C v C (Ancillary Relief: Structured Settlement)
| Jurisdiction | England & Wales |
| Judgment Date | 1996 |
| Date | 1996 |
| Year | 1996 |
| Court | Family Division |
SINGER, J
Ancillary relief – damages for personal injury to one of the parties – structured settlement – severely disabled child – method of approach to periodical payments.
Ancillary relief – lump sum – relevant criteria.
The husband and wife were both in their 30s. Their daughter was born in 1984, severely affected by thalassaemia, and totally dependent upon her mother. The wife provided excellent care. She had no relevant earning capacity now or for the foreseeable future. In 1986 the parents and the child were involved in a serious car crash. All three were injured, the husband most severely: he was permanently brain damaged, his mobility and ability to communicate were greatly impaired.
Liability to the husband had been admitted. The wife's own claim was settled for £39,000, the child's claim in respect of fractures and other injuries had not yet been concluded. Initially the wife had acted as the husband's next friend and in that capacity had in 1987 received some £21,000 as an interim payment for him. That money was not used for the husband's benefit. In 1988 the husband was discharged from hospital into the care of his parents. Later that year the wife petitioned for divorce and in 1989 obtained a decree absolute. In 1991 she gave birth to another child for whom she had never received financial support from the child's father. It was not contended that that birth affected the merits of the wife's claim to ancillary relief. Nor did the birth of a further child in 1994. Although she had filed her claim for ancillary relief in 1990 it was for a number of reasons not pursued until July 1994 when it came before a district judge in the Family Division.
In the meantime there had been two significant developments. A structured settlement of the husband's claim provided him with increasing annuities, and he and his family had moved to Cyprus, their home country, and intended there to build a house for the husband and generally to take care of him.
The wife and the child of the marriage continued to live in this country on State benefits.
The district judge rejected the wife's claims for all forms of ancillary relief for herself and ordered that there be a clean break between the parties thus disentitling the wife from making any future claim of any sort against the husband, including specific provision barring any potential claim which she might have under the Inheritance (Provision for Family and Dependants) Act 1975. In relation to the parties' only child an order was made for periodical payments.
The wife appealed.
Held – (1) The court had to balance the interests of all concerned and to give first consideration to the interests of the child. Although in other circumstances it would not have been unreasonable for the wife to receive a lump sum, in the circumstances of this case it was not practical to impose financial obligations upon the husband which he could ill afford. Damages for personal injuries were not excluded from consideration when a court conducted the section 25 exercise under the Matrimonial Causes Act 1973 but the source of and the rationale for the funds should not be ignored: see Daubney v Daubney [1976] Fam 267 and Wagstaff v Wagstaff[1992] 1 FCR 305. In this case no point of principle concerning the source, namely the personal injuries claim, of the husband's financial substance arose. What was far more relevant was that, notwithstanding the apparent disparity in the capital position of each party, each would have a secure home for their reasonable needs and there was virtually no readily available or realisable capital. As to periodical payments, any amelioration of the wife's position beyond the payment of child maintenance would present a threat to the husband's security and fail to help the wife. Nor was this a case for a nominal order or for payment of a lump sum of £2,500: it would be wrong to encourage a legally advised wife to claim a lump sum in the reasonable expectation that she would receive at least that kind of award. The district judge was right to dismiss the wife's claim under the 1975 Inheritance Act since she had failed in her claim for maintenance and the husband was most unlikely to die domiciled in this country.
(2) The present order for the child would terminate on the husband's death and might expose her to the need for proceedings in Cyprus. By consent that order should be replaced by a secured periodical payments order under s 23(1)(e) of the Matrimonial Causes Act 1973 which in the special circumstances of this case could be extended beyond the death of the payer under s 28(1)(b) and beyond the child's eighteenth birthday under s 29(3). Further, such order could be varied by the English court under s 31(6).
Per curiam: So far as could be ascertained, this was the first ancillary relief claim to be heard in relation to a structured settlement. In the event the issues in the case had been decided without the need to formulate any questions of principle or indeed the answers to them. This was pre-eminently a case which should have been transferred for hearing by a Judge of the Family Division.
