SCHEDULE 1 CHILDREN ACT 1989: A PRACTICAL GUIDE · 2016-03-10 · 1 SCHEDULE 1 CHILDREN ACT 1989: A...
Transcript of SCHEDULE 1 CHILDREN ACT 1989: A PRACTICAL GUIDE · 2016-03-10 · 1 SCHEDULE 1 CHILDREN ACT 1989: A...
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SCHEDULE 1 CHILDREN ACT 1989: A PRACTICAL GUIDE
Samantha Hillas, St Johns Buildings, Manchester
Ros Bever, Irwin Mitchell LLP, Manchester
WHO CAN APPLY?
A. Applicant acting in a parental capacity
1. A claim for financial provision on behalf of a child can be made by a parent,
guardian or special guardian of a child, or by any person who is named in a
child arrangements order as a person with whom a child is to live (para 1(1)
Sch1).
2. A child is defined in S.105(1) CA 1989 as a person under the age of
eighteen.
3. The child must live with the applicant: N v C (Financial Provision; Schedule
1 Claims Dismissed) [2013] EWHC 399 (Fam).
B. The child
4. Pursuant to para 2(1) Sch1, a child who has reached the age of 18 may
apply for an order (only PP or lump sum – see ‘Range of Orders’ below) if
he/she:
a. Is, will be or (if an order were made) would be receiving instruction at
an educational establishment or undergoing training for a trade,
profession or vocation; OR
b. There are special circumstances which justify the making of an
order.
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5. An application to vary a PP order can be made by the child himself if he/she
is over the age of 16 (para 6(4) Sch 1).
C. The Court’s own motion
6. The court can make an order under Sch1 at any time it makes, varies or
discharges a special guardianship order or any provision in a child
arrangements order with respect to the living arrangements of the child –
para 1(6) Sch 1.
7. The court may make a Sch1 order at any time where a child is a ward of
court (para 1(7) Sch 1).
AGAINST WHOM?
8. Generally speaking the Respondent to a Sch1 application will be the other,
biological parent of a child.
9. Athough Sch1 is not limited to unmarried parents (the claims of the child
cannot be estopped, notwithstanding concluded matrimonial claims
between divorced parents: MB v KB [2007] 2 FLR 586) almost all the
reported cases relate to claims by unmarried mothers against a child’s
biological father.
10. Pursuant to 16(2) Sch1 however, the Court’s power extends to making
orders against a party to a marriage or civil partnership in relation to whom
the child concerned is a “child of the family”.
11. A “child of the family” in relation to parties to a marriage or civil partnership
is defined in s.105(1) CA 1989 as either a child of both of them or any other
child (other than a foster child) who has been treated by both of them as a
child of their family.
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12. But there has to be a connection between the child and a prospective
respondent, either biologically or by reference to the payer’s married/civil
partner status:
a. An order cannot be made against a same-sex former partner where
there is no biological relationship or civil partnership: T v B [2010] 2
FLR 1966;
b. There is no jurisdiction to make an order against a father for the
benefit of the mother's children by a different partner: Morgan v
Hill [2007] 1 FLR 1480.
13. If the applicant is a child over 18, he/she can apply against either or both
parents (para 2(2) Sch1) as long as they do not live together (para 2(4)
Sch1) and no order was in force with respect to him prior to reaching the
age of 16 (para 2(3) Sch1).
HOW TO APPLY
14. An application under CA 1989, Sch 1 is defined as a financial remedy under
FPR 2010 r.2.3.
15. Applicants under Sch 1 are required to attend a mediation information and
assessment meeting (MIAM) before making the application: FPR 2010,
PD3A, para 13(1)(b), subject to exemptions (FPR 2010, r 3.8).
16. The application is made on Form A1 (FPR 2010, PD5A) and the fee is £215
(as at March 2016).
17. FPR 2010, r.9.18(A1)(a)(iii) sets out that Sch1 claims should be issued
pursuant to the short form procedure set out in Part 9, Chapter 5. In
practice, this means:-
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a. The court will fix a first hearing date not less than 4 weeks and not
more than 8 weeks after the date of the filing of the application - FPR
2010, r.918(1)(a);
b. Within 4 days of the application being issued, either the Court will
serve a copy of the application, the notice of hearing and a blank
Form E1 on the respondent (FPR 2010, r.9.18(1)(b)) or (if the
applicant requests it), the applicant may serve those documents -
FPR 2010, r.9.18(2);
c. The applicant can request that the application is dealt with under the
longer procedure pursuant to Part 9, Chapter 4 (FPR 2010,
r.9.18A(1)) and the court should determine that application in the
absence of the parties - FPR 2010, r.9.18A(3)(a);
d. The parties must file the relevant Form E (in Form E1 – FPR 2010,
PD5A) within 14 days of issue of the application (FPR 2010,
r.9.19(1));
e. If a party is unavoidably prevented from attaching the necessary
documentation to the Form E1, they must serve it on the other side
at the earliest opportunity (FPR 2010, r.9.19(3)(a)) and file the same
with the court explaining why it was provided earlier - FPR 2010,
r.9.19(3)(b);
f. There shall be no further disclosure or requests for disclosure (other
than documents which should already be attached to Form E1)
between then and the first hearing - FPR 2010, r.9.19(4);
g. Unless the court is able to determine the application at the first
hearing the court may direct that further evidence be filed and set a
date for a directions hearing or appointment or final hearing - FPR
2010, r.9.20.
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DISCLOSURE
18. In practice, the short form procedure as prescribed by Chapter 5 may not
be suitable for all cases, especially complex or high value cases, when it is
likely that further reaching requests for information will be required.
19. Be aware however that the prescription of the short form procedure,
coupled with the very nature of Sch1 proceedings (it is not a divorce – there
is no principle of sharing or compensation – Re A (A Child: Financial
Provision) [2015] 2 FLR 625) means a judge is likely to limit requests for
information.
