The Secretary of State for Work and Pension v LR & Anor

This is the judgment following a final hearing of an application made by the Secretary of State for Work and Pensions, acting on behalf of the Child Maintenance Service (further referred to as ‘the CMS’), for an order pursuant to section 32L(2) of the Child Support Act 1991 (further referred to as ‘the CSA 1991’) to set aside a transfer of a property from LR to PT. LR is the non-resident parent of twins, now aged 4 years. LR owes money by way of child maintenance for the twins. PT is the civil partner of LR. The Secretary of State for Work and Pensions alleges that the transfer of the property from LR to PT was with the intention of avoiding payment of the child maintenance and asks that I set that transaction aside so that they can continue to pursue enforcement proceedings against LR. LR and PT both resist the application, telling me that the transfer was undertaken for valuable consideration and for reasons completely unconnected to the child maintenance claim.

The hearing was conducted in person on 1^st August 2025. The Secretary of State for Work and Pensions was represented by Mr. Woodhead of Counsel. LR and PT represented themselves. I read the bundle and supplemental bundle prepared on behalf of the Secretary of State for Work and Pensions. I heard sworn evidence from Mr. Richard Lee from the Department for Work and Pensions, Child Maintenance Service Delivery Assurance Directorate, LR and PT.

This judgment is anonymised so that it may be published. I have sought to avoid disclosure of any information that may identify the children. Non-specific dates have been given so as to put the facts in context.

In October 2011, LR and PT entered into a civil partnership. I note that the address given for each party on the civil partnership certificate was the same, meaning that they were cohabiting at this time.

In December 2016, LR purchased a four-bedroom property in Merseyside (further referred to as ‘the Property’). There was no mortgage secured against the Property. The Property was registered in the sole name of LR. LR and PT moved into the Property together immediately following purchase.

LR was a sperm donor. LR donated sperm to the mother of the twins. They did not have a sexual relationship. The twins were born in January 2021. The insemination was not through a clinic licensed by the Human Fertilisation and Embryology Authority and so LR is not afforded the protection of the Human Fertilisation and Embryology Acts and as such, he is liable to pay child maintenance. LR accepts that he is liable to pay child maintenance, but he disputes the amount.

On 3^rd June 2021, the CMS wrote to LR to inform him that they had carried out a maintenance assessment and that he was liable to pay £119.26 per week for the children.

LR accepts that he has not paid any child maintenance. The CMS started to take steps to enforce the maintenance assessment. On 21^st June 2022, the CMS wrote to NatWest asking them to set up a regular deduction order from his account. LR was notified of the same by way of a letter sent on the same day. The letter informs him that £807.49 would be deducted from his account on the first day of each month, starting on 1^st July 2022.

Following receipt of the letter, LR closed his NatWest account, he says, on advice from NatWest, because he was concerned that if a deduction was made, he would go into overdraft. The CMS was unable to collect any sums under the deduction order.

As a result, the CMS decided to discharge the order. The decision was communicated to both NatWest and LR by way of letters dated 5^th August 2022. The letter to LR asked him to contact the CMS about paying the sums due to the CMS.

LR continued to fail to pay the sums due to the CMS. On 29^th December 2022, the CMS wrote to LR warning him that they were intending to apply to the Magistrates Court for a liability order. Significantly, the letter warns as follows;

“A liability order will allow us to

•

Send Enforcement Agents (Bailiffs) to recover the money you owe or even seize your goods

•

Put a charge on any land or property you have and order it to be sold or

•

Apply for an order to take your driving licence or a warrant to send you to prison”.

LR admitted in his evidence that he had received the letter, but he could not recall when.

On 24^th January 2023, LR transferred his interest in the Property to PT. The transfer was registered with the Land Registry on 24^th February 2023. The CMS did not become aware of this transfer until September 2023 as I will set out below. No money was paid, and the consideration was for “natural love and affection”. The additional provisions for the transfer were as follows;

“1.

The transfer is subject to [LR] living in the property for as long as he may wish or until the date of his death free of rent subject to him contributing to all the outgoings on it, keeping it in good repair and condition of contributing towards it being properly insured.

2.

Whilst the occupant [LR] is entitled to live in the property, the Transferee [PT] may not sell or transfer the property without his permission”.

On 15^th February 2023, the child maintenance assessment was re-assessed to £97.83 per week.

The CMS applied for a Liability Order. The first hearing took place on 14^th March 2023. The application was adjourned in order for LR to participate in DNA testing to confirm that he is the father of the twins. He subsequently contacted the CMS to say that he did not have the funds to pay £260 for the DNA testing. He failed to attend DNA testing.

