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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Hirachand v Hirachand & Anor [2021] EWCA Civ 1498 (15 October 2021) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2021/1498.html Cite as: [2021] WLR(D) 534, [2022] WLR 1162, [2021] Costs LR 1243, [2022] 1 WLR 1162, [2021] EWCA Civ 1498 |
[New search] [Printable PDF version] [View ICLR summary: [2021] WLR(D) 534] [Buy ICLR report: [2022] 1 WLR 1162] [Help]
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Mr Justice Cohen
FD17F00103
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE SINGH
and
SIR PATRICK ELIAS
____________________
NALINI HIRACHAND |
Appellant/ First Defendant |
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- and - |
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(1) SHEILA HIRACHAND |
First Respondent/ Claimant |
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(2) KATAN HIRACHAND |
Second Respondent/ Second Defendant |
____________________
Constance McDonnell QC and Sophia Rogers (instructed by Moore Barlow LLP) for the Respondent
Hearing date: 29 June 2021
____________________
Crown Copyright ©
Lady Justice King:
i) By an un-appealed order of 29 November 2019, it was declared that the Appellant had pursuant to CPR rule 8.4 been debarred from taking part in the hearing. By the same rule she was however permitted to 'attend'. The issue is whether the judge erred in proceeding with the trial in circumstances where the Appellant, who is deaf, attended the hearing conducted remotely on Skype from the care home in which she lives assisted throughout by a care worker.
ii) In determining the lump sum award payable to the Respondent, the judge included the sum of £16,750 as a contribution towards the Respondent's liability to pay a Conditional Fee Agreement ("CFA") success fee. The issue is whether it is wrong in law for a judge to include such a contribution in an maintenance-based award calculated by reference to the financial needs of a claimant.
Background
The Proceedings
"Consequence of not filing an acknowledgment of service
8.4
(1) This rule applies where –
(a) the defendant has failed to file an acknowledgment of service; and
(b) the time period for doing so has expired.
(2) The defendant may attend the hearing of the claim but may not take part in the hearing unless the court gives permission.
Filing and serving written evidence
8.5
(1) The claimant must file any written evidence on which he intends to rely when he files his claim form.
(2) The claimant's evidence must be served on the defendant with the claim form.
(3) A defendant who wishes to rely on written evidence must file it when he files his acknowledgment of service.
(4) If he does so, he must also, at the same time, serve a copy of his evidence on the other parties.
(5) ……
(6) …..
(7) …….
Evidence – general
8.6
(1) No written evidence may be relied on at the hearing of the claim unless –
(a) it has been served in accordance with rule 8.5; or
(b) the court gives permission.
(My emphasis)
"It is Declared that the First Defendant is automatically debarred from participating in the hearing of the claim pursuant to CPR rule 8.4 and from relying on any written evidence at the hearing of the claim pursuant to CPR rule 8.6."
"4. C's [the Respondent's] mother was previously represented in the proceedings but was declared to be automatically debarred from participating in the hearing as a result of multiple breaches of orders to file acknowledgement of service and evidence. Her solicitors have come off the record. The order debarred her from relying on any written evidence in response to the claim but the day before the hearing she sent a six page hand-written letter which I have read and which can only be seen as an opposition to the claim. It was accompanied by a short letter from the home manager of the care home where she resides.
5.C's mother was in attendance throughout this remote hearing. She is profoundly deaf and did not hear anything that was said but had the assistance of a worker in the home who sat with her and passed her notes so that she had at least some idea of what transpired. I did not hear from her during the hearing.
6. C's brother listened in throughout the hearing and assisted me on matters relating to the administration and size of the estate, his knowledge of his mother's finances and circumstances, and his approach as executor to the litigation."
Basis of the judge's award
i) £17,000 for therapy
ii) £48,169 + £32,000 representing income shortfall and loss of universal credit for a period of three years
iii) £15,000 for white goods/a replacement car
iv) £10,000 for rental deposit
v) £16,750 to meet the Respondent's CFA mark up,
a total award of £138,918.
CFA mark up
"55. I accept that it is appropriate for me to consider this liability as part of C's needs. I do so for largely case specific reasons. I am not making a large award (unlike in Re Clarke). It is not an award that permits of much elasticity. If I do not make such an allowance one or more of C's primary needs will not be met. The liability cannot be recovered as part of any costs award from other parties. The liability is that of C alone. She had no other means of funding the litigation."
The Appeal
"Ground One: the Court erred in proceeding with a trial by video-link, when by reason of the First Defendant's disability (profound deafness) and residence in a care home (closed to outside visitors due to the Covid-19 Crisis), the First Defendant was effectively denied access to the trial of a claim where her home and a substantial portion of her capital assets was at risk".
"Ground Two: the Court erred in law when it made an order for financial provision in favour of the Claimant which included a sum of £16,750 as a contribution towards the Claimant's liability to pay a CFA uplift. The exercise of discretion under section 9 of the Act to facilitate this aspect of the award was also therefore unlawful".
i) The Appellant has capacity to litigate. Notwithstanding that she had legal advice, she failed to comply with CPR 8.4 and 8.6. No application was made for permission to participate in the hearing or to file evidence, although the judge in the exercise of his discretion read the lengthy letter filed by the Appellant shortly before trial.
ii) The trial was conducted by Skype. It follows that all parties attended remotely.
iii) The claimant had a legitimate claim. The outcome (save potentially as to the sum of £16,750, the subject of Ground 2) is not susceptible to appeal.
iv) The award was a strictly needs-based award, assessed at a significantly lower figure than that which had been sought.
