England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE – FAMILY DIVISION
(HIS HONOUR JUDGE BRUNNING – Sitting as a Deputy High Court Judge)

		Royal Courts of Justice Strand, London WC2A 2LL
		24 June 2003

THORPE LJ:

1. The appellant, GP is 28 years of age. The respondent VT is 46 years of age. They met in 1995. The appellant comes from an affluent English family based in Berkshire. There she spent her childhood being brought up with her brother and sister by her parents aided by a nanny. She left school at the age of 18 and almost immediately married. Her parents helped the young couple in the purchase of a comparatively modest first home. When the marriage broke down two years later her parents purchased the property, thus effectively financing the settlement between the young couple. The appellant has never had a career, although she has intermittently earned modestly in the interior decorating trade.
2. By contrast the respondent comes from an Iranian-Jewish family. In 1979 he took refuge in London. He is an immensely successful international businessman who the judge said had described himself in his evidence as fabulously rich and who conceded, in the words of Judge Brunning in the judgment under appeal:

"… that he could without financial embarrassment raise and pay any sum which the court may order … he is in a position he says to pay a lump sum in excess of £10M if ordered to do so."

3. It seems that he has at the same time a flamboyant lifestyle. He is well known in the fashionable nightclubs and he has many women in his life. It was in this milieu that he first met the appellant in 1995. They soon commenced a sexual relationship which continued intermittently for approximately four years. Towards its close the appellant conceived and on 14 July 2000 their daughter, L, was born. Hereafter I refer to the appellant and the respondent respectively as the mother and the father.
4. The father has not been married and L is his only child. His principal home was described by Judge Brunning as 'a large house in Central London, valued at well over £10M'. He also owns a house in South Africa. He maintains a large staff of assistants, representatives and advisors to whom he delegates tasks and responsibilities that others might regard as personal. In addition he employs a domestic staff including drivers and bodyguards.
5. The father's family are also London based. His parents live in Battersea. His brother and business associate, who is also unmarried, lives in Kensington. His sister, however, is married and has recently had a baby. Her home is in Regents Park. Unfortunately the attitude of the father and his family to L is to date ambivalent. Since her birth he has seen her infrequently. Although he has made financial contributions, he has been content for the main provision to be made by the mother's father.
6. On 13 March 2001 the mother issued her application for financial provision for L under section 15 and Schedule 1 of the Children Act 1989. At about the same time she initiated an assessment under the Child Support Act 1991. The Children Act application was transferred to the High Court in August 2001 and eventually came on for hearing on 14 October 2002. The first assessment under the Child Support Act was issued on 20 August 2001 in the sum of approximately £115 per week. The mother appealed this assessment, the appeal was heard on 8 July 2002 and the decision letter of 11 September 2002 substituted the higher figure of £152.43 per week effective from 20 August 2001. These assessments under the Child Support Acts appear to be absurd given that the father was voluntarily paying £1,200 per month with effect from August 2001. However the complex inter-relationship between the Child Support Acts and the judicial powers to make financial orders for children prevent the making of a judicial order until either a parental agreement is in place or an administrative assessment has been made. In the present case, there being no agreement between the parents, an administrative assessment was a necessary gateway to a judicial determination.
7. It is in my view regrettable that on Monday 14 October 2002 there was no Family Division judge available to take the mother's application. Given the facts and the issues the application cried out for trial by a Family Division judge with expertise in related claims brought under the Matrimonial Causes Act 1973. Indeed the reported cases at first instance on Schedule I claims have always in the past been so listed. However the function of the Family Division has become dependent on the support of senior circuit judges who are prepared to volunteer for a stint in London. Judge Brunning is the designated civil judge in Nottingham and has very great experience in proceedings under the Children Act 1989.
8. The case lasted three days after which the judge reserved, handing down his judgment on 28 November in Nottingham. On that occasion he heard further submissions on consequential issues, upon which he then ruled. The judgment as subsequently approved includes those consequential rulings, including the rejection of the mother's application for permission to appeal. However he ordered a stay pending determination of any appellate proceedings in the event of the mother renewing her application to this court. Her application to the Court of Appeal was received on 12 December 2002 and permission was granted on paper on 20 March 2003. In the interim the order to reflect the judgment below was perfected on 14 January 2003.
9. I turn now to record the outcome of the trial and the shape of the judgment below. At the outset of his judgment Judge Brunning recorded the mother's targets as follows:

"(a) A lump sum to provide a house or flat in Central London in the price range of £1.2M - £2.3M.

(b) A lump sum to furnish the property in the sum of £135,000.

(c) A top of the range Range Rover at £55,000, to be replaced every three or four years.

(d) An education fund of £700,000 to meet nursery, school and university costs.

(e) Periodical payments and a caring allowance in the total sum of approximately £170,000 per annum."

10. Later in the judgment he recorded the father's proposal:

"He has put forward, on advice, proposals which he asserts would enable L to live comfortably in a well-furnished house worth £350,000; be educated privately at good schools; and enjoy a good standard of living on periodical payments of £25,000, together with a car."

11. Now I record the judge's solution. He allowed £450,000 exclusive of costs of purchase for the house and £30,000 for its furnishings. He ordered £20,000 for a car on the basis that it would be replaced at the father's expense every four years. He accepted the father's undertaking to meet the costs of L's education, rejecting the mother's application for security. He set the rate of periodical payments at £35,360 per annum.
12. In his rulings at the hand down hearing he decreed of his own motion and without submissions that upon L's seventh birthday the periodical payments order should be reduced by '£9,333 and indexation relief thereon'. He said that periodical payments should cease on completion of L's secondary rather than her tertiary education. Finally he awarded an additional £7,500 to compensate the mother for the shortfall between 13 March 2001 and the implementation of the order.
13. How were these conclusions reasoned? In respect of the fund for a home he balanced the mother's desire to live in a fashionable area of London against the father's submission that she should live in Berkshire or in a London suburb. He looked at predictable bundles of agents particulars, the mother's illustrating desirable and sometimes substantial properties costing between £1M and £2.3M, the father's illustrating decidedly less desirable properties costing between £250,000 and £330,000. His decision was expressed thus:

"I am satisfied that if P chose to live in London or Berkshire, property which was wholly suitable for L's requirements could be purchased for the sum of £450,000. It would obviously be a more commodious property in Berkshire … The sum of £450,000 would give P ample choice suggested by T, relying upon general impressions of price levels in the London area and the Home Counties and assisted by press property reports and national surveys of house prices which are frequently published."

14. In relation to the furnishing fund, the mother relied on a detailed quotation from Chaplins amounting to £130,000 whilst the father proffered a rival hypothesis from John Lewis in the sum of £22,000. The judge plumped for £30,000 saying that Chaplins 'represents the top end of the furnishing business' and that 'furnishings of good quality and necessary white goods could be purchased for a lump sum of £30,000'. I need not record the judge's reasoning for his motorcar allowance or for his rejection of the mother's claim for security for school fees since those issues were not pursued when the mother's counsel filed their skeleton argument.
15. The reduction of periodical payments at L's seventh birthday was explained by the judge as follows:

"In my judgment Nanny Services for two to three days per week are reasonably required for L until that time. However I have to look at things in terms of the history to date. P has historically done odd jobs earning pin money and in all probability has no plans to work fulltime. Therefore, the award in respect of nanny services should be reduced accordingly at that time."

16. In fact £9,333 equals two thirds of £14,000 which was the element within the periodical payments order allowed by the judge to 'have a nanny for 2-3 days a week for a number of hours and [which] will provide P with baby-sitting cover and some cleaning help'.
17. As to backdating the judge ruled:

"I find that, albeit P was living with her parents for a significant period and therefore her expenses significantly reduced, that she would have incurred some expenses over and above the monies paid and therefore it would be appropriate to award an additional sum of £7,500 in respect of the period from 13 March 2001 to today."

18. In order to pursue her appeal the mother has brought in Mr Singleton QC and Miss Parker QC has been instructed on the father's behalf. Their respective juniors, Mr Shaw and Mr Tod, appeared below.
19. Mr Singleton emphasises that his appeal allows this court its first opportunity to consider Schedule 1 of the Children Act 1989 and to offer guidance to trial courts on the proper approach in exercising this highly discretionary jurisdiction. He demonstrates that between 1989 and 2001 the percentage of children born out of wedlock has increased from 26 to 40. Thus he says that two out of five children today fall within the Schedule 1 regime.
20. He has founded his submissions on three reported cases namely Haroutunian v Jennings [1980] FLR 62; A v A (Minor: Financial Provision) [1994] 1 FLR 657; and J v C [1999] 1 FLR 152. His over-arching submission was that all elements of the financial provision for L had to reflect the scale of the father's fortune and expenditure. The individual elements challenged by Mr Singleton were the housing fund, the furnishing fund, the periodical payments order and the allowance of only £7,500 for 26 months of shortfall.
21. Mr Singleton submitted that the judge had been misled by particulars of sale of a tiny mews in Notting Hill which Mr Tod had procured and with which he taxed the mother in cross-examination. But £450,000 would not begin to buy approximately 1500 square feet in Central London, given the need for freehold or long leasehold tenure. The judge's figure was so obviously too low that it had to be plainly wrong. A home of the size that the mother reasonably required in the area for which she reasonably contended could not be bought for less than £1M.
22. In relation to furnishings Mr Singleton simply submitted that again the judge's allowance would only furnish a shoebox. Accordingly the furnishing fund should be increased in proportion to the increase in the housing fund.
23. Mr Singleton's specific criticisms of the judgment were directed against the periodical payments order. Mr Singleton submitted that paragraphs 61 and 62 of the judgment demonstrated that the judge had confused the assessment of the amount to be allowed for services to be provided by the mother in caring for L and the amount to be allowed for additional paid carers. Although the judge had embarked on an assessment of the allowance for the mother he had then diverted into his assessment of the figure of £14,000 per annum to cover part-time nanny, babysitter and cleaner. As a result of the diversion the judge lost his way and failed to return to make any assessment for the services of the mother as L's primary carer. Mr Singleton submitted that the mother's allowance as L's carer could not be less than what it would cost the father to provide a full-time professional nanny. Mr Singleton contended for an overall periodical payments order of £100,340, of which £34,500 represented the mother's carer's allowance.
24. Mr Singleton was equally critical of the judge's anticipation of the periodical payments order at L's seventh birthday. The judge's reasoning was irrational. If the mother were then able to work and earn she would need more, not less, paid help.
25. As to backdating, Mr Singleton submitted that the judge's figure of £7,500 was plucked out of the air and not explained. However he accepted that, as a matter of law, the calculation of past shortfall should commence not from March 2001 but August 2001. Since that date the mother should have received nearly £6,000 a month. She had in fact been receiving only £1,200 a month. Therefore the total shortfall amounted to almost £105,000.
26. Miss Parker in her response rightly relied upon the discretionary nature of the judge's reasoned conclusions for fixing the housing and furnishing funds as he did. Her over-arching submission was that financial provision for L should appropriately be fixed by reference to ordinary middle class standards, even though those standards were not the standards of either of her parents. Miss Parker naturally emphasised that the mother had put her claim so high as to attract the judge's suspicion that she was 'motivated by the prospective of extensive financial gain'. Miss Parker rightly stressed that the mother has no financial claims against a man to whom she was never married and that it would be wrong in principle for her to exit with an overall package beyond that which the court would award a wife at the end of a short marriage. In amplifying that submission Miss Parker relied upon a number of cases illustrating the restricted awards in short marriage cases, particularly where the applicant wife had the benefit of support from her own affluent family.
27. Miss Parker's specific submissions also concentrated on the periodical payments order. She stressed that the parents had never shared a common household or cohabited. In the circumstances the mother's claim went far beyond reasonable bounds. She submitted that the mother's claim to an allowance of over £30,000 a year was an ill-disguised claim for herself and not for L. In defending the judge she submitted that he had within his overall award included an allowance for the mother and that the reduction to take effect at L's seventh birthday was to be understood as a reduction in the mother's allowance, since she would at that stage be liberated from the level of care required by an infant. She submitted, perhaps alternatively, that any allowance for paid care could not be sustained when her client was paying for L's full-time attendance at a nursery of the mother's choosing, open from 8.00am to 6.00pm 51 weeks of the year.
28. As to backdating, Miss Parker submitted that the court has no jurisdiction to order backdating beyond 8 July 2002 by virtue of the provisions of section 8(6)(c) of the Child Support Act 1991. In any event the mother and L had been living with her parents and there was no evidence that the mother had either depleted her assets or incurred debt throughout the period of the father's regular voluntary payment of £1,200 per month.
29. In reply Mr Singleton submitted that the effect of section 8 of the Child Support Act 1991 and paragraph 3 of the First Schedule, read as a whole, is that the court has jurisdiction to backdate to the date upon which the higher assessment became effective, namely 20 August 2001.
30. When the court referred Mr Singleton to paragraph 5 of Schedule 1 he submitted that it was open to the court to augment the mother's lump sum since the past shortfall was clearly covered by the terms of paragraph 5(1)(a) and (b). Miss Parker, on the other hand, submitted that paragraph 5(1)(a) was not engaged since the mother could not demonstrate that she had incurred either liabilities or expenses in maintaining L.
31. Before stating my opinion on counsels' contending submissions it is convenient to set out the statutory framework and then to review the authorities. Section 15 of the Children Act 1989 itself records the legislative history of the current statutory code:

"(1) Schedule 1 (which consists primarily of the re-enactment, with consequential amendments and minor modifications, of provisions of section 6 of the Family Law Reform Act 1969, the Guardianship of Minors Acts 1971 and 1973, the Children Act 1975 and sections 15 and 16 of the Family Law Reform Act 1987) makes provision in relation to financial relief for children."

32. Paragraph 1(1) of Schedule 1 sets out the range of orders that fall within the court's jurisdiction:

"(1) On an application made by a parent or guardian of a child, or by any person in whose favour a residence order is in force with respect to a child, the court may –

(a) in the case of an application to the High Court or a county court, make one or more of the orders mentioned in sub-paragraph (2) …

(2) The orders referred to in sub-paragraph (1) are –

(a) an order requiring either or both parents of a child –

(i) to make to the applicant for the benefit of the child; or

(ii) to make to the child himself,

such periodical payments, for such term, as may be specified in the order;

(b) an order requiring either or both parents of a child –

(i) to secure to the applicant for the benefit of the child; or

(ii) to secure to the child himself,

such periodical payments, for such term, as may be so specified;

(c) an order requiring either or both parents of a child –

(i) to pay to the applicant for the benefit of the child; or

(ii) to pay to the child himself,

such lump sum as may be so specified;

(d) an order requiring a settlement to be made for the benefit of the child, and to the satisfaction of the court, of property –

(i) to which either parent is entitled (either in possession or in reversion);

and

(ii) which is specified in the order;

(e) an order requiring either or both parents of a child –

(i) to transfer to the applicant, for the benefit of the child; or

(ii) to transfer to the child himself,

such property to which the parent is, or the parents are, entitled (either in possession or in reversion) as may be specified in the order."

33. I pass over paragraph 3 to which I will return when I consider ultimately the question of the court's jurisdiction to backdate a periodical payments order. I also reserve the necessary reference to paragraph 5(1) of the Schedule. The crucial paragraph directing the discretionary determination of an application under paragraph 1 of the Schedule is to be found in paragraph 4 which provides in sub-paragraph 1 as follows:

"4(1) In deciding whether to exercise its powers under paragraph 1 or 2, and if so in what manner, the court shall have regard to all the circumstances including –

(a) the income, earning capacity, property and other financial resources which each person mentioned in sub-paragraph (4) has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each person mentioned in sub-paragraph (4) has or is likely to have in the foreseeable future;

(c) the financial needs of the child;

(d) the income, earning capacity (if any), property and other financial resources of the child;

(e) any physical or mental disability of the child

(f) the manner in which the child was being, or was expected to be, educated or trained."

34. In the present appeal only paragraphs (a), (b), (c) and (f) of the statutory checklist are engaged.
35. I turn next to the authorities. The case of Haroutunian v Jennings was decided by the Divisional Court of the Family Division in July 1977. It established the principle that it is not wrong for the court to augment the periodical payments order for a child to include an allowance for the mother, especially if the mother has to give up work or is unable to work because she has to look after the child. The principle is clearly stated in the judgment of Sir George Baker P at 65. In his concurring judgment Balcombe J reinforced his opinion by reference to claims under the Fatal Accidents Act.
36. In the case of A v A Ward J stated that the provision of a home for the child should be ordered under paragraph 1(1)(d) rather than under sub-paragraph (e) of Schedule 1, that is to say by way of settlement of property rather than transfer of property order. Then in fixing the level of periodical payments to the child he included an allowance for the mother, applying the principle established in Haroutunian v Jennings.
37. Finally in the case of J v C in 1997, Hale J traced the genesis of the Family Law Reform Act 1987. She said:

"This implemented two Law Commission reports on illegitimacy. The object of those reports was to remove the differences in the legal positions of children. The underlying principle was that children should not suffer just because their parents had, for whatever reason, not been married to one another.

Equally of course they should not get more. There is a long line of authority … that children are entitled to provision during their dependency and for their education, but they are not entitled to a settlement beyond that, unless there are exceptional circumstances such as a disability, however rich their parents may be."

38. Secondly Hale J explained why Schedule 1 makes no express reference to the welfare of the child, as do section 25 of the Matrimonial Causes Act 1973 and section 3 of the Domestic Proceedings in Magistrates Court Act 1978. She said:

"The reason for the omission of the requirement to treat the child's welfare as the first consideration is probably that these provisions apply in cases where the adult parties are, or were, married to one another and, therefore, the court will usually be faced with claims for some provision for the adults as well as for the children. In such cases it makes sense to provide that the children's welfare should come before that of the adults in determining these claims.

Nevertheless, in cases under the Children Act 1989 the welfare of the child concerned, even if neither the paramount nor the first consideration, must be one of the relevant circumstances to be taken into account when assessing whether and how to order provision."

39. Thirdly Hale J stated that in the exercise of the judge's discretion no great significance should be attached to the issue of whether a pregnancy was planned or otherwise. There was nothing in the private law to distinguish between wanted and unwanted children and it was the policy of the Child Support Act to fix financial responsibility for a child whether or not wanted.
40. Fourthly Hale J stated that the child in question was entitled to be brought up in circumstances which bore some sort of relationship to the father's current resources and the father's present standard of living. That proposition was preceded by an acknowledgment that the court must guard against unreasonable claims made on the child's behalf but with the disguised element of providing for the mother's benefit rather than for the child.
41. The considerations arrived at in these three cases have guided the determination of Schedule 1 claims for some years. They are unquestionably sound and should be clearly endorsed. I have only two qualifications.
42. First in A v A, in explaining his quantification of an allowance for the mother's care Ward J said:

"I bear in mind a broad range of imprecise information from the extortionate demands (but excellent service) of Norland nannies, to au pair girls and mothers helps, from calculations in personal injury and fatal accident claims and from the notice-boards in the employment agencies I pass daily. I allow £8,000 under this head. It is almost certainly much less than the father would have to pay were he to be employing staff, but to allow more would be – or would be seen to be – paying maintenance to the former mistress who has no claim in her own right to be maintained."

