The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
[The judicially approved judgment and accompanying headnote has now published in Family Law Reports  1 FLR 559]
Non-molestation order - Ex parte - Woman sought to discharge - Agreement to provide cross-undertakings - Costs
The parties agreed to provide cross non-molestation undertakings but the wife's application to discharge an ex parte order had merit and would be reflected in a costs award.
The man and woman had a close relationship and as a result conceived a child. An ex parte order was made under Part IV of the Family Law Act 1996 which forbade the woman from going to the man's office, home, communicating or harassing, pestering or molesting him. The order was of one years' duration. A further hearing was listed 6 months' later. The woman sought the discharge of that order.
The parties had now given cross-undertakings not to molest one another.
Section 45(3) of the Act had been breached insofar as the woman had not been given the opportunity of a full hearing. Futhermore, the order did not state on its face why the court was satisfied that the application needed to be made ex parte and on the facts that route was entirely unjustifiable. As the parties had reached a compromise that issue did not need to be resolved but it was a matter for consideration in relation to costs. The woman's application to discharge the order, arguably, had merit.
The woman's costs were £49,000. Given that the woman's initial offer to provide undertakings was rejected, the starting point was that the woman should have her costs. On a standard basis the woman was awarded 70% of her costs or, £34,200.
The fully referenced, judicially approved judgment and headnote will appear in a forthcoming issue of Family Law Reports. A detailed summary and analysis of the case will appear in Family Law.
__________________________________________________________________ Neutral Citation Number:  EWHC 1125 (Fam) MATTER NO: FD13F01002
IN THE HIGH COURT OF JUSTICE FAMILY DIVISION Royal Courts of Justice Strand London WC2A 2LL Date: 27 February 2014
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Transcribed from tape by: W B Gurney & Sons LLP 10 Greycoat Place, London SW1P 1SB Telephone Number: 020 7960 6089
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MR J SOUTHGATE QC (instructed by Charles Russell LLP) appeared on behalf of the Applicant. MR P CHAMBERLAYNE QC (instructed by Penningtons Manches LLP) appeared on behalf of the Respondent. JUDGMENT MR JUSTICE MOSTYN:  This is my judgment on costs, given in circumstances where the substantive dispute between the parties has been compromised by the giving of cross non‑molestation undertakings which will expire on 20 May 2014. Had the matter not been compromised, in conformity with the movement towards much greater transparency in family proceedings, I believe I would have given my judgment in open court on a non‑anonymised basis. However, in circumstances where the parties have wisely compromised the main dispute, I consider that it is in such circumstances appropriate that any report of this judgment should be anonymised.
 The application before me is made by the respondent, is dated 5 February 2014 and seeks the discharge of an order made ex parte by District Judge Reid in the Principal Registry of the Family Division on 20 December 2013. That order was made under Part IV of the Family Law Act 1996. The jurisdictional basis for the application was that the parties were, in the words of ss 42 and 62, ‘associated persons' in that they are, in the words of s 62(3)(ea), people who have had ‘an intimate personal relationship with each other ... of significant duration'.
 Put shortly, the factual position is that for many years these two people, the applicant and respondent, had been in a close relationship which fell short of cohabitation, but which involved many sexual liaisons, as a result of which, in August 2013, the respondent fell pregnant.
 I am not going to describe the circumstances which led to the applicant applying ex parte for the order on 20 December 2013, but the order that was made on that day provided as follows:
(i) That the respondent was forbidden from going within 50 metres of the applicant's office address in the City.
(ii) She was forbidden from going within 50 metres of the applicant's home address in North London.
(iii) She was forbidden to communicate with the applicant, whether by letter, text message, email, telephone or other means, except through his solicitors.
(iv) She was forbidden from harassing, pestering or molesting the applicant, whether doing so directly or by proxy.
 The order provided that it should endure for one year, until 6.00 pm on 19 December 2014 ‘unless before then it is varied or revoked by the court'. The respondent was given permission to apply on 48 hours' notice to the applicant. Finally, a further hearing was listed on 16 May 2014, just under six months from the date of the original order, for reconsideration.
