AB v CD (Jurisdiction Global Maintenance Orders)

This is an appeal against an order made by His Honour Judge Everall QC sitting in the Central Family Court on 2 November 2016. That order was made at the conclusion of a four day final hearing in respect of the respondent’s application for financial remedies following the breakdown of her marriage to the appellant. Whist the marriage was dissolved on the grant of decree absolute, I propose nevertheless to refer to the parties in this judgment as “the husband” and “the wife”.

By his order of 2 November 2016 (which was intended to be a final order), the judge provided as follows:-

The issues before me on this appeal are:-

The husband’s notice of appeal against the judge’s order was issued on 7 July 2017. On 17 July 2017, Mr Justice Baker listed the application for an oral hearing.

That oral hearing took place on 28 July 2017. At its conclusion, Mr Justice Baker allowed the husband’s application for an extension of time and gave him permission to appeal on all three of the grounds set out above on the basis that he considered the appeal to have a real prospect of success: FPR 2010 r. 30.3(7)(a). He listed the substantive appeal before me with a time estimate of one day.

Mr Alexander Chandler has appeared on behalf of the husband to argue the full appeal. The wife has acted in person. Both parties have filed full skeletons and, in the husband’s case, an amended Grounds of Appeal. In addition I have been provided in the appeal bundle with all relevant material (including the parties’ financial disclosure in the 2016 proceedings), a transcript of the judgment delivered by His Honour Judge Everall QC on 2 November 2016, and a bundle of authorities.

The law in this context is straightforward. Pursuant to FPR 2010 r 30.12(3), the appeal court will allow an appeal where the decision of the lower court was either (a) “wrong”; or (b) “unjust because of a serious procedural or other irregularity in the proceedings in the lower court”. No reliance is placed on (b). Thus the question which has to be determined is whether or not the decision was wrong.

The husband and the wife are both qualified lawyers, albeit in different fields. The wife’s background is in employment and discrimination law. The husband’s field is commercial and corporate law. They had represented themselves at the final hearing in October 2016, a task which each undertook ably, as acknowledged by the judge. The husband is now 47 years old; the wife is 44.

A relationship between them which started in 1999 led to cohabitation the following year in the London property which the husband had purchased in 1999. By the time they started to live together, the wife was already in negotiations to purchase a property of her own in the same part of East London. There was a temporary separation between the couple in 2002 but they reconciled towards the end of that year and, by the time they resumed full-time cohabitation in 2003, they had decided to marry. Both were then working as junior solicitors in different London “magic circle” firms.

They married on 8 September 2005. The wife sold her London property and gave the entire net proceeds (some £156,000) to the husband which he used to pay off the mortgage on the London property which had by then become their first matrimonial home. That transfer of equity represented the entirety of the wife’s independent financial resources at the time. As a result the London property was transferred into their joint names.

Towards the end of 2005, the parties decided to start a family. By this stage the wife was working part-time as a lawyer and had started to work on her first project as a writer. The husband had been offered the opportunity to leave England and work in the United Arab Emirates where his employers maintained an office for their corporate and other clients. Each of the parties saw the potential move from London as a rewarding opportunity both in terms of the financial benefits which such a move would bring and also in terms of the lifestyle which they would enjoy with the prospect of a child or children on the horizon.

Their first son, S, was born in July 2006. Shortly thereafter the family moved to live in Dubai which was to become their home for the next nine or ten years. Their second son, T, was born in May 2008. Two years later, in 2010, their daughter, C, was born. The children are now respectively 11, 9 and nearly 7 years old. The wife has not worked since S was born but has devoted herself to bringing up the children and creating a home for the family. The husband acknowledges the full contribution which she has made to family life over the years in her capacity as a wife and mother.

The husband’s career flourished in Dubai. He, in turn, worked extremely hard and built up an impressive client base for his firm. After a few years of expatriate existence, he was headhunted by another major London law firm which had an office in Dubai. He was made an equity partner in this firm and earned a substantial tax free income over the next few years. By the end of August 2015, when the family left Dubai to return to England, he was earning a net income of some £312,000.

The decision to return to England was prompted in no small part by the diagnosis at the end of 2011 of their elder son, T, with type 1 diabetes. He was then three years old and the wife brought him to England to seek specialist care at a central London hospital. He became a patient of Professor H and remains so to this day. Whilst the family continued to live in Dubai for the next two or three years, the wife, with the three children, made repeated trips back to London during the school holidays in order that T’s condition could be properly monitored and controlled. By the summer of 2012, the wife had started house-hunting in Kent. The parties chose that particular area because of the availability locally of excellent education for the children. Their final matrimonial home, TW, was purchased in August 2012 for £1.385 million. It was a substantial property and this couple spent a further £400,000 odd renovating and refurbishing that home.

However, all was not well in the marriage by this point in time. By mid-April 2015 the parties had agreed to separate. The wife left Dubai and returned with the children to TW in July 2014. All three children were enrolled in a local fee paying school.

I need say little about the months which followed. It was clearly a difficult time for the whole family and for the husband as he began to contemplate the prospects of resuming his legal career in central London, a professional environment in which he had not operated for the best part of ten years. His partners had agreed that he could relocate to their London offices. He did not want to live at a distance from his children and took a short term lease on a property in close geographical proximity to the jointly owned family home in which the wife was then living with the children.

The financial infrastructure which underpinned the family’s existence by the time this litigation was underway was thus very different. The husband’s income was taxed at source. His monthly drawings reduced. His entitlement as an equity partner to profit distributions through the year was performance related and, in circumstances where he was rebuilding a client base, lower than had been the case whilst he worked in the UAE. In addition, this couple was now running and maintaining two homes for the children who were spending significant periods of holiday and weekend time with their father.

At the beginning of November 2015, the wife issued an application for maintenance pending suit which was eventually compromised. By the time of the final hearing in October 2016, she was receiving voluntary financial support of £2,000 per month over and above the other outgoings and expenses which the husband continued to discharge.

The parties were, in addition, shouldering the escalating costs of the litigation. Each was separately represented by well-known firms of London matrimonial solicitors. By December 2015, each had decided to save the legal costs and to act as litigants in person. A Financial Dispute Resolution hearing in February 2016 failed to achieve a resolution of the proceedings and thus it was that the matter was listed for final hearing in October 2016 before His Honour Judge Everall QC.

The judge had before him a wealth of written evidence. By and large, the valuation evidence was agreed. The issue of computation was thus reasonably straightforward. He heard oral evidence from both the husband and the wife. By the time he came to deliver his judgment on 2 November 2016, he was fully aware of every relevant aspect of this family’s financial situation and their intended living arrangements as each moved forward into an independent future. The husband sought an equal division of the available matrimonial capital. He accepted that the wife would require an element of ongoing financial support for a limited period of time and had made an open offer in respect of spousal periodical payments in the sum of £1,000 per month reducing to £500 (Footnote: ³) per month in March 2019 and £300 per month in March 2020.

He contended that the wife had an earning capacity going forward which she should and could be exercising, albeit on a part-time basis. It was common ground that, were she to return to full-time work, she would incur costs in respect of child care.

The judge made the following findings of fact which are relevant to this appeal:-

By way of his first challenge to the order under appeal, Mr Chandler submits that the court had no jurisdiction to make a final periodical payments order which was expressed to be a “global order” which included an element of financial support for the two younger children of the family. The reason why T is not included within the sibling group for the purposes of this ground is because he is in receipt of a disability living allowance and, as such, he can potentially be considered as falling within the exemption set out in paragraph 8(8)(a) of the Child Support Act 1991 (“the 1991 Act”).

Following the introduction of the 1991 Act, the responsibility for the assessment and collection of child support payments is now vested in the Secretary of State for Work and Pensions. Save in certain circumstances identified as exceptions to the 1991 Act, the jurisdiction formerly vested in the court to make child maintenance orders has been removed. Whilst the 1991 Act has been extensively modified and amended by subsequent primary legislation, that fundamental principle has remained undisturbed. Section 8 of the 1991 Act provides as follows:-

“8 Role of the courts with respect to maintenance for children

(1)

This subsection applies in any case where the Secretary of State would have jurisdiction to make a maintenance calculation (Footnote: ⁶) with respect to a qualifying child and a non-resident parent of his on an application duly made by a person entitled to apply for such a calculation with respect to that child.

(2)

….

(3)

Except as provided for in subsection 3A, in any case where subsection (1) applies, no court shall exercise any power which it would otherwise have to make, vary or revive any maintenance order in relation to the child and non-resident parent concerned.

(3A) ….

(4)

....

(5)

The Lord Chancellor … may by order provide that, in such circumstances as may be specified by the order, this section shall not prevent a court from exercising any power which it has tto make a maintenance order in relation to a child if –

(a)

a written agreement (whether or not enforceable) provides for the making, or securing, by a non-resident parent of the child of periodical payments to or for the benefit of the child; and

(b)

the maintenance order which the court makes is, in all material respects, in the same terms as that agreement.”

For the purposes of this appeal, it is accepted that there was no written agreement which might have given the court jurisdiction to make an order by virtue of s 8(5), nor had any steps been taken at the time of the final hearing to secure a maintenance assessment.

It is clear from the terms of the judgment that the judge was fully aware of that position.

Further, whilst a maintenance assessment has now been carried out by CMS in the sum of £413.14 per week, there was as I have said no such assessment in place on 2 November 2016 when the global maintenance order was made.

Paragraph 8(6) of the 1991 Act is a departure from the general prohibition expressed in s 8(3). In circumstances where a non-resident parent’s income exceeds the maximum permissible assessment undertaken by the CMS, the court’s jurisdiction is restored but only to the extent of making what is often referred to as “top up” provision.

“(6)

This section shall not prevent a court from exercising any power which it has to make a maintenance order in relation to a child if –

(a)

a maintenance calculation is in force with respect to the child;

(b)

the non-resident parent’s gross weekly income exceeds the figure referred to in paragraph 10(3) of Schedule 1 (as it has effect from time to time pursuant to regulations made under paragraph 10A(1)(b)); and

(c)

the court is satisfied that the circumstances of the case make it appropriate for the non-resident parent to make or secure the making of periodical payments under a maintenance order in addition to the child support maintenance payable by him in accordance with the maintenance calculation.”

The judge accepted that he had no jurisdiction to make an order in respect of periodical payments which were directly for the benefit of the children. He further accepted that, in the absence of a CMS maintenance assessment, there was no ‘gateway’ jurisdiction under s 8(6) to make a ‘top up’ order: see paragraph 158. Nevertheless he concluded that it was “appropriate to make a Global Order for Spousal Maintenance to include an element referable to child maintenance and to give credit for any sums paid pursuant to a child support assessment, if such an assessment is made” [my emphasis].

In taking this course, the judge appeared to be following the well-known precedent set by District Judge Segal during his days spent sitting in the Principal Registry of the Family Division. The court’s jurisdiction to make an order for spousal maintenance under s 23(1)(a) of the Matrimonial Causes Act 1973 was plainly engaged. The provisions of a so-called ‘Segal order’ incorporate into a spousal maintenance order some of the costs of supporting the children as part of a global order. Its utility was considered in Dorney-Kingdom v Dorney-Kingdom [2000] 2 FLR 855. In that case, a district judge had found a wife’s entitlement to financial support in her own right to be only nominal but ordered the husband to pay £200 per month for each child, such sums being reduced pro tanto by any sums found to be payable following an assessment by the Child Support Agency. On appeal, a circuit judge confirmed that the wife had no more than a nominal entitlement to support in her own right but increased the element of the children’s support to £1,000 per month reducing, as before, on a pound for pound basis to reflect future decisions made by the Agency. The Court of Appeal set aside the order on the basis that there was no jurisdiction to make provision for the children through an order for spousal support where the spouse (or former spouse) in question had no substantive entitlement in his or her own right to receive financial support from the other spouse.

Thorpe LJ delivered the judgment of the court. He explained the position following the enactment of the 1991 Act in this way:-

“13.

…… there can be no doubt of the parliamentary intention to remove the task from the judges and instead to confer it upon the administrative agency. The only circumstance in which the court may make an order for periodical payments to children are where the parties themselves consent. That is permitted by section 8(5) of the Act, which allows the parties to make an agreement about child maintenance and or the court to convert that agreement into an order. There can be no doubt at all that that provision, which is commonly exercised, was not exercised in this case. ……”

“14.

It is necessary now to refer to a mechanism which the judges thought might confer upon them jurisdiction. A practice has grown up, finding its origins before District Judge Segal in the Principal Registry, to make an order for spousal maintenance under s 23(1)(a) of the Matrimonial Causes Act 1973 that incorporates some of the costs of supporting the children as part of a global order. When a ‘Segal order’ is made an important ingredient is that the overall sum will reduce pro tanto from the date upon which the Child Support Agency brings in an assessment. The utility of the ‘Segal order’ is obvious, since in many cases the determination of the ancillary relief claims will come at a time when the Child Support Agency has yet to complete its assessment of liability. It is therefore very convenient for a district judge to have a form of order which will carry the parent with primary care over that interim pending the Agency’s determination.

15.

The proscription on the court making orders for child periodical payments other than by agreement, expressed in s 8(3) of the statute, could be said to be challenged, if not breached, by the mechanism of the Segal order. However, it seems to me to be just within the bounds of legitimacy, since it is no sort of ouster of or challenge to the jurisdiction of the Agency, but merely a holding until such time as the Agency can carry out its proper function. But it seems to me to be absolutely crucial that if legitimacy is to be preserved, there must be a substantial ingredient of spousal support in the Segal order. If in any case there is a determination that the primary carer has no entitlement to periodical payments on her own account, any form of order that is not an agreed order plainly circumvents the prohibition.” [my emphasis]

In the course of submissions, Mr Chandler took me to an article which had been written by District Judge Segal himself in 2002 (Footnote: ⁷) following the publication of the Court of Appeal’s decision in the Dorney-Kingdom case. He made it clear within that article that the so-called ‘Segal order’ had been widely misunderstood, possibly because of an unintentionally misleading precedent in the Solicitors Family Law Association book of precedents. In that article, he explained that a ‘Segal order’ does not, and was not intended to, include the child’s or children’s periodical payments order(s) in the mother’s order:-

“… If the Child Support Agency (CSA) has jurisdiction to make an assessment, as it will in the majority of cases, the court cannot include the child’s periodical payments in the mother’s order, as the Court of Appeal made clear in Dorney-Kingdom.

The only exception is this: on an application, early in the ancillary relief proceedings, where there has been no CSA assessment, no first directions hearing and no disclosure, if a parent applies for maintenance pending suit or interim periodical payments, the court may – as a short term measure – make an order in favour of that parent, which includes an element of support for the child, but I stress that this is a short-term order.”

Whilst clearly an extra-judicial comment in terms of its status, it is helpful to note the limits to the jurisdictional ambit of the ‘Segal order’ as recognised by its author.

In the context of the order made by His Honour Judge Everall QC, two things are clear. First, paragraph 20 (entitled ‘Global order with extendable term’) was expressed as a final periodical payments order which, after decree absolute, would continue in full force and effect for a period of ten years unless brought to an end before its term by death, remarriage of the wife or further order, or unless she secured the court’s permission to extend its life beyond the ten year cut off point. Whilst the global order was formulaic to the extent that it provided for a claw back in respect of any sums which might in due course be payable pursuant to a CMS assessment, it was not an order which expressly expired upon that assessment. That the global order had the potential to continue throughout the younger two children’s minorities is clear from paragraphs 198 to 202 of the judgment:-

“198.

In my judgement, it is not appropriate to terminate the Periodical Payments Order as proposed by the husband. It is not possible, on the evidence, for the Court to form the opinion the wife will have achieved earnings of a sufficient level to enable her to adjust without undue hardship to the termination of her periodical payments. I am not satisfied that I can make a finding as to whether and if so when the wife will be earning sufficiently to enable her to adjust without undue hardship. If and when she can re-enter the legal employment market is too uncertain.

199.

The wife concedes, however, that the term should be to October 2026 but should be extendable.

200.

There should not be a Section 28A bar, i.e. the wife should have the ability to apply to extend. The order which I have made is a Global Periodical Payments Order, rather than spousal periodical payments and a separate Periodical Payments Order for the children. As I have explained, I have no jurisdiction to make a separate Child Periodical Payments Order.

201.

The term will bring the child maintenance element to an end as well. C will be 16 by that stage. I would expect the parties to agree a level of voluntary periodical payments for C at that stage. If no agreement is reached, the wife can of course apply to the Child Maintenance Service for a child assessment.

202.

If the husband is earning anywhere near what he is earning now, there would be a maximum assessment, which would lead to the Court having the top up jurisdiction, as it is known, namely the ability to assess what further periodical payments should be made for the relevant child or children. Accordingly, the matter would, as it were, come full circle and the parties would be back before the Court. Alternatively, it would be open to the wife to apply to extend the Global Periodical Payments Order at that stage.”

Thus, as the above passage of the judgment makes clear, this was not a global order which was to expire automatically once the CMS had made an assessment. The judicial intention was clearly that it should continue in full force and effect until the end of its term on 1 October 2026 unless brought to an end before that date as a result of any one of the contingencies set out in paragraph 20 (a) to (c) of the order.

Secondly, this was not an order where, from the outset, the spousal element of the support could be clearly identified from that referable to provision for the children. Whilst the judge may have proceeded on the basis that the husband’s income was such that his liability was likely to be assessed in the maximum sum permitted, he did not frame his order in those terms. There was no application then pending to the CMS, far less an assessment; as the terms of the judgment which I have quoted above make clear, the judge had clearly catered for a situation where it was possible that no such assessment would be carried out during the life of the order. Of course, the court does not trigger the assessment process or have any part to play in the referral process. The application to the CMS comes from one of the parties (usually the parent who will benefit from payments made pursuant to a completed maintenance assessment). There is no obligation on a parent to make such an application.

In circumstances where orders in this form are being made regularly in family courts up and down the country, there will inevitably be many instances where former spouses and children continue to be maintained and supported financially as a result of such court orders. If no one does anything to trigger a maintenance assessment but the payer continues to comply with his or her obligations pursuant to the order, what is the status of such payments ? As Mr Chandler reminds me, the mere fact that it may be both practical and convenient to make orders in this form will not, and cannot, engage a jurisdiction which does not exist: see Wicks v Wicks [1998] 1 FLR 470.

In this context I bear in mind that the terms of the order made by His Honour Judge Everall QC are a reflection of the standard draft precedent forms contained in the omnibus created by Mr Justice Mostyn and approved by the President of the Family Division in July 2013. In his View from the President’s Chambers: the process of reform: an update”, the President set out his concerns about the amount of time and money which were being wasted in the process of drafting orders which could be standardised. He appointed Mr Justice Mostyn as chair of a small but highly experienced drafting group. That group produced the comprehensive set of orders contained in the omnibus. It was the clear intention of the President at the time that the use of such orders would in due course become mandatory in the Family Court and the Family Division. In the normal course of events, counsel for the parties would have agreed the terms of the order under appeal following delivery of judgment. In this case, as the parties were litigants in person, albeit with a legal background, it may well be that the judge himself drew the order. I know not and it makes no difference to the issues which I have to determine on this appeal. I merely make the point that paragraph 20 of the judge’s order was framed in entirely conventional terms which appear to be an amalgam of Mostyn J’s draft precedents 62(d) and 68 in the omnibus.

Nevertheless, Mr Chandler invites me to consider the validity of the global order and the court’s jurisdiction to make it. He submits that in relation to S and C (neither of whom came within the exemption in s 8(8) and/or 8(9) of the 1991 Act) and in the absence of a qualifying written agreement for the purposes of s 8(5)(a) of the Child Support Act 1991, there was no jurisdiction to ‘top up’ a child maintenance assessment under s 8(6) by deploying an assumption as to the maximum likely assessment because no ‘maximum assessment’ had been made. In this submission he relies on the judgment of Holman J in Dickson v Rennie [2014] EWHC 4306 (Fam), [2005] 2 FLR 978. That case concerned a mother’s financial claims for a child under s 15 and Schedule 1 of the Children Act 1989. The unmarried father was resident outside the jurisdiction in Jersey. His financial obligations towards the child, as assessed by the court in 2007, included an order for periodical payments at the rate of £41,200 per annum, index-linked. The court’s jurisdiction to make such an order was expressly agreed and recorded as a recital on the face of the order. After several years of paying under the order, the father made an application to the CMS for a maintenance assessment. On the basis that his income for these purposes was assessed to be just over £20,000 per annum, the maintenance calculation was fixed in the sum of £26.43 per week or about £1,375 per annum. The mother applied for what was, in effect, the reinstatement of the 2007 periodical payments order. There was a very significant dispute between the parties as to the true level of the father’s income. Whilst expressing his sympathy for the mother’s plight, Holman J dismissed her application. Because at the time of her application there was a maintenance assessment in place which fell far short of a maximum assessment, the jurisdiction of the court to “top up” that order under s 8(6) of the 1991 Act was not engaged. For so long as the asserted jurisdiction of the CMS remained in force, it was not open to the mother to seek a full restoration of the 2007 order through the jurisdictional gateway of s 8(6). The court could not interfere with the manner or approach in which the CMS had made its assessment of the father’s income (that approach having been mandated by regulations). Although it was open to the mother to appeal the maintenance calculation via the First-tier Tribunal, the court could not assist her.

Of course, this case is different in that, at the time the global order was made by His Honour Judge Everall QC, there was no involvement by the CMS and no maintenance calculation had been sought. By way of further challenge to the validity of the order, Mr Chandler submits that even if the court had the jurisdiction it purported to exercise on that occasion in the context of an interim order to cover the hiatus between judgment and assessment by the CMS, any such periodical payments order should have been apportioned. In this way, it would have been possible to determine the specific element for these two children which would be replaced by the amount assessed as payable by the CMS. There is no indication on the face of the order as to how the court intended it should be apportioned.

The judge had made detailed findings in this case about the husband’s income, both current and in the future. These are set out at some length in paragraphs 101 to 112 of the judgment. His finding that the husband’s income was at the time of the hearing £132,000 net per annum with “the real possibility” that his earnings would rise considerably in the future provided a solid platform for the assumption which he clearly made that any future CMS assessment was likely to be made on the basis that the regulated threshold had been crossed. This was not a husband living offshore and operating through arm’s length corporate structures in this jurisdiction but a UK taxpayer whose financial circumstances within the partnership were clear and transparent. Having made that assumption (quite properly in my view), the judge was entitled to fold it into his overall consideration of what the wife needed in terms of an income to sustain her own and the children’s domestic economy in the new home they would purchase when the former matrimonial home was sold. He assessed that figure against the background of what she had coming into the household in the form of benefits and tax credits. He found that the amount she needed was affordable in terms of the husband’s ability to pay.

As I have already said, in so doing the judge adopted the established approach which has been used by the court for more than 20 years following the creation of the Child Support Agency in its original statutory guise. Confined to the sort of situation envisaged by Lord Justice Thorpe in Dorney-Kingdom, the Court of Appeal has confirmed that ‘Segal orders’ do not per se amount to an impermissible device to circumvent s 8(3) of the Child Support Act 1981. The practice of making such orders is well known to the CMS. The wife herself, in completing the standard pro forma application for a maintenance assessment, has informed the Service of the existence of a court order in these terms, reflecting a pound for pound reduction in the event of a future CMS assessment.

In the case of Smith v McInerney [1994] 2 FLR 1077, a wife had accepted the transfer of her husband’s 50% interest in a property they shared in discharge of any future obligations he had to maintain her and their three children. That agreement was recorded in a separation agreement made independently of any court proceedings. When the husband was subsequently made redundant, he applied within divorce proceedings for property adjustment and lump sum orders. The district judge at first instance ordered that he should retain a 35% interest in the former matrimonial home which had been transferred into the sole name of the wife following the separation agreement. By the time of the appeal there was no child support assessment in force although it appears that one was imminent in respect of the youngest child of the family. Thorpe J (as he then was) allowed the wife’s appeal holding that it would have been manifestly unfair to sanction a situation where such an assessment might result in the husband being deprived of part of the benefit for which he originally contracted (i.e. the indemnity in respect of child maintenance) when he parted with his share of the equity in the property. In terms of outcome, the husband’s charge on the property was set aside on the basis that his claim for a property adjustment order was adjourned for the single purpose of providing him with an indemnity if, but only if, the Child Support Agency extracted from him substantive periodical payments in respect of the child.

In CCS 316/1998, a decision made by Mr Commissioner Jacobs sitting in his capacity as the Child Support Commissioner, it was held that an arrangement in a court order whereby payments of spousal maintenance were to reduce by the amount of any child support maintenance assessment were not void insofar as they were based on an agreement between the parties. Such an arrangement merely adjusted the paying parent’s overall financial commitments in the light of his liability for child support maintenance.

In that case, a court order had provided that an absent parent (a husband) was to pay to the parent with care of two children (the wife) a weekly sum for child support. That sum was to reduce by 50% when the elder child completed full-time education and the order would come to an end when the younger child completed her full-time education. There was specific provision in the order for an abatement of the specified weekly sum in respect of any sums which were in future assessed to be payable by the Child Support Agency. The order also contained undertakings: the wife undertook not to apply to the court for an increase in the order for periodical payments and the husband undertook to make good any future shortfall in the event of an assessment thereby guaranteeing the prescribed level of support during the life of the order.

