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You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> CF v KM [2010] EWHC 1754 (Fam) (13 July 2010) URL: https://www.bailii.org/ew/cases/EWHC/Fam/2010/1754.html Cite as: [2011] 1 FLR 208, [2010] Fam Law 1060, [2010] EWHC 1754 (Fam) |
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FAMILY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
CF | Applicant |
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| - and - |
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KM | Respondent |
____________________
Rebecca Bailey – Harris (instructed by Kingsley Napley) for the Respondent
Hearing dates: 29 June 2010
____________________
VERSION
OF JUDGMENT
Crown Copyright ©
Charles J :
Introduction
v
C [2009] 2 FLR 1540. It seemed to me arguable that the court could determine the issue of fact that is part of the trigger to its jurisdiction set by s. 8(6)(b), namely whether the father has a net weekly income in excess of the figure set in regulations (at present £2,000 per week). It was common ground that the jurisdictional issue of fact set by s. 8(6)(a) is satisfied.
view,
whatever the answer is to point (a) there should be a full two way street of disclosure relating to the father's income and more generally his financial resources between the Schedule 1 proceedings and the Commission's assessment.
The most relevant statutory provisions of Schedule 1 Children Act 1989
Orders for financial relief against parents
1 (1) On an application made by a parent or guardian of a child, or by any person in whose favour a residence order is in force with respect to a child, the court may–
(a) in the case of an application to the High Court or a county court, make one or more of the orders mentioned in sub-paragraph (2);
(b) in the case of an application to a magistrates' court, make one or both of the orders mentioned in paragraphs (a) and (c) of that sub-paragraph.
(2) The orders referred to in sub-paragraph (1) are–
(a) an order requiring either or both parents of a child–
(i) to make to the applicant for the benefit of the child; or
(ii) to make to the child himself,
such periodical payments, for such term, as may be specified in the order;
(b) an order requiring either or both parents of a child–
(i) to secure to the applicant for the benefit of the child; or
(ii) to secure to the child himself,
such periodical payments, for such term, as may be so specified;
(c) an order requiring either or both parents of a child–
(i) to pay to the applicant for the benefit of the child; or
(ii) to pay to the child himself,
such lump sum as may be so specified;
(d) an order requiring a settlement to be made for the benefit of the child, and to the satisfaction of the court, of property–
(i) to which either parent is entitled (either in possession or in reversion); and
(ii) which is specified in the order;
(e) an order requiring either or both parents of a child–
(i) to transfer to the applicant, for the benefit of the child; or
(ii) to transfer to the child himself,
such property to which the parent is, or the parents are, entitled (either in possession or in reversion) as may be specified in the order.
(3) The powers conferred by this paragraph may be exercised at any time.
(4) An order under sub-paragraph (2)(a) or (b) may be
varied
or discharged by a subsequent order made on the application of any person by or to whom payments were required to be made under the previous order.
(5) Where a court makes an order under this paragraph–
(a) it may at any time make a further such order under sub-paragraph (2)(a), (b) or (c) with respect to the child concerned if he has not reached the age of eighteen;
(b) it may not make more than one order under sub-paragraph (2)(d) or (e) against the same person in respect of the same child.
(6) On making,
varying
or discharging a residence order the court may exercise any of its powers under this Schedule even though no application has been made to it under this Schedule.
Matters to which the court is to have regard in making orders for financial relief
4 (1) In deciding whether to exercise its powers under paragraph 1 or 2, and if so in what manner, the court shall have regard to all the circumstances including–
(a) the income, earning capacity, property and other financial resources which each person mentioned in sub-paragraph (3) has or is likely to have in the foreseeable future;
(b) the financial needs, obligations and responsibilities which each person mentioned in sub-paragraph (3) has or is likely to have in the foreseeable future;
(c) the financial needs of the child;
(d) the income, earning capacity (if any), property and other financial resources of the child;
(e) any physical or mental disability of the child;
(f) the manner in which the child was being, or was expected to be, educated or trained.
