Mrs MB v Mr KB

MRS JUSTICE BARON: This is an application on behalf of Mr KB (to whom I shall refer as the father) to strike out an application made by his former spouse, MK (to whom I shall refer as the mother). She issued an application on 25 April 2006 under section 15 and schedule 1 of the Children Act 1989 by which she seeks a settlement of property order and/or lump sum on behalf of the parties' daughter, A, who was born on 30 September 1999 and so is 7 1/2 years old.

The factual matrix is as follows. The father was born on 15 July 1964 (42 years old). He is the son of F and N. He has one brother, M. They are a successful family. From what I can glean F has been an extremely successful businessman. He owns a number of properties, including a small hotel with 55 bedrooms called the LC, worth, according to the wife's assertions, in excess of £3 million. He also has an interest in a small chain of sandwich shops which operates under the name of KB. It employs about 30 people. Both of the sons took professional qualifications, the father being a chartered surveyor and his brother a chartered accountant. This was clearly a hard-working and enterprising family.

As the boys grew their parents, in accordance with tradition, sought brides for them. Two sisters, M - the mother and her sister, S, were chosen. They married and the sisters came to the United Kingdom. These parties went through the formal ceremony of marriage on 14 September 1997. They set up home in a property, flat 4, C Court in W Road. It was held in the husband's name, apparently so that he could achieve a first-time buyer's discount in relation to the mortgage. At some stage a declaration of trust was entered into indicating that the underlying beneficial interest remained with his father, F.

The marriage appears to have been troubled from the outset and these parties had separated by July 2000. A petition was launched on 25 January 2001. It led to a decree absolute being granted on 15 February 2002. I have mentioned the other sibling in this case. Unfortunately, it seems that S and M's marriage also foundered, they having produced one daughter. It seems that the divorces were dealt with as a package. The sisters moved into accommodation which was owned by F through one of his companies. It is a modest flat at 7 B Court, 1 R Road in West Ealing SW13. So far as I can tell, it contains two relatively small bedrooms. The two sisters and their daughters have been living there since about 2002. During the ancillary relief proceedings the mother was represented by an established firm with a good reputation in respect of matrimonial work called RPC.

An agreement was reached between the husbands and the two sisters. The compromise was encapsulated in a court order made by District Judge Green. The main terms of that order (made on 15 February 2002) are as follows: upon the father agreeing to procure (i) that the mother had a shared grant with her sister of an assured shorthold tenancy in respect of B Court on the terms that she had the right to occupy that property (a) until she or S either cohabited or remarried or (b) for so long as the property remained her primary residence, (c) until the child of the family, A, or S' child, AR, have each attained the age of 18 years or ceased full-time tertiary education, whichever is the later. It was also provided that no person other than a member of the mother's immediate family was permitted to stay overnight in the property without the father's express and prior written consent. Moreover, no member of the petitioner's immediate family was permitted to stay in the property for a continuous period of more than two weeks in any 12 months without the father's express and prior written consent. The parties agreed that if the petitioner's sister, S, should cohabit or remarry or cease to occupy the property as her primary residence, then, subject to the father providing suitable alternative accommodation for the petitioner and her daughter, he was entitled to terminate the tenancy agreement in respect of the property.

The father undertook to pay nursery fees for A until she began to start state primary school. He also agreed to pay one half of the “rent”, the service charge, the electricity, gas and council tax in respect of the property until further order. A mirror order in like terms was made in respect of S. In essence, therefore, the two brothers agreed to provide a rather insubstantial housing arrangement for their former spouses. The father agreed that he would take reasonable steps to ensure that the mother obtained the child benefit allowance. An order was also made giving the mother periodical payments at the rate of £1,200 per annum, payable monthly in advance during their joint lives until her remarriage or further order. Some £3,600 per annum, payable monthly in arrears, was to be paid to A. On that basis each of the parties' claims for secured provision, lump sum, property adjustment and pension attachment. Sharing orders stood dismissed, as did the mother's application under section 37 of the Matrimonial Causes Act. There was provision in relation to the small amount of costs that had been incurred, totalling about £2,000 including VAT. The order was made against a background of the father indicating that he had no other real assets.

By giving effect to the agreement the District Judge exercised his powers under the Matrimonial Causes Act. The force of that order under English law is clear upon Authority which does not need to be reiterated by me. The wife cannot seek further capital for herself, whether by lump sum or by seeking any property adjustment order for herself under section 24 of the Matrimonial Causes Act. Of course, she did not compromise her claims for continued periodical payments nor did she compromise her child's rights for periodical payments or lump sum under section 23 of the Matrimonial Causes Act. The latter forms of order can, as the statute makes clear, be made “from time to time”.

