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Family analysis: Richard Todd QC of 1 Hare Court and Christopher Wagstaffe QC of 29 Bedford Row believe the court failed to address the issues in an appropriate manner in a case where a separating couple had amassed a combined legal bill of £1.3m on all aspects of their dispute (including the children proceedings) following what was described by the judge as 'titanic litigation'.
Seagrove v Sullivan  EWHC 4110 (Fam),  All ER (D) 61 (Dec)
The Family Division adjourned a hearing in respect of financial matters and required the parties to return to court with a single composite bundle of documents, in circumstances where the relevant practice directions had not been complied with.
What have been the key features of this 'titanic litigation'?
Richard Todd QC (RT): The dispute involved many different issues:
What were the issues around property?
Christopher Wagstaffe QC (CW): It was not just the whole of the equity in the property that was in issue but the valuation of the property as well. Without going into detail, the rise in house prices generally would indicate that the value of the relevant property was rather higher than the single joint expert had suggested--a difference of about £2m if the rise in the value of the relevant property matched the rise in house prices generally since the date of purchase. A challenge to the value may or may not have succeeded, but it is of relevance that both the value of the property and the extent of the borrowing secured against it were in issue in the case. All in all, the provision sought by the applicant was for something in excess of £1.6m plus child maintenance and school fees. Excluding that part of her overall costs that related to the (fully contested) residence/contact dispute, the mother spent something like £600-£650,000 pursuing a claim for an award in excess of £1.6m. There is undoubtedly a wider debate to be had about the cost of litigating this sort of dispute generally, but the criticism that she spent on legal fees almost three times what the claim was worth is, frankly, some way wide of the mark.
What are your thoughts on the criticism from the judge on the failure to settle the case?
RT: The £1.3m of costs included the considerable costs of fighting the fully contested residence/contact hearings, which were not before the judge. It was also gross of VAT--in my opinion the judge appeared keen to embrace a figure which would paint the legal profession in the worst possible light.
The effect of the Part 36 offers was that there was a considerable burden of costs which would fall onto the party who 'lost'. That was a necessary part of the negotiation process. We did everything to try and settle the case--offers and even a private financial dispute resolution (FDR) (despite there being no procedure for that in Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) cases).
We had asked for time to conclude settlement negotiations at 10.30 am on the morning of the hearing. We asked for 15 minutes and this was initially refused. When eventually we were given the 15 minutes, the case settled. This was the culmination of strenuous efforts by both sides to reach a negotiated settlement.
Regarding the criticism as to the court bundles, the judge was given a reading list (which was less than the 350 pages) and two days of listed court time to read it. The new bundles which had arrived in court were for assisting the witnesses--the judge was not invited to read them.
As to compliance with the Family Procedure Rules 2010, SI 2010/2955, PD 27A (FPR 2010), Moor J had directed both the trial template which we were using and that there should be more than one bundle, after a pre-trial review (PTR) which lasted the best part of two days. The comments of Holman J that the time estimate (accompanied by the detailed trial template) Moor J had ordered was 'ridiculous' (para ) were surprising as the core bundles approved by Moor J at the PTR were the basis for the trial bundles. They had been in front of him on that occasion and were substantially the same as those before Holman J (save for two new statements and a few miscellaneous documents).
CW: It is of course always unfortunate that parties who have litigated for (say) 18 months only enter into sensible discussions at the door of the court. However there are many reasons why that might be the case, and simple intransigence and unreasonable conduct is not necessarily the only answer. In some cases, the real strength of one parties' case only becomes apparent once their arguments for trial are fully deployed in skeleton arguments. In another, a party might be indulging in simple brinksmanship. Some cases settle even later in the day, possibly even after the evidence has been heard. Settling earlier rather than later is almost always preferable, but settling late is better than not settling at all.
What would have happened if the parties had not settled?
CW: Whoever had lost at the conclusion of the court's truncated hearing, had the case not settled, might well have had extremely fertile grounds for an appeal. The law requires the entire course of dealings between the parties to be taken into account, the direction at the pre-trial review requires the parties' solicitors to agree the content of the trial bundles, and yet the trial judge was proposing to refuse to consider 90% of the material produced in accordance with those two matters. For the successful party to have to spend even more money defending whatever decision was reached on appeal was an unattractive prospect.
Was this case a missed opportunity?
CW: The following day, when presenting to the court the settlement achieved by the parties, I raised with the judge the fact that, although the Law Commission and a host of senior judges have called for legislation to confer upon the courts limited discretionary powers to deal with parties who have entwined their lives and financial affairs without marrying, Parliament has so far chosen not to legislate. That is Parliament's prerogative, of course, but that means that parties in the positions of Ms Seagrove and Mr Sullivan must have their cases dealt with under the general law of trusts. That, as the Supreme Court has made clear, necessitates a survey by the court of the entire course of dealings between the parties--which in this particular case spans over twenty years, encompasses five properties, three children and various business and other concerns (including a special school for disabled children). Such a survey invariably takes time and money, so it seemed to me that an opportunity presented itself for a judge to comment on the fact that the current law had some deeply undesirable practical consequences, including the cost of litigating such disputes.
The judge declined to say anything on that score, commenting rightly that whether some limited extension of the court's powers to unmarried couples should be provided for was a matter of social policy for Parliament. That is right, of course, but there are nonetheless things that judges can do and say on an issue such as this without crossing the line as to what is impermissible--one being to comment on the fact that the current state of the law requires a great deal of time and money to be expended in order to demonstrate that a claim based in trust is valid (or not, as the case may be). Given that there is in fact at the moment a Bill before the House of Lords dealing with this very issue, such a comment might well have been particularly opportune: so to comment in the way the judge did on the absurd amount of money that had been spent, without going into why it was necessary (at least on each party's case) for that amount of money to be spent, seemed to me to be a rather missed opportunity.
What will be the impact of this case on similar cases?
CW: The judge rejected my proposition that the FPR 2010 do not apply to TOLATA 1996 cases in any event. He refers in his judgment to the opening words of PD 27A which confirms that the practice direction applies to all hearings in the Family Division. However PD 27A is of course a practice direction under the FPR 2010. Under FPR 2010, 2.1, these rules and the relevant practice directions apply to 'family proceedings' in the High Court or in the Family Court--but TOLATA 1996 claims are not family proceedings. Notwithstanding the judge's comments, it seems to me to be highly arguable that the practice direction referred to at length by the judge simply did not apply to the TOLATA 1996 claim.
It might be argued that the opening words or FPR 2010, 2.1 'unless the context otherwise requires' import TOLATA 1996 cases that are being heard together with ChA 1989, Sch 1 cases into the scope of the FPR 2010, but the judge was not addressed on this point. (The advocates had, by the by, been given no notice that the court was proposing to raise any point in relation to the applicability of the FPR 2010 to a civil claim, and as neither party had indicated that any point was being taken on the applicability of the FPR 2010, PD 27A and so forth, none of the advocates had researched the matter in any detail.) Anybody who, on the basis of this judgment, takes the view that all TOLATA 1996 cases in the Family Division are covered by the FPR 2010 and by extension by PD 27A and other practice directions might wish to think about this point in a future case.
How might this decision affect the advice lawyers give their clients in such cases?
RT: It will have no effect at all. The practice directions on bundles are already in force and the profession is already aware of them. We were alive to them before Moor J and he had directed a departure from them.
Interviewed by Anne Bruce.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
This News Analysis was first published in LexisPSL Family. Click here for a free one week trial.
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