(2) In deciding whether to exercise its powers under paragraph 1 against a person who is not the mother or father of the child, and if so in what manner, the court shall in addition have regard to–
(a) whether that person had assumed responsibility for the maintenance of the child and, if so, the extent to which and basis on which he assumed that responsibility and the length of the period during which he met that responsibility;
(b) whether he did so knowing that the child was not his child;
(c) the liability of any other person to maintain the child.
(3) Where the court makes an order under paragraph 1 against a person who is not the father of the child, it shall record in the order that the order is made on the basis that the person against whom the order is made is not the child´s father.
(4) The persons mentioned in sub-paragraph (1) are–
(a) in relation to a decision whether to exercise its powers under paragraph 1, any parent of the child;
(b) in relation to a decision whether to exercise its powers under paragraph 2, the mother and father of the child;
(c) the applicant for the order;
(d) any other person in whose favour the court proposes to make the order.
Provisions relating to lump sums
5 (1) Without prejudice to the generality of paragraph 1, an order under that paragraph for the payment of a lump sum may be made for the purpose of enabling any liabilities or expenses–
(a) incurred in connection with the birth of the child or in maintaining the child; and
(b) reasonably incurred before the making of the order,
to be met.
(2) The amount of any lump sum required to be paid by an order made by a magistrates' court under paragraph 1 or 2 shall not exceed £1000 or such larger amount as the Secretary of State may from time to time by order fix for the purposes of this sub-paragraph.
(3) The power of the court under paragraph 1 or 2 to
vary
or discharge an order for the making or securing of periodical payments by a parent shall include power to make an order under that provision for the payment of a lump sum by that parent.
(4) The amount of any lump sum which a parent may be required to pay by
virtue
of sub-paragraph (3) shall not, in the case of an order made by a magistrates' court, exceed the maximum amount that may at the time of the making of the order be required to be paid under sub-paragraph (2), but a magistrates' court may make an order for the payment of a lump sum not exceeding that amount even though the parent was required to pay a lump sum by a previous order under this Act .
(5) An order made under paragraph 1 or 2 for the payment of a lump sum may provide for the payment of that sum by instalments.
(6) Where the court provides for the payment of a lump sum by instalments the court, on an application made either by the person liable to pay or the person entitled to receive that sum, shall have power to
vary
that order by
varying–
(a) the number of instalments payable;
(b) the amount of any instalment payable;
(c) the date on which any instalment becomes payable.
Interim orders
9 (1) Where an application is made under paragraph 1 or 2 the court may, at any time before it disposes of the application, make an interim order–
(a) requiring either or both parents to make such periodical payments, at such times and for such term as the court thinks fit; and
(b) giving any direction which the court thinks fit.
(2) An interim order made under this paragraph may provide for payments to be made from such date as the court may specify, not being earlier than the date of the making of the application under paragraph 1 or 2.
(3) An interim order made under this paragraph shall cease to have effect when the application is disposed of or, if earlier, on the date specified for the purposes of this paragraph in the interim order.
(4) An interim order in which a date has been specified for the purposes of sub-paragraph (3) may bevaried
by substituting a later date.
Financial provision for child resident in country outside England and Wales
14 (1) Where one parent of a child lives in England and Wales and the child lives outside England and Wales with–
(a) another parent of his;
(b) a guardian of his; or
(c) a person in whose favour a residence order is in force with respect to the child,
the court shall have power, on an application made by any of the persons mentioned in paragraphs (a) to (c), to make one or both of the orders mentioned in paragraph 1(2)(a) and (b) against the parent living in England and Wales.
(2) Any reference in this Act to the powers of the court under paragraph 1(2) or to an order made under paragraph 1(2) shall include a reference to the powers which the court has by
virtue
of sub-paragraph (1) or (as the case may be) to an order made by
virtue
of sub-paragraph (1).