The Commissioner held that the order in question was not an order requiring the husband to make periodical payments to or for the benefit of either of the two children of the family. He did so on the basis that, whilst the undertaking was framed in terms of maintenance for the children, the substantive order was an order for spousal maintenance. Although the undertaking and order fell to be considered as a single package for the purposes of their interpretation, they had to be considered separately in their operation. He found that the order was clearly drafted with the child support legislation in mind. In paragraphs 23 and 24, the Commissioner said this:-

“23.

… [The court order] did not purport to restrict the right of any person to apply for a maintenance assessment. Indeed, it recognises that right and the supremacy of a child support maintenance assessment. However, it goes on to do what the child support scheme does not cover. It adjusts the absent parent’s overall financial obligations in the light of the child support maintenance assessment. This is a power that is left to the courts. The court order anticipates that a child support maintenance assessment may be made and makes provision to avoid the need for the parties to return to court in order to vary the order for spousal maintenance. This is achieved by tying the payments of maintenance to the parent with care to the absent parent’s liability in respect of their children, so that if the latter increased the former reduced. There is general support for my conclusion that this is not caught by section 9(4) of the Child Support Act 1991 in Smith v. McInerney [1994] 2 Family Law Reports 1077.

24.

When the court order is read literally and its overall operation is considered, what emerges is a coherent structure designed to benefit both parents. The parent with care benefits by guaranteeing a minimum income for a significant period. The absent parent benefits by minimising the impact of any child support maintenance assessment on his finances. There is no reason to interpret the court order in any other way than its literal meaning and good reasons not to do so.”

This analysis led the Commissioner to conclude that the order for periodical payments had been made under section 23 of the Matrimonial Causes Act 1973. That section of the statute distinguished between (i) payments to the other party to a marriage; (ii) payments to a child of the family; and (iii) payments for the benefit of a child of the family. As he said in paragraph 27 of his judgment, “Orders in these terms are part of the everyday business of the family courts, whether or not made by consent”. There was nothing in the order itself which prevented a child support officer from assessing the child support maintenance pursuant to its statutory function.

In my judgment, the decision in CCS 316/1998 properly reflects the manner in which courts have historically operated in terms of engaging the jurisdiction conferred by s 23 of the 1973 Act to make provision for the benefit of a child or children of the family who are not yet the subject of a maintenance support assessment. Some two years later, that jurisdiction was confirmed by the Court of Appeal in Dorney-Kingdom v Dorney-Kingdom (see above). Thorpe LJ construed an order in similar terms to the one under appeal before me to be legitimate. Whilst he may have qualified such legitimacy as being “just within bounds”, that expression does not dilute or neutralise his confirmation of the status of such orders as legitimate and proper orders within the court’s armoury. Their legitimacy derives from the fact that they do not challenge or seek to oust the jurisdiction of any statutory agency which from time to time fulfils the function imposed on it by Parliament to assess the level of child support and the liability of the payer. Such orders must have a substantial ingredient of spousal support in order to engage the jurisdiction of s 23 of the 1973 Act. Here, it is clear from His Honour Judge Everall’s judgment that this criterion was met. He dealt in clear terms with his assessment of the wife’s own needs. The authority of Dorney-Kingdom continues to be cited in many of the leading text books on the subject of child support: see, for example, ‘Child Support: the Legislation’ (13^th Edition) with commentary provided by Edward Jacobs, judge of the Upper Tribunal (and author of the judgment in CCS 316/1998) at page 32 and Child’s Pay, The Complete Guide to the Child Support Law and Practice (Third Edition) at page 145. The latter publication has been endorsed by the Family Law Bar Association.

For these reasons, I reject Mr Chandler’s first ground of appeal and I find that there was no error on the part of the court. The judge had jurisdiction to make the order set out in paragraph 20 in relation not only to the wife and T but also in relation to S and C insofar as payments to the wife conferred a financial benefit on each of them. The judge’s failure to apportion the order is not reason to set it aside because of the assumption he plainly made that the husband’s income crossed the threshold for a maximum assessment both at the time of the final hearing and in all likelihood into the future. He declared on more than one occasion that he did not have jurisdiction to make an order which was exclusively for the benefit of one or more of the children. That was not an order which he made or one which he intended to make. The door was left open for a CMS assessment which is precisely what has happened in this case.

Taking into account his net income of £11,000 per month and deducting his rent, the school fees and some fixed employment costs, the husband’s net disposable income was found by the judge to be £6,550 per month or £78,600 per annum. Once he had met the global maintenance order of £3,250 per month, that income would reduce to £3,300 per month or £39,600 per annum. The wife’s position, as calculated by the judge, would be as follows:-

Thus, she would be left with £4,700 per month or £56,400 per annum with no mortgage to fund. The imbalance in their respective disposable incomes, on the appellant’s case, renders the outcome unfair.

On behalf of the appellant, Mr Chandler invites me to discharge the current order and to replace it with an order for spousal support in the sum of £1,000 per month. If he were to pay the sums due under the current maintenance assessment, the husband’s monthly liability would thereafter reduce to £2,790 or £33,480 per annum.