On 11^th April 2023, the Magistrates granted a liability order in the sum of £14,092.40, made up of £13,792.40 in child maintenance and a further £300 costs.

On 21^st April 2023, the CMS wrote to LR confirming that they had obtained the liability order, seeking payment of £14,092.40 to avoid further action. In the event that the amount remains unpaid by 30^th April 2023, the letter warns that enforcement action will be taken, including seizing goods and seeking a charge against land or property LR owns.

In May and June 2023, the CMS took steps to enforce the arrears by way of a Bailiff seizing goods, but that was unsuccessful.

On 27^th September 2023, the CMS sought and obtained an interim charging order, securing an interim charge against the Property in the sum of £14,137.40 plus interest. The interim order was made final on 22^nd November 2023. When the CMS attempted to register the charge, they were informed that it could not be registered against the Property because LR was not the registered proprietor of the Property.

On 15^th February 2024, there was a further re-assessment, and the child maintenance was assessed downwards to £24.12 per week.

On 9^th August 2024, the Secretary of State for Work and Pensions made this application asking the Court to ‘revoke’ the transfer of the Property from LR to TP and consequential orders. The substantive application was accompanied by an application for an interim injunction to restrain LR and PT from further dealing of the Property. By the time the application was made, the arrears stood at £23,084.84. The application was submitted to the High Court. It was transferred to this Court on 27^th February 2025. I gave directions for a further statement to be filed setting out the up-to-date position and listed the application for a hearing on the without notice application for an interim injunction pursuant to section 32L(1) of the Child Support Act 1991 preventing LR and PT from further dealing of the Property pending determination of the application to set aside the transfer under section 32L(2) of the Child Support Act 1991. On 28^th February 2025, I granted the interim order restraining LR and PT from further dealing with the Property. I listed an inter partes hearing on 26^th March 2025 and gave directions for LR and PT to file statements in response.

LR and PT attended the inter partes hearing on 26^th March 2025. They did not file statements prior to the hearing. At the hearing, LR raised the issue of paternity, saying that he did not accept he was the biological father of the twins. I adjourned the matter for further consideration by me at a case management hearing on 6^th June 2025. In particular, I was to consider at that hearing whether I should determine the issue of paternity within these proceedings. I directed LR and PT to file statements. In the case of LR, he was to file and serve a statement regarding the issue of paternity. In relation to both LR and PT, they were to file statements regarding the circumstances of the transfer of the Property from LR to PT.

The applicants filed a statement from the mother of the twins stating that there is no other potential biological father and that LR had previously acknowledged the children as his.

At the hearing on 6^th June 2025, I determined that it was not necessary to determine the issue of paternity as it was implicit in the fact that the Magistrates made the liability order that they were satisfied he is the biological father of the twins. Accordingly, I listed the applications for orders pursuant to section 32L of the Child Support Act 1991 for final hearing.

The liability to pay child maintenance arises as a result of the operation of section 1 of the Child Support Act 1991. The task of collecting child maintenance where parents are unable to resolve it between themselves falls upon the CMS.

A resident parent can ask the CMS to carry out a maintenance assessment pursuant to section 4(2) of the CSA 1991. Where a maintenance assessment has been undertaken and the resident parent makes the request to do so, arrangements are made by the Secretary of State for the collection of the child maintenance pursuant to section 4(2) of the CSA 1991.

Section 32L of the CSA 1991 provides for a scheme of orders to prevent the disposal of assets to avoid the enforcement of child maintenance. They include orders to restrain a person from making a disposition or transfer out of the jurisdiction or otherwise deal with any property (section 32L(1) CSA 1991) and setting aside a transaction (section 32L(2) CSA 1991).

For me to make the order to set aside the transfer of the Property from LR to PT, I must be satisfied of the following;

I have understood the provision to mean that the burden of proving that LR has failed to pay an amount of child maintenance, that there was a reviewable disposition and that the reviewable disposition was made with the intention of avoiding payment of child support falls on the Secretary of State. In the absence of any suggestion to the contrary, the standard of proof is the civil standard of proof, that is, on a balance of probabilities.