20. It is useful to take along to the first hearing (even if is not served on the
other side pursuant to FPR 2010, r.9.19(4)) a draft questionnaire setting out
further information and documentation required.
21. In PG v TW (No 2) (Child: Financial provision) [2014] 1 FLR 923, His
Honour Judge Horowitz QC (sitting as a deputy HCJ) referred to the
‘millionaire’s defence’ as an “obsolete doctrine”.
22. However, in the subsequent decision of the Court of Appeal in Re A (A
Child: Financial Provision) [2015] 2 FLR 625, Macur LJ conceded it
“survived to a degree”, endorsing the decision of Moor J in AH v PH
(Scandinavian Marriage Settlement) [2014] 2 FLR 251 that, at least in the
‘super rich’ category, a broad outline of wealth is all that is necessary.
IS A CMS MAXIMUM ASSESMENT REQUIRED?
23. In respect of PP claims, practitioners should be aware of the recent
authority of Holman J in Dickson v Rennie [2015] 2 FLR 978 which clarifies
for the avoidance of doubt that a ‘top up’ order for PP should not be made
unless and until the CMS have made a maximum assessment. At
paragraph 31:
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“Patently s 8(6) is not intended to provide some form of disguised ‘appeal'
just because it is, or may be, arguable, or even demonstrable, that his gross
weekly income exceeds £3,000. For those reasons …I so hold, that the top-
up jurisdiction under s 8(6) is not available unless the CMS have
themselves assessed the gross weekly income as being or exceeding
£3,000 per week, or (which comes to the same thing) have made a
maximum maintenance calculation, currently in the sum of £294 a week or
£15,288 pa.”
24. However, an application can be issued (and – arguably - interim provision
can be ordered) prior to the conclusion of the CMS assessment process,
especially where it is clear from existing disclosure that a maximum
assessment will be made - see H v C [2009] 2 FLR 1540, where the CMS
appeals process to reach a maximum assessment took more than 3 years:
but for an early application the children's arrears would have been back-
dated to any later application as the ‘later' of the two ‘earliest dates' (see
‘Backdating’ below).
25. Be mindful of costs however: launching an unmeritorious Sch1 application
is likely to invite an adverse costs order. If there is any doubt about
whether a maximum assessment will be made, it is better to frame the
application limited to capital claims, then amend subsequently if and when
the maximum assessment is reached.
26. For the avoidance of doubt, the fact there is no maximum assessment does
not prevent a claim for capital or for the payment of legal fees - CF v KM
[2011] 1 FLR 208.
27. The court’s powers under schedule 1 can be exercised “at any time” (para
1(3) Sch1).
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RANGE OF ORDERS
28. If the applicant is acting in a parental capacity and the application is on
behalf of a child, they can apply for one or more of the following orders:
a. Periodical payments (for themselves on the child’s behalf or to the
child himself) – para 1(2)(a) Sch1;
b. Secured periodical payments (for themselves on the child’s behalf or
to the child himself) – para 1(2)(b) Sch1;
c. Lump sum (for themselves on the child’s behalf or to the child
himself) – para 1(2)(c) Sch1;
d. Settlement of property for the benefit of the child – para 1(2)(d) Sch1;
e. Transfer of property (to themselves on the child’s behalf or to the
child himself) – para 1(2)(e) Sch1.
29. If the application is by a child over 18, they can apply for periodical
payments – para 2(2)(a) or lump sum – para 2(2)(b) Sch 1 (ie no settlement
or transfer of property).
PERIODICAL PAYMENTS AND THE CHILD SUPPORT ACT 1991
30. Pursuant to s.8(3) CSA 1991, where the CMS would otherwise have
jurisdiction to make an assessment of child maintenance, the Court cannot
make, vary, or revive a PP order save in the very limited circumstances
prescribed by s.8 CSA 1991, namely:-
a. CMS Top Up
There is a CMS assessment in force and the paying parent’s income
exceeds the upper limit (s.8(6)(a) and (b) CSA 1991) AND the court
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is satisfied that the circumstances of the case make it appropriate for
the payer to pay more than the CMS assessment (s.8(6)(c) CSA
1991).
b. School Fees/Vocational fees
If the child is at school or undergoing training for a trade, profession
or vocation (s.8(7)(a) CSA 1991) AND the order is made solely to
meet some or all of the expenses incurred in connection with the
provision of the instruction or training (s.8(7)(b) CSA 1991).
c. Disability
I. If the child receives PIP or DLA (s.8(8)(a) CSA 1991); OR
II. No such benefits are received but the child is disabled (s.8(8)(b)
CSA 1991); AND
III. The order is made solely for the purpose of meeting some or all
of any expenses attributable to the child's disability
IV. Disabled is defined in s.9 CSA 1991 as being “blind, deaf or
dumb or is substantially and permanently handicapped by
illness, injury, mental disorder or congenital deformity or such
other disability as may be prescribed”;
V. ‘mental disorder' as defined in MHA 1983, s 1(2) as ‘mental
illness, arrested or incomplete development of mind,
psychopathic disorder and any other disorder or disability of
mind and ‘mentally disordered' shall be construed accordingly'’.
d. The CMS does not have jurisdiction
For example, the parties do not meet the requirement of s.44 CSA
1991 that each of the non-resident parents1, the person with care
and the qualifying child are habitually resident in the UK.
1 Unless the non-resident parent is employed in the civil service of the Crown, including Her Majesty's
Diplomatic Service and Her Majesty's Overseas Civil Service, is a member of the naval, military or air forces of the Crown or is employed by a company of a prescribed description registered under the Companies Act 2006
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e. Variation
Notwithstanding s.8(1) CSA 1991, V v V (Child Maintenance) [2001]
2 FLR 799, (at page 804) that it remains possible for the court to vary
existing orders, whether made before or after April 1993, subject to
(where the parent with care is on benefit) there being no application
for a child support calculation. Consider the recent decisions in
Dickson v Rennie (above) where a CMS assessment was positively
required and TM and TM (Minors) [2015] EWHC 3054 (Fam), when
Mostyn J felt able to vary an earlier order made by consent)
f. Costs allowances (see below).