43. I cannot agree with that reservation. I believe that a more generous approach to the calculation of the mother's allowance is not only permissible but also realistic. Nor would I have regard to calculations in either personal injury or fatal accident claims. It seems to me that such cross-references only risk to complicate what is an essentially broad-brush assessment to be taken by family judges with much expertise and experience in the specialist field of ancillary relief.
44. Second, in the passage which I have cited from the judgment of Hale J in J v C, in which she rightly sets the welfare of the child to be clearly embraced within the court's general duty to 'have regard to all the circumstances', I would only wish to amplify by saying that welfare must be not just 'one of the relevant circumstances' but, in the generality of cases, a constant influence on the discretionary outcome. I say that because the purpose of the statutory exercise is to ensure for the child of parents who have never married and who have become alienated and combative, support and also protection against adult irresponsibility and selfishness, at least insofar as money and property can achieve those ends.
45. Before coming to the details of the present case I would like to offer my opinion as to the method by which a judge should determine a case similar to this, in that one or both of the parents lie somewhere on the spectrum from affluent to fabulously rich. Such cases may be more likely to be litigated, partly because where the parents are of more modest means financial liabilities will be conclusively settled by the administrative process under the Child Support Acts, to which the judicial process is only supplementary, and second because the affluent and the very rich may be less deterred by the costs of litigation. The starting point for the judge should be to decide, at least generically, the home that the respondent must provide for the child. The value, the size, and the location of the home all bear upon the reasonable capital cost of furnishing and equipping it as well as upon future income needs, directly in the case of outgoings but also indirectly in the case of external expenditure such as travel, education, and perhaps even holidays. The home will ordinarily be transiently required during the child's minority or until further order. The appropriate legal mechanism is therefore a settlement of property order. Since the respondent is entitled to the reversion, which in certain circumstances may fall in before the child's majority, the respondent must have some right to veto an unsuitable investment.
46. Once that decision has been taken the amount of the lump sum should be easier to judge. For the choice of home introduces some useful boundaries. In most cases the lump sum meets the cost of furnishing and equipping the home and the cost of the family car.
47. Those issues settled the judge can proceed to determine what budget the mother reasonably requires to fund her expenditure in maintaining the home and its contents and in meeting her other expenditure external to the home, such as school fees, holidays, routine travel expenses, entertainments, presents, etc. In approaching this last decision, the judge is likely to be assailed by rival budgets that specialist family lawyers are adept at producing. Invariably the applicant's budget hovers somewhere between the generous and the extravagant. Invariably the respondent's budget expresses parsimony. These arts have been developed in Matrimonial Causes Act claims, particularly where the budget is advanced to found the calculation of the price of the clean break. But it is worth emphasising the trite point that, by contrast, an order for periodical payments is always variable and will generally have to be revisited to reflect both relevant changes of circumstance and also the factor of inflation. Therefore in my judgment the court should discourage undue bickering over budgets. What is required is a broad commonsense assessment. What the court first ordains may have a comparatively brief life before a review is claimed by one or other party.
48. In making this broad assessment how should the judge approach the mother's allowance, perhaps the most emotive element in the periodical payments assessment? The respondent will often accept with equanimity elements within the claim that are incapable of benefiting the applicant (for instance school fees or children's clothing) but payments which the respondent may see as more for the benefit of the applicant than the child are likely to be bitterly resisted. Thus there is an inevitable tension between the two propositions, both correct in law, first that the applicant has no personal entitlement, second that she is entitled to an allowance as the child's primary carer. Balancing this tension may be difficult in individual cases. In my judgment the mother's entitlement to an allowance as the primary carer (an expression which I stress) may be checked but not diminished by the absence of any direct claim in law.
49. Thus in my judgement the court must recognise the responsibility, and often the sacrifice, of the unmarried parent (generally the mother) who is to be the primary carer for the child, perhaps the exclusive carer if the absent parent disassociates from the child. In order to discharge this responsibility the carer must have control of a budget that reflects her position and the position of the father, both social and financial. On the one hand she should not be burdened with unnecessary financial anxiety or have to resort to parsimony when the other parent chooses to live lavishly. On the other hand whatever is provided is there to be spent at the expiration of the year for which it is provided. There can be no slack to enable the recipient to fund a pension or an endowment policy or otherwise to put money away for a rainy day. In some cases it may be appropriate for the court to expect the mother to keep relatively detailed accounts of her outgoings and expenditure in the first and then in succeeding years of receipt. Such evidence would obviously be highly relevant to the determination of any application for either upward or downward variation.
50. When I apply this suggested method to the present case I start with the judgment that the mother reasonably seeks to live in Central London. As an unmarried single parent she has a particular need for a network of supportive friends. Her evidence established that her friends are London friends and that she favours the excellent range of private day schools that London offers. The father and all his family are based in Central London. It is to be hoped that he will become a significant figure in L's life and, given his exceptionally busy life, L's proximity might increase the prospects of him seeing her. Once the general location has been decided the scale suggested by the mother, a three bed-roomed house or flat, does not seem to me unreasonable. L is likely to want to have the freedom to invite a friend to stay overnight and the mother may reasonably want to invite a member of her extended family to stay overnight.
51. Location and accommodation in conjunction, in my judgment establish the reality of Mr Singleton's proposed budget of £1M. I accept the validity of Mr Singleton's over-arching submission that the dominant feature in the present case is the scale of the father's fortune and of his chosen way of life. The judge's figure of £450,000 represents less than 5% of the value of his principal home. Furthermore the order only requires him to invest a much smaller percentage of his total assets in a Central London residential property for a relatively brief term of years, dependent upon developments in the mother's personal life.
52. Equally I would accept Mr Singleton's submissions in regard to that part of the lump sum required to create a suitable interior within the shell that passes on completion. I would not myself reason it only as Mr Singleton sought to reason it. The inventory in the sum of £22,000 advanced by the respondent was prepared by one of his assistants and in my opinion it represents the sort of expenditure that an investor would contemplate in preparing a property for a furnished tenancy. In his oral evidence the husband treated the suggestion that he would shop at John Lewis as comic. Chaplins may well be at the expensive end of the furnishing market but that is not inappropriate given the father's standing, or even given the standing of the mother's family. In the exercise of a broad discretion I would allow the sum of £100,000 for the internal decoration of the home, by which I mean finishing, furnishing and equipping it. Things that are bought for the home must be liable to depreciate rather than appreciate in value over the years of use. Of course the father is entitled to proof that the whole sum has been spent on the making of L's home and that none of it has gone into the mother's pocket.
53. Turning to the judge's order for periodical payments, again I am of the opinion that his order cannot stand. First I accept Mr Singleton's submission that in the course of the judgment Judge Brunning lost sight of the need to assess the allowance for the mother as primary carer as an independent item. I cannot begin to accept Miss Parker's highly speculative suggestion that it is possible to spell the allowance out of various paragraphs of the judgment. Her submission was contradicted by the plain words of the paragraphs to which I have already referred. Further I am of the opinion that the judge was plainly wrong to provide for the downward variation at L's seventh birthday. First I consider that that was wrong in principle. Future variations, unless to take early effect, are far better left to await events and to allow an agreement or a decision to reflect facts and circumstances that have transpired in the interim. Second I accept Mr Singleton's criticism of the logic of the judge's reasoning for this reduction.
54. In making an independent assessment in the exercise of my own discretion I have regard to the likely cost of running the home that the trustees will buy for the mother and L. I have regard to the fact that the mother is to be L's primary carer. I would not relate that to the cost of a Norland nanny. That would be to demean the mother's role. Mothers provide 24-hour care for children. That level of care would be difficult to buy in, even for a father as rich and resourceful as this. In the real world even professional nannies come and go. In the real world nannies are entitled to days off, weekends off and holidays. I consider that Mr Singleton's figure of £100,000 is put too high, if only because I accept Miss Parker's submission that it is unreasonable to suggest that the father should pay for the most extensive nursery school placement as well as a part-time professional nanny. I would take a broad-brush figure of £70,000 per annum from which the father is entitled to deduct the amount of state benefits that the mother receives for L. Of course it is easy to say that that represents a liability of approximately £1,500 a week for a two-year-old child. But that is a distortion of the reality that £70,000 is a budget to enable the mother to run the home for L and to provide her additional needs. Again the father may be entitled to reasonably detailed accounts of expenditure so that he can be satisfied that, taking one year with another, all is spent to meet the needs for which it is provided and none goes to the personal or exclusive benefit of the mother.
55. Although this figure contains a substantial element of establishment costs I would nevertheless not defer its introduction until the mother takes possession of L's new home. There may be a considerable delay pending selection, trustee approval, necessary legal work and perhaps alterations, renovations or decorations. As an interim arrangement the mother may wish to rent and the establishment element within the periodical payments should allow her to do so.
56. I turn now to the submissions in relation to backdating. Before coming to the merit arguments I will set out my conclusions on the court's jurisdiction. Paragraph 5(1) of the First Schedule provides:

"5(1) Without prejudice to the generality of paragraph 1, an order under that paragraph for the payment of a lump sum may be made for the purpose of enabling any liabilities or expenses–

(a) incurred in connection with the birth of the child or in maintaining the child; and

(b) reasonably incurred before the making of the order to be met."

57. I am of the opinion that this provision should be broadly construed. The mother has incurred a liability to her father, admittedly one that would never be enforced, in maintaining her as the primary carer and L directly over the past 22 months.
58. If I am wrong in that opinion I am confident that Mr Singleton is correct in his construction of the complicated interaction of the provisions of the Children Act 1989 and the Child Support Act 1991.
59. The Children Act 1989 itself provided conventionally by paragraph 3 of Schedule 1:

"The term to be specified in an order for periodical payments made under paragraph 1(2)(a) … in favour of a child may begin with the date of the making of an application for the order in question or any later date [or a date ascertained in accordance with sub-paragraph (5) or (6)]."

60. The words in the square brackets and sub-paragraphs (5) – (8) of paragraph 3 were added by the Maintenance Orders (Backdating) Order 1993 (SI 1993 No 623). It is therefore necessary to set out sub-paragraphs (5) and (6) of paragraph 3 as follows:

"(5) Where –

(a) a maintenance assessment ('the current assessment') is in force with respect to a child; and

(b) an application is made for an order under paragraph 1(2)(a) or (b) of this Schedule for periodical payments in favour of that child –

(i) in accordance with section 8 of the Child Support Act 1991; and

(ii) before the end of the period of six months beginning with the making of the current assessment,

the term to be specified in any such order made on that application may be expressed to begin on, or at any time after, the earliest permitted date.

(6) For the purposes of sub-section (5) above, 'the earliest permitted date' is whichever is the later of –

(a) the date six months before the application is made; or

(b) the date on which the current assessment took effect or, where successive maintenance assessments have been continuously in force with respect to a child, on which the first of those assessments took effect."

61. Now I set out the relevant provisions of the Child Support Act 1991 namely section 8(1), (3) and (6):

"(1) This sub-section applies in any case where the Secretary of State would have jurisdiction to make a maintenance calculation with respect to a qualifying child and a non-resident parent of his on an application duly made (or treated as made) by a person entitled to apply for such calculation with respect to that child.

(3) Except as provided in sub-section (3A), in any case where sub-section (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.

(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) the maintenance calculation is in force with respect to the child;

(b) the non-resident parent's net 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."

62. Mr Singleton's essentially simple submission in relation to these statutory provisions is as follows:

i) This case is clearly caught by section 8(1)

ii) Equally section 8(3) excludes the court from making a periodical payments order

iii) However section 8(6) is satisfied, since first the present case falls within sub-paragraph (a) and second a departure direction has been made under sub-paragraph (b) and third the court has decided that a top-up order is appropriate.

iv) The consequence is that our journey continues into paragraph 3 of Schedule 1 where the criteria set out in sub-paragraph (5) are satisfied.

v) Finally sub-paragraph (6), in its definition of 'the earliest permitted date', takes us to sub-paragraph (b), namely the date on which the current assessment took effect. That date is, of course, 20 August 2001.

63. In my judgment these submissions from Mr Singleton are correct in law.
64. How then should we exercise our discretion, given that we have at least the jurisdiction to backdate the order to 20 August 2001? In principle the father should not escape financial obligations in consequence of the fact that he has been in conflict with the mother both in relation to administrative and judicial assessments. On the other hand some regard should be paid to the fact that the mother has had the support of her affluent family over these months of conflict. She has not had to deplete her own assets or incur debts.
65. Mr Singleton's monthly rate of £6,000 was said to be stripped of establishment expenses that will not be incurred until the applicant and L are installed in their new home. On that basis his proposed monthly rate is manifestly too high. The monthly rate that I adopt also reflects the absence of establishment expenses as well as the factors referred to in the preceding paragraph. I am mindful of the fact that during the 22 months in question the mother was for a time renting a London flat. I have however made no allowance for that given the judge's adverse finding that it was not substantially used as a home for L. Again adopting the broad-brush approach I would halve the monthly rate sought by Mr Singleton to produce arrears of £40,000 after giving credit for the voluntary payments received.
66. Although I have differed from Judge Brunning fundamentally on a number of aspects of the case I wish to record that I am not in any way critical of his judgment. He approached the case with manifest care and many of his findings and conclusions have not been challenged. Insofar as we differ in our conclusions it may be because we bring to the case different experience. The parties, or at least one of them, are members of an exceptionally affluent cosmopolitan society with which much of my professional life has been concerned.
67. A more concrete explanation for my more generous conclusions lies in paragraph 40 of Judge Brunning's judgment. In this paragraph Judge Brunning expressed the importance that he attached to the fact that the father had no financial obligations in respect of L beyond her minority or the completion of her education. In consequence he suggested a danger in creating an unsustainable expectation of luxury with a consequential need to adjust to a rude reduction in standards. This approach is likely to have influenced the settlement of property order, the lump sum order and the periodical payments order.
68. The possibility that the father will make no financial provision for L once his Schedule 1 obligations terminate cannot be denied. However I do not consider that to be a possibility that should influence the determination of the present applications. After all during the course of the father's cross examination the following exchange is recorded:

"Mr Shaw: Mr T, one of the things that you're probably very concerned about is the welfare of L isn't it?

A – Yes

Q – Is she very important to you?

A – She is important to me.

Q – One of the most important things in your life?

A – What happens to her?

Q – No. She is probably one of the most important things in your life isn't she?

A – Yes, yes.

Q – And I am sure that you want to give her the best.

A – Yes."

The father's responses are of course much to his credit.

69. It is accordingly impossible to speculate on the nature of the father's feelings towards L when she completes her education and he is in his mid sixties. So much depends upon developments in the intervening years. But it may well be said that L's prospects of enjoying a relationship with her father in and beyond her minority may be strengthened rather than diminished by whatever enhanced familiarity with his world material benefits would provide. L will need to feel at ease in the surroundings that her father inhabits and with the company that he keeps. I do not therefore see it as being in L's interests to restrict her economy in the years which the court can control merely to guard against the speculative risk that she may be cut off without a penny, to use an old-fashioned phrase, upon attaining her majority.
70. An aspect of this litigation that has struck me is its seeming irrelevance given the scale of the father's fortune. Acrimonious exchanges further corrode adult relationships that have already foundered. Moreover the future relationship between the father and L is problematic. Accordingly it seems sad that these money issues have had to be fought out. What help have the parties had to resolve their differences without contested hearings? We were told that there had been no attempt at mediation. Procedural reforms introduced in 2000 ensure that the court has the duty to explore settlement of Matrimonial Causes Act claims before directing a trial. Would not such an obligation be appropriate in Schedule 1 claims, certainly where capital provision is sought?
71. Consideration should also be given in my judgment to the allocation of Schedule 1 cases to judges with the appropriate expertise. Certainly in a case such as the present where very substantial orders are sought, the trial should be conducted by a Family Division judge with ancillary relief experience. In other cases where the sums in play are more modest there would be advantages in allocating the trial to the judge concerned with any contested proceedings under section 8 of the Children Act.
72. In conclusion I would allow this appeal to the extent indicated. Otherwise the order of 14 January 2003 stands as drawn.

MAY LJ:

73. I agree that this appeal should be allowed for the reasons given by Thorpe LJ and to the extent which he has indicated.
74. For obvious reasons, this is a most unusual case. In the context of the financial needs of a very small child, the father has unlimited resources and a personal standard of living to match. He invites the court to treat him without investigation as such a person having such means and he will pay whatever the court orders without blinking. In the circumstances which Thorpe LJ has described, I agree that the judge pitched his order much too low and that an appropriate order should require a number of very substantial payments. By no other means would L be brought up in circumstances which bore some sort of relationship to her father's current resources and his present standard of living. There is, however, in my view a danger that the necessary expression of the considerations which lead to individual conclusions in the present case may be regarded as relevant and perhaps necessary considerations to take into account in other cases in which the available resources are necessarily smaller and, in most cases, in a quite different league.
75. In short, this is not a typical case and I do not anticipate that what is said in this case will necessarily apply to others. To take one example, I entirely agree with Thorpe LJ that a broad approach is appropriate to many of the elements of the order which he proposes. I agree that the father is entitled to some account of how the money is spent. In the present case, this is a possible source of undesirable friction between the parties which I trust their sense and sensibilities will avoid. In other cases where available resources are much more modest, a degree of calculation may be unavoidable to avoid injustice and accounting for how exiguous payments are spent may be positively undesirable.

BODEY J:

76. In the light of Paragraph 4 of Schedule 1 of the Children Act 1989 and the authorities to which we have been referred, the following summary can be offered as to the considerations applicable to claims under Schedule 1:

i) The welfare of the child while a minor, although not paramount, is naturally a very relevant consideration as one of "... all the circumstances..." of the case.

ii) Considerations as to the length and nature of the parents' relationship and whether or not the child was planned are generally of little if any relevance, since the child's needs and dependency are the same regardless: J v C (Child: Financial Provision) [1999] 1 FLR 152 at 154B.

iii) One of the "... financial needs of the child..." (to which by paragraph 4(1)(c) the court must pay regard) is for him or her to be cared for by a mother who is in a position, both financially and generally, to provide that caring. So it is well established that a child's need for a carer enables account to be taken of the caring parent's needs: Haroutunian v Jennings [1980] 1 FLR 62 at 66C; and A v A ( Minor: Financial Provision) [1994] 1 FLR 657 at 665G.

iv) By Paragraphs 4(1)(a) and (b) of Schedule 1, the respective incomes, earning capacities, property and other financial resources of each of the parents must be taken into account, together with their respective financial needs, obligations and responsibilities. So "... the child is entitled to be brought up in circumstances which bear some sort of relationship with the father's current resources and the father's present standard of living..." - per Hale J in J v C (Child: Financial Provision) (above).