The judge carried out a survey of the wife’s Form E budget. In paragraph 166 of his careful judgment, he found that her target figure of £16,382 per month (or £196,584 per annum) was “an unachievable budget”, albeit one which properly reflected the family’s standard of living during the marriage. The level of periodical payments on which he fixed was one which he described as “modest” in the circumstances. He made it plain that, if there was more money coming in to the combined households, the sum of £3,250 per month would be unreasonably low in all the circumstances of this particular case. He made a specific finding that the husband would be able to meet his own needs going forward whilst providing the wife with this level of support. That finding was confirmed to an extent by his anticipation that the husband’s income may rise significantly in the future.

The wife by her own submissions has urged me not to disturb the judge’s figure in relation to quantum. She submitted that the judge’s order was part of a carefully considered package which the court found to be fair over a passage of time. She said that the judge himself acknowledged that there would need to be some economies made in the short term. Whilst there was no guarantee that the husband’s income would increase in the coming years, it was clear that his financial responsibilities for the family would reduce over a foreseeable period. Both parties had agreed that the children would transfer from the private sector to state education for their secondary education. S had already secured a place at a local grammar school and the expectation was that his siblings would follow him. Thus, within a relatively short pace of time, the school fees burden on the husband would reduce significantly and would be eliminated altogether within about four years.

Thus his position is likely to become more secure with each year that passes whereas her own position would continue to be vulnerable to any changes in tax credits which would be likely to fluctuate with whatever sums she could earn from time to time. T’s disability living allowance would come to an end on his 16^th birthday and it was a state benefit which was payable specifically to assist with the extra costs and expenses which T’s long term health issues generated. She made the point that if maintenance were reduced now, the inevitable effect would be to keep the parties locked in ongoing litigation whenever there were material changes to the husband’s future income position.

The judge was well aware that, for the foreseeable future, the wife would be dependant upon maintenance from the husband to supplement her only other income which took the form of state benefits. If those benefits are stripped out, the income distribution leaves more or less the same disposable income in each of their hands. She reminds me that T’s disability living allowance is a tax free, non-means-tested benefit which recognises the practical and financial burdens of dealing with disability within the family.

Extrapolating forward to July 2019, the wife has calculated that, as the school fees decrease, the husband’s disposable income will increase to just under £4,200 per month and by July 2022 the balance will have reversed entirely in his favour leaving him with £5,340 per month or in excess of £64,000 per annum. Those calculations assume no further increases in his income through enhanced drawings or profit share.

Given the judge’s findings and, in particular his finding that an order of £3,250 per annum left in the wife’s hands “a fair proportion of the husband’s income” with which to run her own and the children’s domestic economy, it is difficult to see how his order can be said to be wrong. This was the figure alighted upon as fair by a very experienced judge exercising a broad discretion against a wide canvas of evidence about this particular family’s circumstances. For the reasons he spelt out in his judgment, he found that the wife’s foothold in the employment market was weaker and more vulnerable than that of the husband. That is a view I share. In all the circumstances, I reject the second ground of appeal so far as it relates to the overall quantum of the judge’s award of maintenance.

As set out in the judge’s findings, the division of the available matrimonial capital was based upon the husband being able to purchase a property for c. £800,000 with a mortgage of £200,000. This finding was made after a careful survey of the evidence which both parties submitted at the final hearing. The judge spent some time considering the property particulars which were put before the court and he heard oral evidence from the parties about their future housing needs. Those property particulars showed a range of houses costing between £900,000 and £1.2 million. Mr Chandler submits that the judge should have found that the wife could rehouse herself in suitable accommodation at the lower end of the spectrum for £900,000. With costs, this would have allowed a modest departure from equality in her favour instead of the more pronounced disparity produced by the judge’s order. Had he taken this course, submits Mr Chandler, it would have eliminated the need for the husband to take on any mortgage at all and he could have discharged the outstanding term’s school fees of c. £12,000 from capital.

Because the wife has now purchased a new home relying on the final order, the husband does not now seek by his present appeal to put her and the children in a position where they have to move. In my judgment, that would be the inevitable result of any lump sum order which required the wife to make a payment to the husband at this stage. She plainly does not have a mortgage capacity which would enable her to absorb that liability. Instead, he submits through Mr Chandler that an uplift in the capital distribution in his favour should be reflected in a deferred charge or Mesher order which would not take effect for some years and not before their youngest child had completed her education.

In this context I bear well in mind that it was no part of the husband’s case at the final hearing that the court should make a Mesher order, nor did he seek an outcome which would have permitted him to purchase mortgage free accommodation. Thus His Honour Judge Everall QC expressed no view in his judgment about the appropriateness of such a course for this family. As far as his current domestic arrangements are concerned, I was told that since the final hearing (concluded more than a year ago) the husband has returned to live in the London property which is worth about £1.1 million and which is subject to a mortgage of just over £250,000.

The wife resists this ground of appeal for two principal reasons.

First, she submits that the departure from equality is justified by the judge’s treatment of the pension assets. At the final hearing, she was seeking a pension sharing order to remove the disparity in the parties’ pension positions (the husband’s funds being worth some £282,800 more than the wife’s funds). The judge declined to make any adjustment to pensions with the result that his order reflected a 53% : 47% division of the non-pension assets in the wife’s favour. He took that course because he assessed her housing need at c.£1 million plus costs. He found that it would be difficult for the wife to make provision from any future earnings for her retirement and one of the reasons which justified a small departure from equality in respect of the non-pension assets was explained by him as a ‘step down’ in housing in due course. By building in an assumption as to her ability to downsize, the judge provided a mechanism for the release on retirement of some further equity which the wife would need when she was no longer generating any earned income (paragraph 150). It was his solution to the pensions imbalance and an order which catered for her future as well as her present income needs.