31. It used to be thought that the court was entitled to take a flawed CMS
decision into account when exercising its discretion with regard to the level
of financial provision: DE v AB [2012] 2 FLR 1396 – see in particular
paragraphs 22 and 39. The recent decision of Dickson v Rennie makes it
clear however that the court cannot use discretionary powers under Sch1 to
remedy defects with the CMS system. If a CMS assessment is flawed, that
assessment must be challenged through the CMS appeals process. If
necessary, the court will order a lump sum payment to the mother for that
purpose, as happened in Dickson v Rennie.
ADDITIONAL PROVISIONS WITH REGARD TO LUMP SUMS
32. Para 5(1) Sch1 provides that, without prejudice to the generality of
paragraph 1 – which provides that the court can make one or more order
(para 1(1) Sch1) at any time (para 1(3) Sch1), the court may order a lump
sum to be paid to enable the applicant to meet any liabilities or expenses
incurred in connection with the birth of the child or in maintaining the child
and “reasonably incurred before the making of the order”.
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33. The court may order a lump sum to be paid by instalments - para 5(5) Sch1.
34. Where a lump sum is ordered to be paid by instalments, on an application
to vary, the court can vary (para 5(6) Sch1):
a. the number of instalments payable;
b. the amount of any instalment payable;
c. the date on which any instalment becomes payable.
INTERIM ORDERS
A. Periodical Payments
35. The Court may make an interim PP order pursuant to para 9(1) Sch1.
36. An interim order will cease to have effect if the application is disposed of or,
if earlier, on the date specified in the interim order - para 9(3) Sch1.
37. An application can be made to extend any interim order to substitute a later
date - para 9(4) Sch1.
38. An application for interim PP should be made by way of the Part 18
procedure - FPR 2010 r.9.7(1)(c).
39. Pursuant to FPR 2010 r.9.7(3), where an application is made before the
filing of the Form E1, the written evidence in support of the application
must:
a. Explain why the order is necessary; and
b. Give up to date information about that party's financial
circumstances.
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40. Unless the respondent has filed a Form E1 he must, at least 7 days before
the court is to deal with the application, file a statement of his means and
serve a copy on the applicant - FPR 2010 r.9.7(4).
41. The court can award interim PP to cover legal costs: G v G (Child
Maintenance: Interim Costs Provision) [2010] 2 FLR 1264 (and see ‘Costs
Allowances’ below).
B. Lump Sums
42. Although, para 9 Sch1 makes specific reference to interim orders to PP,
there is no specific reference to interim lump sum payments.
43. The Court can however (as set out above and pursuant to para 1(1) and
1(3) Sch1) make more than one order for a lump sum and to order a lump
sum at any time.
44. This has been held to mean (in CF v KM (Financial Provision for Child:
Costs of Legal Proceedings) [2011] 1 FLR 208 that the court can make an
interim lump sum order.
45. Again, an application for an interim lump sum order would be by way of the
Part 18 procedure – FPR 2010, r.9.7(1)(e) “any other form of interim order”.
46. An application for an order mentioned in FPR 2010 r.9.7(1)(e) may be made
without notice – FPR 2010, R.9.7(5).
JURISDICTION
47. The restriction on the power to make financial provision against a parent in
England and Wales where a child resides outside the jurisdiction
(previously limited to periodical payments and secured periodical payments)
has been abolished.
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48. Although the High Court has recently referred to the European Court of
Justice the issue of whether the enforcement of European maintenance
orders can be made directly to the Family Court (as opposed to via REMO)
MS v PS [2016] EWHC 88 (Fam), there are numerous to support the
jurisdiction of the court in England and Wales in cases involving an
international element:-
a. In Re S (Child: Financial Provision) [2005] 2 FLR 94 the court made
an order against a parent who is out of the jurisdiction with the child
(although taken there without the mother’s consent);
b. In Re S [2015] 2 FLR 77 the court permitted the mother to pursue an
application under Sch1 commenced in 2000, notwithstanding the fact
she and the child now lived in Australia. F’s application for stay of
the proceedings was refused;
c. In EDG v RR [2015] 1 FLR 270, Mostyn J permitted a mother to
enforce a French order for PP in the Principal Registry – mother and
child resided in France and father resided in London;
d. In Re M-M (A Child) (Financial Provision: Father Resident Abroad)
[2014] 2 FLR 1391, the mother was residing in England with the
child, the father resided in France;
e. In PG v TW (No 2) (Child: Financial Provision) [2014] 1 FLR 923 the
mother and child resided in Africa, F resided in England.
49. If another jurisdiction is already seized however, the court may stay English
proceedings – see EA v AP (Schedule I Proceedings: Jurisdiction: Stay)
[2013] EWHC 2344 (Fam) in which the court found that it would have had
jurisdiction to deal with Sch1 proceedings in the absence of proceedings in
Italy, but as the Italian court was first seized, the English proceedings would
be stayed, pursuant to Article 12(1) of the Maintenance Regulation
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(Regulation 4/2009) - see in particular paragraphs 15 and 19-20 of
judgment.
NUMBER OF ORDERS
50. The court may make one or more of the orders mentioned in sub-paragraph
(2) - para 1(1) Sch1.
51. Where the court makes any order under Sch1, the court can make a further
PP, secured PP or lump sum order with respect to any child who has not
yet turned 18 – para 1(5)(a) Sch1.
52. The Court cannot however make any more than one settlement or transfer
of property order against the same person in respect of the same child –
para 1(5)(b) Sch1.
