UD v DN (Schedule 1, Children Act 1989; Capital Provision)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moylan,Lord Justice Newey,Lady Justice King |
| Judgment Date | 21 December 2021 |
| Neutral Citation | [2021] EWCA Civ 1947 |
| Docket Number | Case No: B6/2020/1179 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1947
Lady Justice King
Lord Justice Moylan
and
Lord Justice Newey
Case No: B6/2020/1179
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
MR JUSTICE WILLIAMS
ZC18P04013
Royal Courts of Justice
Strand, London, WC2A 2LL
Christopher Pocock QC and Katherine Kelsey (instructed by Hall Brown Solicitors) for the Appellant
Father Charles Howard QC and Laura Moys (instructed by Freemans Solicitors) for the Respondent Mother
Hearing date: 16 June 2021
Approved Judgment
The father appeals from the order made under Schedule 1 of the Children Act 1989 (“the CA 1989”) by Williams J (“the Judge”) on 7 July 2020. He sought permission to appeal in respect of a number of the provisions in the order but I only granted permission in respect of the settlement of property order made in favour of two of the parties' children.
The order required the father to settle a property in London (“the family home”) in trust for the benefit of the parties' two younger children, then aged 19 and 14. The trust period was defined as the period starting with the establishment of the trust and ending on the first to occur of a number of events including the date on which the youngest child attained the age of 18 or 6 months after they completed full-time tertiary education.
The challenged provision in the order provides that, at the end of the trust period, 6.5% of the gross sale price or market value of the family home “shall be held on trust for the benefit of the children … absolutely”.
There are a number of grounds of appeal but, in summary, it is contended:
(a) that any order for financial provision, made on an application by a parent under paragraph 1, Schedule 1 of the CA 1989, must be made before the relevant child attains the age of 18, because the court has no power to make an order under paragraph 1 once the child has attained the age of 18;
(b) that the court does not have power to make a property transfer order or lump sum order to a person who is a child at the date of the order, but who will be aged over 18 when it takes effect or will be paid; and
(b) that, in any event, the judge was wrong to make an order under which the children would receive capital provision when they were adults because there were no special circumstances justifying such an award in this case.
The point argued under (b) does not seem to have been raised below. It appears, as submitted by Mr Howard QC, that it was accepted that the court had jurisdiction to make an order in the above terms, the issue being whether it was justified in this case. Further, in my view, the order made by the Judge is a settlement of property order and not a transfer of property order. Nevertheless, I propose to deal with it, briefly, when setting out my view of the merits of the respective grounds of appeal.
The father is represented by Mr Pocock QC and Ms Kelsey and the mother is represented by Mr Howard QC and Ms Moys. They all also appeared below.
Background
The background history is set out in detail in the judgment below, which is reported as DN v UD (Sch 1 Children Act: Capital Provision) [2020] EWHC 627 (Fam). I will, therefore, only set out a brief summary.
The mother and the father were in a relationship between 1996 and 2017/2018. They have three children. At the date of the hearing below, the eldest was 22 and, as referred to above, the younger two were 19 and 14 (I will call them DD, TD and GD, as in the judgment below). The father also has three children from other relationships including SD aged 33 and ED aged 20 at the date of the hearing below.
The mother moved with her three children to England in 2010. They lived at the family home which was valued for the purposes of the proceedings at approximately £10 million. In late 2017, the father gave DD £607,000 to enable him to purchase a property in London. This had been found at a previous hearing to be a gift.
In February 2018 the mother issued proceedings under Schedule 1 of the CA 1989. At that date DD, TD and GD were aged respectively 20, 17 and 12. The proceedings were determined by the Judge in his judgment of 29 January 2020 and order of 7 July 2020. By the date of the order, and also in fact the judgment, the middle child was aged 19. As referred to above, the family home was settled on trust for the benefit of the two younger children. The father was also ordered to pay approximately £200,000 to the mother for the purchase of a car and for other expenses. Periodical payments were ordered at the rate of £200,000 per year until TD completed full-time tertiary education and then at the rate of £160,000 per year until GD attained the age of 18 or ceased full-time tertiary education. There was also an order for school fees.
As part of her application, the mother sought outright capital provision for the two younger children. This claim was advanced on an unusual basis in that, essentially, it was said that, as set out in the skeleton argument for the final hearing below, the children “should be in the same financial position as [DD] qua the provision of a first home and not disadvantaged as a direct result of F's egregious behaviour”. It was argued that “[b]ut for F's conduct … and M's appropriate decision to protect the children by seeking protective orders against F, F would have purchased homes for each child equivalent to that bought for [DD]”. It was also said that the father's conduct towards the children and the mother “means that he will not meet his parental responsibilities towards the children” making it “appropriate” for the court to make an order which would “enable them to purchase a first home in their own right”. It was submitted that there was no requirement for special circumstances but, if there was, “this is in any event such a case, given the level of abuse and trauma suffered by the children”.
During the course of the hearing below, and as later reflected in his judgment, the Judge raised the issue of whether, once the children became adults or ceased their education, they would be “vulnerable to the financial muscle which the father is able to deploy”. The Judge later questioned whether, if he “concluded that there was a risk of [GD] being subjected to coercive behaviour by the father in the future and the only way to protect her against that was to give her financial independence”, he could properly make an order for capital provision in her favour.
The father applied for permission to appeal in respect of the settlement of the family home (and its contents) rather than an alternative, cheaper, property; the provision of that property by way of a trust rather than a lease; the rate of periodical payments; and the order for the payment of a lump sum of £80,000 to enable the mother to refurbish a property of hers in Russia. I refused permission to appeal in respect of all these grounds.
Judgment below
The judge set out the issues the subject of this appeal. The first was:
“18. As a result of the mother's open offer I also have to consider whether there should be an outright provision of capital for a home for each of the children whether by way of settlement, property adjustment order or lump sum on a sale of the family home (either the London Apartment or any alternative home provided for by my order) and, if so, in what sum.”
In her open offer, the mother had proposed that the family home should be settled on, what was called, “a conventional Schedule 1 trust” and that, at the end of the trust term, the younger two children should each receive, outright, a housing fund (of £950,0000 plus indexation) from the proceeds of sale of the property.
The jurisdictional issue, namely whether, on an application made by a parent under paragraph 1 of Schedule 1, any order has to be made before the relevant child attains the age of 18, was addressed from [34]. It was submitted on behalf of the father, at [37], that “the court has no jurisdiction to make an order in respect of a child who has reached the age of 18 unless it is an application which falls within Sch 1, para 2” (i.e. an application made by a child who is over the age of 18). The mother countered, at [36], that “the power to make one of the ‘menu’ of orders is triggered at the point of application and from that point on the court has power to make interim and final orders”.
On the latter, jurisdictional, issue, the Judge concluded that the court has power to make an order under Schedule 1, on an application made by a parent, provided the relevant child or children are under the age of 18 at the date of the application. His reasons were as follows:
“42. The effect of Sch 1, para 3 which permits the court to backdate a periodical payments order to the date of the application and to extend it beyond the child's 18th birthday would support the construction that an order for periodical payments can be made for the first time after the child reaches the age of 18 provided that the application was made prior to the child's 18th birthday. The use of the word ‘is’ in paragraph 3(2)(a) would also support the construction that an order can be made at a time when the child is 18. It seems to me that if the court has the power to make a periodical payments order in respect of a ‘child’ who has reached the age of 18 where the application was made prior to the 18th birthday that the court would also retain the jurisdiction to make other species of order under para 1. Para 3 is looking at the duration of orders in terms of...
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