 The power to make an ex parte order in proceedings under Part IV of the Family Law Act 1996 is expressly given by s 45 of that Act. If s 45 did not exist, there would of course exist the same power but, by s 45, the power is put on an explicit footing. By subs (1), the court may make such an order where it is ‘just and convenient to do so'. By subs (2), in considering whether to exercise its powers to make an order ex parte, the court must have regard to all of the circumstances including:
‘(a) any risk of significant harm to the applicant or a relevant child, attributable to conduct of the respondent, if the order is not made immediately;
‘(b) whether it is likely that the applicant will be deterred or prevented from pursuing the application if an order is not made immediately; and
‘(c) whether there is reason to believe that the respondent is aware of the proceedings but is deliberately evading service and that the applicant or a relevant child will be seriously prejudiced by the delay involved ... in effecting substituted service ...'
 By subs (3), and this is a provision of key importance in the matter before me, it is provided:
‘If the court makes an order by virtue of subsection (1) it must afford the respondent an opportunity to make representations relating to the order as soon as just and convenient at a full hearing.'
 It is my opinion that subs (3) requires a full inter partes hearing very shortly after the ex parte order is made. It is my judgment that merely granting the respondent liberty to apply for such a hearing does not satisfy that provision. This is the view of the editors of Family Court Practice 2013, where they say:
‘Whenever an order has been made ex parte, there must be a full hearing as soon as just and convenient thereafter. There are no circumstances in English law in which it is appropriate to make an ex parte order without provision for review once an order has been served. Any such order would be unlawful. It is the duty of the court to list for a full hearing, as required by section 45 ...'
 That opinion is mirrored by the view of Ward LJ in the case of Horgan v Horgan  EWCA Civ 1371. He said this:
‘ Although that order is not the subject of the appeal, I feel bound to express that I am a little disconcerted by some aspects of the procedure that were adopted on this occasion. I am troubled by these matters in particular. First, accepting as I do that it was just and convenient to make an order without notice to the respondent, section 45(3) of the Family Law Act 1996 nevertheless requires the court to afford the respondent the opportunity to make representations relating to the order ‘as soon as just and convenient at a full hearing'. It is disappointing to note that the half‑hour appointment for that further hearing could not be fixed earlier than seven weeks after the matter first came before the court. An important order with a power of arrest ordinarily deserves - indeed demands - earlier reconsideration than that, and I am surprised that the matter was not brought back to the court within no more than 14 days. If it could not be effective within that time (if, for example, the respondent had not had [the] opportunity to obtain proper legal representation) the matter might need to be adjourned again. But to leave things in the air for seven weeks without notice to a respondent that he had the right to apply to vary or discharge the order seems to me to be wrong.
‘ The second concern is the fact that whereas the court is given the discretion to direct that the power of arrest may be attached to an order made without notice, and/or that the power of arrest may have effect for a shorter period than the initial order, those matters may not have been fully borne in mind by the district judge. Given the ease with which a power of arrest may be invoked by an applicant, the court should normally be wary about making an order of this kind for longer than is necessary to give the applicant adequate and necessary protection, but also to give the respondent the opportunity to be heard to oppose it. In this case, the order for the injunction and the effectiveness of the power of arrest were directed to endure for the whole year. The application was, however, ordered to be returned to the court within the seven‑week period. A better practice, in my judgment, would be to limit the time for the injunction and the power of arrest so that they remained effective for no [more] than the conclusion of the return hearing. Those dates ought ordinarily to coincide.'
 It can be seen that the order made in this case did not comply either with the terms of section 45(3) or with the editorial comment in Family Court Practice 2013 or with the views of Ward LJ. In my opinion, the order made in this case was a wrong order.