BACKDATING OF PERIODICAL PAYMENTS
53. A PP order (such as for school fees etc) may be directed to commence
(and thus arrears can accrue) from the date of the making of the application
- para 3(1) Sch1).
54. In respect of a top up order however, when an application is made within
six months of a CMS calculation, there is a possibility the order may be
backdated further – to the “earliest permitted date” – para 3(5) Sch1. The
‘earliest permitted date’ is the later of:
c. Six months before the Sch1 application - para 3(5)(a) Sch1; or
d. The “effective date” of the original calculation that led to the
maximum assessment calculation - para 3(5)(b) Sch1.
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DURATION OF ANY PP ORDER
55. An order for PP shall not in the first instance extend beyond a child’s 17th
birthday unless the court considers it is right in the circumstances to specify
a later date – para 3(1)(a) Sch1.
56. In any event, an order for PP shall not extend beyond a child’s 18th
birthday (para 3(1)(b) Sch1) unless:-
e. The child is, or will be or (if an order were made) would be receiving
instruction at an educational establishment or undergoing training for
a trade, profession or vocation, whether or not while in gainful
employment – para 3(2)(a); or
f. There are special circumstances which justify the making of an order
without complying with that paragraph.
57. “Special circumstances” can include physical or other disability, and, under
Sch1, the expenses attributed to the child's disability should be in the
broadest sense (C v F (Disabled Child: Maintenance Orders) [1998] 2 FLR
1) as opposed to being limited pursuant to s.8 CSA 1991 (above).
58. “Special circumstances” do not to include the extreme wealth of the father
or the possibility that the child might not inherit upon his death: MT v OT
(Financial Provision: Costs) [2008] 2 FLR 1311.
59. Neither is the fact that an adult child remains living at home with a parent
considered to be ‘special circumstances’. See Re N (Payments for Benefit
of Child) [2009] 1 FLR 1442 for an interesting analysis of this issue.
60. In terms of PP orders, the ‘usual’ order either agreed or endorsed by the
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court is for PP to be paid until the child reaches the age of 18 or otherwise
ceases full time tertiary education. Query whether in terms of PP this can
include a gap year before or after university (see Re N above).
61. In the absence of ‘special circumstances', any settlement of property under
Sch 1 should be expressed as terminating when the child attains 18 or
completes tertiary education. See again the useful analysis of this area in
Re N when two interesting points are made:-
a. A child over 18 cannot apply against either parent for a settlement or
transfer of property;
b. A child over 18 cannot apply for capital provision at all if his parents
are living together – the question is posed in Re N why a child of
separated parents should receive further advantage.
62. A PP order shall end on the death of the payer – para 3(3) Sch1.
63. A PP order shall cease to have effect if the parents (if those parents are the
payer and payee) live together for a period of six months – para 3(4) Sch 1.
64. A PP order shall cease to have effect if a maintenance calculation is
subsequently made by the CMS - s.10(1)(a) CSA 1991.
VARIATION
65. A PP or secured PP order can be varied or discharged upon the
subsequent application of either the recipient or the payer – para 1(4) Sch1.
66. The power to vary includes a power to suspend temporarily and revive a PP
order - para 6(2) Sch1.
67. A variation of a PP order can backdated to the date of the application (para
6(3) Sch1); unless (unusually) a PP order is a ‘global’ order for more than
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one child and a CMS assessment is made in respect of one but not all of
the children. In those circumstances, the order can be varied from the date
of the CMS assessment - para 6(9) Sch1.
68. Upon varying a PP order, the Court can make an order for the payment of a
lump sum - para 5(3) Sch1.
69. As set out above (see ‘Additional Provisions for Lump Sums Orders), the
court can vary the arrangements of an order for a lump sum payable by
instalments - Para 5(6) Sch1.
70. In exercising its powers to vary or discharge a PP order, the court shall
have regard to all the circumstances of the case, including any change in
any of the matters to which the court was required to have regard when
making the order - para 6(1) Sch1.
71. The court may order a review of payments, expressed as ‘subject to further
order of the court', where the father's capital and income is in transition: FG
v MBW (Financial Remedy for Child) [2012] 1 FLR 152.
QUANTUM
A. Statutory factors
72. When considering whether to make an order under Sch1 at all and if so “in
what manner” the court shall take into account “all the circumstances” -
para 4(1) Sch 1. These shall include include:-
a. The income, earning capacity, property and other financial resources
a parent has or is likely to have in the foreseeable future - para
4(1)(a) Sch1;
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a. The financial needs, obligations and responsibilities a parent has or
is likely to have in the foreseeable future - para 4(1)(b) Sch1;
b. The financial needs of the child - para 4(1)(c) Sch1;
c. The income, earning capacity (if any), property and other financial
resources of the child - para 4(1)(d) Sch1;
d. Any physical or mental disability of the child - para 4(1)(e) Sch1;
e. The manner in which the child was being, or was expected to be,
educated or trained - para 4(1)(f) Sch1.
73. Where the court is considering making an order an order against a person
who is not a biological parent (ie who was married to or in a civil partnership
with the other parent and the child was treated as a child of the marriage),
then in addition to the above, the court will take into account the following
matters - para 4(2) Sch1:-
a. Whether that person has assumed responsibility for the maintenance
of the child, and, if so, the extent to which and basis on which he
assumed that responsibility and the length of the period during which
he met that responsibility;
b. Whether he did so knowing that the child was not his child;
c. The liability of any other person to maintain the child.
74. Unlike s.25 MCA 1973, there is there is no statutory duty to consider the
parties conduct, standard of living or the duration of their relationship.
However, a long relationship may be relevant in that it has accustomed a
child to a particular standard of living: N v D [2008] 1 FLR 1629.
75. Again, unlike s.25, there is no requirement to consider the child’s welfare as
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the first consideration and, under s.1(1)(a) Children Act 1989, questions
about the “upbringing” of a child, which trigger considerations of
paramountcy, specifically exclude maintenance2.