Ground One: Was there procedural irregularity?
Discussion: Ground One
Ground Two: CFA
"[94] In my view, I am entitled to take them into account both because they fall within the Claimant's financial needs under section 3(1)(a) and because they are debts incurred since the death and the court is enjoined to make the assessment at the date of trial not the date of death (section 3(5)). I am sympathetic to the Defendant's argument that these are not costs that could in law be awarded against the Defendant, but I think that I have to look at the reality of the situation or as Briggs J put it "in the real world"……
"[95] The current issue is different to the one Briggs J wrestled with. In this case I know for sure that the Claimant will have these additional liabilities to pay. In [Lilleyman] the Judge could not know who was paying the costs until after he had handed judgment down. This does not, however, mean that the Defendants have to indemnify the Claimant in relation to all her additional liabilities…."
"58. I think that it would not be fair on C for me to ignore completely her liability to her solicitors. But, I recognise that there is a risk of injustice to the estate, in particular if an appropriate Part 36 offer had been made, of which I am necessarily unaware at this stage of the proceedings. In addition, I flag up that I do not know the precise terms of the agreement and what is the definition of 'success'. If my award does not bring about the operation of the uplift, I will revisit this element of the award.
59. I cannot see how I can avoid some potential (and it is only potential) injustice to either C or the estate. All I can do is mitigate the potential by taking a cautious approach to this liability.
60. Bearing that approach in mind and knowing what I do of the case, I cannot envisage how it could be reasonably be thought that the chance of failure was a high chance. I propose to allow the figure, as part of C's needs, of £16,750, which approximates to a 25% uplift."
"14. The concept of maintenance is no doubt broad, but the distinction made by the differing paragraphs of section 1(2) shows that it cannot extend to any or every thing which it would be desirable for the claimant to have. It must import provision to meet the everyday expenses of living. In re Jennings, Deceased [1994] Ch 286 was an example of a case where no need for maintenance existed. The claimant was a married adult son living with his family in comfortable circumstances, on a good income from two businesses. The proposition that it would be reasonable provision for his maintenance to pay off his mortgage was, correctly, firmly rejected - see in particular at 298F. The summary of Browne-Wilkinson J in In re Dennis, Deceased [1981] 2 All ER 140 at 145-146 is helpful and has often been cited with approval:
"The applicant has to show that the will fails to make provision for his maintenance: see In re Coventry (Deceased) … [1980] Ch 461. In that case both Oliver J at first instance and Goff LJ in the Court of Appeal disapproved of the decision in In re Christie (Deceased) … [1979] Ch 168, in which the judge had treated maintenance as being equivalent to providing for the well-being or benefit of the applicant. The word 'maintenance' is not as wide as that. The court has, up until now, declined to define the exact meaning of the word 'maintenance' and I am certainly not going to depart from that approach. But in my judgment the word 'maintenance' connotes only payments which, directly or indirectly, enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him. The provision that is to be made is to meet recurring expenses, being expenses of living of an income nature. This does not mean that the provision need be by way of income payments. The provision can be by way of a lump sum, for example, to buy a house in which the applicant can be housed, thereby relieving him pro tanto of income expenditure. Nor am I suggesting that there may not be cases in which payment of existing debts may not be appropriate as a maintenance payment; for example, to pay the debts of an applicant in order to enable a him to continue to carry on a profit-making business or profession may well be for his maintenance.
(my emphasis)
"71. The above summary of the net estate ignores the parties' agreement that the four legacies of £25,000 each should be paid to Mr Lilleyman's grandchildren (as at the date of his death) regardless of the outcome of these proceedings. It also ignores the contingent liability for the costs of these proceedings, which I am unable either to quantify or to guess as to their likely incidence, as between the estate and Mrs Lilleyman. Counsel were united in submitting that I have no alternative but to leave the contingent costs liabilities entirely out of account, however unrealistic in the real world that might prove to be".
"26. I must in concluding express a real sense of unease at the remarkable disparity between the costs regimes enforced, on the one hand for Inheritance Act cases (whether in the Chancery or Family Divisions) and, on the other hand, in financial relief proceedings arising from divorce. In the latter, my understanding is that the emphasis is all on the making of open offers, and that there is limited scope for costs shifting, so that the court is enabled to make financial provision which properly takes into account the parties' costs liabilities. In sharp contrast, the modern emphasis in Inheritance Act claims, like other ordinary civil litigation, is to encourage without prejudice negotiation and to provide for very substantial costs shifting in favour of the successful party. Yet at their root, both types of proceedings (at least where the claimant is a surviving spouse under the Inheritance Act) are directed towards the same fundamental goal, albeit that the relevant considerations are different, and that there is the important difference that one of the spouses has died, so that his estate stands in his (or her) shoes.
27. I express no view on which of those fundamentally divergent approaches to costs is better calculated to serve the ends of justice, and in particular to promote compromise. I merely observe that the potential for undisclosed negotiations to undermine a judge's attempt under the Inheritance Act to make appropriate provision for a surviving spouse is a possible disadvantage of the civil litigation costs regime currently applied to such claims, by comparison with the regime applicable to financial provision on divorce. I consider that those fundamental differences in approach to proceedings having the same underlying objective deserve careful and anxious thought."
Discussion: Ground 2
Conclusion
LORD JUSTICE SINGH:
SIR PATRICK ELIAS: