F v M
| Jurisdiction | England & Wales |
| Judgment Date | 24 February 2006 |
| Neutral Citation | [2006] EWHC 3676 (Fam) |
| Date | 24 February 2006 |
| Court | Family Division |
| Docket Number | CASE NO: FD05P00050 |
[2006] EWHC 3676 (Fam)
IN THE HIGH COURT OF JUSTICE
Mr. Peter Hughes QC Sitting as a Deputy High Court Judge
CASE NO: FD05P00050
FAMILY DIVISION
Philip Cayford QC and Jonathan Tod for the Applicant
Charles Howard QC and Sara Staite for the Respondent
APPROVED JUDGMENT
INTRODUCTION
This is a mother's application under Section 15 and Schedule 1 of the Children Act 1989 for financial provision for the benefit of her son, who was 5 at the end of December last year.
The father is a highly successful businessman of very considerable wealth. To preserve the anonymity of the parties and their families, and in case this judgment should ever be reported, I propose to refer to the mother as “M”, the father as “F”, and their son as “S”. M has an 8 year old daughter by a different father, and I propose to refer to her as “D” and the father as “P”. In addition I do not propose to refer to details that might assist to identify where either of the parties live.
The case raises a number of difficult issues. In particular:—
(a) Should M be held to the terms of a written agreement made in 2001, and negotiated through very experienced family lawyers on both sides, but never made into an order of the Court? This gives rise to consideration of the application of the principles set out in Edgar v Edgar [1980] 1 WLR 1410 in the context of child provision.
(b) How should the Court approach a case where the father is immensely wealthy and can provide whatever may be appropriate, in the light of the decision of the Court of Appeal in Re P (Child: Financial Provision) [2003] 2 FLR 865. Is it material that Re P postdates the agreement?
(c) To what extent is it relevant that the mother already had a child by an earlier relationship when S was born? How does P's contribution and ability to make provision for D affect what F ought to provide?
I suspect that there are no easy answers to some of these questions and, certainly, no perfect solution. What I think has to be borne in mind is that one is exercising a jurisdiction which involves a significant element of judicial discretion. The objective should be to achieve a solution which pays due regard to the welfare of the child, and which seeks to strike a balance of fairness between the parties.
THE BACKGROUND
(a) The parties and their relationship
M is 39 years old. She is a highly intelligent and capable woman with both graduate and post graduate qualifications. She is a fluent French speaker.
She made a career for herself in the banking industry and there met P, a married man with a young family. She had a relationship with him, which began in 1995, and led to the birth of D in 1997. On M's evidence, P was separated from his wife during this period. P decided, though, to try and save his marriage. He has had no contact with D since her birth, and continues to live with his wife and family. The family now includes children born since D.
In May 1999, M obtained a court order, after a contested hearing, whereby P was ordered to pay maintenance of £80 per week for D's benefit.
F is 53 years old. He is a self-made multi-millionaire, with a shrewd head for business. His wealth runs into many millions of pounds. Its precise extent is immaterial to these proceedings, and it predates his relationship with M. At the time of that relationship he was still married to his first wife. By her he has two children, both of whom are now grown up.
He and M had known each other socially for some years but not on an intimate basis. Their relationship developed in 1998, a few months after D's birth. F offered M employment, enabling her to give up her banking job and move back to live near her family. Within a short period, though, the relationship became public knowledge and F was required to terminate M's employment.
The relationship continued until shortly after M became pregnant with S in March or April 2000. There is some disagreement between the parties as to the extent of the relationship and the circumstances in which S was conceived. The areas of disagreement have, wisely not been dwelt on in these proceedings, and in my judgment have no more than a peripheral relevance. In this context, I gratefully adopt the observations made in J v C (Financial Provision) [1999] 152 at 154 (B-C) by Hale J (as she then was).
Of more significance is what is accepted by both parties; that the relationship was volatile and that they never set up home together. F was, at the time, living abroad for tax reasons. His periods in the UK were, therefore, limited and the opportunities for the parties to be together were restricted. They tended to be confined to periods when he was in the UK on business and short holidays away together.