76. However, in Re P (Child: Financial Provision) [2003] 2 FLR 865, the Court
of Appeal made it clear that welfare is not just a relevant circumstance, but
‘in most cases a constant influence on the discretionary outcome'.
B. Case law
77. Re P established (an this approach that has been adopted in much of he
subsequent jurisprudence) that the exercise of the jurisdiction was highly
discretionary and involved an essentially broad brush assessment to be
taken by Family judges with much expertise and experience in the specialist
field of ancillary relief.
78. In search of a starting point (at least in the high value cases), the deputy
HCJ in PG v TW (No 2) (Child: Financial provision) [2014] 1 FLR 923
summarised the approach of Thorpe LJ in ReP:
“ In Re P (Child: Financial Provision), Thorpe LJ suggested at paras [45]–[47] an analytical framework applicable at least along the spectrum from affluent to fabulously rich and thus more likely to be litigated:
(i) The starting point is the decision at least generically on the
home to be provided by the respondent in value, size and location.
(ii) That choice bears upon and frames the reasonable capital cost of furnishing and equipping the house as well as future income needs both directly in the case of outgoings and indirectly in the case of external expenditure such as travel, education and holidays.
(iii) A lump sum appropriate within that determination will provide for the cost of furnishing, equipping the home and a car.
2 s.105(1) “upbringing”, in relation to any child, includes the care of the child but not
his maintenance
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(iv) Next step is to determine the budget the mother reasonably requires to fund her expenditure on maintaining the home, content and meeting other expenditure external to the home including school fees, holidays, routine travel expenses, entertainment, presents etc.
(v) The assessment is broad but will include the mother's allowance which is checked but not diminished by the absence of any entitlement in her own right. While there is to be no slack or margin for saving, the court must recognise the sacrifice of unmarried parents, generally the mother, as primary and usually exclusive carer with a budget that reflects both her position and the position of the father, both social and financial. She is to be free from anxiety or resort to parsimony where the other parent chooses to live lavishly.
(vi) The court is required to navigate between rival budgets produced by specialist family lawyers on a broad common sense assessment [47]. I add that on both sides this is a calculation of a household not formed and election between an aspirational budget and a critique of proposed alleged extravagance quite different from the factual task performed by a court under s 25 forming an evidential view as to the standard of living actually enjoyed and the accuracy of its recollection by the parties.
(vii) Bodey J in what I respectfully describe as a helpful and succinct supporting judgment proposed that in big money cases the mother's budget should be painted with a broad brush without being bogged down in detailed analyses and categorisations of specific items making up opposing budgetary presentations. The better approach was to seek to achieve a fair and realistic outcome by the application of broad commonsense to the overall circumstances of the particular case.”
C. Periodical Payments
79. This approach was endorsed very recently in the Court of Appeal by
Lewison LJ, who said at paragraph 43 of Re A:
“I think, if I may say so, that Thorpe LJ was very wise when he said in In re P (Child: Financial Provision) [2003] 2 FLR 865, para 45 that the judge should start by deciding, at least generically, the home that the father must provide for the child. As he rightly said, the value, size and location of the house all bear on the capital cost of furnishing it and the future income needs, both direct and indirect. As he went on to say at para 46: “Once that
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decision has been taken the amount of the lump sum should be easier to judge. For the choice of home introduces some useful boundaries.”
80. Looking back to Re P, in the case of a very wealthy father, Thorpe LJ found
that:
“….a more generous approach to the calculation of the mother’s allowance is not only permissible but also realistic”. Whilst the mother should have “control of a budget that reflects her position and the position of the father, both social and financial” nevertheless the budget would be limited to ensure “there can be no slack to enable the recipient to fund a pension or an endowment policy or put money away for a rainy day”
81. Again, some guidance is provided by Re A per Macur LJ at paragraph 21:
“The extent of the non-residential parent's wealth may still inform reasonableness of budgetary claims as well as ability to pay; that is, for example, the child of a wealthy man may well expect to be dressed in designer rather than high street store clothes. However, that is not to say that the court may dispense with any budget and sanction an award supportive of a lavish lifestyle devoid of context to the relevant child's circumstances as is argued on behalf of this appellant. The court is responsible for ensuring appropriate financial support for the child and must confine the aspect of the carer's allowance within the award to its legitimate purpose. The most casual analysis of a proposed budgetary allowance for a five-year-old child which includes membership of Annabel's nightclub reveals the exaggeration of the claim to compensate or benefit the previous partner in their own right and not as carer for the child”.
82. In cases outside the super wealthy however, the starting point for PP is a
top up case is the level of CSA assessment: GW v RW (Financial
Provision: Departure from Equality) [2003] 2 FLR 108 and SW v RC [2008]
1 FLR 1703.
83. See also Mostyn J’s recent case of TW and TM (Minors) [2015] EWHC
3054 (Fam), in which he found the judge at first instance had not justified a
significant departure from the formula provided by CSA 1991 when granting
a child maintenance order for a father to pay 31.5 per cent of his gross
income (£30,000pa for each of two children when F earned £190,000pa),
almost double the rate prescribed by the formula. It was replaced with an
order that F pay at the rate of £15,200pa per child.
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84. An income order may take account of bonus payments, but overall should
be at CSA levels: Re M–M (A Child) [2014] 2 FLR 1391.
85. It is trite to say, but each case will turn on its own facts: a CMS-equivalent
calculation will be more easily displaced when a payer’s income far
exceeds the CMS threshold (see TW and TM (Minors) above). In such
circumstances, the needs of the individual child in the light of the available
resource will be the determining factor.