The mother's jurisdictional arguments
i) under paragraph 1(2)(c) of Schedule 1 having particular regard to the terms of paragraphs 1(3), (4), (5) and (6) thereof, essentially because paragraph 1(3) provided that the orders in paragraph 1(2) can be made at any time after a claim under Schedule 1 has been issued, and thus before it has been determined, and
ii) under paragraph 9(1)(b) as a fall back argument.
very
tentatively and in my judgment that power to give directions does not confer the power to make a substantive lump sum order. Rather, it is what it says it is, namely a power to give directions when the power conferred by paragraph 9 is engaged, and not a power to make a substantive order for periodical payments or a lump sum.
The father's jurisdictional arguments
i) the only such interim orders the court has jurisdiction to make are orders for periodical payments, and so it has no jurisdiction to make an interim order (in that sense) for a lump sum,
ii) here, that jurisdiction / power to make an order for periodical payments (on an interim or final basis) is excluded by s. 8(1) and (2) Child Support Act 1991, and so
iii) the court does not have jurisdiction / power to make an interim order for a lump sum in respect of costs (or otherwise for the benefit of the child).
Reliance was placed on the approach to construction that express enactment shuts the door to further implication (see Whiteman
v
Stanley [1910] AC 514 at 527). This maxim "expression unius est exclusio alterius" is a well known approach to statutory construction which has been said to be no more than an application of common sense to legislative interpretation, and like other canons and principles of construction is not to be applied too rigidly. In its application, it has to be considered whether what is expressly provided for is something of the same kind as the thing in question. In its application here, I have to consider, in the context of the legislation as a whole, whether it is possible or appropriate to account for the inclusion in express terms of the power conferred by paragraph 9 of Schedule 1 and the effect on it by the enactment of the Child Support Act 1991 (inclusio unius) of an intention other than to exclude the power contended for by the mother (exclusio alterius) (see for example Dean
v
Wiesengrund [1955] 2 QB 120 at 130).
v
T [2006] EWHC 2494 (Fam) and [2007] 2 FLR 925) which concludes that there is no jurisdiction to make an order for an interim lump sum, and the arguments and conclusion of the authors were adopted by the father.
v
Peace [2005] 2 FLR 1212 and taken under the MCA 1973 in Wicks
v
Wicks [1998] 1 FLR 470.
v
T, or that such a power should not be generally exercised and should not be exercised here. An aspect of this latter argument, and of the earlier public interest / legislative purpose argument, was a fllodgates argument.
Authorities
v
J (Child:
Variation
of Financial Provision) [2003] EWHC 2657 (Fam) [2004] 2 FLR 300 (Bennett J), Re S (Child: Financial Provision) [2004] EWCA Civ 1685 [2005] 2 FLR 94 (Court of Appeal), MT
v
T [2006] EWHC 2494 (Fam) [2007] 2 FLR 925 (Charles J) and G
v
G (as yet unreported) (Moylan J).
v
G, Moylan J had the power to make a "top up" order for periodical payments because an assessment made by the CSA in the maximum amount had been made. Expressly, he was considering whether to make an interim order for periodical payments under paragraph 9 of Schedule 1. He considers the three earlier cases and concludes that the court has power to make an award "of interim maintenance" and thus in terms of Schedule 1 of "periodical payments for the benefit of the child".
v
J has now been overtaken by the later authorities. In Re S the conclusion as to the extent of the jurisdiction as to what can be ordered in exercise of the statutory powers is based on the meaning and range of the application of the word "benefit". This also founds my decision in M-T
v
T.
v
T is part of the long saga of litigation between those parties. As is apparent the report is of an ex tempore judgment delivered against the background of material and orders known to the parties, but not to the reader of the report. The nature of the relevant order that I had made, and was considering, is not clear from the report. I have checked the order and confirm that the costs element was included within an order for periodical payments and that the capital sum of £250,000 was not a lump sum ordered under Schedule 1 but was a sum provided as a sinking fund from which periodical payments could be deducted given the history on non-payment. The reality in that case has been that the periodical payments ordered have been made from, or through, that fund in the UK and it has been topped up from time to time. The jurisdiction to provide for that fund either under Schedule 1 (e.g. paragraph 9(1)(b)), or as an aspect of the grant of the stay of the contested divorce proceedings (it being disputed whether the parties had been married in Nigeria, and I decided that this should be determined by the Nigerian courts) was not the subject of argument.
v
T covered costs in respect of the Schedule 1 claim, and the proceedings in that case under s. 8 Children Act 1989. It was not argued (as here) that the power to make an order to cover costs did not extend to the costs of the s. 8 proceedings.
v
T the order I made on the disposal of the Schedule 1 claim included a provision that the father should provide a fund to purchase a house for the mother and the twin girls, and that in setting the sum to be so provided and used I made an allowance for costs funded by the father for the benefit of the children. The effect of this was that the amount available for the purchase of the house was reduced. These provisions were effected by undertaking rather than by order under paragraph 1(2)(c), (d) or (e) and resulted in the father buying the house and letting it to the mother as a home for her and the twins.
Provision for the Benefit of the Child – In respect of the costs of the Schedule 1 proceedings and in respect of the costs of the s. 8 proceedings
variation
of periodical payments and (d) on applications for a further lump sum.
i) the jurisdiction to make an award in respect of costs of Schedule 1 proceedings is because they are incurred for the benefit of the child and not because they fall within the meaning of "maintenance" within s. 22 MCA 1973, and
ii) under Schedule 1, there is jurisdiction to make more than one order for a lump sum (see paragraph 1(5)(a) of Schedule 1), and no statutory requirement, or steer, to consider a clean break, or once and for all orders (other than in respect of orders for a settlement or transfer of property).
v
T, in which as I have said (and is not apparent from the judgment) the order covered costs of s. 8 proceedings (and a separate argument was not advanced in respect of those costs). The father's argument was that the non-technical "representative" capacity of a parent seeking financial provision under Schedule 1 does not apply because the parent in s. 8 proceedings is not acting in any representative capacity, but is putting forward proposals as to the best interests of the child for the adjudication of the court.
views.
So, for example, in my
view,
the "equality of arms" point can apply in s. 8 proceedings just as it has been found to warrant a provision for costs in Schedule 1 proceedings.
view
paragraphs 28 and 31 of the judgment of Wall LJ in Re S support that conclusion (and the
view
that the discretionary jurisdiction needs to be exercised with care and sparingly).
view
counsel was correct to accept this, but this acceptance shows the weakness in her argument on behalf of the father because, just as in residence and contact disputes, on such a specific issue application the paramountcy principle applies, as does the investigatory nature of the proceedings with the aim of identifying what will best promote the welfare of the child.
The interplay between paragraph 9 and paragraph 1 of Schedule 1
i) paragraph 1 is focused on (a) orders made on the disposal of the Schedule 1 claim at a final hearing, and (b) future orders if and when earlier orders are revisited, and
ii) paragraph 9 is focused on orders made during the relevant Schedule 1 proceedings and thus pending the making of orders sought under paragraph 1 at the substantive hearing of that claim, whether it be for periodical payments, a lump sum or other relief.
They can therefore both be said to be directed at orders that can be described as orders that are interim in different senses namely:
a) orders at substantive or final hearings for periodical payments or a lump sum that can be revisited by the making of further such orders or by them beingvaried,
and
b) orders in the sense used in paragraph 9, namely orders made in proceedings before they are disposed of at their substantive or final hearing.
i) clearly reflects the language of paragraph 9 when it is read alone, and means that
ii) paragraph 1(3) falls to be read as relating to the making of an order at a substantive or final hearing of a claim (or a part of a claim) on application by a party, or by the court when making,
varying
or discharging a residence order or in respect of a ward of court.
