SUSAN ELIZABETH HORTON v. GERARD FRANCIS HORTON

IN THE COURT OF APPEAL

BETWEEN

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JUDGMENT

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Kempster, J.A.:

1. On 4th May 1984, in the course of an application by a wife Petitioner for ancillary relief, Power J made an order, by consent of the parties, which recited an undertaking by the Respondent husband to undergo a medical examination at the Petitioner's expense so that she might temporarily insure his life, at least to the value of two lump sum payments he was to make for her maintenance, and thereby obviate the risks of transferring to him certain interests in property meanwhile.

2. The Respondent submitted himself to a medical examination but declined to take the usual related steps of disclosing to insurers the names and addresses of his doctors and of authorising them to furnish details of his medical history. As a result no policy on his life was forthcoming. The Petitioner who, having regard to the information which the Respondent furnished about his health, could be forgiven for thinking that he was trying to put every obstacle in her path, issued a Summons ostensibly for an order for compliance with but effectively for the construction of, the undertaking.

3. The Summons first came before Deputy Judge Barnett on 26th November 1984 and then, having been adjourned for the consideration of evidence filed late by the Respondent, on 15th April 1985. The hearing continued until the 18th when a further order, giving agreed directions as to the implementation of the undertaking, was made. The question of costs was reserved for further argument. On the 23rd April the Deputy Judge ordered that the Petitioner should have her costs up to and including the 29th June 1984 and the Respondent his costs thereafter.

4. The rights and wrongs of the order as to costs made in these leisurely and doubtless expensive proceedings have now been canvassed before us, by leave and in the course of a hearing interrupted by a gap of some 5 months, on an appeal by the Petitioner. She considers that she should have been awarded the whole of her costs of the Summons. The order for costs in her favour up to 29th June 1984 is not challenged by the Respondent.

5. In his relevant Ruling the Deputy Judge explains the significance of the date, 29th June 1984, in these words:

"On 29th June 1984 the Respondent's solicitors wrote to the Petitioner's solicitors with an offer that the Respondent would provide the required information if the Petitioner and her 2 daughters would convenant by deed not to obtain, use or try to obtain or use any information disclosed to the insurers by the Respondent's doctors. The summons should be withdrawn with no order as to costs. The offer was open to 3rd July. The offer was repeated by telex dated 20th August, although the then time limit of 10 a.m. the following day was rather unrealistic, not least because it was the middle of vacation."

These considerations did not warrant the order as to costs after the date in question contends the Petitioner in her Notice of Appeal. "On the contrary the order is to be supported on additional grounds" contends the Respondent in his Notice under RSC 0.59 r.6(1)(b).

6. Since the agreed order of 18th April 1985 granted to the Petitioner the relief she had sought she might, prima facie, have expected to recover the whole of her costs on the footing that, since the Respondent's offer of 29th June 1984 had not included the payment of her costs to date, she was entitled to prosecute the Summons to a hearing in order to secure the appropriate order. But the agreed order also incorporated provisions, sought by the Respondent prior to completing the insurance company's forms, safeguarding the confidentiality of personal medical information furnished for the purposes of the required policy. Until the third day of the substantive hearing of the Summons such safeguards had been refused by the Petitioner in the supposed interests of the daughters of the marriage.

7. What was said by Lord Diplock in relation to an appeal from the exercise of a discretion to grant or refuse an interlocutory injunction equally applies to appeals from the exercise of discretion in relation to costs:

"- an appellate court, including your Lordships' House, must defer to the judge's exercise of his discretion and must not interfere with it merely upon the ground that the members of the appellate court would have exercised the discretion differently. The function of an appellate court is initially that of review only. It is entitled to exercise an original discretion of its own only when it has come to the conclusion that the judge's exercise of his discretion was based on some misunderstanding of the law or of the, evidence before him - there may also be occasional cases where even though no erroneous assumption of law or fact can be identified the judge's decision to grant or refuse the injunction is so aberrant that it must be set aside upon the ground that no reasonable judge regardful of his duty to act judicially could have reached it. It is only if and after the appellate court has reached the conclusion that the judge's exercise of his discretion must be set aside for one or other of these reasons, that it becomes entitled to exercise an original discretion of its own.

Garden Cottage Ltd. v. Milk Board ⁽¹⁾. Did the Deputy Judge in the instant case demonstrate any misunderstanding of the law or of the evidence before him: Has he been shown manifestly to have erred and then to have "exceeded the generous ambit within which a reasonable disagreement is possible"? G. v. G. ⁽²⁾.   "Yes" answered Mr. Payne who appeared on behalf of the Petitioner at the outset of this appeal. "He indulged in speculation as to the result of a more positive reaction to the Respondent's offer of 29th June 1984 and upon the outcome of such speculation held that the Petitioner had continued the proceedings unnecessarily since 6th July of that year.  He thereby placed significant weight upon an irrelevant consideration. At the adjourned hearing Mr. Ching made the same point on behalf of the Petitioner by way of reply. He added that a party to litigation should not feel obliged to make a counter offer in response to an offer made by the other party which does not satisfy him. In my opinion both these submissions are valid. The award of costs to the Respondent after 29th June 1984 upon the basis of speculation exceeded the generous ambit within which reasonable disagreement is possible.

8. Since the parties had to resort to a hearing of the Summons before the issues arising between them as to the construction of the consent order of 4th May 1984 were subsumed in an agreed order, partly in favour of the Petitioner and partly in favour of the Respondent, the relative success of the parties can, in my opinion, be reflected only by so varying the order as to costs made on 23rd April 1985 as to substitute for the requirement that the Petitioner pay the Respondent's costs as from 29th June 1984 a direction that the Petitioner and the Respondent pay their own costs after that date.   I would allow the appeal accordingly.

Li, V. -P.,

9. I am in agreement with my brother Kempster. There is very little useful that I can add. My only comment is that it is a pity that the appeal has taken so long. In my opinion, as Mr. Ching rightly conceded, there is very little disagreement or dispute in matters of law in this appeal. The fact remains that whereas the Respondent in his offer on 29th June consciously or unconsciously demanded something more than he was entitled yet, on 6th July when the Petitioner rejected the offer, she also rejected the request for assurance on the matter of confidentiality to which the Respondent was entitled. It is for this reason that I feel that the parties should pay their own costs as from the 29th June 1984.

Power, J.

10. I also agree that the appeal should be allowed as proposed.

(1)    (1984) 1 A.C. 130 at p. 137

(2)    (1985) 1 W.L.R. 647 at p.p. 651 and 652