86. Assessment of need will be handled with a broad brush (Re P, DE v AB).
87. The child may be entitled to be brought up in circumstances which bear
some relation to the father's resources and standard of living - J v C (Child:
Financial Provision) [1999] 1 FLR 152; F v G (Child: Financial
Provision) [2005] 1 FLR 261 ; MT v OT (Financial Provision: Costs) [2008]
2 FLR 1311 ; H v C [2009] 2 FLR 1540.
88. Notwithstanding the Court of Appeal’s reluctance to accept the concept of a
ceiling, there is a natural and logical limit to a child’s needs, as can be
demonstrated by the judgment of Macur LJ above in Re A.
89. In the resumed case involving the parents of Re A, Bodey J very recently
confirmed (in GN v MA [2015] EWHC 3939 (Fam)) that the child’s needs
would be capped at the previously ordered rate of £204,000pa (M wanted
£780,000pa), despite describing the father’s wealth in the following terms:-
“It is impossible to know the reality of his lifestyle, save to say that his family, the royal family, appears to rank pretty clearly among the super-rich and that as a senior member of that family he moves naturally within a world of opulence (the mother's word) where there is effectively little if anything which he cannot have, or have the use of.”
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90. The future needs of a carer beyond the child’s dependency plays no part in
the calculation of a Sch1 award: Re A (A Child: Financial Provision) [2015]
2 FLR 625.
91. The economic circumstances of the payer will be scrutinised: where a father
could not pay maintenance out of income but used capital and borrowing to
provide himself with a good lifestyle, maintenance could be paid from
capital resources: SW v RC [2008] 1 FLR 1703.
92. Some account needs to be taken the costs involved in father’s contact with
the child and of the father’s existing responsibilities towards other children
in his household – A v M [2005] EWHC 1721 (Fam).
93. As to the concept of a carer’s allowance, it was established as long ago as
Haroutunian v Jennings (1980) 1 FLR 62 that mother may be entitled to a
carer's allowance for looking after the child if she has to give up work, a
principle developed in.
94. In PG v TW however, the Hight Court thought the concept of a carer's
allowance was “past its utility” and that the court should instead provide the
resources for back-up childcare and housekeeping to allow the mother to
go out to work without anxiety:
95. Perhaps we ought not to consign the concept of a carer’s allowance to the
dustbin just yet however – even Mostyn J, when shooting down the mother
in KS v ND (Schedule 1: Appeal: Costs) [2013] EWHC 464 (Fam) conceded
the existence of the concept (at paragraph 9), as did Macur LJ in Re A, as
long as this was for its “legitimate purpose” of meeting the child’s needs.
96. As Re A confirmed however, a carer's allowance cannot take into account
the future needs of the carer at the conclusion of the relevant child's
dependency. As Per Macur LJ
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“The literal or purposive interpretation of Schedule 1 does not permit of the concept of sharing or compensation for the benefit of the child, nor, by the back door, financial provision and compensation for the carer beyond that element attributable to the care of the child during his minority, or other determined duration of dependency. There is no established authority to the contrary. The judgment of Baroness Hale of Richmond JSC in Gow v Grant 2013 SC (UKSC) 1, paras 44-56, which urges reform of the law to re-balance the financial consequences of relationship breakdown in cohabitation, makes this clear, as does the prevailing case law on this point: see: J v C (Child: Financial Provision) [1999] 1 FLR 152 , 159H; In re P [2003] 2 FLR 865 , paras 40, 41, 49; PG v TW (No 2) [2014] 1 FLR 923 , para 105.”
97. However cases where the mother is working and has her own income to put
towards meeting the child’s needs, the court is unlikely to find that such
income should reduce the father’s obligation to pay PP. In F v G (Child:
Financial Provision) [2005] 1 FLR 261 Singer J held that a mother who
returned to work should deploy her income to pay for a nanny but that the
balance of her own income could be spent as she saw fit, including putting
that income towards pension provision of her own for the future.
D. Housing
98. The provision of a home usually lasts only as long as it will benefit the child
and ultimately reverts to the father – see Re P and practically every
subsequent authority. Those authorities in which there has been an
outright transfer to the mother, or provision for the trust property to revert to
the child invariably involve agreed orders to that effect.
99. The reasonableness of housing and other capital provision under Sch1 is
invariably considered in the context of the father’s resources. The reported
Sch1 authorities almost always involve very wealthy fathers, where the
scale of provision (however generous) is dwarfed by the father’s remaining
resources.
100. Arguably, the court is so concerned to avoid tainting Sch1 cases with the
concepts of sharing and compensation that it goes too far in the other
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direction. This might be considered especially parsimonious in those cases
where outright housing provision cannot be agreed and housing is settled
for the child only during his minority: in those cases, the property in which
the mother and child will live is not much more than a long term investment
for the father.
101. Although it is distinguishable on its own facts (the father had dissipated
capital during a three year ‘sabbatical’ following his redundancy and there
was, subsequently, non-disclosure), in one unusual case, the court made
an order which required F to pay £250,000 for a property (on reversion)
plus £40,000 lump sum to M, despite the fact it would require him to sell his
home, in which he had £358,000 of equity: DE v AB [2012] 2 FLR 13963.
102. DE v AB is probably the only reported case in which mortgage capacity was
said to feature (the court found that the £68,000 retained by the father
would be sufficient to put down a deposit on property only).
103. There are no reported cases in which a father was required to raise a
mortgage to pay a lump sum for housing (and it is not clear what jurisdiction
the court would have to make such an order in any event) but as far as the
mother’s contribution is concerned, in DE v AB (above), Baron J permitted
M the option of supplementing the £250,000 housing fund with her own
mortgage capacity as long as there was no risk to the amount ultimately to
revert to F.
104. Anecdotally (and in more modest Sch1 cases), the court has been prepared
to take both parties’ mortgage capacity into account as an available
resource and then scaled the award for housing accordingly, with sum as
the mother requires to revert to the father when the children reach the age
of 18 or cease full time education.
