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Family Law

The leading authority on all aspects of family law

07 JAN 2015

Dickson v Rennie [2014] EWHC 4306 (Fam)

Dickson v Rennie [2014] EWHC 4306 (Fam)
(Family Division, Holman J, 10 December 2014)

[The judicially approved judgment and accompanying headnote have now published in Family Law Reports [2015] 2 FLR 978]

Financial remedies – Sch 1, Children Act 1989 – Downwards variation as a result of CMS calculation – Application to reinstate periodical payments order – Application for lump sum order

The full judgment is available below

The mother’s application to reinstate a periodical payments order for a lump sum order to clear debts incurred as a result of a Child Maintenance Service calculation which reduced the level of periodical payments was refused pursuant to ss 8 and 10 of the Child Support Act 1991.

When the parents of the 9-year-old child separated the mother issued proceedings under Sch 1 to the Children Act 1989 for financial provision. The judge assessed the father’s overall assets including his pension fund to be £8.5m and his annual income to be in the region of £130,000.

The judge ordered the provision of a house for the mother and child and maintenance of approximately £3,400 pm index-linked. The father duly paid.

In 2010 the father unsuccessfully sought a downward variation of the periodical payments. By this time the mother had given birth to another child by a different father. In 2014 the father made an application as a non-resident parent to the child maintenance service for an assessment of the level of maintenance he should be paying. The assessment was based on the father’s current income of £20,045 per annum and on that basis, taking into account the number of nights a year that the child spent with her father (which were considerable) they calculated the total amount of maintenance due and payable as £26.43 per week or about £1,375 pa. Since the assessment he had paid £1,000 per month. The mother was in the process of appealing the assessment and disputed whether the Child Maintenance Service had jurisdiction as the father lived in the Channel Islands, although he worked for a UK company.

The mother applied to enforce the original order and claimed arrears of £3,903. In addition she sought a free-standing lump sum from the father pursuant to para 1(2)(c) and (3) of Sch 1 to the Children Act 1989. A discrete issue arose as to when the father ceased to be under a legal obligation to make payments as per the order.

It was clear that the top-up jurisdiction under s 8(6) of the Child Support Act 1991 was not available unless the Child Maintenance Service had themselves assessed the gross weekly income as being or exceeding £3,000 per week, or (which cane to the same thing) had made a maximum maintenance calculation, currently in the sum of £294 a week or £15,288 pa. Accordingly, for so long as the asserted jurisdiction of the Child Maintenance Service remained in force, it was not open to the mother to seek a full restoration of the previous order.

The father made an offer to increase the level of maintenance to £2,250pm including £250 pm as a sinking fund for periodic replacement of the mother’s car payable until the child obtained her first degree and contingent upon the mother withdrawing her appeal and abandoning further litigation.

The mother sought a lump sum of approximately £25,000 to cover debts incurred following the reduction in maintenance paid by the father. However, to make a lump sum order in this way would flout the intention of Parliament outlined in ss 8 and 10 of the Child Support Act 1991 that a lump sum payment should not make provision for maintenance disguised as a lump sum.

A lump sum order was permissible and would be made for £10,000 to enable the mother to pursue her appeal from the Child Maintenance Service assessment. The application for a sum of £1,500 to cover repair works to the house occupied by the mother and child was also allowed.

The mother’s application for capitalised periodical payments as it remained unclear what the appropriate level of maintenance should be until the mother’s appeal was heard, it was not possible to calculate a capitalised lump sum. The parties were urged to settled as so far the costs involved were disproportionate to the sums being argued over.




Neutral Citation Number: [2014] EWHC 4306 (Fam)

Case: No. FD06P00566

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

Case: No. FD06P00566

Royal Courts of Justice

10th December 2014

B e f o r e :

MR JUSTICE HOLMAN

____________________

DICKSON
Applicant

- and -

RENNIE
Respondent
____________________

Transcribed by BEVERLEY F. NUNNERY & CO.
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____________________

MISS L. POTTER appeared on behalf of the applicant (mother).
MISS R. SPICER appeared on behalf of the respondent (father). ____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

MR JUSTICE HOLMAN:


[1]  I have heard the whole of this case in public and now give this ex tempore judgment in public. It concerns financial provision for a child, and I direct that no report of this case in the media or elsewhere may name the child concerned nor depict a picture of her, nor identify the address at which she lives, or the school which she attends.

[2]  This case is yet another illustration of two things. First, the idiosyncratic and, some might say, absurd effect that the child support legislation and scheme can have on child maintenance arrangements. Secondly, the folly with which intelligent parents can allow themselves to be sucked into a vortex of litigation in which the sums expended in legal costs lose all proportion to the amounts in issue.

[3]  The essential factual background to this case is as follows. The father is now aged 57. The mother is now aged 44. In about 1994, and long before these parties ever met, the father moved to settle and live, essentially full-time, in Jersey.

[4]  In 2003 the parties met. At that time the father was living in Jersey and the mother was living in Southern England. They lived together for about two years from early in 2004 until about March 2006. From their relationship they have one daughter. She was born in March 2005 and is now aged about nine and three quarters. As I understand it, there was a time during the period of their relationship and cohabitation when a marriage was planned but, in the end, it did not take place.

[5]  Soon after the separation the mother applied to the court for financial provision for their daughter pursuant to the provisions of Schedule 1 to the Children Act 1989. In due course, in June 2007, there was a two day "main" or "final" hearing in relation to financial matters. Both parties were represented by very well- known solicitors and counsel in this field. The district judge, District Judge Walker, handed down a detailed written judgment on 18th July 2007. She then made an order, for reasons explained in the judgment, which made provision for a house to be provided on certain terms for the occupation of the mother and the child, plus payment of a lump sum to meet certain immediate needs, plus long term periodical payments for the child. In view of the later stance of the father, that in fact this is a situation in which the Child Support Agency (now the Child Maintenance Service) have exclusive jurisdiction with regard to setting the level of child maintenance, it is important to record what the district judge said at the end of paragraph 2 of her judgment:

"Both parties accept that the court has jurisdiction to make the orders sought and accept that an order will be made."

The district judge had clearly set out in the same paragraph that one of the orders sought was an order for:

". . . maintenance payments under paragraph 1(2)(a) of Schedule 1. What is in dispute is the quantum of each of these items."

So, the very well-known and experienced solicitors and counsel then acting on behalf of the father do not seem to have taken any point at that time that the jurisdiction of the court to make provision for periodical payments or maintenance for the child was, in fact, excluded by the relevant provisions of the Child Support Act 1991, which had been in force for many years prior to 2007.

[6]  The district judge assessed the overall capital wealth of the father as being about £8,500,000 including the CETV value of his pension funds and including also the capital in a trust in respect of which he was entitled to the income. It would, I think, be wrong to suppose that the father then had capital which he was completely free to dispose of of as much as £8.5 million, but that, at any rate, was the district judge's overall assessment of his capital position, and the capital that was potentially available to him as a source of income. So far as income was concerned, the district judge appears to have accepted figures put forward by the father. She said at paragraph 8 of her judgment:

"In respect of income the father's position is that he has had an average net income from all sources from 2002 to 2006 of £130,303 per year . . ."

The district judge appears broadly to have accepted that presentation of his net income position. During the course of her judgment, the district judge, who had heard oral evidence from both parties, made one or two observations which may help to illuminate the present round of litigation. She said at paragraph 24:

". . . I have been particularly struck by the father's attention to detail and his determination to examine every aspect of the mother's case. It is not surprising that this should be so; he is an accountant by training and has worked all his life in business. He is someone who is willing to fund those aspects of his lifestyle that he enjoys and which he can indulge due to his financial good fortune. This mainly relates to his cars, boats and planes. I accept that in other aspects of his life he is not unduly flamboyant . . ."

So far as the relationship between the father and mother was concerned, the district judge said at paragraph 26:

"The father has a view of the mother as profligate. When they were living together a very significant sum of money was spent on the provision of a new kitchen, which involved ultimately its relocation within the house. The father seemed to believe that the costs had been increased by the mother's input into this, and that he had been under pressure to spend more on it than he otherwise would . . ."

At paragraph 27 the district judge said:

"The mother, I believe, has difficulty understanding why a man as well off as the father should approach her case in the way he has, just as she cannot understand why he should have wanted to keep such a close watch on spending . . ."

A little further on she said:

"He has, however, been extremely pedantic in his approach and the mother's case has been trawled over in painstaking detail . . . "

Overall, the district judge made this appraisal:

"I am satisfied that the father is a person of significant wealth, although he cannot be described as 'fabulously rich'. He could lead a very comfortable life, even on his present means, without seeking to pursue other business interests or seek work."

[7]  The ultimate order of the district judge made provision, as I have indicated, for a house in Southern England to be owned by the father but occupied by the mother and daughter. She made an order for aggregate maintenance of £3,433 a month, which is £41,200 a year, index linked. I do observe that that was a high level of periodical payments in relation to a child then only aged about two and a half, given that the father, although "a person of significant wealth", was not "fabulously rich". The order was index linked. The father, as I understand it, paid in full every penny that he had been ordered both to put up by way of capital and also to pay by regular periodical payments. No criticism whatsoever can be made of the father in fully discharging his legal liabilities for the next several years.

[8]  In December 2010 the father applied, as he was fully entitled to do, for the level of periodical payments to be reduced and varied downwards. That application was given added impetus when, in April 2011, the mother gave birth to another child by a different father. This had an impact on the mother's own earning capacity and led the father to feel, as he clearly still does feel, that if he were paying the very high level of periodical payments that were ordered in 2007 he would, in effect, be supporting, or contributing to the support of, another man's child. So his application to vary the level of periodical payments downwards continued, in a rather slow way, through the courts during 2011 and 2012. It is, however, significant, that in July 2012 the father consented to his application for a downwards variation being completely dismissed and, indeed, that he should pay to the mother all her costs of and incidental to resisting that application. So, the effect of events between 2010 and 2012 was, in the end, that the husband effectively reaffirmed his acceptance that he should, and would, continue to pay periodical payments at the level that had been originally ordered by the district judge in 2007, uplifted by index linking. He continued fully to do so throughout the period 2010 to 2012 and throughout 2013. I have been told that by application of the index linking fixed by the district judge in 2007 to her original base order, the correct level of periodical payments, if that order remained in force, would now be £4,009 a month, or about £48,108 per annum.

[9]  However, in March 2014 the father, who had never previously done so, made an application as the non-resident parent to the Child Maintenance Service for the level of maintenance due to be paid to or for the child to be calculated by that service. The Child Maintenance Service then performed calculations. They first calculated the level of maintenance at £7 a week, which is about £365 a year. Later, however, they performed another calculation, now recorded in a pro-forma letter from the Child Maintenance Service dated 7th October 2014. That letter under "Step 1" assesses the father's gross weekly income as £385.48, which is the equivalent of £20,045 per annum. On the basis of that level of assessed gross weekly income, and taking into account the number of nights a year that the child does, indeed, spend with her father (which are considerable) they calculated under "Step 6" the total amount of maintenance due and payable as £26.43 per week or about £1,375 per annum. The difference between that level of maintenance as assessed by the Child Maintenance Service and the level of maintenance that had been fixed about seven years earlier by a district judge is, of course, stark and startling. From March 2014, when he issued or made his application to the Child Maintenance Service, the father slashed the level at which he made regular payments of maintenance. It is right and fair to say that he has never paid only at the levels actually fixed by the Child Maintenance Service. He paid £1,500 in each of April and May. Since then and currently he has paid and pays £1,000 a month.

[10]  This dramatic reduction in the income received by her, led the mother to issue a number of applications to the court. Unfortunately, it is not entirely clear exactly what she was originally seeking by those applications for a combination of two reasons. First, she was acting in person for a period. Secondly, the court appears to have mislaid the issued applications. They have never been located, and neither she, herself, nor the father appear to have any copy. So exactly what the mother was seeking in form by applications which she issued in April 2014 is not clear.

[11]  There is an order made by Deputy District Judge Hudson on 28th May 2014 at a hearing when, on that occasion, the mother was represented by counsel. The order recites the following:

"And upon it being recorded that the court file appears to be incomplete and the application from 3 April 2014 cannot be located, and upon the applicant having issued an application for enforcement of periodical payments and a lump sum on 3 April 2014 . . ."

More recently the mother has issued in the Southampton County Court a judgment summons (which has not yet been heard and determined) for the enforcement of claimed "arrears". As I understand it, the amount now claimed to be enforced by that judgment summons is £3,903. The basis of that particular claim and application for a judgment summons turns upon a dispute between the parties as to the "effective date" upon which the jurisdiction of the Secretary of State, acting through the Child Maintenance Service, commenced, and the jurisdiction of the court was excluded. There is, therefore, some discrete dispute between the parties (separate and independent from all the matters that I have to decide) as to the point at which the father ceased to be under a legal obligation to make payments pursuant to the order of the district judge and, instead, became under an obligation to make payments pursuant to calculations made by the Child Maintenance Service. It is in relation to that disputed period or "gap" that the dispute as to £3,903 arises.

[12]  However, as I have mentioned, in the whole period since April 2014 the father has, in fact, made payments at a considerably higher level than the amounts calculated as due by the Child Maintenance Service. It appears, therefore, that he is well able to show that between April and now he has made payments in excess of his actual, enforceable, legal liability, which considerably exceed £3,903.

[13]  Although the judgment summons is not before me, I have to say that it seems to me in those circumstances that the mother will have some difficulty in proving, if and when that judgment summons is finally heard, that there has been an overall failure by the father to pay that which he is legally required to pay. A judgment summons is a serious matter, since it seeks by its terms the committal of the alleged debtor to prison. This particular judgment summons is also something of a sideshow in these proceedings. It has been issued in the Southampton County Court and would, of course, involve the parties and, possibly, also lawyers travelling specifically to the Southampton County Court for the purpose of a hearing. Although the judgment summons is not itself before me today, I hope that the mother will reflect upon what I have just said before making a decision further to pursue that judgment summons.

[14]  I return, therefore, from that brief outing to the Southampton County Court to the Central Family Court here in London. By now the applications for the mother seem to have been made more clear and specific. There was a hearing on 1st September 2014 in preparation for which her then counsel, Mr Stuart McGhee, prepared a skeleton argument. At the outset of it, he made very clear that: "The applicant seeks a full restoration of the previous order", namely, the previous order of District Judge Walker as to periodical payments. So, although Miss Louise Potter, who appears on behalf of the mother at the present hearing, was to say that the mother has not issued any application under what she calls the "stand alone" jurisdiction under section 8(6) of the Child Support Act 1991, to which I will later refer, it is, in fact, quite clear that it is such an application that the mother wishes to pursue, for it is only by such an application that there could be "a full restoration of the previous order". Separately and additionally, the mother has made clear both by that preamble to the order of Deputy District Judge Hudson of 28th May 2014 and the document of Mr McGhee, and by the written and oral arguments of Miss Potter, that she now seeks a free-standing lump sum for the child pursuant to the provisions of paragraph 1(2)(c) and (3) of Schedule 1 to the Children Act 1989.

[15]  It is now necessary to set out and explain the legal context in which this dispute arises. As I have said, the Child Support Act 1991 has been in force for many years and was, in substance, in force in 2007 when District Judge Walker made her order. As I have said, there appears to have been no suggestion whatsoever at that time that any aspect of the Child Support legislation and scheme was engaged by this case and, as I repeat, District Judge Walker said, in paragraph 2 of her judgment: "Both parties accept that the court has jurisdiction to make the order sought and accept that an order will be made."

[16]  That stance seems to have remained the stance of the father for the ensuing seven and more years. The basis of his application to the Secretary of State and the Child Maintenance Service for that service to fix the legal level of maintenance is section 44 of the Child Support Act 1991. That provides as follows:

"44 Jurisdiction
(1) The Secretary of State shall have jurisdiction to make a maintenance calculation with respect to a person who is—
(a) a person with care;
(b) a non-resident parent; or
(c) a qualifying child,
only if that person is habitually resident in the United Kingdom, except in the case of a non-resident parent who falls within subsection (2A)."

On the face of it, this father appears to be, and for many years to have been, habitually resident in Jersey, which is not part of the United Kingdom. However, section 44(2A) then provides as follows:

"(2A) A non-resident parent falls within this subsection if he is not habitually resident in the United Kingdom, but is–
(a) employed in the civil service of the Crown . . .;
(b) a member of the naval, military or air forces of the Crown . . .;
(c) employed by a company of a prescribed description registered under the Companies Act 2006; or
(d) employed by a body of a prescribed description."