In that sense paragraph 1(3) is redundant or repetitive in the context of paragraph 1(5) but sets out, or at least clarifies, the position under paragraphs 1(2), (4), and in particular (6) and (7).
i) the language of paragraph 1(3) is wide enough to be interpreted, and
ii) paragraph 1(3) would be interpreted and applied,
as conferring power to make orders during the period leading up to the substantive hearing of a current claim (and thus to make interim or interlocutory orders in that sense). I shall refer to this as "Jurisdictional Basis One".
i) to make an order for periodical payments or a lump sum (possibly by instalments) on the basis that a further order for periodical payments or a lump sum can be applied for and made at any time, and to do so
ii) on the basis that such an order disposes of the claim within the current Schedule 1 claim for periodical payments and/or a lump sum (possibly by instalments).
I shall refer to this as "Jurisdictional Basis Two".
i) paragraph 9 of Schedule 1, and/or
ii) arguments relating to the underlying purposes of the relevant legislation and thus the Children Act 1989 and the Child Support Act 1991 and the public interests they advance.
i) when providing by the Child Support Act 1991 that in certain circumstances no award for periodical payments could be made (on an interim or final basis), and/or earlier
ii) when passing the Children Act 1989, that if and when jurisdiction to make an order for periodical payments and thus an order under paragraph 9 was excluded,
an order for a lump sum to fund such costs, or other expenditure for the benefit of the relevant child could only be made as part of a final determination of all aspects of a current claim under Schedule 1.
i) the analogous question to that posed by Wall LJ in Re S in respect of paragraph 14 is whether paragraph 9 caters exclusively for the only circumstances in which an interim order (in the sense in which it is used in paragraph 9) can be made, and there is a further question, namely
ii) whether, if the power conferred by paragraph 9 does not apply because it has been excluded or suspended by the Child Support Act 1991 (or otherwise) the court can make an interim order in a different sense by disposing of the existing application for a lump sum (leaving it open for the applicant to seek a further order for a lump sum, if so advised).
i) the main purpose of Schedule 1 is to make financial provision for the benefit of a child,
ii) by definition, the issue only arises when the power of the court to make such provision, by way of a final order, and potentially further orders, for a lump sum is engaged albeit that the jurisdiction to make any final or interim order for periodical payments is excluded by the Child Support Act 1991, and
iii) in making an order under Schedule 1 the court takes into account all of the financial resources of the non resident parent (as defined in the Child Support Act 1991, see s. 3(2)) and thus the paying parent under both statutes.
view
that, without expressly doing so (which it has not by the Child Support Act 1991 or otherwise) Parliament would not have intended to restrict the jurisdiction of the court to making a lump sum order only on the final determination of all aspects of an existing and current claim under Schedule 1. The essential reason for this is that such an intention would run counter to the central underlying purpose of Schedule 1 Children Act 1989 to enable the court, in the exercise of a judicial discretion, to provide fair and appropriate financial support for the benefit of a child, having regard to the financial resources of the paying parent, on a properly informed basis from time to time.
view
that Parliament intended that from time to time for the benefit of the child in the circumstances of the case the court could:
i) make an order in respect of any part of the claim (or under any power) that had not been expressly excluded, and thus an order for a lump sum, and
ii) adjourn parts of the claim (namely those under paragraph 1(2)(d) and (e)) as they could not be re-opened or looked at again) so that they could be considered on a properly informed basis in the light of the future events.
i) to paragraph 1, when it is read alone, does not found that result but founds Jurisdictional Basis Two, and
ii) that approach to paragraph 1 is not one that results in the court making an interim order in the sense in which that term is used in paragraph 9.
view
the maxim relating to statutory interpretation relied on does not operate to found a different conclusion because the common sense that underpins it does not apply. The reason for this is that although there is an overlap between orders under paragraph 9 Schedule 1 and the exercise of a power to make lump sum orders from time to time:
i) this is not complete because, as I have explained, orders for lump sums can be made from time to time (and so on an interim basis in a different sense to that used in paragraph 9) and by reference to any part of the financial resources of the paying parent and thus (and this was not disputed) not only to those taken into account under the Child Support Act 1991, and the relevant Regulations relating to it, and therefore
ii) the two powers are not sufficiently the same or of the same kind, to engage the maxim when Schedule 1 is read alone and without reference to the impact of the Child Support Act 1991, and
iii) it is possible and appropriate to conclude that when enacting the Child Support Act 1991 Parliament was not intending directly or indirectly to prevent payments being made to or for the benefit of a child other than pursuant to a maintenance order (as defined) and thus other than by way of periodical payments.
i) Jurisdictional Basis One, namely that if and when the power in paragraph 9 is excluded (or perhaps is inappropriate, because the provision would be better made or classified as a lump sum) paragraph 1(3) is given a wide meaning in accordance with what it says if it is read alone, or
ii) Jurisdictional Basis Two, namely that the lump sum order is made by the court as a disposal of the existing claim for a lump sum (adjourning the claims under paragraph 1(2)(d) and (e)) and on the premise that the Applicant could seek a further lump sum if so advised,
is an exercise directed to form rather than substance.
Purpose and public interest arguments
i) an underlying purpose and theme of the Child Support Act 1991 is to remove from the court the jurisdiction to make orders for periodical payments in the circumstances provided for in that Act, and
ii) the court should not use its powers to circumvent that purpose and theme.
v
Peace). But in my
view:
i) the example I have used of medical treatment is analogous to the example used there by Johnson J, namely a lump sum to meet capital expenditure to modify a house for a child who suffers a physical handicap,
ii) an order to provide for costs of either the Schedule 1 proceedings, or s. 8 proceedings is not within the types of expenditure to which the maintenance calculation under the Child Support Act 1991, and the relevant Regulations, is directed, and
iii) a lump sum order can be based on capital and other financial resources apart from income as assessed for the purposes of the Child Support Act 1991 and the relevant Regulations (which were not examined in any detail before me but are focused on income – see for example SI 2001 No 155)
and therefore the discretion to make a lump sum order in respect of costs as a final order, or on the bases set out above does not circumvent, undermine or run counter to the underlying purpose and theme of the Child Support Act 1991.
view
the floodgates argument that my conclusion on jurisdiction will lead to applications up and down the country for lump sum orders to provide for costs of the Schedule 1 proceedings and/or s. 8 proceedings between the same parties is unconvincing because:
i) such an application would only have a sensible chance of success if the non resident parent has capital assets or financial resources from which a lump sum could be paid or which would warrant a settlement or property transfer order being made,
ii) in most cases where s. 8(6) does not apply this would not be the case, and so there would be no realistic claim under Schedule 1 for any purpose, and
iii) authorities on the exercise of the discretion would establish that provision in respect of costs would only be made in limited circumstances, and in particular after the court had had regard to (a) whether such an order would be unfair to the paying parent, (b) whether there was real prospect of a substantial award being made under one or more of paragraphs 1(2)(c) to (e) against the paying parent because of his financial resources and (c) the prospects of such costs (or some of them) being recouped by deduction from the award that the paying parent was ordered to pay, settle or transfer.
Discretion
v
T, the existence of the discretionary jurisdiction does not mean that it will be exercised.
very
important to remember that the exercise of the power can cause considerable unfairness to the payor because he or she is funding both sides of a case, and runs the risk of never being able to recoup either set of costs.
v
G Moylan J helpfully comments on cases relating to the approach to be taken under the MCA 1973 on ordering a payment in respect of the costs of the other side (namely Currrey
v
Currey (No 2) [2007] 1 FLR 946 in which the Court of Appeal give guidance and consider Moses-Taiga
v
Taiga [2006] 1 FLR 1074 (another round in the M-T
v
T saga), TL
v
ML [2006] 1 FLR 1263 and other earlier cases). These cases are obviously helpful by analogy and I have so applied them. But, it seems to me, that the different nature of the proceedings and orders under Schedule 1 needs to be remembered and an aspect of this is that the risk of non-recoupment is different, and probably higher, in respect of a claim under Schedule 1 than it is in respect of a claim under the MCA 1973.
v
T because I concluded that the sum available after a deduction for costs was adequate to provide appropriate housing for the twins (and their mother).
view
this should be checked.