3 This is an interesting case - at first instance the mother was awarded £80,000 as a lump sum, this
was reduced to £40,000 on appeal and then increased further still to take account of the non-disclosure subsequently found on the part of the father
25
105. Requests to limit the mother’s future occupation of the property or for the
insertion of provisions which seek to trigger an earlier reversion (for
example in the event of the mother’s cohabitation) should be resisted. The
settled property is for benefit the child: as long as the child lives with the
mother, the mother’s cohabitation or remarriage ought not to affect a
settlement of property – see F v G (Child: Financial Provision) [2004]
EWHC 1848 (Fam) in which Singer J approved a trust agreed on those
terms (at paragraph 2).
106. Other practical considerations need to be borne in mind when settling a
property or housing fund:-
a. Consideration will need to be given for the cost of future repairs to or
maintenance of the property;
b. The father will usually require a right of reasonable veto over the
choice of housing;
c. The mother may require the right to move during the currency of the
trust, as long as F’s investment is protected;
d. The arrangements for any future sale will need to be considered: the
mother may require the right to purchase at the expiry of the trust, for
example;
107. A property should be settled on the child until he or she reaches the age of
18 or ceases his/her full time education, including a gap year - Re N
(Payments for Benefit of Child) [2009] 1 FLR 1442.
108. If there are the resources available to provide for the purchase of a property
by way of trust to settle on the child, this should be preferred to merely
renting a property during the child’s minority. A settled property will provide
26
a child with stability and security: Re C (Financial Provision) [2007] 2 FLR
13.
E. Other capital/lump sums
109. The authorities show that the court is prepared to exercise a wide discretion
with regard to lump sum orders: as long as it is for the child’s benefit, the
court is prepared to stretch capital provision beyond that envisaged in Re P
(ie for home moving costs, incidental capital costs and provision of a car).
110. In Re S (Child: Financial Provision) [2005] 2 FLR 94, the Court of Appeal
made a financial order to include the costs of the mother's travel to the
Sudan to see the child (where he had been taken by the father without the
mother’s consent).
111. The court will order a lump sum to cover M’s credit card debts if F has
sufficient available capital: Re M-M (Schedule 1 Provision) 2 FLR 1391,
where the father ordered to pay £44,600 to discharge the mother’s credit
cards. This represented about a third of his cash at bank of £137,000. But
beware of this approach extending to an application for maintenance by the
back door, which is impermissible.
112. In Dickson v Rennie, the court refused to award a lump sum to cover debts
accrued by the mother during a period of alleged ‘under-maintenance’ by
the father or for a shortfall in maintenance due to his shenanigans with the
CMS. Per Holman J at paragraph 38:
“So it can be seen both from the way in which Miss Potter developed this head of claim, namely: ‘debts incurred due to the dramatic reduction … caused by the changed level of maintenance'; and… ‘the shortfall in maintenance', that this element of the lump sum application is frankly no more than seeking to recoup or recover the difference between the ordered maintenance and the CMS calculated maintenance by means of a lump sum. I simply cannot entertain that limb of this application. To do so would be very blatantly to flout what I have described as the barrier or shutter erected by Parliament between the functions of the CMS
27
and the court. For the reasons that I have already explained, the court order has totally ceased to have effect. For the reasons that I have also already explained, there is absolutely no power in this court to make some form of ‘top up' order. If I were now to order a lump sum to reflect those amounts, I would be very obviously flouting the will of Parliament and, indeed, not acting as a court of law.
113. Although in Re M-M (above), the court approved in principle, the concept of
a father paying lump sums for other uses, such as repairs to the mother’s
property, the father was not ordered to make those payments, given his
(relatively) limited resources. That said, the father in Re M-M he still had
the remaining two-thirds in his bank account (about £90,000) and a further
£60,000 in a long term investment, but the court did not consider it
appropriate he pay for repairs to the mother’s own property.
114. The applicant can be asked to account for the respondent and provide
receipts where a lump sum has been ordered for a specific purpose: Re N
(Payments for Benefit of Child) [2009] 1 FLR 1442, but should not
necessarily be forced to do so in respect of PP, given the broad brush
nature of a lump sum award in a bigger money case: Re C (Financial
Provision) [2007] 2 FLR 13, when it would be “unhelpful and
counterproductive” to do so.
COSTS
A. Costs allowances
115. Costs allowances are particularly important in Sch1 cases: the applicant
has no entitlement to a capital award for herself and is therefore unlikely to
attract third party litigation funding or a Sears Tooth.
116. As set out above, the scope of Sch1 extends to interim costs (M-T v T
[2007] 2 FLR 925), which can be funded either via a lump sum (CF v
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KM [2011] 1 FLR 208) or periodical payments (G v G (Child Maintenance:
Interim Costs Provision) [2010] 2 FLR 1264).
117. Although the legal costs provision set out in s.22ZA MCA 1973 does not
apply to Sch 1 proceedings, the criteria is analogous and as set out
in Currey v Currey (No 2) [2007] 1 FLR 946: in essence an applicant must
demonstrate that she cannot reasonably procure legal advice and
representation at the appropriate level of expertise by any other means.
118. The court must have regard to the reasonableness of the mother's stance in
the proceedings, and the merits of her claim: G v G (Child Maintenance:
Interim Costs Provision) [2010] 2 FLR 1264.
119. There are advantages flowing from competent representation and equality
of arms, which would be of benefit ultimately to the child: Re C (Financial
Provision) [2007] 2 FLR 13.
120. The court may take the father's costs as a benchmark, allowing for the extra
costs for the mother in making the application: PG v TW (No 1) (Child:
Financial Provision: Legal Funding) [2014] 1 FLR 508.