[17]  This father is not employed in the civil service of the Crown, nor is he a member of any of the forces of the Crown, so neither (a) nor (b) are in point. Nor is he employed by "a body of a prescribed description", so paragraph (d) is not in point. His case and argument is, however, that he is "employed by a company of a prescribed description registered under the Companies Act 2006." This is at the heart of this controversy between these parents.

[18]  As I understand it, there is a company which is registered under the Companies Act 2006 within the United Kingdom. The case of the father is that he is employed by that company and so falls within the overall ambit of the jurisdiction conferred by section 44 of the Act, even although he may not be personally habitually resident in the United Kingdom. It is on that basis and argument that the Child Maintenance Service have, indeed, concluded that they have jurisdiction in this case. The actual gross income that the father receives from that company is apparently the gross income assessed by the Child Maintenance Service to which I have already referred, namely gross income within the United Kingdom of the order of £20,000 a year. In a letter dated 2nd June 2014 to the mother, who was, of course, complaining bitterly about this turn of events, the Child Maintenance Service wrote:

"Turning to the issue of whether [the father] is habitually resident in the UK, a person does not have to be present in the UK all the time to be habitually resident. They may be habitually resident in more than one country, or in none. You are correct that the Channel Islands are not usually considered part of the UK. However, we were able to accept [the father's] application after considering other factors, namely, that he has an interest in the UK as a director of a company based here. "

[19]  The mother does not at all accept that reasoning, nor the application of section 44(2A)(c) to the actual facts and circumstances of this case. As a result, she has now launched an appeal, which she is fully entitled to do, from the decision of the Child Maintenance Service that they have jurisdiction in this matter, to the First Tier Tribunal within the statutory appellate structure of the overall child support structure and scheme. That appeal has not yet been heard and determined. I know from documents within these proceedings that the mother's essential case on the question of the jurisdiction of the Secretary of State and the Child Maintenance Service is that the company to which the father refers is not a company "of a prescribed description" for the purposes of the legislation, because the father himself owns 99.8 per cent of the issued shares in the company. He is (she says) the sole director of the company. She says that the company is no more than a vehicle for receiving payment within the United Kingdom for the provision of consultancy and management services by the father. The father will, no doubt, resist and defend those contentions before the First Tier Tribunal.

[20]  What essentially has happened in this case is that the district judge in 2007 was able to take, and did take, a global view of the worldwide assets and income of the father. Now, however, the father has asserted his right to make this application to the Child Maintenance Service. Under regulations that have, relatively recently, come into force, the Child Maintenance Service take as the data for their assessment of income the contents of United Kingdom tax returns and assessments made by Her Majesty's Revenue and Customs. The effect has been that a calculation has been made that is based solely upon that relatively small part of the father's income and assets which is (he says) his remuneration from this company which is undoubtedly registered and located here. The income is the modest sum of about £20,000 gross per annum.

[21]  The mother, as I have said, has already appealed to, and is proposing to advance her appeal within, the tribunal structure. Meantime, however, it is an undoubted fact that the Child Maintenance Service have been engaged; they have concluded that they have jurisdiction in this matter; and they have made the assessment of the father's income, and calculation of his maintenance liability, to which I have referred. Where does that leave the previous order of this court as to maintenance, and how does it leave the power and jurisdiction of this court at the moment? Those are the essential issues at this hearing.

[22]  It was, and is, quite clearly a purpose and effect of the Child Support Act 1991 and the whole statutory scheme (buttressed, as it is, by many regulations) to erect a barrier, or shutter, between the functions of the Secretary of State and the Child Support Agency (now the Child Maintenance Service) on the one hand, and the powers and functions of the court under Schedule 1 to the Children Act 1989 (and other legislation in relation to divorced parents) on the other hand. That emerges very clearly from the provisions of section 8 of the Child Support Act 1991. So far as is material that provides as follows:

"8. Role of the courts with respect to maintenance for children
(1) This subsection applies in any case where the Secretary of State would have jurisdiction to make a maintenance calculation with respect to a qualifying child and a non-resident parent of his on an application duly made by a person entitled to apply for such a calculation with respect to that child.
(2) . . .
(3) Except as provided in subsection (3A), in any case where subsection (1) applies, no court shall exercise any power which it would otherwise have to make, vary or revive any maintenance order in relation to the child and non-resident parent concerned."

[23]  Pausing there, subsection (3A) is not in point in the circumstances of the present case. It will be noted that section 8(1) applies not only in any case where the Secretary of State has actually made a maintenance calculation, but in any case where he "would have jurisdiction to make a maintenance calculation". As I understand it, the company upon which the father relies as bringing himself within section 44(2A)(c) was incorporated and operating as a company by which he was (he says) "employed" before 2007 and at all times since then. In other words, there has been no change in the essential corporate structure and factual background to this case between 2007 and now. It appears, therefore, that if the father is right in what he now says, and the Child Maintenance Service are right in what they have now determined, then the Secretary of State equally "would have [had] jurisdiction" to make a maintenance calculation back in 2007, so that the jurisdiction of the court, even then, was excluded. That, however, is not the way in which the case proceeded before the district judge.

[24]  So, the essential exclusion of the courts from having any role or jurisdiction in relation to child maintenance by virtue of the provisions of section 8(1) and (3) could not be more clear. Further on in section 8, however, there are certain exceptions. The one which it is suggested might be in point in the present case is that under section 8(6). That provides as follows:

"(6) This section shall not prevent a court from exercising any power which it has to make a maintenance order in relation to a child if—
(a) a maintenance calculation is in force with respect to the child;
(b) the non-resident parent's gross weekly income exceeds the figure referred to . . . [now in certain regulations]; and
(c) the court is satisfied that the circumstances of the case make it appropriate for the non-resident parent to make or secure the making of periodical payments under a maintenance order in addition to the child support maintenance payable by him in accordance with the maintenance calculation."

That subsection provides what is colloquially known as the "top-up" jurisdiction to which I will later return.

[25]  It is next appropriate, however, to refer to section 10 of the Child Support Act 1991. That provides as follows:

"10 Relationship between maintenance calculations and certain court orders and related matters
(1) Where an order of a kind prescribed for the purposes of this subsection is in force with respect to any qualifying child with respect to whom a maintenance calculation is made, the order—
(a) shall, so far as it relates to the making or securing of periodical payments, cease to have effect to such extent as may be determined in accordance with regulations made by the Secretary of State; . . ."

The Secretary of State has made regulations pursuant to that section, namely, The Child Support (Maintenance Arrangements and Jurisdiction) Regulations 1992" SI [1992] No 2645. Paragraph 3 of those regulations provides that:

"(1) Orders made under the following enactments are of a kind prescribed for the purposes of section 10(1) of the Act—"

And the listed enactments include at (v) "Schedule 1 to the Children Act 1989". Paragraph 3(2) of the regulations provides that:

"(2) Subject to paragraphs (3) and (4), [neither of which are in point], where a maintenance calculation is made with respect to—
(a) all of the children with respect to whom an order falling within paragraph (1) is in force . . .
that order shall, so far as it relates to the making or securing of periodical payments to or for the benefit of the children with respect to whom the maintenance calculation has been made, cease to have effect on the effective date of the maintenance calculation."

[26]  It is around the correct identification in the present case of "the effective date of the maintenance calculation" that the dispute that is the subject of the judgment summons to which I have referred arises. As I understand it, the mother contends that "the effective date" was 23rd May 2014. The father contends that it was an earlier date in March. However that may be, it is clear beyond doubt that the effect of section 10(1) of the Act, read with those regulations, is that on and after the effective date, whatever date that precisely was in this case, the order of District Judge Walker, in so far as it relates to periodical payments to or for the benefit of the child, has totally ceased to have effect, subject to the outcome of the mother's current appeal to the First Tier Tribunal and any subsequent appeals.

[27]  The first question that arises upon the application that was identified by Mr McGhee for "a full restoration of the previous order" is whether the mother can, on the facts and in the circumstances of this case, apply for a so-called "top up" maintenance order from the court in reliance on the provisions of section 8(6) of the Act which I have already quoted. There is, of course, no doubt in the present case that paragraph (a) of that subsection is satisfied, since currently a maintenance calculation is in force with respect to the child. The issue that arises is as to how the non-resident parent's gross weekly income falls to be determined for the purposes of subsection (6)(b). Under the regulations currently in force, the cut-off figure of gross weekly income, which has to be exceeded in order to enable an application to be made for top up maintenance under section 8(6), is £3,000 per week or £156,000 per annum. The essential case of the mother must necessarily be that she can demonstrate, after appropriate inquiry and investigation of the means of the father, that his true worldwide gross weekly income exceeds £3,000 a week or £156,000 per annum. This raises the question, however, whether determination of the "gross weekly income" for the purposes of section 8(6)(b) falls upon the court or falls upon the Secretary of State and the Child Maintenance Service. This appears to be a point upon which there is currently no decided authority of the court. The "conventional" view appears always to have been that the top up jurisdiction under section 8(6) can only be triggered when the Secretary of State or the Child Maintenance Service themselves have already made a maximum maintenance calculation, currently in the sum of £294 a week, or £15,288 per annum, to reflect an assessment by them of the gross weekly income as being or exceeding £3,000.

[28]  Thus, in the most recent, 2002 edition of the very well-known practitioners' guide "Child's Pay" by Nicholas Mostyn QC, Belinda Cheney and Rebecca Wood, it is stated at paragraph 17.16 on page 145 that:

"CSA 1991, s.8(6) permits a parent to seek from the court a 'top up' to a CSM calculation. The right to apply for such a 'top up' is only available where the maximum liability for CSM has been reached, presently set at net weekly income of £2,000."

As I have said, it is currently now set at a gross weekly income of £3,000. Similarly, in the current, 18th Edition of Rayden and Jackson on Divorce and Family Matters at paragraph 22.129, the following is stated:

"Parent may seek 'top up' to CSM calculation.
A parent may seek from the court a 'top up' to a CSM calculation. The right to apply for such a 'top up' is only available where the maximum liability for CSM has been reached, presently set at net weekly income of £2,000."

So it can be seen from those almost identical passages in two very authoritative works on this topic, that the various authors and editors have all taken the view that a top up can only be applied for when "the maximum liability" has been reached. The current maximum liability is £294 per week. The calculated liability in this case is £26.43 per week.

[29]  Miss Louise Potter, who has argued this case with the utmost knowledge and skill on behalf of the mother, describes the provisions of section 8(6) as providing "a stand alone jurisdiction". She correctly says that normally it is the power, duty and function of a court to reach its own determination and decision as to whether or not it has "jurisdiction" in some matter. Her argument gains considerable force from some obiter observations by Charles J in the case of CF v KN (Financial Provision for Child: Costs of Legal Proceedings) [2010] EWHC 1754 (Fam) [2011] 1FLR 208. At paragraph 4 of his judgment in that case Charles J said the following:

"The premise for that stance was and is that, unless and until the Commission make a maximum assessment, the court's power to order 'top up' periodical payments pursuant to section 8(6) Child Support Act 1991 is not engaged. I queried this, because it is not what section 8(6) expressly provides, and I was referred to [certain authorities]. It seemed to me arguable that the court could determine the issue of fact that is part of the trigger to its jurisdiction set by section 8(6)(b), namely whether the father has a net weekly income in excess of the figure set in regulations . . ."

