View from the High Court – Offsetting costs against maintenance

We consider here an interesting case where the liability for costs from a former wife to her husband was, on Appeal, found not to be sufficient of itself to justify the postponement of maintenance payments payable the opposite way.

Divorce is rarely, if ever, a simple process however some are more complex and convoluted than others. So found Mr Justice Holman in the matter of Welch v Welch [2015] EWHC 2622 (Fam), describing “…the entangled complexities…” with regard to the parties’ relationship as capable pf being “…the subject matter of a book…”.

The matter at first instance had been dealt with by District Judge Hess, who had found Mrs Welch to be “…obstinate, unrealistic and obsessive…”, a sentiment with which Holman J agreed when he made an extended Civil Restraint Order against her to prevent any further litigation which she might have been contemplating. However, within all of the twists and turns of this particular matter, one issue which comes to the fore is that of the costs.

The original Order of District Judge Hess had provided for Mrs Welch to offset maintenance payments made by her former husband against her costs liability to him, and whilst Holman J found little merit in the vast majority of the issues before him brought by Mrs Welch, he did find some merit in re-examining the “…somewhat unusual order…” made by the District Judge in respect of this aspect.

Holman J noted

“On the basis that the applicant [the wife] will have a significant liability to pay the respondent’s costs as set out in paragraphs 9 to 11 of this order, and on the basis that the amounts of costs sought (subject to detailed assessment) is in excess of the total liability the respondent has to the applicant under the term periodical payments order of 9 September 2014, the respondent’s liability to pay periodical payments to the applicant under paragraph six of the order made on 9 September 2014 shall be suspended until such time as District Judge Hess shall further consider the matter following the outcome of the detailed assessments of the costs ordered at paragraphs 9 to 11 of this order and such other costs orders made from time to time hereafter.”

Holman J continued

“As I understand the thinking behind it, the maintenance order was made at the rate of £12,000 a year for a fixed term (having regard to the age of the husband) of six years. In other words, the total amount payable by the husband until the ultimate termination of the maintenance order would have started out as £72,000.

“However, pursuant to costs orders already made, it was being asserted that (subject to detailed assessment) the wife already owed the husband costs of around £70,000. Therefore, District Judge Hess obviously took the view that it was wrong and unjust that on the one hand there should be an unsatisfied debt by the wife to the husband for costs of the order of £70,000, and on the other hand that the husband should continue to be expected to pay, month in, month out, £1,000 a month to an ultimate total of about £70,000.”

This position, Holman J found to be somewhat “…rough justice…” as the purpose of the maintenance was to meet Mrs Welch’s basic needs rather than to improve her standard of living and whilst “…It may be that there simply is not room in this case to suspend the maintenance any longer, leaving her on the breadline, however great her costs debt to her former husband”

further observing

“It is not completely clear to me how, if the wife had a ‘basic need’ for the necessities of life of £2,000 a month, of which she herself could at best only contribute half by her own earnings, that ‘basic need’ could be justifiably put on hold in that way because of the outstanding amounts owed by way of costs… I have some reservations (I put it no higher) about the appropriateness of the order… on the facts and in the circumstances of this case.”