AZ v FM
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mostyn |
| Judgment Date | 20 January 2021 |
| Neutral Citation | [2021] EWFC 2 |
| Date | 20 January 2021 |
| Docket Number | Case No: FD09D05205 |
| Court | Family Court |
[2021] EWFC 2
IN THE FAMILY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Mostyn
Case No: FD09D05205
The Appellant acted in person
Helen Williams (instructed by Bross Bennett LLP) for the Respondent
Hearing dates: 12–13 January 2021
Approved Judgment
This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.
In this judgment I will refer to the appellant as “the husband” and to the respondent as “the wife”.
This is my judgment on the husband's appeal against the judgment of Deputy District Judge Butler (“the trial judge”) dated 29 January 2019 (as supplemented on 24 July 2019, 25 September 2019 and 16 October 2019) which (a) refused the husband's application to vary downwards periodical payments made for the benefit of the child of the marriage; (b) capitalised those periodical payments; and (c) dealt with the division of the remainder of a fund previously set aside to satisfy the parties' liability for capital gains tax (“the CGT fund”).
In this judgment I shall refer to a lump sum which capitalises and replaces future payments of periodical payments in favour of a child as a “commutation lump sum”.
On 30 January 2020, in a decision made on the papers, HHJ Everall QC granted the husband permission to appeal the order of the trial judge on a single ground which challenged the jurisdiction of the court to capitalise periodical payments for child maintenance (Ground 2). He refused the husband permission in respect of Grounds 1 and 3 which asserted respectively that the judge was wrong (a) to draw adverse inferences as to his level of income, and (b) to divide the CGT fund as he did. At the hearing before me the husband renewed orally his application for permission on Grounds 1 and 3. I refused permission on those two grounds but made clear that I would correct any mathematical errors in the calculation of the commutation lump sum either under the slip rule or the court's inherent jurisdiction.
This judgment records my reasons for refusing permission on Grounds 1 and 3. It also gives my decision on Ground 2.
The husband is a well-respected architect, aged 57. He resides in the USA and holds a professorship at Princeton University, although he told me during the hearing that the future of this position is uncertain as he is in dispute with the university. In 2012 the husband remarried a woman who is also an architect and academic. They now have two young children. I was told in the husband's skeleton argument, and by him orally in his submissions, that since the hearing before the trial judge the eldest of these daughters has been diagnosed with an incurable illness which is life-limiting and requires extensive care. The husband tells me that there are significant costs associated with this care and treatment regime which may increase in the future, especially if he were to lose the medical insurance provided by his employer. I will explain below that none of these changes of circumstances has been the subject of a formal application to adduce fresh evidence notwithstanding that HHJ Everall QC specifically directed that such an application should be made if the filing of such evidence were to be pursued.
The wife is also a very well-respected architect, aged 55. She continues to reside in London and holds a professorship at Harvard University.
The child of the marriage, M, in whose favour the order for the periodical payments was made, is now aged 19 and is studying at a university in London. Outside term time, she resides with the wife and has had very little direct contact with the husband for some years now.
The parties were married for 15 years. They enjoyed a good standard of living together, building successful careers and acquiring multiple properties.
Since their separation, the parties have been engaged in very lengthy and costly litigation not only in the Family Court but in the Chancery Division also. Moylan J made a final order in the financial remedy proceedings on 23 June 2011. There was also parallel commercial litigation arising out of the division of the parties' joint architects' practice. These proceedings were not settled until 2014. Further, the wife had to bring enforcement proceedings in November 2017 following the husband's failure to pay periodical payments for M from June 2017, though these were not pursued once the husband cleared the arrears.
