Case No. BV19D14014

73.I referred above to the accusatorial versus the inquisitorial. Of course one benefit of the former is that the judge is given arguments of law by each side. In the inquisitorial, the judge may well be on his or her own! Thus it was here. I would have welcomed argument from equally specialist junior counsel. The former husband of his own admission said he couldn’t understand the exchanges and arguments during the closing submissions on these points and, with full respect, relatively few lay parties would. Accordingly, I conceded to counsel for the former wife that I had no obvious case law authorities to counter his argument. There may be some but I’m not aware at the preparation of this judgement. Deputy district judges do not have legal clerks! But equally I said that I didn’t find the authorities referred to me, although helpful in respect of remarks made, dealing with the situation before me74.Instead, I rely on 2 key elements namely what is no order as to costs in the sharing process and what does it mean fairly to share the marital partnership assets.75.At its most straightforward, no order as to costs means simply the court makes no order for either party to pay the costs of the other. The default starting point that each is responsible for their own costs. Simple and straightforward. But that’s not in reality and practice how it often works. The costs owing by one party appear on the balance sheet required by the Rules for the hearing. It’s a liability. It forms part of the needs with recent Court of Appeal blessing, as above, that it should be, or could be, part of the needs provision. Immediately, no order as to costs becomes meaningless. Because the other party is paying those costs either on a needs basis or as part of the sharing process if they are deducted before equality sharing. Yet without any attempt at analysing if they are reasonable or fairly incurred; the argument rightly made by several of the judges in the reported decisions above. To provide for the outstanding costs of one party in the substantive award and then simply to say no order as to costs is, bluntly, disingenuous, ignoring or even acknowledging the fact that a costs order has indirectly been made. This is why I believe the no order as to costs starting point and default from 2003, then in the immediate aftermath of White when I remember we were still working out what it meant in the dramatic redirection of financial remedies work, doesn’t do the justice now as it was intended or expected. Specifically in the sharing scenario because I am adamant this discreet judgement only relates to that scenario.76.No order as to costs on the understood basis that each party meets all their own costs is perfectly good and admirable, fitting the analogy as a marital partnership, when it is their own costs as a totality. Immediately it becomes only part of their costs being those outstanding, relatively arbitrarily at a point in time such as the date of the settlement at FDR or final hearing, the simple default of no order as to costs must be questioned in my assessment. It is particularly so when there has been a very different pattern of behaviour of the separate spouses. One may have taken their costs funding from marital assets and the other from their own non marital assets, with the former then divided equally net of the taken costs and the latter being held separately. One of them as in the case before me may have taken a substantial amount from the marital assets and still owe their lawyer a fairly substantial amount and the other much less so. One may have paid from existing resources and owe nothing and the other have a litigation loan or owe family and friends on a goodwill basis shown as a liability. I believe the no order as to costs needs unpacking as to the impact in each of these separate situations. How much does it mean accepting liability for the relatively random amount owing at a particular point in time and how much is it a more fundamental understanding of individual responsibility for legal costs of proceedings? As it happens, I only have to decide on the narrow circumstances before me. But I think generally there needs to be a wider discussion on this aspect.77.I am clear that the no order as to costs principle with each party being responsible for their own costs cannot in a case like this lead to arbitrary and unfair outcomes, with relatively random and very different amounts which may be owing at a particular point in time of the settlement by each. Instead, it should be a more holistic, rounded and comprehensive analysis of the costs incurred by both parties in coming to the point where the overall marital assets are divided up and on the basis that each would be responsible for their own costs.78.Secondly, what does it mean to share the marital partnership assets? We were introduced to this in White and yet 20 years on we are still working out some of the consequences; such is the impact of dramatic law reform. But in the circumstances of the case before me, what does it mean? 79.Perhaps a starting place is professional partnership. Those with the unhappy experience of a professional partnership breakup know about the turmoil and distress associated with the drawing of accounts as at a particular date of the acknowledged ending of the partnership. Once prepared, the division according to partnership interests occurs. In essence this is what the family Court is doing in a sharing case. Only professional partners after a partnership breakup and before the sharing out of the partnership funds do not support each other, pay rental for the other’s property, pay grocery bills, and so on. And this is the element which sometimes (but not always) makes it difficult for the family Court to go back with purity and precision to the date of separation and then divide up. Consequently as well this is why we have so many reported decisions on how to treat post separation income and resources. It is why the family Court has a discretion; to deal with these complicated and often facts specific situations.80.But it may well be for example that in a professional partnership dispute where there remains goodwill, now former partners may agree for an advance for a partner in desperate financial need or indeed for legal and accountancy assistance in the partnership dissolution process. But this is not a gift, provision for needs or similar. It is an advance, an early payment, goodwill assistance for cash flow purposes as happens between partners even in a dissolution and we see happen between divorcing spouses from time to time. But to be consistent anticipated by our law as it presently stands and to be consistent for a party being responsible for their own legal costs in a sharing scenario, it is unfair for the significant costs drawn by one party out of the marital partnership assets not to be notionally brought back in before the division of those partnership assets of equal partners. To do otherwise is to give even greater encouragement to the unilateral action by one partner to the disadvantage of the other in the period after the end of the partnership and before resolution of accounts. Instead to recognise it as an advance, on account, a provision for needs out of what will be the eventual division, recognises what I suggest is the financial provision law in England and Wales from White onwards on this narrow and distinctive issue of legal costs being incurred and withdrawn from the marital partnership assets81.The costs, precisely known from their lawyers, which either party draws down from the marital partnership assets to fund their legal costs in the resolution of the marital partnership dispute shouldn’t be theirs alone, safeguarded from the division process and consequently meaning there is less in the pot for division. But more in the way of an advance from the marital partnership assets due to them on the division, whether by agreement, at an FDR or by ADR settlement or by judicial adjudication. As an advance, perhaps even an agreed advance to help fund legal costs in the partnership dispute, it is to be brought into account in the division. That taking into account, partnership funds already received, is not to be characterised as an add back in the way that the authorities refer to wanton dissipation. The fact that it is brought back in the arithmetic calculation should not be a reason for legal confusion with the so-called add back principle. It is more by way of an advance, a payment out, on account, from the marital partnership resources.82.This is a judgement for this specific case. I appreciate there may be other instances where instead of drawing down from the marital resources for legal fees, one party may do so for disputed high living expenses which may be merely a continuation of the marriage and indeed may have been a friction of the marriage. Should this be akin to an advance from what will subsequently be received, especially when an adjudication is needed on that expenditure? This judgement does not attempt to decide because it doesn’t have to83.Another situation arising is that one spouse, without much lawyer involvement, feels completely confident of negotiating, perhaps litigating, and does so perfectly well whereas the other requires substantial handholding, as solicitors would describe it, many attendances and considerable assistance, including perhaps complete ignorance of any of the marital finances and so starting the disclosure exercise from scratch. They will have very different needs to draw down for their legal expenses. I think that is a reasonable consideration to be taken into account. But it needs to be known how, for the profession to settle cases84.Accordingly having given careful consideration both during the closing submissions and then subsequently in preparing this reserved written discrete judgement when I have gone back to the authorities provided to me by counsel for the former wife, I do not find that on bringing back legal costs drawn from marital resources predominantly by one of the two spouses in order to have a fair division of the marital assets I am going against any of the higher court decisions or the remarks made by the judges in those decisions. Indeed I reject the notion of add back in as far as this has similarities with the high burden required in the quasi-conduct context. Instead, I believe this can be the only fair and just outcome in a sharing partnership case by bringing back the amount already withdrawn by each spouse for their legal fees and thereafter dividing the gross amount to establish the then share of the marital partnership resources.85.I have already made clear that I think the question of the costs payable by one spouse to the other should wherever possible in a sharing case, the keywords in my opinion, be quantified and separate to the marital partnership division. I do not consider withdrawing funds from the marital partnership resources for legal fees, even although I was concerned about the level of those fees, represents litigation misconduct on the present state of judicial guidance and/or professional practice. Although in this case I didDDJ David Hodson 14 November 2022