121. Although not brought pursuant to s.22ZA MCA 1973, the jurisdiction under
Sch1 is analogous and the guidance as to best practice set out in Rubin v
Rubin [2014] 2 FLR 1018 should be followed. In particular, an application
for a costs allowance should be supported by written evidence and include:
a. A detailed estimate of current and future costs;
b. Evidence of refusal to fund by two commercial lenders of repute;
c. Evidence as to the (non)availability of a Sears Tooth agreement;
d. Funding should not in the first instance last beyond FDR stage;
29
e. Monthly instalments are preferable to a single lump sum payment;
f. Historic unpaid costs would not be met unless the court was satisfied
that without such a payment appropriate legal services would not be
obtained;
g. A costs allowance can be made to assist in the costs of mediation
and arbitration;
h. In determining the availability of funding from another source, the
court will not normally require an applicant to deplete her modest
savings or sell or charge her home; but this depends on the facts.
122. In relation to historic costs in Sch1 cases, in appropriate cases, the court
has found it necessary for the paying party to be responsible both for
accrued legal costs and costs going forward, to enable equality of arms and
for the pressures of litigation to be more fairly divided between the parties
PG v TW (No 1) (Child: Financial Provision: Legal Funding) [2014] 1 FLR
508.
B. Inter Partes costs orders
123. Sch 1 is excluded from the general rule of no order for costs set out in FPR
2010, r.28.3. Costs may therefore follow the event.
124. Costs orders against the mother are rare, but not unheard of. In various
pieces satellite litigation, the mother in DE v AB had several costs orders
made against her (reported as Y v Z [2014] EWHC 650 (Fam).
125. In appeals under Sch 1, costs should follow the event: KS v ND (Schedule
1: Appeal: Costs) [2013] 2 FLR 698.
126. KS v ND is an interesting read for Mostyn J’s consideration of the first
instance decision of no order for costs (and a salutary lesson for
30
practitioners who believe that a costs order will always be recovered for the
mother in a Sch1 case.
127. At first instance, the mother in KS v ND had run up costs of £37,500. The
father’s costs were £58,000. Both had borrowed heavily to meet those
costs. At the conclusion of the first instance proceedings, the court made
no order for costs. A challenge to this decision formed part of the mother’s
appeal.
128. On appeal, Mostyn J confirmed the first instance decision was
unimpeachable. Although doubting whether it was appropriate for there to
be ‘no order for costs’ in every case (given the mother was acting in a
quasi-representative capacity on behalf of the child), consideration of costs
in Sch1 should begin with a ‘clean sheet’.
129. As conduct is relevant to costs (r.44.3(4) CPR), any offers to settle, whether
open or Calderbank “…would be the first things to write on the clean sheet”,
but clearly the economic impact of an order is also relevant (although not in
the circumstances of KS v ND itself as the debt position of both parties with
regard to their costs was equally calamitous.
130. See also Re A in which the mother’s litigation conduct led to an adverse
costs order, to be paid on a monthly basis from her PP.
131. Anecdotally, the impact of those cases has already filtered down. It is by no
means a given that a claimant will recover all of her costs at the conclusion
of a Sch1 case, especially if there has been some litigation conduct on her
part, for example unfounded allegations of non-disclosure, dogged
pursuance of an unmeritorious case etc. There remains a risk (even
without those factors) that a claimant may have to fund at least part of her
own legal fees.
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LIST OF AUTHORITIES
A v M [2005] EWHC 1721 (Fam)
AH v PH (Scandinavian Marriage Settlement) [2014] 2 FLR 251
C v F (Disabled Child: Maintenance Orders) [1998] 2 FLR 1
CF v KM (Financial Provision for Child: Costs of Legal Proceedings) [2011] 1 FLR
208
Currey v Currey (No 2) [2007] 1 FLR 946
DE v AB [2012] 2 FLR 1396
Dickson v Rennie [2015] 2 FLR 978
EA v AP (Schedule I Proceedings: Jurisdiction: Stay) [2013] EWHC 2344 (Fam)
EDG v RR [2015] 1 FLR 270
F v G (Child: Financial Provision) [2005] 1 FLR 261
FG v MBW (Financial Remedy for Child) [2012] 1 FLR 152
G v G (Child Maintenance: Interim Costs Provision) [2010] 2 FLR 1264
GN v MA [2015] EWHC 3939 (Fam)
H v C [2009] 2 FLR 1540
J v C (Child: Financial Provision) [1999] 1 FLR 152
KS v ND (Schedule 1: Appeal: Costs) [2013] EWHC 464 (Fam)
MB v KB [2007] 2 FLR 586
MS v PS [2016] EWHC 88 (Fam)
Morgan v Hill [2007] 1 FLR 1480
MT v OT (Financial Provision: Costs) [2008] 2 FLR 1311
M-T v T [2007] 2 FLR 925
N v C (Financial Provision; Schedule 1 Claims Dismissed) [2013] EWHC 399
(Fam)
N v D [2008] 1 FLR 1629
PG v TW (No 1) (Child: Financial Provision: Legal Funding) [2014] 1 FLR 508
PG v TW (No 2) (Child: Financial provision) [2014] 1 FLR 923
GW v RW (Financial Provision: Departure from Equality) [2003] 2 FLR 108
Re A (A Child: Financial Provision) [2015] 2 FLR 625
Re C (Financial Provision) [2007] 2 FLR 13
Re M-M (A Child) (Financial Provision: Father Resident Abroad) [2014] 2 FLR
1391
Re N (Payments for Benefit of Child) [2009] 1 FLR 1442
32
Re P (Child: Financial Provision) [2003] 2 FLR 865
Re S (Child: Financial Provision) [2005] 2 FLR 94
Re S [2015] 2 FLR 77
Rubin v Rubin [2014] 2 FLR 1018
SW v RC [2008] 1 FLR 1703
T v B [2010] 2 FLR 1966
TW and TM (Minors) [2015] EWHC 3054 (Fam)
V v V (Child Maintenance) [2001] 2 FLR 799
Y v Z [2014] EWHC 650 (Fam)