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COSTS/ANCILLARY RELIEF/APPEALS: Charman v Charman (Security for Costs) [2006] EWCA Civ 1791

Date:11 DEC 2007

(Court of Appeal; Sir Mark Potter, Thorpe and Wilson LJJ; 11 December 2006)

At the conclusion of the financial relief proceedings the husband, a resident of Bermuda, had been ordered to pay the wife a lump sum of £40m, £12m of which was to be paid on or before 31 August 2006. When the husband failed to pay £4m of the £12m by the due date, the wife was granted a freezing order up to the value of the outstanding liability. The husband subsequently paid the outstanding £4m, but no interest; the court directed that he was to pay the remaining £28m on or before 1 March 2007. The husband was given leave to appeal against the judge's award, and was granted a stay of execution in respect of the remaining £28m. The wife argued that the permission to appeal should be subject to a condition that the husband provide security for the outstanding £28m plus interest and also that the husband should provide security for the wife's costs of the appeal.

The court would not assume that the husband's determination to protect what he regarded as his wealth generated entirely by his own efforts would necessarily extend to refusal to pay under a judgment of the Court of Appeal if his appeal were unsuccessful. Events pre judgment were merely background; it was events post judgment which were of concern to the appellate court, in particular whether there had been a failure to pay under the judgment and whether there was reason to suppose that if the appeal failed the judgment would not be paid and, if so, whether the judgment was amenable to the normal procedures for enforcement. The husband should not be treated as in breach of any order of the court at this stage and his likely failure to make payment on 1 March 2007 should not be regarded as a compelling reason to make an order for security. However, security for costs in the sum of £225,000 should be ordered under CPR Part 25.13(2)(a) on the basis that the husband was resident outside the jurisdiction, not in a Brussels or Lugano Contracting State.