 I am aware, however, that the order made here reflected the usual practice in the Principal Registry. In my capacity as the head of the team drafting the body of standard orders for promulgation after the Family Court comes into being on 22 April 2014, I have been provided with a comment made by His Honour Judge Million on 25 November 2013 on the proposed new non‑molestation order. He has agreed that I may incorporate his comments into this judgment. He said this:
‘Experience shows that respondents commonly do not attend on the return date. As a result, the applicant (who has been abused by the respondent) then has to endure the inconvenience of attending at court twice to obtain the injunction, whereas the (abuser) respondent has to do nothing. Also, the respondent has to be served with two orders, not just one. This is expensive and time consuming and the two hearings are a waste of judicial resources. Many courts have therefore developed the practice of making an initial order for, say, 12 months but with the respondent being able to ask for a hearing to vary or revoke the order. The Court of Appeal has said that this is permissible.
‘However, if the respondent has to apply to obtain a hearing, he or she may have to pay a fee whereas if a simple return date had been set, no fee would have been payable because the review date would have been automatic. To avoid this potential financial prejudice, the order should contain a paragraph which merely requires the respondent to ‘request' (not ‘apply for') a hearing to vary or revoke. Experience in routine county court cases shows this method to be simple, effective and efficient. People may write a letter with a request or sometimes just come to the court counter and ask for a hearing.'
 It would seem that the order made in this case reflects the practice referred to by Judge Million. I do recognise that there is strong tension here between the allocation and use of the court's most valuable resource, which is time, and the principle that justice should be fully afforded to a respondent against whom an ex parte order has been made. With all due respect, I have to say that the practice referred to by Judge Million does not conform with the statutory provision, namely s 45(3), or with the authority of the Court of Appeal in Horgan, to which I have referred. It seems to me that, here, there is a danger of a practice having arisen which sacrifices principle on the altar of expediency.
 I asked both leading counsel here, each of whom is extremely experienced, if they had any suggestion for resolving the dilemma which is presented. Mr Chamberlayne QC suggested that there should be a practice which met the concerns which provided as follows: namely, that the return date should be listed, say, 14 days after the initial ex parte order had been made but that the respondent ought to confirm in writing, seven days before the return date, both to the applicant and to the court, whether he in fact wished to attend on the return date and to argue for variation or discharge of the order; and that if the respondent failed to write to the court within that period, it would be open to the applicant to notify the court that the return date should be vacated and to invite the court to extend the injunction as a matter of box work. That proposal seems to me to meet and fairly balance the competing considerations. Were that procedure to be adopted, the present practice of saving court resources would be preserved but at the same time a respondent who wished to have a full hearing - to which s 45(3) entitles him - would be able to have one.
 I now turn to the general principles that should apply on an ex parte application made in Part IV proceedings. It is agreed at the Bar that the principles which have been collected in a number of decisions - including three of my own, which are most recently summarised in my decision in UL v BK (Freezing Orders: Safeguards: Standard Examples)  EWHC 1735 (Fam) - do apply fully to proceedings under Part IV of the Family Law Act. I would note that the principles which have been collected in my decision in UL v BK have recently been approved as being applicable in Children Act 1989 proceedings by the Court of Appeal in the decision of Re C (A Child)  EWCA Civ 1412, at para 20.
 In my decision in UL v BK, I made it clear that an application for ex parte relief could only be justified where the matter was one of ‘exceptional urgency' and that, at the very least, ‘short informal notice must be given to the respondent unless it is essential that he [or she] is not made aware of the application'. I stated at para 51, and in my judgment this is equally applicable to the proceedings with which I am concerned, that:
‘(v) ... No notice at all would only be justified where there is powerful evidence that the giving of any notice would likely lead the respondent to take steps to defeat the purpose of the injunction, or where there is literally no time to give any notice before the order is required to prevent the threatened wrongful act. Cases where no notice at all can be justified are very rare indeed. The order of the court should record on its face the reason why it was satisfied that no or short notice was given ...'
In my judgment, that principle applies fully to an ex parte application made under Part IV of the 1996 Act. In UL v BK, I went on to say this:
‘(vi) Where no notice, or short informal notice, is given the applicant is fixed with a high duty of candour. Breach of that duty will likely lead to a discharge of the order. The applicable principles on the re‑grant of the order after discharge are set out in Arena Corporation v Schroeder  EWHC 1089 Ch at paragraph 213.
The importance of candour in these applications cannot be overstated.