" My remaining assets relate to my shareholding in XY Investment Advisers Ltd and XY Investments Ltd, which are the corporatevehicles
through which I conduct my investment business. Both are unlisted and sustained significant losses in the last financial year. My shareholding is not realisable. In any event, these companies are the mechanism through which I derive my income (I am employed by XY Investment Advisers Ltd), which in turn I rely upon to meet my outgoings, and also to pay child support for [the child's] benefit.
Cash flow for both of the companies is poor. The chief asset of XY Investments Ltd is a debtor that might or might not be recoverable."
value
of his home.
i) a more optimistic future is predicted than that presented in the father's brief statement (see for example the statement for the year ended 31 July 2009 of the chairman of XY European Financials Investment plc),
ii) the accounts for XY Investments Ltd (one of the companies through which the father says he conducts his investment business and of which he is a significant shareholder) show (a) profits of £5.65 million for the year to 30 June 2008 and of £5.98 million for the year to 30 June 2009, (b) shareholders funds of £8.29 million in 2008 and £2.75 million in 2009 (after a revaluation reserve of £3.23 million) and (c) assets / investments of £11.5 million in 2008 and of £5.76 million in 2009 (after deducting £5.86 million in respect of a revaluation). The notes to those accounts record an agreement on 31 March 2009 for the sale of the company's shares in three XY companies which is contingent on Bank approval. It may be that this is the agreement that gives rise to the debt referred to by the father that he says in his statement (without giving any reason) might or might not be recoverable. The uncertainty as to that debt (whatever its source) calls for explanation,
iii) it is clear that a number of the XY companies hold assets that are easily convertible into cash and have distributable profits available to enable significant dividends to be paid notwithstanding the recent financial downturn. Whether it would be commercially sensible, or fair in the context of these proceedings, to sell company assets to fund dividend payments and/or loans or other payments to the father is a different matter but the likely quantum of the claim seems to be far less than the net
value
after extraction of saleable assets in XY Investments Ltd (and other XY companies),
iv) over the past two years significant dividends have been paid by XY companies:
a) a dividend from one of them (XY European Financials Investment plc) of £740, is referred to in the father's Form E. An extract from the annual report and accounts of that company for the year ended 28 February 2009, included in the bundle before me, asserts that a dividend of 3.22p per share has been proposed and that the father, as I understand it through his shareholding in XY Investments Ltd and XY Investment Management Ltd has an interest in 4,025,218 shares. The source of this personal dividend of £740 is not clear to me from what I have read, but it seems that companies in which the father is a shareholder received a substantial dividend, and might be in line to receive further significant dividends, from this source,
b) I was told by counsel for the mother that the accounts of XY Holdings Ltd indicate that a gross dividend of £351,631 in 2009. No copy of the accounts was before me, but as mentioned earlier a note to the accounts of XY Investment Management Ltd state that it is owned by its parent company, XY Holdings Ltd, the ultimate controlling party of which is XY Malta Employee Trust. So it seems that, contrary to what I was told, this dividend was not paid directly to the father, but may be a dividend from which he may be able to benefit through the Employee Trust, or otherwise,
c) accounts before me of the following XY companies show gross dividends :
| Company | Dividend 08 | Dividend 09 |
| Investment Advisers Ltd | £600,000 | £150,000 |
| Investment Management Ltd | £281,640 | |
| Investments Ltd | none | none |
The father owns all the issued ordinary share capital of XY Investment Advisers Ltd, but the dividend may be in respect to the preference shares (it is described as preference dividends) and the preference shares are owned by XY Investments Ltd (which the notes to the accounts of XY European Financials Investment plc assert the father owns).
visit
to the limited material available indicates that some of the points made during the hearing as to the father having a dividend income may be bad ones but that nonetheless there are a number of issues that merit further explanation in connection with the father's presentation of his financial position as effectively being one of (a) him owning assets (shares in XY companies) that are not realisable and which produce no income apart from salary, (b) of him having no savings (and thus by inference no direct or indirect rights in the product of the successful years of the XY companies, of which he seems to be the controlling mind or in which he plays a significant role, and (c) of his only income being £82,000 gross which leaves him little after his expenditure.