Part of the uplift is accounted for by the judge’s decision to allow the wife a small capital contingency fund of c.£30,000. There was no direct challenge by Mr Chandler to this element of his award per se. His submissions were made in the context of the wider point about the impact of an unequal division of capital in terms of his client’s own housing needs. Nevertheless, he did point to the fact that the judge had not allowed any ‘head room’ in his judgment for a contingency fund for the husband thereby compounding the unfair nature of the division between them.

In this context, it seems to me that the judge cannot be said to be ‘wrong’ to have factored in a small fund for future emergencies and to have added that to the wife’s list of ‘needs’. For the foreseeable future, she has no independent income. She is, and will be, entirely dependent upon the support provided by the husband and state benefits. As matters currently stand, everything which she owns is tied up in her present home. There is no prospect of further slack in relation to her income unless and until she is able to find work. The judge found that this measure of independence will not be available to her until January 2020. Whilst I accept that the husband’s income resources will also be under pressure whilst he re-establishes a client base in London, his ‘financial shoulders’ are nevertheless broader than the wife’s in this context. He does have limited ability to borrow in the event of emergency and co-owns a Ferrari motor car with his father. That vehicle, as I understand it, is stored securely and appears to be treated more as an investment than as a means of transport. Even without recourse to that potential asset in an emergency, I am satisfied, as was the judge, that it was not unfair to leave the wife with the small measure of financial ‘head room’.

Secondly, the wife describes the suggestion that her present home should be impressed with a deferred charge as “catastrophic” in terms of her sense of security in that home. Apart from depriving her of further equity to provide for her retirement as the judge had intended by his order, such a charge would cause her significant hardship and prejudice. She develops her submissions in this way.

In my judgment these are sound reasons for rejecting the solution of a Mesher order at this stage. It is not without significance that the husband’s appeal is being dealt with more than 12 months after the conclusion of the final hearing. The wife has reorganised her domestic and family living arrangements relying on the decisions which the judge made. She has invested her share of the capital she was awarded in a home to which she has had to make a number of repairs or improvements. She has made this investment in the knowledge and belief that, unlike their former matrimonial home, this was to be her home and the husband would have no interest in it now or in the future. When seen in the light of the judge’s treatment of the pension funds, and notwithstanding the current illiquidity of the pension assets, the small uplift of capital in the wife’s favour appears to be wholly reasonable, entirely justified on a needs footing, and well within the band of outcomes which the judge could have settled upon in the exercise of the wide discretion which was entrusted to him pursuant to s 25 of the 1973 Act. He was entitled to find that the wife’s housing needs went beyond buying the cheapest available property which met the minimum requirements for bedrooms and the like. He was entitled, having heard her oral evidence, to factor in the importance to these children of having a garden. It was essentially a value judgment and not one with which this court is entitled to interfere unless his decision can be shown to be ‘wrong’. In my judgment, the husband has failed to persuade me that the judge’s approach can be described thus. Indeed, in all but the form of the order, I consider the judge’s approach to be unimpeachable.

Thus I dismiss the appeal in relation to the overall quantum of the maintenance award and the division of capital in terms of Grounds 2 and 3.

Having reached these conclusions in respect of all three grounds of appeal, I formally dismiss the husband’s appeal. The consequence for the parties is that the order made by His Honour Judge Everall QC remains in full force and effect. I know not whether the husband is now making payments via the CMS on the basis of a pro rata reduction in the sums he is paying to the wife. The parties may think it appropriate to recognise the new status quo by submitting a fresh consent order to the Central Family Court reflecting a variation to paragraph 20 of the original order. There is no requirement on them to do so but it may focus minds for the future in the event of an application by either party to vary the spousal element of the periodical payments order and/or in the event of an application by the wife to extend the term of the order beyond October 2026.

By way of postscript, I note that on the day I have completed my judgment, the President of the Family Division, Sir James Munby, has issued formal Guidance by way of an update to his 2013 update. In Practice Guidance: Standard Financial and Enforcement Orders, 30 November 2017, the President remains convinced that the arguments in favour of standardising financial order are “clear and compelling”. He points to the assistance which judges will derive from the existence of “a body of standardised and judicially approved forms of order”. I see that included within the new omnibus of orders as example 79 is a precedent for a Global order framed in very similar terms to the order which has been the subject of this appeal. I have already rejected the jurisdictional challenge to such orders for the reasons set out in my judgment. It is worth repeating at its conclusion the very important guidance from the President in these terms:

“These orders do not have the strict status of forms within Part 5 of the FPR 2010 and their use, although strongly to be encouraged, is not mandatory. Moreover, a standard order may be varied by the court or a party if the variation is required by the circumstances of a particular case. There will be many circumstances when a variation is required and departure from the standard form will not, of course, prevent an order being valid and binding. The standard orders should however represent the starting point and, I would hope and expect, usually the finishing point, of the drafting exercise.”