 The re‑grant test, as set out by Mr Boyle QC in Arena Corporation v Schroeder  EWHC 1089 (Ch), is in nine propositions. In my judgment, that does apply in Part IV proceedings, but it is to be tempered by the fact that the Part IV proceedings are not financial proceedings, whereas plainly Mr Boyle QC, in devising his nine propositions which drew upon many authorities, was concerned with a commercial dispute that was purely monetary.
 Plainly, in Part IV proceedings the refusal to re‑grant, as he says in proposition 7, ‘should not be allowed to become an instrument of injustice'. If an ex parte order has been discharged because of, say, lack of candour or because notice ought to have been given but it is clear that the applicant is in need of protection, it would not be right - and it would be unjust - if the principles in Arena Corporation were applied to refuse to re‑grant the application.
 In this case, the order that was produced by the court did not say on its face why the court was satisfied that the application was made ex parte and the attendance note of the hearing gives no reasoning by the judge as to why she was so satisfied. I did not hear argument in this case to its conclusion, but I can say that I had formed the clear view - and admittedly it may have been a view that Mr Southgate QC would have persuaded me to alter - that this was a case where the lack of any notice at all was unjustifiable.
 Further, and this much was accepted by Mr Southgate QC in his submissions to me, it was obvious that the applicant was going to face considerable problems in satisfying me that he had fully complied with the duty of candour to which I have referred, but I do not need to make any further findings in this regard in circumstances where the parties have wisely agreed to compromise the matter by them each giving an undertaking not to molest the other, which undertaking will endure until 20 May 2014.
 For the purposes of adjudicating on the question of costs, the place where I should start is the offer that was made by the respondent to compromise this matter on cross undertakings. The offer was made on 28 January 2014. It was rejected on 30 January 2014 in these terms:
‘My client ... does not agree to replace the order with mutual undertakings. He simply does not feel that your client would adhere to her undertakings based on her previous conduct. The appropriate time for the court to consider this matter further is on 16 May 2014.'
 For the purposes of making the decision that I do in relation to costs, I record that I do not understand the stance that was then taken. To breach an undertaking is an extraordinarily serious matter which would, on the facts of this case, possibly lead to imprisonment.
 In circumstances where that offer was made - which, in my view, was unwisely turned down - my starting point is that the respondent is entitled to her costs. My view in that regard is fortified by my preliminary view of the merits of this matter. I had formed a clear provisional view, but I emphasise that Mr Southgate QC may have changed my mind, that her application for discharge of this ex parte order had merit; whether it would have been re‑granted by me is another matter. I express no opinion on that, not having heard full argument on the topic.
 In view of the fact that the compromise reflects what was offered, it is clear to me that the starting point is that the respondent should have her costs. In my view, this is not a case where the respondent is entitled to indemnity costs. Indemnity costs are awarded in cases only where there has been some conduct by the party liable to pay the costs which takes the case out of the norm - see in that regard Three Rivers District Council & Ors v Governor and Company of the Bank of England  EWHC 816 (Comm), per Tomlinson J (as he then was).
 This case having been listed for a day, it is incumbent upon me to assess costs. The respondent's costs are just short of £49,000.
 Before the Jacksonreforms took effect on 1 April 2013, the only difference between an order for standard costs and indemnity costs was upon whom the burden of proof of demonstrating that an item was or was not unreasonable fell. However, with the introduction of the Jacksonreforms, the two bases of assessment are now completely different. Now, a standard order is dealt with under a new prescription provided by CPR 44.3(2) and CPR Practice Direction 44, paragraph 6.2, whereby the court will on a standard assessment:
‘(a) 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 ...'
I agree that the effect of that is to deflate or drive down the yardstick which would otherwise have been applied.
 I have invited counsel to give me their anecdotal experience as to the usual percentage tariff that is allowed on a standard assessment. Mr Chamberlayne QC was of the view that it laid between 70‑80%, Mr Southgate QC that it was around 66%. In my view, the correct percentage yardstick which I should take for the purposes of assessing these costs on the standard basis is 70%. In my opinion, that gives rise to an entitlement by the respondent to costs of £34,200. That is the award I make, which will be paid within 14 days.