MG v FG
| Jurisdiction | England & Wales |
| Judge | COBB J |
| Judgment Date | 28 July 2016 |
| Neutral Citation | [2016] EWHC 1964 (Fam) |
| Court | Family Division |
Costs – Schedule 1 – Legal costs funding – Repeated failed applications – Litigation conduct – Outstanding costs order – Existence of prior agreement.
Financial remedies – Schedule 1 – Application to strike out – Test – Estoppel and res judicata – Whether prior failed Australian and English Pt III proceedings created estoppel issues – Extent to which overriding objective relevant – Likely approach of court to prior failed proceedings in substantive proceedings.
The couple met in 2004 and married in Sydney in November 2006. They lived together in England until their separation 16 months later, in March 2008. They were divorced in Australia in May 2009. After the separation the mother and the child lived together in Australia; the father remained in London, where he subsequently remarried and had two children with his new wife.
In March 2009, the mother issued financial remedy proceedings in Australia, and made a claim for child support through the Australian Child Support Agency. Following mediation the proceedings were resolved by consent; the couple entered into three ‘binding agreements’, negotiated and drawn up with the assistance of specialist family lawyers, relating to spousal maintenance, child support and capital provision. Under these the mother was to receive spousal maintenance of Aus$600 pw for three-and-a-half years (until the child’s fifth birthday); the child support award was Aus$350 pw, adjustable by reference to the consumer price index (more than the Australian CSA would have required the father to pay); and the father was to pay the mother Aus$172,500 (about £72,000), equating to about 40 per cent of the net matrimonial assets.
In August 2011, the mother applied to the English court, seeking an order under Schedule 1 of the Children Act 1989. The father applied to strike this out and the mother agreed to the dismissal of her application. In July 2012, the mother sought to vary and/or set aside the agreements in Australia; however, her claim for capitalised spousal maintenance of Aus$300,000 plus a further Aus$200,000 by way of child support was dismissed by the Australian judge.
The mother then argued that the agreements had been procured by duress and/or fraud, and/or unconscionable conduct and/or on the basis of (a) failure to give full and frank disclosure, (b) a change of circumstance, and (c) negligent advice from her lawyers. The mother’s child support claim had risen to Aus$580,000. The mother’s new claims were all rejected by the Australian court, which noted there had been 16 affidavits from the mother, 12 of which had been ruled inadmissible in whole and the remaining 4 inadmissible in part, with exhibits running to 2,200 pages. The mother did not appeal.
The mother then attempted unsuccessfully to claim financial relief in England under Pt III of the Matrimonial and Family Proceedings Act 1984, on the basis that she now wished to move to England. A costs order was made against the mother in these proceedings on the basis that application had been ‘unnecessary and unjustified’. Shortly after being refused permission to appeal, in April 2016, the mother issued English proceedings under s 15 and Schedule 1 of the Children Act 1989. The father applied to strike out the mother’s Schedule 1 application under r 4.4 of the FPR 2010, on the basis that it was an abuse of process. The mother applied for a legal costs funding order in respect of the Schedule 1 proceedings.
The child was now 8 years old. The father was currently paying child support of £833 pcm, increasing to £1,085 pcm from August 2016. No evidence contradicted the father’s claim that he had throughout fulfilled all his obligations under the agreements. The father’s Form E disclosed a net income of £82,000 a year, with capital (mostly in his current home) of £800,000. The mother claimed that she wished to move to central London, in order to pursue a career and so that the child could attend a private school. She said she had no assets and debts of between £86,000 and £115,000, that she needed surgery, was likely to be evicted from her current home and was reliant on state benefits in Australia. Her claim included capital provision to house herself and the child in central London, financial support of about £152,000 pa, plus about £24,000 pa for education and healthcare, plus help paying off her debts. The mother was also seeking a legal costs order in the form of a contribution of £30,000 to her prospective costs from now to FDR of £78,198.
Held – (1) In deciding whether to order a strike out based on ‘abuse of process’ under r 4.4, the court must not be distracted by a detailed consideration of the merits of the claim itself, but must confine its consideration to whether the claim was incoherent, lacking in sense, legally unrecognisable, factually baseless or similar. The court did not believe that the rules and supporting Practice Direction, or the Supreme Court’s interpretation of the rules, excluded an application for strike out on the basis that a matter was res judicata in any sense, or under the convention of estoppel (see [21], below).