Under section 32L(7) of the CSA 1991, if the disposition or dealing has the consequence of making ineffective a step that has been taken to recover the outstanding child maintenance, it is presumed, unless the contrary is shown, that the person who disposed of the property did so with the intention of avoiding payment of child support maintenance. I have understood from that provision that it is for the Secretary of State to prove that the disposition has the effect of making ineffective a step that has been taken to recover the outstanding child maintenance, but it will fall upon LR to prove that the disposition was not with the intention of avoiding payment of child support maintenance.

If I decide that the Secretary of State for Work and Pensions has proved on a balance of probabilities the matters I have set out in paragraph 27 above and LR fails to prove that the disposition was not made with the intention of avoiding payment of child support maintenance, then I have a discretion to set aside the disposition and can make such consequential orders or directions as it thinks fit “for giving effect to the order (including provision requiring the making of any payments or the disposal of any property)”. I consider that that would include orders to prevent disposal of the property until the debt is satisfied and/or otherwise protected under section 32L(1) of the Act. That provides for the Court to make orders restraining a person from making a disposition or transfer out of the jurisdiction or otherwise deal with any property if satisfied that the party has not paid child maintenance and that there is an intention to deal with property.

LR has admitted during the course of his evidence that he is liable to pay child support maintenance and that he has not paid any child support maintenance. Whilst he disputes the amount of his liability, he has accepted that there is unpaid child maintenance. It follows that I must determine the following issues;

LR explained to me in his oral evidence that when he entered into the civil partnership with PT, a number of people had expressed concerned that PT may be ‘after his money’ (my paraphrasing) and as a result, he decided to put the property in his sole name. He said that he didn’t tell PT at the time. However, he then decided that he would transfer it to PT, saying in his written evidence that that had been “planned for a number of years” but it was delayed for one reason or another. He told me that PT had expressed concern that she would be vulnerable if something were to happen to him. He then says “Then, out of a [sic] blue and without expecting it, I was contacted by the CMS shifting my attention and delaying it further”. He goes on to say that his attention was diverted as a result of his brother being ill with Covid, to the point he needed intubation. He had to stay in Ireland to support his brother. He gave reasons for the transfer as being the contributions made by PT and a concern about his mental health, saying that he was at risk of suicide. He considered a transfer of the Property to PT would give PT security in the event of his death. In his written evidence, he says;

“the transfer was never done to avoid paying debt. For a start the transfer was done before the liability order was approved, and I was positive at that time that they’d fail. Mainly based in [sic] the fact that even if I was the father of those children, the amount put forward by the CMS is wrong. I was presuming the CMS hadn’t had time to look at my economic situation at the time and eventually they’d correct themselves and give me a different account”.

In his oral evidence, he accepted that he had closed his NatWest account to avoid the CMS taking money from the account. He said that this was on advice from NatWest. He said that he had not transferred the property to PT before January 2023 because he didn’t have the resources to pay for a solicitor to complete the transfer. He accepted that he had had the letter from the CMS dated 29^th December 2022, but he could not remember when, possibly in January 2023. He said that he didn’t know what a liability order was when he received the letter, even though his statement seemed to suggest he understood what one was because he referred to the fact that he didn’t think the CMS would be successful in obtaining one. He said that he did have a solicitor for part of the liability order proceedings. He did instruct a solicitor to prepare the TR1 transferring the Property to PT. He said that he considered the transfer for “natural love and affection” was valuable consideration because of the contributions PT had made to the Property and PT’s care of him whilst he was suffering with his mental health.

It was put to him that, in reality, the transfer was cosmetic because he had retained rights as an owner as a consequence of the entry in box 11 on the TR1 which sets out terms of the transfer. The transfer is subject to LR’s right to occupy the Property for the rest of his life and PT can only sell the Property if LR consents to it. LR said that the provisions had been inserted by his lawyer.

It was put to him that PT had given different reasons for the transfer and that PT’s statement referred to the fear any of LR’s biological children (of which I understand there are seven) could claim against the property. He said that was part of the reason, on the basis that they could claim against his estate if he died. He repeated that he had been suicidal, and that PT had supported him when he had suffered with his mental health. He wanted to reward PT for this.

PT’s evidence was that the Property was purchased in 2016 in LR’s sole name but always viewed as their shared home. PT told me they thought it had been purchased in joint names. PT told me that they had become aware that it was in LR’s sole name one year after purchase and PT had been concerned by that, asking for the Property to be transferred to joint names. PT said that they asked for the property to be transferred into joint names in 2018. Nothing was done to transfer the property until January 2023 because they “couldn’t find the right lawyer”. PT said that they signed the TR1 without reading it and that PT had not discussed with LR that there was a provision that PT could not sell the property without the consent of LR.

