph (6), the court must have regard to –
any failure by a party to comply with these rules, any order of the court or any practice direction which the court considers relevant;
any open offer to settle made by a party;
whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
the manner in which a party has pursued or responded to the application or a particular allegation or issue;
any other aspect of a party's conduct in relation to proceedings which the court considers relevant; and
the financial effect on the parties of any costs order."
Of importance is the Practice Direction FPR PD 28A which applies to costs in financial remedy cases and has particular resonance in the present case. FPR PD 28A para.4.4 provides that:
"In considering the conduct of the parties for the purposes of rule 28.3(6) and (7) (including any open offers to settle), the court will have regard to the obligation of the parties to help the court to further the overriding objective (see rules 1.1 and 1.3) and will take into account the nature, importance and complexity of the issues in the case. This may be of particular significance in applications for variation orders and interim variation orders or other cases where there is a risk of the costs becoming disproportionate to the amounts in dispute. The court will take a broad view of conduct for the purposes of this rule and will generally conclude that to refuse openly to negotiate reasonably and responsibly will amount to conduct in respect of which the court will consider making an order for costs. This includes in a 'needs' case where the applicant litigates unreasonably resulting in the costs incurred by each party becoming disproportionate to the award made by the court."
If a costs order is made against one of the parties as a consequence of their conduct, the court will need then to decide upon which basis those costs should be determined; standard costs or indemnity costs. It is not necessary for the purposes of this judgment to set out the relevant considerations which determine which of those assessments apply other than to note that the difference as between standard and indemnity costs is set out at CPR 44.3(2) and (3) as:
Where the amount of costs is to be assessed on the standard basis, the court will –
only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and
resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party.
Where the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party."
The test for deciding whether to make an award on the indemnity basis was considered (in a different context) by Joanna Smith J in Cabo Concepts Ltd v MGA Entertainment (UK) Ltd & Anor [2022] EWHC 2024 (Pat), where she said:
Subject to one caveat, the principles to be applied by the court on an application for indemnity costs are not in dispute. They were clearly articulated in the leading authority of Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson [2002] EWCA Civ 879 by Lord Woolf CJ at [31]-[32] and by Waller LJ at [39]. In summary, the court has a "wide and generous discretion" in making orders about costs. An order for indemnity costs will be justified where either the conduct of the parties or "other particular circumstances" of the litigation (or both) are such as to take the situation "out of the norm". As Lord Woolf observed, "that is the critical requirement". In Esure Services Ltd v Quarcoo [2009] EWCA Civ 595, at [25], Waller LJ explained that the word "norm" was not intended to reflect whether what occurred was something that happened often so that in one sense it might be seen as "normal", but was "intended to reflect something outside the ordinary and reasonable conduct of proceedings".
As Lord Woolf CJ made clear in Excelsior, there are an infinite variety of situations which may justify the making of an indemnity order. It is not necessary for some sort of moral lack of probity or conduct deserving moral condemnation on the part of the paying party to be established. An award of indemnity costs is not penal but compensatory, the question in all cases being, what is fair and reasonable in all the circumstances of the case (see Catalyst Investment Group Ltd v Lewinsohn [2009] EWHC 3501 (Ch) per Barling J, citing Reid Minty (A Firm) v Taylor [2001] EWCA Civ 1723, at [20]-[28])...
…In [Suez Fortune Investments Ltd v Talbot Underwriting Ltd [2019] Costs LR 2019]…, Teare J pointed out at [7] that there was a long line of authority to the effect that where it was said that conduct was unreasonable, it must be unreasonable to a high degree to justify an order for indemnity costs…
…At [11] he concluded his analysis of the competing arguments in these terms:
"In the light of the wide nature of the discretion to order costs on the indemnity basis I accept the submission made by counsel for the Underwriters that there may be an "aggregation of factors" which justify an order for costs on the indemnity basis, one of which may be unreasonable conduct though not to a high degree. What matters is whether, looking at all the circumstances of the case as a whole, the case is out of the norm in such a way as to make it just to order costs on the indemnity basis. That is the approach in Excelsior; see also ABCI v Banque Franco-Tunisienne [2003] EWCA Civ 205 at para 70 per Mance LJ".
With respect, I agree. I shall adopt the same approach in considering the submissions made in this case.
I shall do the same. The wife’s conduct in this case, as set out in my original judgment, and above, plainly justifies a costs order being made on an indemnity basis, which conduct has been completely out of the norm, and has certainly been unreasonable to a high degree. There is no doubt that she has engaged in litigation misconduct. This is one of the four categories of conduct identified by Mostyn J in OG v AG [2020] EWFC 52, at §38, where he said: “… there is litigation misconduct. Where proved, this should be severely penalised in costs.”
I recognise that Mostyn J also stated at §90 in that case: “On an indemnity assessment one would normally expect about 90% of the actual costs to be awarded”. This, with respect to that phenomenal jurist, is in my experience a little higher than often found to be the eventual level of indemnity assessments, but I consider that a reasonable level can be set at between 80 and 85%. The wife here has caused the husband to spend his money on legal costs while incurring nothing herself, I am satisfied very consciously. In light of the wife’s egregious behaviour throughout these proceedings, I propose to direct that she should meet 85% of the husband’s claimed costs of £324,352, which I shall round to £275,000. The husband may deduct this from the lump sum to be paid by him following my order.
That is my judgment.
27 January 2026