value
and I am satisfied that the mother's position that he should give further information and disclosure and that this will disclose that he has the ability to fund an award in the amounts she seeks and costs (of both sides) cannot be categorised as "fishing" or "Micawberism" (see G
v
G [2003] 2 FLR 71 in particular at paragraph 79). Indeed the factors I have referred to above indicate that further disclosure and explanation is required and in its absence his general assertion as to his income and capital position, and thus his overall financial resources, is unconvincing. This is necessarily a preliminary
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on limited information and in reaching it I have focused on the published material about the XY companies and have left out of account other matters going to his general credit advanced on behalf of the mother.
very
little information about the rival contentions in the s. 8 proceedings. As I understand it, within them the father relies on an agreement with the mother that when the child had completed her primary education she would move to Edinburgh and continue her education under his care and supervision spending her holidays with her mother. Initially his position was that the child would need to board, but this has now changed. The schooling issue is therefore closely linked to the issues on residence and contact because the father contends for a school in Edinburgh and the mother for one in England. Further, and although as I understand it the father accepts that he will pay her fees wherever she goes to school, this schooling issue has a tangible link to the Schedule 1 proceedings because it has an impact on where the child will have her home or homes and what, if any, provision should be made by the father for or towards a home for the mother and child and the upkeep of the child.
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that the welfare of the child would be best promoted by her living with her mother and going to school in England.
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based on limited information.
view,
first because it cannot at this stage be known what it will say and recommends and, in any event, it is not its function, it cannot be said that such a report means that representation of the mother is unnecessary or undesirable. The child has not been joined as a party and it is now too late to take that course (even if it was appropriate).
very
little information about the rival arguments in the Schedule 1 proceedings and so far as I am aware neither open nor without prejudice offers have been made. To my mind this is a pity and seems to reflect the antagonism and adversarial approach taken in the statements. It also means that I am not in a position to assess whether the mother is asking for costs to enable her to pursue a claim for the benefit of the child in the face of a sensible offer.
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it is clear that it is more likely than not that it would benefit the child if the mother was represented in both the s. 8 proceedings and the Schedule 1 proceedings. This accords with the conclusion I reached in M-T
v
T and the conclusion reached by Moylan J in G
v
G. In large measure, this
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is based on the generally recognised advantages flowing from competent representation, and there being an "equality of arms" in an investigatory as well as in an adversarial process.
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be appropriate. Also his report will need to be considered by someone with appropriate expertise to seek to ensure, for the benefit of the child, that a full and accurate picture of the father's financial position is before the court.
i) the costs of the hearing of the s. 8 proceedings set down for three days starting on 4 August, and
ii) the costs of preparing for, and of, the FDR (set for the end of July), plus a further amount to cover the initial steps thereafter if settlement is not reached which may well include an application for another lump sum in respect of costs (on the jurisdictional basis set out earlier).
A review after the FDR is an approach approved in Currey
v
Currey (No 2).
i) the gaps and uncertainties I have mentioned earlier concerning:
a) the past funding of the mother's costs,
b) the father's financial position,
c) the issues and arguments in both sets of proceedings, and
d) offers (and the claims) made in the Schedule 1 proceedings, and
ii) the risk of an award in respect of costs being unfairly burdensome on the father particularly if it cannot be recouped,
I have concluded that my award should exclude past costs and should be for, and only for, the future costs referred to in the last paragraph.
VAT.
Tailpiece / miscellaneous
view a number of relevant issues have not been covered in the evidence. I have therefore considered whether I should adjourn the exercise of the discretion I have found I have so that the gaps I have identified can be filled. If the issue relating to schooling did not have to be decided urgently, and it was not as closely connected to the Schedule 1 proceedings as it is, it is likely that I would have delayed the exercise of the discretion or remitted it to a District Judge. But, if I was to do that, the benefits to child of the mother being represented at the two hearings set for the end of July and early August would be lost and the schooling issue would nonetheless have to be decided so that the school for September is identified.