In 2004 the wife applied for a variation upwards of her periodical payments. The counter from the father was that her application should be dismissed and his liability under the terms of the previous order should be extinguished. The matter came before District Judge Segal. He heard counsel for the mother and her sister. It appears that the applications were conjoined. Both the father and his brother appeared in person. The District Judge heard evidence from each of the former wives. The former husbands declined to give evidence, as is their right, choosing simply to make their statements from, as it were, counsel's row.

The District Judge had no doubt that he preferred the evidence of the wives as from the submissions of their former spouses. He made an order increasing the periodical payments. It is right to point out that the wives had limited their claims to the shortfall between their expressed income needs and the amount of monies coming into their household. In the intervening period each of the sisters had worked to the best of their ability. The mother as a shop assistant for a period of time and her sister apparently training as a hairdresser.

The District Judge made an order to the effect that the father would pay £650 per calendar month in advance, made up as to £200 worth of arrears and £450 per month by way of current maintenance. He totalled the arrears at some £4,640 and indicated that once they had been paid the order would reduce to £450 per calendar month. In addition, he made periodical payments for the benefit of A at the rate of £350 per month until she reached 17 years old or ceased full-time secondary education. He made the father pay the costs of the mother’s application.

DJ Segal was clear that where there was a difference between the evidence of the sisters and their former husbands, he preferred the wives' version of events. He went on to note that the father in this case had made very serious allegations against his former wife, which included the allegation that she had used the entire marriage as an “economic scam”.

By this time, the husband had moved from the former matrimonial home and he was living at a property in Kingston, number 1 J Terrace. Apparently this had been purchased for about £265,000 with a mortgage of £200,000. It was held in the name of F. That property was the husband's home on and off between 2003 (or thereabouts) and 2005. He indicated that he also spent a good deal of time at his parents' own home at M Place, particularly as he was suffering from depression. He continued to work in the family businesses, not simply as an operative within the sandwich bar company, but as a manager and assistant to his father. The District Judge in the context of the family's situation made a specific finding at paragraph 36:

That is a very specific finding and, of course, given that it was made about two years ago, it is a finding from which I cannot and would not derogate. There is no question of an appeal having been launched against that particular order or findings of the learned district judge.

The sisters and their children have continued to live in B Court. The mother's claim is that that accommodation has over the years become increasingly unsatisfactory. She points to a number of matters (in no particular order); its current state of repair; the area in which it is situated; the unsatisfactory schools in the locality which her daughter would be entitled to attend and the overall facilities that are available. All of these have been put firmly in issue.

The crux of this case is that the mother wishes to move with A to new accommodation. Perhaps, it is not an unworthy aspiration. Her solicitors in correspondence recently wrote that she wanted to think about renting new premises. I understand that her current case is that she would like to have a property held for her on some form of trust under schedule 1 of the Children Act, which would mean that it would revert to the husband or his family when A reached 18 or ceased full-time education. If that is not an option then she wishes with assistance, if it is at all possible, to purchase a property on mortgage as a new home. If all of that fails, I suspect that the original letter would stand in that she would wish to be able to rent more salubrious accommodation. She requires some assistance with the funding of her proposals.

She believes that the father has substantial assets. He is, allegedly, a proven non-discloser and her aim is to obtain further information from him to prove either that he has more capital or income than was the case either in 2002 or 2005.

I am clear that she could issue an application for periodical payments and/or lump sum for A under the Matrimonial Causes Act. She has, however, chosen an application under the Children Act 1989 because, at the present time, her preferred solution is a home held in some form of trust. She may be right that that is the proper option, but she may be better with another alternative. She wishes to investigate further.

The husband asserts that she is not entitled so to do because the question of her housing needs has already been determined under the provisions of the order made in 2002 and her capital claims have been dismissed. Accordingly, he asserts that, as a settlement of property order on behalf of A could not be brought or made under the terms of the Matrimonial Causes Act 1973, the application under the Children Act amounts to a second bite of the cherry and should be dismissed in limine at this stage. Whilst it is accepted that this court has bare jurisdiction, it is asserted that it should not be exercised in this case because of the above “quasi issue estoppel” or “res judicata” as a result of the mother having already had hers (and the child's housing) needs approved by a matrimonial court.

This court has the power to strike out unmeritorious applications. This principle was established in the well-known authority of Rose v Rose. In that case Bennett J held that the court was entitled to strike out an application (in that case an application to set aside a consent order) under the court's inherent jurisdiction if it was right so to do, notwithstanding that the Family Proceedings Rules 1991 contain no provision similar to rule 3.4(2) of the Civil Procedure Rules. It is absolutely essential that the court in ancillary relief cases is able to put a stop to applications seeking to reopen matters that have already been determined by the court, whether by consent or after a contested hearing, if the court is satisfied that no useful purpose would be served by reopening the matter.