PT was at great pains to emphasise to me that they had worked hard in a restaurant to fund the costs associated with the Property and that they had carried out work themselves on the Property. PT also provided financial support to their family in Thailand, and they considered that the Property was needed for their own security and that of their family.

I note that PT asserts that if I set aside the transfer, PT is left without a home. That is not correct. PT, as LR’s civil partner, has rights of occupation under section 30(2) of the Family Law Act 1996.

I am satisfied on the balance of probabilities that the Secretary of State has proved that this was a reviewable disposition because it was not for valuable consideration. The transfer was not for any money. The contributions said to have been made by PT are those you would expect of a spouse. In any event, the reality is that LR has retained rights as an owner because he has the right to occupy the property for the rest of his life and the property cannot be sold without his consent. Accordingly, there was no valuable consideration.

In any event, I am satisfied on the evidence that this transfer was with the intention of avoiding payment of the child maintenance payment for the following reasons;

The short answer is ‘yes’. The effect of the transfer of the Property from LR to PT is that the step taken to enforce the child maintenance arrears, namely the charging order made on 22^nd November 2023, was rendered ineffective because LR no longer had a legal interest in the property. That is evidenced by the refusal of the Land Registry to enter he charge against the property in favour of the CMS.

Accordingly, the presumption set out in section 32L(7) applies and I am entitled to presume that the transfer was made with the intention of avoiding payment of child support.

The burden now shifts upon LR to show that there was no intention to avoid payment of child support maintenance. For the reasons I set out in paragraph 40 above, I am entirely satisfied that LR has failed to show that the there was no intention to avoid payment of child maintenance when the transfer took place.

I have a discretion as to whether I should make an order pursuant to section 32L(2) of the Act. In weighing up what decision to make, I have considered PT’s argument that to set aside the transfer has the effect of punishing PT for LR’s actions and that PT would be left without a home. Firstly, I do not consider that the effect of setting aside the transfer has the effect of punishing PT because I do not consider that there is any loss to PT as a result of setting aside the transaction, there being a continuing right to occupy the property pursuant to the Family Law Act 1996. Further, given my findings as to the true motivation for the transfer, I do not consider that there is an economic loss to PT.

PT also seeks to argue that it would be disproportionate to make the order setting aside the transaction. I have understood that, because the debt is £23,084.84 as of August 2024 and the value of the property has been estimated to be in the region of £117,000 to £171,000, that debt should not be enforced against what is their family home. I don’t agree. It appears to be the only asset against which the CMS can enforce the debt and, in the absence of any realistic offer for repayment by LR, I cannot see any other option.

Accordingly, I make the order to set aside the transfer of the property form LR to PT, so that the ownership of the property reverts to LR.

In terms of consequential orders, it appears to me that the injunction I made on an interim basis restraining both LR and PT from dealing with the Property must continue so as to ensure that there is not a further attempt to defeat the enforcement of the child maintenance. The order must continue until the debt is satisfied.

In terms of the other consequential orders, I note that in the application, the Secretary of State indicates that if I set aside the transfer, there will follow a further application for a charging order. I can see no reason why the charging order made on 22^nd November 2023 cannot be re-presented to the Land Registry following the transfer being set aside, because the charging order has not been set aside. However, the charging order is in the sum of £14,137.40 plus interest and does not include the additional child maintenance arrears since the charging order was made. It seems to me that a further application for a charging order will have to be made for the balance outstanding over and above the amount of the current charging order. If necessary, I would ask that my views about the validity of the charging order are recorded on the face of the order and I give permission to the Secretary of State to disclose a copy of this order to the Land Registry.

In closing submissions, Mr. Woodhead invited me to consider re-listing the case for further directions to give LR time to pay. I consider I have resolved this application by making the orders setting aside the transaction and restraining LR and PT from further dealing with the Property. Accordingly, there is no reason for me to further list this matter in the absence of any other applications.

So, the orders I make are;

I finish my judgement by saying that LR, you must pay the child maintenance which has been assessed as owed by you. I have already made one costs order against you and I am aware that I will be invited to make a further costs order following this judgment. Failing to pay will result in additional liabilities that you can avoid if you simply comply.

With the approval of the FRC leadership judge Mr. Justice Peel, I certify this judgment may be cited in accordance with the Practice Direction on the Citation of Authorities [2001] WLR 1001 and Guidance given by the President of the Family Division dated 24^th February 2025 under the heading Citation of Authorities: Judgments of Circuit Judges and District Judges.