The husband applied on 20 October 2017 to vary Moylan J's child maintenance order and the final hearing took place before the trial judge on 9 and 10 July 2018. Judgement was reserved. As mentioned, that main judgment was produced in writing on 29 January 2019. Clarifications were sought, predominantly by the husband's legal team, and consequently supplemental judgments were given on 24 July 2019, 25 September 2019 and 16 October 2019. The order giving effect to the judgment was not perfected until 1 October 2019. I have to say that for an application relating merely to child maintenance to take almost two years from start to finish is an unacceptably long period of time. Further, it is my view that to take 6 1/2 months to produce a reserved judgment is also an unacceptably long period of time.
The salient parts of Moylan J's order were:
i) The husband shall pay periodical payments to the wife for the benefit of M at the rate of £1,700 per month until she attains the age of 18 years or ceases full time tertiary education (to first degree level and to include one gap year) whichever shall be the later or until further order.
ii) When in tertiary education the husband shall, provided M continues to make her primary home with the wife during vacations, pay the maintenance 1/3 to the wife and 2/3 directly to M.
iii) The parties agree and undertake to pay 50% each of the school fees for M (and reasonable extras appearing on the school bill).
iv) The parties agree and undertake to pay 50% each of the university fees for M (and reasonable extras).
The husband's variation application was based predominantly on the argument that M was now older and that her needs could be sufficiently met by a smaller award; that the amount was unaffordable; and that the obligations were onerous and unfair. He was seeking to reduce the monthly payments from £1,700 to £800, a saving of £1,100 each month for perhaps four years. So the parties were arguing about £50,000 or thereabouts.
The salient parts of the trial judge's judgment and order were:
i) Although the parties accepted that the jurisdiction of the Child Maintenance Service (“CMS”) and the court could not be excluded in relation to financial provision for M, the parties agreed that the terms of the order were intended to meet M's maintenance needs through to the end of her first degree, including a gap year. The husband and wife therefore agreed not to make any further application to any court or to the CMS for further financial provision to meet M's maintenance needs beyond the terms of the order.
ii) The parties agreed and undertook to pay 50% of M's university tuition fees to the end of the first degree.
iii) The wife agreed and undertook to the court that in the event that she seeks any further or additional child maintenance for M (beyond the sum provided for in the order), any such payment which the husband has to make to M or the wife shall be repayable in full by the wife to the husband within 14 days of the receipt.
iv) Within 7 days of receipt of the funds set out below, the wife agreed and undertook to pay the sum of £44,000 into an account in M's name and the balance plus 50% of the CGT funds into an account in her own name to be used solely for the purpose of sustaining M in tertiary education.
v) The CGT fund and interest accrued were to be paid to the wife.
vi) The husband was to pay the wife a lump sum of £59,200, less 50% of the CGT funds, in discharge of the obligation to pay periodical payments for the benefit of M. 50% of the CGT funds amounted to £7,096. Therefore, the commutation payment to be paid by the husband was £52,104.
vii) The husband was to pay the wife's standard costs, with a payment of £17,500 on account.
In his main judgment at [9] the trial judge explained the circumstances in which he was making this atypical order of a single lump sum in lieu of monthly payments. He said:
“It would be a significant understatement to say that since the Moylan Order there has been a depressing amount of litigation between the Husband and the Wife over the implementation of the terms of this Order. The chronologies provided to me demonstrate that the Husband and the Wife have been engaged in almost constant litigation since the Moylan Order, not only in this Division but also the Chancery Division. It is extremely depressing when standing back to see that an Order which was designed to address the financial matters between them and bring finality has given rise to such an extraordinary level of conflict and, no doubt, a significant amount of costs expenditure on both sides.”
And at [14(viii)]:
“Between them these parties have spent [costs of] £124,586.68. It is not difficult to see how this has happened. A huge amount of work has been done. Stepping back and analysing the commerciality of this exercise, I have to confess when surveying what is actually between these parties, I struggle to understand how it could be possible for them to have got so far and...
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...(“the MCA”) provides that the Court may make an order for a lump sum in favour of a child on more than one occasion. Although in AZ v FM [2021] EWFC 2, Mostyn J agreed that the Court had the power to make a lump sum payment for a child in lieu of maintenance, he commented that such an order......