Statutory provisions referred to:Inheritance (Provision for Family and Dependants) Act 1975.
Matrimonial Causes Act 1973, ss 23, 24, 24A, 25, 25A, 28, 29 and 31.
Cases referred to in judgment:Daubney v Daubney [1976] Fam 267; [1976] 2 WLR 959; [1976] 2 All ER 453.
Fisher v Fisher [1989] FCR 309.
Fullard, Re, Fullard v King [1982] Fam 42; [1981] 3 WLR 743; [1981] 2 All ER 796.
G v G (Minors: Custody Appeal) [1985] 1 WLR 647; [1985] 2 All ER 225.
Wagstaff v Wagstaff[1992] 1 FCR 305.
Whiting v Whiting [1988] FCR 569; [1988] 1 WLR 565; [1988] 2 All ER 275.
AppealAppeal from District Judge Groves sitting in the Principal Registry.
Howard Shaw for the wife.
Elizabeth-Anne Gumbel for the husband.
MR JUSTICE SINGER. IntroductionThis appeal is brought by the wife petitioner against an ancillary relief order made in the Principal Registry by District Judge Groves on 7 July 1994, which was I believe effectively the third day of the hearing. I shall for convenience in this judgment refer to the parties as "husband" and "wife" although in fact their divorce took place as long ago as October 1989.
The district judge rejected the wife's claim for all forms of ancillary relief for herself, both as to maintenance and capital provision, and ordered that there be a clean break between the parties thus disentitling the wife from making any future claim of any sort against the husband, including specific provision barring any potential claim which she might have under the Inheritance (Provision for Family and Dependants) Act 1975. In relation to the parties' only child, ["the child"] an order for periodical payments was made, to run from 14 July 1994 at the rate of £70 per week until 15 August 1996 and thereafter at the rate of £115 per week until the child should reach the age of 17 or cease full-time secondary education (whichever should be the later) or further order. Finally the district judge made no order for costs inter partes, thus leaving the private-paying husband to bear his own, and the wife's taxed costs to be borne by the Legal Aid Fund.
The notice of application filed on behalf of the wife in support of her appeal challenges the decision to effect a clean break and suggests that the wife should receive a lump sum of £2,500 from the husband; that her maintenance claim should be left alive and recognized as viable by the imposition of a nominal periodical payments order to run at the rate of 5p per annum; and that the wife's potential claims under the 1975 Act should be preserved intact. There is a further claim that it was wrong for the district judge not to have backdated the child's periodical payments order to some earlier date such as that of the petition (filed as long ago as November 1988), the initiation by the wife of her ancillary relief claims (in December 1990, with a revised application filed in March 1992), or indeed some other date. The notice of appeal does not seek to disturb any other part of the order made by the district judge, and indeed expressly suggests that the order for no costs between the parties should stand.
The backgroundThe factual background underlying these orders is unusual and tragic for all members of each spouse's family, and for their child. I shall recount it as succinctly as possible. The husband was born in 1959 and is therefore now just short of 36. The wife was born 1962 and will shortly be 33. Each of them comes from a Greek Cypriot family, and each of them was born in this country. They married in 1979 when he was 20 and she was just 17. He was a Jehovah's Witness, and after the marriage she too adopted that faith.
The child was born on 5 March 1984 so that she is now just 11. She has from birth been very seriously affected in her development, both physically and to a lesser extent, intellectually and psychologically, by an inherited illness,
thalassaemia. This has as one consequence that for her life to be sustained she requires regular in-patient admissions for a transfusion of blood. She furthermore requires, under the mother's supervision, to be treated each night with iron supplements to counteract anaemia. The relevant drug is infused by a needle or catheter which has to be inserted nightly into her stomach. As a consultant haematologist wrote in a report in March 1994:
"She is totally dependent on her mother's excellent supervision and management of her condition at home."
At the hearing before the district judge there was no word of criticism concerning the mother's care of the child which, it was expressly agreed, was devoted and which (if even there were no other calls upon her) required effectively constant availability to minister to the child's needs. Thus there was no suggestion at the hearing nor is there now that the wife has any relevant earning capacity at present or in the foreseeable future, a future which may...
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