In the case of Rose itself the learned judge was satisfied that there was no evidence that was likely to persuade the court that the order (in that case allegedly because the wife had been guilty of non-disclosure at the date of consent order) should be set aside. In this case the assertion is to the contrary. I am clear that the court has jurisdiction to strike out an application which is doomed to failure. In other words, the court should only sanction the continuation of a case if there is a good arguable case put before it.

The applicable law is not in issue between the parties and has been set out in detail by the wife's counsel. The note that he prepared sets out the various cases in relation to “issue estoppel”. I have been pointed specifically to the case of Carl Zeiss Stiftung v Rayner [1967] 1AC 853. In that case Lord Guest said that the doctrine of estoppel per rem judicatam applies because public policy and private justice require an end to litigation. Moreover the rule of res judicata makes it clear that, where a final decision has been pronounced by a judicial tribunal of competent jurisdiction over the parties to and the subject matter of litigation, any party or privy to such litigation as against the other party is estopped in any subsequent litigation from disputing or questioning such decision on its merits. The rule is that once the issue has been raised and determined between the parties then, as a general rule, neither party should be permitted to fight over that issue again.

The basic requirements of issue estoppel were further honed by Lord Brandon in the case of The Sennar (No 2) [1985] 1WLR 490, in which he said:

In addition to that, the case of K v P [1995] 1FLR, decided by Ward J as he then was, added a fourth factor. He said:

It is accepted in this case that in approving the order, District Judge Green dealt with the case on the merits. This has been confirmed in a number of cases, but particularly in the case of Xydhias [1999] 1FLR 683 where Thorpe LJ said that:

The concept of issue estoppel simpliciter is not, to my mind, appropriate in matrimonial cases, particularly when dealing with the developing needs of a child. The requirements of children, as they grow, require for the court to preserve its jurisdiction for the protection of the child. No adult compromise can oust that jurisdiction. In the case of Re B [1997] 1FLR Hale J, as she then was, said:

I agree with that simple maxim. Clearly, no mother or father can seek to oust the court's jurisdiction when it relates to their child. In this case, in addition, the “fourth requirement”, as it was referred to in the case of K v P, may call for the court to give fresh consideration to orders that have been previously made.

The essence of this case is the appropriateness of the child’s housing as she grows. When I read the excellent written submissions made on behalf of the husband I thought that his application for a strike out was based on theory and authority. However, as his oral submissions have unfolded, I came to the increasingly sturdy conclusion that the argument was based on fact. The assertion is now that the father accepts that there is technical jurisdiction under the Children Act to make an application for provision under schedule 1. He accepts that this court therefore has bare jurisdiction.

However, he submits that in this case the application should not proceed because the wife has advanced no proper factual basis for revisiting the provision made under the consent order, given that her capital claims were dismissed under the consent order. It is claimed that the capital claims the wife now makes on behalf of A are plainly for her own benefit. Finally, he points out that the Children Act has prohibitions against double provision. In respect of that he points to the case of Phillips v Peace 2FLR 1212. Of course, that case is not on all fours with this matter because an unmarried mother applied for financial support in respect of her child. The father, who was wealthy, was ordered to settle monies on trust to purchase a home for the child which ultimately reverted to him. He was also required to pay periodical payments. The unmarried mother made a second application because she wished to provide better housing for her family because she by that stage had had a second child. The learned judge dismissed her claim on the basis that there was no inconsistency between Schedule 1, para 1.3 permitting the court to exercise powers at any time and a specific prohibition within the Act under paragraph 1.5B preventing the court from making more than one settlement of property or transfer of property order against one person for the same child. The order having already been made, the learned judge was clear that he could not make a further order. He also considered that it would be inappropriate for there effectively to be a second bite of the cherry.

It is asserted for the husband that, (i) because the Matrimonial Causes Act order dismissed the wife's capital claims there is no exercisable jurisdiction to make a claim under the Children Act because that would have the effect of circumventing the original order that was made. (ii) Even if there is bald jurisdiction it should not be exercised unless there are radical and overwhelming reasons so to do. (iii) Even if there are radical or overwhelming reasons, the court has to consider what order is likely to be made and whether it is appropriate on the facts of the case to permit it to continue. Given the impact of the initial order, and how it might affect a second order, the case should be dismissed now.

