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COSTS: Hashem v Ali Shayif and Radfan Ltd [2009] EWHC 864 (Fam)

Date:7 MAY 2009

(Family Division; Munby J; 17 April 2009)

Both the 'husband' and the 'wife' had known that the couple's marriage was bigamous at the time of the ceremony; at the end of the relationship the 'wife' sought ancillary relief from the court. The husband was resident in Saudi, and refused to participate meaningfully in the ancillary relief process. The wife argued that the English court could treat the English property she was living in, and another investment property, as beneficially owned by the 'husband', although legally owned by a family company whose shares were distributed between the 'husband' and his children. The company issued proceedings in the Chancery Division, seeking a possession order and declarations that the company owned the relevant property. The two sets of proceedings were consolidated. In the Chancery element of the proceedings the wife failed to make good her claim against the company and the children, except in as much as she established that the company could not remove her from the property she was living in without first giving her notice. However, in the ancillary relief element of the proceedings the court awarded the wife what she had asked for, that is a lump sum of £7,061,570, including company shares belonging to the husband. The court held that she was entitled to ancillary relief even though the marriage had been bigamous, because the impact of the bigamy had been marginal. In a separate agreement, the children agreed to buy-out the wife's shareholding in the company. At the costs hearing the wife sought her costs against the husband; the company and the children sought their costs against the wife, who was legally aided.

Given that the wife's claim for ancillary relief against the husband had been completely successful, the husband should pay the wife's costs of the proceedings, on an indemnity basis to reflect his failure to cooperate with the litigation process. Equally, the children were entitled to recover their costs of the proceedings from the wife, as she had lost her case against them, and the company was entitled to recover its costs of the proceedings from the wife, with a small discount in respect of one issue. The wife had failed to assess properly her prospects of success in the Chancery element of the proceedings once discovery had been made. However, the wife's obligation to pay the costs of both the children and the company formed part of the costs she was entitled to reclaim from the husband, as it was only because of husband's unhelpful approach that the wife had made a claim against the company and the children. The children were entitled to enforce their costs against the wife, who must then recover from the husband. However, as there was no set off as between the children and wife, because the buy-out of the wife's shares was the result of an agreement, separate from proceedings, in relation to the children's claim the wife, as a publicly funded litigant, was entitled to the protection of the Access to Justice Act 1999. s 11. As between the wife and the company there was a set-off, so no protection was available to the wife under s 11 in relation to the company's claim.