However, although he considered the point "arguable", Charles J went on in paragraph 5 to explain that the point had not been raised nor, therefore, considered by counsel in advance of the hearing, and so he had concluded that the point could not be fairly pursued on the appeal that was before him. He, in fact, was essentially concerned with the question of whether or not a lump sum order could be made (notwithstanding the existence of a CSA assessment) essentially for the provision of funding some legal proceedings. So those observations of Charles J are plainly entirely obiter, and the highest he had put it was that it seemed to him that the point was arguable.

[30]  Although I absolutely accept the view of that distinguished judge that the point is "arguable", I am absolutely clear that the point is not in the end a good or correct one. It is perfectly true that, as Charles J observed, section 8(6)(b) does not include any express words within it to the effect that the gross weekly income "as calculated [or assessed] by" the Secretary of State or the Child Support Agency/Child Maintenance Service exceeds the relevant figure. Section 8(6)(b) merely refers in the abstract to what is essentially a question of fact, namely, as a matter of fact that the gross weekly income does exceed the specified figure. But it seems to me crystal clear from the scheme of the Act as a whole, and section 8(6) within it, that even although the question may be said to go to the jurisdiction of the court, to make a top up order the relevant "gross weekly income" for the purposes of section 8(6)(b) has to be the gross weekly income that has been assessed or calculated by the Secretary of State or the Child Maintenance Service. Quite clearly that subsection is, indeed, providing a "top up" jurisdiction; it is not providing some avenue of challenge or appeal to the calculation or assessment that has earlier been performed by the Secretary of State or the Child Maintenance Service.

[31]  As the facts of the present case so clearly demonstrate, there is a huge dispute between these parties as to the true level of income of this father. The Child Maintenance Service (applying the approach mandated by regulations) have assessed it at the figure that they have. The mother says that his true level of gross weekly income is far higher than that. She has, of course, an avenue of appeal to the First Tier Tribunal, which she is pursuing on the issue of the quantum of his gross weekly income as well as on the issue of whether the Child Maintenance Service have jurisdiction at all. There is simply nothing at all in the legislation which enables or permits any kind of challenge or appeal (absent judicial review) into the court system from the calculation or assessment that has been made by the Child Maintenance Service in any case or situation in which it is not arguable that the gross weekly income does, or may, exceed £3,000. It would be completely adventitious if section 8(6) provided some avenue of challenge or appeal in the relatively small number of cases in which the gross weekly income happens arguably to exceed £3,000; and, in my view, it is manifestly not the purpose of section 8(6) to provide that. Thus, on the facts of the present case, the mother strenuously disputes that the true level of gross weekly income of the father is £385 or anything remotely like it. But Miss Potter accepts that, whether it is that figure, or £500, £1,000, £1,500, £2,000, or £2,500, in none of those circumstances can there be any resort to the court by way of appeal or challenge to the calculation made by the Child Maintenance Service. Patently section 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, notwithstanding the obiter observations of Charles J which I have quoted, it is my very clear and firm view, and I so hold, that the top up jurisdiction under section 8(6) of the Child Support Act 1991 is not available unless the Child Maintenance Service 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 per annum. Accordingly, for so long as the asserted jurisdiction of the Child Maintenance Service remains in force, it is simply not open to the mother to seek, as Mr McGhee said she was seeking: "a full restoration of the previous order."

[32]  I am, of course, profoundly sympathetic to the position of the mother in this case. The fact remains that, after a fully contested hearing at which they were both very well represented, a district judge in 2007 fixed a liability by the father to maintain the child at a rate which has now risen with indexation to £4,009 a month, or just over £48,000 per annum. As a generalisation, the costs of caring for a child tend to increase and certainly do not decrease as a child grows older. In 2007 the child was aged about two and a half. She is now aged about nine and three quarters. It is widely known that between 2007 and now, the cost of living has increased, which is why the order has, indeed, increased by indexation. The father, responsibly and punctually, paid the full amounts for a period of over six and a half years. As I have already described, he sought between 2010 and 2012 to reduce the amounts, but he abandoned that application. So, after that history, and with no suggestion at all that there has been any diminution in the overall financial circumstances of the father, it must be a devastating blow to the mother to now find that her maintenance income has fallen so drastically to a calculated £1,300 a year and a paid £12,000 a year. But this is a court of law. To my mind the law is crystal clear, as I have described it. She has her avenue of appeal to the First Tier Tribunal, but meantime this court can do absolutely nothing to remedy her plight.

[33]  Before I turn to consider the lump sum aspect of the present application, it is, I think, appropriate now to make some reference to the expenditure of legal costs on this litigation and, indeed, to the current gap between the parties. During the course of this year alone the mother has incurred, to the end of this hearing, legal costs and disbursements of £38,000 inclusive of VAT. Since the father (being resident in Jersey) is not liable to VAT, it is only fair to the mother also to give her costs figure net of VAT, namely £31,454. That, of course, does not alter the fact that she is liable to VAT and that that further cost has been incurred and must be paid. The father, for his part, has incurred (exempt from VAT) costs of £20,726. So the total outlay of these two parties on this round of litigation is only just under £60,000.