(b) The agreement
The negotiations for the agreement began in October 2000, before S was born. F consulted specialist matrimonial solicitors in London. They sent him a letter, which he showed to M. In this he was advised that he had no obligation to maintain M, but that he had “definite obligations” to maintain and provide housing for his unborn child. M then consulted another well known and respected firm of London matrimonial lawyers. There followed months of turgid and, at times, acrimonious correspondence until agreement was eventually reached in August 2001, by which time S was over seven months old.
The agreement, as eventually concluded, made provision for: —
(a) Maintenance of £39,000 per annum, payable monthly and index linked, apportioned between S at £16,000 p.a., and M as a “carer's allowance” at £23,000 p.a.
(b) The carer's allowance to reduce, in the event of M returning to work. The reduction was stipulated to be half of M's net earnings after deduction of child care expenses. There was, also, provision for it to be suspended for the duration of any period of cohabitation exceeding six months and to terminate on marriage.
(c) F to pay S's school fees and for extras, which were to be agreed in advance for items costing more than £250.
(d) An allowance towards the cost of providing a new car every 5 years, linked to the price of a Volkswagen Golf, although M's car of choice was a Land Rover Discovery. There was provision for the car so purchased to be owned by the parties in accordance with their respective contributions.
(e) Contribution towards the cost of provision of housing for M and S, to revert to F when S reached the age of 18 or ceased secondary education, whichever was the later. The value of this contribution was approximately £115,000. The agreement also included provision for what was to happen in the event of M marrying or cohabiting.
At the time of the agreement M was living with D and S in a semi-detached three bedroomed barn conversion. She had bought the property with her sister in 2000. F had provided them both with some assistance to buy the property by negotiating a £30,000 reduction in the purchase price, which they raised together on mortgage. Under the agreement, F bought out the sister, and repaid her share of the mortgage. The effect was that he owned 50% of the property and M owned the other 50% but subject to her share of the mortgage, leaving her with only a small realisable equity.
M also owned a small apartment, which she had purchased on mortgage before her relationship with F, and which was at the time let to cover the mortgage payments and other expenses, and hopefully produce a small income. M has retained the apartment, which continues to be let to cover the mortgage and other expenses. Its present re-sale value is put at £166,000. The equity is put at £117,000, but that is before allowance for the costs of sale and Capital Gains Tax.
The agreement envisaged that M might want to move house in the future. It provided a mechanism whereby F would agree to transfer his interest to the new property. In the event of M making any capital contribution to the acquisition of the new property, he would match her contribution pound for pound. M was, though, to be entirely responsible for the costs of the move (within the first five years of the agreement), and, as the agreement was drafted, for any additional mortgage costs.
(c) The Schedule 1 Proceedings against P
In September 2002, roughly a year after the agreement had been concluded, M commenced proceedings against P for variation of the 1999 order to provide increased maintenance, provision for school fees, a lump sum and a secured provision order.
The proceedings were eventually compromised, and by a consent order of the 17 th July 2003, P was ordered to pay increased maintenance for D at the rate of £11,700 per annum, with provision for future index linking, school fees, and a lump sum of £14,500. This figure included agreed arrears of £2,500 in respect of school fees.
At the beginning of the present hearing, Mr. Howard sought an order for disclosure of the application forms relating to the proceedings against P, and the details of the budget that M had submitted in the proceedings. The application was opposed by Mr. Cayford. I ordered disclosure, and indicated that I would incorporate my reasons for so ordering into my judgment. These are to be found in Annex A at paragraph 137 onwards.
In her Form C10, in answering the question about the terms of the order that she sought against P, M said that she sought a periodical payments order of £23,689.60 per annum, index linked, a lump sum of £29,200, and a school fees order. Her budget was attached, broken down under various heads, between the costs attributable to her, to D and to S, and coming to a grand total of £72,405 per annum. Of this figure, £32,361.67 was attributed to herself, £24,415.02 to D, and £17,017.01 to S. In arriving at the figure of £23,689.60 she deducted the portion of the child benefit she received attributable to...
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