(2) However, the rules of res judicata or estoppel did not apply so as to justify striking out this application. The Australian decision had not involved
consideration of the financial settlement on its merits or issues such as standard of living and there had been no determination of the Pt III claim on the merits, as it had stalled at the procedural permission stage. Further, under Schedule 1, unlike Pt III, the court had a broad discretion to make one or more of a wide range of orders in favour of or in respect of a child, having regard to the non-exhaustive list of factors set out in para 4. Finally, the doctrine of estoppel ought to be sparingly applied in cases concerning children (see [21]–[23], [25], below).
(3) Applying PK v BC (financial remedies: schedule 1) [2012] EWHC 1382), cases in which the court would exercise its jurisdiction to award a further lump sum under Schedule 1 following a clean break in divorce proceedings were few and far between, and would be the exception rather than the rule, but even an unexceptional claim under Schedule 1 might be legally recognisable and therefore outwith the scope of r 4.4 (see [26], [28], below).
(4) The ‘overriding objective’ (r 1 FPR 2010) did not come into play in determination of r 4.4, but would drive case management decisions going forward, so that the case remained strictly within cost-controlled and proportionate boundaries. Without creating an estoppel, the mother’s previous applications were likely to be highly relevant to the general approach of the court on the substantive application; the mother would not be permitted to go behind the findings already made and the court would plainly have regard to the terms of the agreements. The mother’s aspirations were ambitious, if not exorbitant; in some respects, they appeared to be outwith the Schedule 1 jurisdiction altogether. The court was doubtful (without having heard argument) that the mother could expect to recover any award from the father for the child’s benefit at this point to fund the planned relocation to the UK; furthermore, the prospects of her receiving any award of substance might be materially circumscribed by the respective financial positions of the parties. There was a very clear risk, given the extraordinary history of litigation in this case, that any potential financial benefit for the child (which, if any at all, was likely to be modest) would be swiftly and possibly wholly absorbed by the legal costs. The mother would be required to show cause why the agreements did not make proper provision for the child (see [29], [33], below).
(5) Taking into consideration various factors, including the mother’s repeated failed applications in this jurisdiction and in Australia involving filing of plainly excessive materials, the mother’s failure to discharge her own existing costs liability, the matters in issue between the parties (s 22ZB(1)(c)), the fact that there was a binding agreement between the parties in relation to the matters in dispute, that ‘the claim for substantive relief appears doubtful ... having regard to its subject matter’ (applying Rubin v Rubin[2014] EWHC 611 (Fam)) and the reality that the father would be unlikely to recover any
sums paid to the mother now, the court was not prepared to make a legal costs funding order (see [31], [32], below).
Cases referred to
Agbaje v Agbaje[2010] UKSC 13, [2010] 1 AC 628, [2010] 2 FCR 1, [2010] 2 WLR 709 [2010] 1 FLR 1813.
B (minors) (care proceedings: issue estoppel), Re[1997] Fam 117, [1997] 2 All ER 29.
B (minors) (issue estoppel), Re[1997] 1 FCR 477.
B and another (minors) (care proceedings: evidence), Re [1997] 3 WLR 1, [1997] 1 FLR 285.
BC v DE[2016] EWHC 1806 (Fam).
C (children) (family proceedings: case management), Re[2013] 3 FCR 399.
C (family proceedings: case management), Re[2012] EWCA Civ 1489, [2013] 1 FLR 1089.
Crossley v Crossley[2007] EWCA Civ 1491, [2008] 1 FCR 323, [2008] 1 FLR 1467.
Currey v Currey (no 2)[2006] EWCA Civ 1338, [2007] 1 FLR 946.
Dellal v Dellal and Others[2015] EWHC 907 (Fam), [2015] WTLR 1137.
F v G (child: financial provision)[2004] EWHC 1848 (Fam), [2005] 1 FLR 261.
J v C (child: financial provision)[1998] 3 FCR 79, [1999] 1 FLR 152.
MB v KB[2007] EWHC 789 (Fam), [2007] 2 FLR 586.
P (a child: financial provision), Re[2003] EWCA Civ 837, [2003] 2 FLR 865.
PK v BC (financial remedies: schedule 1) [2012] EWHC 1382, [2012] 2 FLR 1426.
Rose v Rose (divorce: consent orders) (no 2)[2003] EWHC 505 (Fam), [2003] 2 FLR 197.
Rubin v Rubin[2014] EWHC 611 (Fam), [2014] 1 WLR 3289, [2014] 2 FLR 1018.
Wyatt v Vince[2015] UKSC 14, [2015] 1 FCR 566, [2015] 2 All ER 755, [2015] 1 WLR 1228, [2015] 1 FLR 972.
Xydhias v Xydhias[1999] 1 FCR 289, [1999] 2 All ER 386, [1999] 1 FLR 683.
Application
On 9 May 2016 the father applied for summary dismissal, or strike out, of the mother’s...
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