[34]  I do appreciate that the main issue in contention between them is a long term issue, which will stretch out another 10 years or more, as to whether the legal level of maintenance is at the rates calculated by the Child Maintenance Service, or at or about the levels previously set by the district judge. Compounded over 10 years, and with indexation, the difference between the figures does, of course, become quite considerable. But that is not the true difference between the parties. As I have said, the father, in any event, has been voluntarily paying, and says that he will continue voluntarily to pay, at any rate £1,000 a month. Further, during the course of this hearing certain open offers and counter offers were made. The father made an open offer which remained on the table for acceptance (and, so far as I am aware, remains on the table for acceptance at this precise moment) to increase the level of maintenance to £2,000 per month by way of general maintenance, and an additional £250 per month as a sinking fund for periodic replacement of the mother's car. So he offers to increase what he pays from £1,000 a month to £2,250 per month, and offers that that should be indexed, starting now, to the RPI (X) Index, and payable to the end of their daughter achieving a first degree of university education. That is, however, fundamentally and absolutely conditional upon her withdrawing her current appeal to the First Tier Tribunal and generally abandoning any further litigation. Additionally, he makes plain that he will continue to pay, as he currently does, the child's school fees. On the other side, the open position of the mother until moments before I began to deliver this ex tempore judgment was that she would settle for maintenance at a current level of £3,250 per month (of which £250 is referable to the car fund) index linked to the CPI for a further five years. She would further agree now that, after five years, the level of maintenance should reduce to the then equivalent (index linked to the CPI) of £2,750, also payable until the end of a university first degree course. If that were accepted and agreed to by the father, then she, too, would abandon her further appeal to the First Tier Tribunal and bring all these proceedings to an end.

[35]  Roughly (and ignoring indexation) the difference between those two positions (including the mother's proposed reduction after five years) over the next 10 years or so is somewhere of the order of £100,000. So, insofar as the real issue between these parties is as to the long term level of maintenance or periodical payments, they have spent between them £60,000 arguing about a difference over the next 10 or so years of around £100,000. Some people might wonder at the wisdom of doing that. The difference is apparently now even further narrowed because, although the mother is not personally present this morning, her counsel, Miss Potter, told me moments before I began this judgment at 10.30 a.m., that the mother, in fact, would now further lower the amounts of maintenance at which she would settle, so the gap between the parties narrows even further. However, no agreement has been reached. It is right to say that there was also some gap between their respective offers with regard to a capital lump sum payment now; but that was measured only in a relatively small number of thousands of pounds, and I doubt whether that particular gap would have proved unbridgeable. That is why I referred at the outset of this judgment to "the folly with which intelligent parents [as both these parents undoubtedly are] can allow themselves to be sucked into a vortex of litigation in which the sums expended in legal costs lose all proportion to the amounts in issue".

[36]  I turn now, and finally, to the current lump sum elements of the mother's claim. There is no doubt that the court does have a power under Schedule 1 to the Children Act 1989 to make orders "at any time", and from time to time, for payment of lump sums, and that power is in no way directly affected or impacted by any aspect of the Child Support Act 1991 and the statutory scheme. I must, however, be very careful that I do not circumvent the clear statutory intention, in particular of sections 8 and 10 of the Act, which I have quoted above, by making provision for what, in effect, is maintenance disguised as a lump sum.

[37]  By the time of the present hearing there are three limbs, or elements to the mother's claim for a lump sum. I can deal with one very shortly, for it is essentially agreed between the parties. Apparently, there is a pressing need for work to be done to the kitchen ceiling, and the left hand garden fence, and a leaking lavatory in the child's bedroom, in the home which is owned by the father but provided for the occupation of the mother and the child pursuant to the order of District Judge Walker. It is said that it will cost about £1,500 to repair all those matters. The father has said, through his equally skilled and knowledgeable counsel, Miss Rachel Spicer, that provided the mother first produces to him a builder's estimate for doing those items of work he will pay to her in advance a sum which is the lesser of the amount estimated by the builder or £1,500. I am sure that these very experienced counsel will be able to draft a form of words which gives legal effect to that very small part of this case.

[38]  The other two elements of the application for a lump sum are larger and much more contentious. The second limb of her application was put as follows by Miss Potter. The mother seeks:

"A lump sum to relieve the hardship arising out of debts incurred due to the dramatic reduction in her household budget caused by the changed level of the maintenance payable for the child's benefit."

The mother herself had made a recent statement dated 20th November 2014. At paragraph 2 she says as follows:

"My financial position has continued to deteriorate and is now critical. By way of summary my debts are approximately as follows . . ."

She then lists a number of credit card debts (several of them at their lending limit) and also an overdraft with the bank which total £22,380. At paragraphs 7 to 9 of the same statement, she deals with what she describes as "arrears". By arrears she means the difference between the amount as ordered by District Judge Walker at its current indexed level, and the amounts actually paid by the father since he ceased paying at the full rate under that order. At paragraph 9 she shows what she describes as a series of monthly "shortfalls", and a bottom line of "total arrears" of £22,702. The correlation between her overall debts and the so-called "arrears" is striking. Further, the mother's very experienced solicitors, Kingsley Napley, wrote a letter dated 4th December 2014 to the father's solicitors. On page 2 of that letter they say:

"In addition, we will be asking the court to order payment of the following lump sums:-
(1) £25,702 to cover the shortfall in maintenance to date . . ."

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 way in which the mother herself put it in her recent statement in which her debts on the one hand, and the so-called arrears on the other hand, almost exactly match each other; and the way in which Kingsley Napley put it in their letter in which they refer to 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 Child Maintenance Service 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 Child Maintenance Service 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.

[39]  The third limb of the current application is that the mother seeks a lump sum to provide her with a fund to pay costs in relation to her appeal to the First Tier Tribunal. The solicitors' estimate of those costs, produced yesterday, was about £14,700 inclusive of VAT. Miss Spicer effectively demonstrated that some of those estimated costs are, frankly, extravagant. For instance, it really does not seem necessary in this case for both a partner and a solicitor to attend upon a conference with counsel. It is doubtful that it is justifiable for both experienced counsel and also a solicitor to travel to Southampton to attend the hearing before the First Tier Tribunal. Some of the photocopying charges may be somewhat exaggerated, and there is, for instance, a figure in the estimate for "updating Schedule of Costs and preparation of next costs estimate" which does not seem applicable to a hearing before the tribunal which, as I have been told, has no power to make any order as to costs in any event. So, for those reasons I would, in any event, limit the reasonable and justifiable projected costs of the appeal to the First Tier Tribunal in the sum of £10,000 inclusive of VAT.