It is pointed out on behalf of the husband that the wife cannot complain about the original order. She was, after all, represented by RPC. She had been living in the flat for some 7 months before the consent order was made. Accordingly, she knew the area in which the flat was situated and had described it as “comfortable” in her form E. She stated that she did not understand what was happening in those proceedings because she did not have sufficient English, but it is pointed out that she was educated in English whilst in Pakistan and described herself as having a working knowledge of the language. It is also suggested that she has the resources to improve her current accommodation by way of repairs if that is what she wants. All those are said to point to the fact that there are no radical or overwhelming change of circumstances.

Although the wife submits that her husband is a non-discloser and that he has the means to meet her claim, it is claimed that she has produced no evidence that would lead the court to suppose that he is such a man. Indeed, her evidence before District Judge Segal indicates that she accepts that most of the assets are held by Mr F. Thus the assertion is that even on her own case this application is bound to fail, the wife's evidence being to the effect that the father now lives in a property which is owned by his parents, by implication only works for KB Sandwiches, which is owned by his father (and perhaps a partner); that her flat at 7 B Court is owned by Mr F. Even the hotel and the other properties are owned by the older generation.

The only asset to which she was able to point in 2005 was the former matrimonial home, which was at some stage owned by the father but was transferred as long ago as 2002 to his father, F. She had challenged the transfer in 2002 and her section 37 application was dismissed. So, it is asserted, she can no longer go behind the orders that were made as long as five years ago.

I accept that what happened in 2002 is set in stone. The mother cannot go behind the order that was made. She cannot assert that her legal advice was bad or that she compromised her claims without understanding what was happening. I accept that she compromised her own claims on the basis of living in some form of free accommodation for a period, subject to remarriage or cohabitation. In a similar way, the father cannot go behind the findings of the District Judge, set out above and against which he did not seek to appeal.

However, I do not accept that A's housing needs, are governed by some notion of res judicata in any formal or informal sense. The settlement is part of the background of this case which would inform a judge dealing with the final merits of any application, but that does not mean that the application itself is thereby invalid or should be struck out. The case of Phillips v Peace is wholly distinguishable on its facts. Housing needs, so far as a child is concerned, can be dealt with, if appropriate, to take account of the changing conditions that occur as a child grows.

In this case there is no definitive home in which this lady and her child can live assuredly for the rest of the child's minority. I say that because if her sister moves then she, in accordance with the terms of this order, can be removed from B Court into some other accommodation. The basis upon which that removal could take place is not made wholly clear in the context of the order save that the premise must be reasonable. In this case long term housing has not been definitively decided and there has been a change in circumstances, in the sense that, as time has gone by A's needs have changed. Whilst, of course, I accept Mr Warshaw's truism that everybody knows that children grow, it is often unclear is how their needs are going to develop.

In reaching my decision the notion that there should be an end to litigation and that there has been a capital clean break between the parties is at the forefront of my mind. Of course, I am well aware of the now long-standing decisions of De Lasala and Minton. I am also clear that the court will hold parties to their bargain, as has been made clear in many cases such as Dean and Edgar. However, in this case the crucial question is the developing needs of this child. The wife agreed to compromise her own claims on the basis of the right to remain in rent-free property. She did not, on the particular factual matrix of this case, compromise the right to make claims on behalf of her child. The father agreed to pay half of the rent and part of the outgoings, even though the rental element remained within the family.

In the context of this case the provision of future housing for this child is something that merits proper investigation. Accordingly, I do not consider that this case should be struck out in limine. In any event, even if I strike out the application, it seems that the case could proceed under the terms of the Matrimonial Causes Act for a lump sum for the child and increased periodical payments. If an application is to be launched under the terms of the Matrimonial Causes Act then it should be conjoined with these proceedings and all applications should be dealt with at the same time.

Certainly, I consider that the wife is entitled to further disclosure on the basis that there are resources available to this father. Insofar as she seeks information she runs the risk that a costs order may be made against her if she fails to persuade the court that there are assets available. At this stage therefore this case can proceed. There may come a time when consideration will have to be given as to the overall merits.

I hope that these parties will appreciate that at the end of the day any judge is going to want to do his or her best for A. Under the Matrimonial Causes Act she is the court's first consideration. Under the Children Act her overall needs are paramount. It seems to me that each of these parents have, in a way, been ignoring A's needs. It does not seem that contact has been running smoothly. I do not know the detail and so it would be wholly wrong of me to come to any conclusions, but any child as they grow needs to know both sides of her family. Likewise, if one part of the family has greater resources it is incumbent on the family in the widest context to seek to assist with a child who is, after all, their own flesh and blood.

I caution these parties against spending unnecessary funds on legal costs. I caution both of them if at all possible to look to the real issue of this case, that is the provision for the future of a home that is somewhat better than B Court. With good will, I am confident that this could be provided. I will fix an FDR and invite Mr F (the grandfather) to attend as his input is important in the potential resolution of this case.