[40]  Miss Spicer, on behalf of the father, says that even such a sum should not be ordered. There is, to my mind, no doubt that the court can, in appropriate circumstances, make a lump sum order under Schedule 1 in order to enable a parent to fund proportionate and justifiable litigation designed to achieve a higher level of underlying maintenance for the child concerned. Authority for that may be found in the decision of the Court of Appeal in Re S (Child: Financial Provision) [2004] EWCA (Civ) 1685, [2005] 2FLR 94; and, indeed, in the authority of Charles J in CF v KM to which I have already referred on another point. Miss Spicer accepts that there is the power, but she submits that I should not exercise it in this case. She relies in particular on the open offer that the father has already made, namely, to pay £2,250 a month index linked, if the mother withdraws her appeal to the First Tier Tribunal. Miss Spicer says that as the father does currently pay £1,000 per month, and has made an open offer to pay £2,250 a month if she withdraws that appeal, that should be taken into account in deciding the reasonableness of, and the need for, the proposed appeal to the First Tier Tribunal and the claimed costs fund. I do bear that in mind. I have already referred to the folly of these two parties, and the disproportionality of their costs to date to the amounts in issue. It does, however, seem to me that sufficient remains in issue between them, including the whole fundamental question of whether the Secretary of State and the Child Maintenance Service have any jurisdiction at all in this matter, that the incurring of costs not exceeding £10,000 on pursuing the appeal to the First Tier Tribunal does remain reasonable and of itself proportionate. It seems to me that at the moment this child must be suffering very greatly from the very dramatic fall in the income available to her within the household of her mother, and that it is very much in the overall interests of this child that her mother, on her behalf, should be able to pursue that appeal.

[41]  For those reasons, I intend that there will be a lump sum order in the sum of £10,000 that the father must pay within a very short period of time to the mother, expressly for the purpose of her funding her lawyers in the proposed appeal to the First Tier Tribunal. But it must be paid on terms that she pays the whole of the £10,000 to Kingsley Napley, or such other solicitors as she may instruct, as an upfront payment towards their costs and disbursements of the hearing before the First Tier Tribunal. Further, she must produce to the father the final itemised bill from her solicitors after that hearing, and refund to him any amount by which £10,000 exceeds the actual final bill inclusive of VAT.

[42]  There is one additional way in which Kingsley Napley, in their letter of 4th December 2014, and Miss Potter, at the outset of this hearing, advanced a claim to a lump sum, that is as a capital figure "to capitalise maintenance". The suggestion in the open letter of Kingsley Napley of 4th December 2014 was that a lump sum of just under £600,000 should be paid in order to capitalise suggested maintenance levels between now and the child ceasing tertiary education. Apart from any jurisdictional matters, the difficulty, of course, with capitalising maintenance at the moment is that there is such a lack of clarity as to what the ultimate legal levels of maintenance are. The mother's position is that the Secretary of State and the Child Maintenance Service had, and have, no jurisdiction at all on this matter and, essentially, that the order made by District Judge Walker, as indexed, should revive. The father's position is that his legal liability is limited to the very low amount calculated by the Child Maintenance Service. With such a vast gap of well over £45,000 a year between those two figures, it is, of course, quite impossible to embark on any conceivable process of capitalisation, even if it were otherwise appropriate to do so.

[43]  The upshot is that all the applications by the mother currently before this court are dismissed, save that I will expressly make provision for two lump sums to cover the repairs and the costs fund in the amounts that I have indicated, and on the terms that I have indicated.

[44]  During the course of this hearing I repeatedly urged these two parents to try to settle, not merely for now but on a long term basis, these financial issues between them. I afforded many opportunities for them to do so, and during the last two days I have spent an appreciable period of time waiting outside the courtroom whilst negotiations took place. As I have said, they are both highly intelligent people. The father is a qualified accountant, and clearly is, or has been, an astute businessman. He was described by District Judge Walker in terms that I have already quoted. The mother, paradoxically, has recently trained as a family law mediator. Each of them expressly agreed with me personally, in answer to a question that I put to each of them, that this continuing conflict between them is "crazy". I believe that each of them agrees that the sort of money that they have been spending on legal fees is out of all proportion to the amounts really in issue between them. As I have pointed out to them, they did have two years during which they lived together and even, apparently, for a period planned to marry; and they have conceived this child. They are both clearly absolutely devoted to this child, who spends large amounts of time in England with her mother, but also large amounts of time in Jersey with her father. Their daughter is still only not yet 10. As I have pointed out to them, they are going to have to learn to co-operate with each other in matters relating to their daughter for at least another 10 years, although in truth responsibility as a parent is lifelong.

[45]  This is a court of law, not of morals. For reasons that I have explained, the current legal obligation of this father is apparently a very low one, although that might change depending on the outcome of the appeal to the First Tier Tribunal. But there are, in fact, moral and parental issues engaged in this situation, as well as legal issues. To a degree, the father, of course, recognises that, for he does not even now pay at the calculated level but at the higher level of £1,000 a month.

[46]  I can only conclude this judgment, which may seem hard hitting to the mother and her position, by begging both these parents, and in particular the father, to search their consciences, consider the objective needs of their child, consider the need for the child to have some proportionality in her lifestyle with her mother as well as with her father, and, even now, once and for all, to resolve their differences by a fair and sensible negotiated outcome. 
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