v) However, as this latter concept lends itself to demands going potentially far wider than those reasonably necessary to enable the mother properly to support the child, "... one has to guard against unreasonable claims made on the child's behalf but with the disguised element of providing for the mother's benefit rather than for the child...": J v C (Child: Financial Provision) (above).

vi) In cases where the father's resources permit and the mother lacks significant resources of her own, she will generally need suitable accommodation for herself and the child, settled for the duration of the child's minority with reversion to the father; a capital allowance for setting up the home and for a car; and income provision (with the expense of the child's education being taken care of, generally, by the father direct with the school).

vii) Such income provision is reviewable from time to time, according to the changing circumstances of the parties and of the child.

viii) The overall result achieved by orders under Schedule 1 should be fair, just and reasonable taking into account all the circumstances.

77. From the experience of this case, I would propose three further considerations:

i) In considering the mother's budget, at least in bigger money cases, the court should paint with a broad brush, not getting bogged down in detailed analyses and categorisations of specific items making up opposing budgetary presentations. Rather, the court should do its best to achieve a fair and realistic outcome by the application of broad common sense to the overall circumstances of the particular case.

ii) Comparisons with the commercial cost of providing professional care are unlikely to be of great assistance and may only serve to distract.

iii) When setting up a budget for the sort of lifestyle a child should be enabled to have, the court should not generally attach weight to the risk that the father may reduce or withdraw his support when the child comes of age (or ceases education or training) thereby obliging the child to adapt to a lower lifestyle at that time.

78. It is in quantifying the mother's reasonable needs as carer of the child that a tension emerges in such cases as this where the father is very wealthy. This tension is between seeking to achieve that the child has a standard of living bearing 'some sort of relationship with the father's current resources and standard of living', yet that the mother is not in the process provided for just the same as if she and the father had undertaken the commitment of marriage.
79. Such tension is unlikely to emerge where the father is of lesser means, as (i) his lifestyle will be more modest as a comparative factor and (ii) his own needs will place a curb on the amount which he can reasonably be expected to pay.
80. Since there will always be distinctions of fact and degree as between cases, it is not possible to reduce to words any formula for seeking to ensure that the above distinction is maintained between mother as carer and mother as former wife. There will always be some budgetary needs claimed by a mother which fall clearly within her reasonable needs as the child's carer and others which fall clearly outside those needs as carer.
81. There will equally and inevitably be numerous grey areas, where the need asserted is of no direct benefit to the child, but is (or is arguably) of legitimate indirect benefit in helping reasonably to sustain the mother's physical/emotional welfare. This will be most pronounced when the father is very wealthy and able without difficulty to provide for living costs of no clearly identifiable direct benefit to the child, but which would indirectly promote the mother's care of the child by allowing her such a lifestyle as not to feel 'out of place' in the society of the parents of the child's friends.
82. It is these fine (and largely insoluble) distinctions of fact and degree within the grey areas of indirect benefit to the child which particularly justify the proposition at paragraph 77(i) above, namely as to the desirability of a broad budgetary approach by the court in bigger money cases. Such an approach aims so far as possible to avoid subjectively driven, time consuming and cost ineffective arguments, so often fairly sterile in the result.
83. For the same reasons, the parties should themselves likewise be prepared to adopt a broad-brush approach to questions of sums claimed and sums actually spent. Some give-and-take is plainly required in this sensitive area, if conflict is to be avoided. But where there are grounds for belief that a mother is taking or is likely to 'take advantage' by spending Schedule 1 payments on things of clearly no benefit whatever to the child, there needs to be some longstop for the father. So as Thorpe LJ says, he may request an account of monies spent and may revert to the court, if necessary, for his financial obligations to be reconsidered.
84. This is in no way to encourage a father's taking this step, nor any sort of officious policing of the mother's lifestyle. It is simply a remedy of last resort if a mother were exploiting or were seriously likely to exploit her child-carer status, by for example making significant savings from the income provision ordered for the benefit of the child, or using that income to support the lifestyle of a new partner.
85. Turning now to the orders made in this case, they were par excellence the product of an exercise of judicial discretion and can only be interfered with if plainly wrong. Having said that, it must be remembered that the father, by working extremely hard and for very long hours, is a man of exceptional wealth. He has for example the use of a detached house in Mayfair worth (as found) well over £10M, and of a Rolls Royce, a Bentley, an Aston Martin, two range Rovers and two drivers. The skeleton argument of his counsel in the court below stated that: "… the respondent concedes rightly that he can meet any order that the court deems appropriate and has stated that he could pay a lump sum in excess of £10M …". His lifestyle is clearly one of great comfort and affluence, justifying the judge's observation that he can "... afford any order this court may make without noticing its impact on his wealth ".
86. In determining the question of quantum against this background, the learned judge was faced with two areas of the case which we have not been required to address in any depth. The first concerned the mother's claim that following the break-up of the parties' relationship, she had lived for a time with L in a flat which she rented in central London. Cross examination on her bank statements however proved (as found by the judge) that this claim was false and that she had in fact lived with L at the material time with her wealthy parents in Berkshire.
87. The judge thus decided this issue in favour of the father, whose case was that the mother had only rented in central London as a device to boost her claim against him to be enabled to continue to accommodate herself and L in central London during L's minority.
88. He was thus perhaps understandably unimpressed by the fact, as established on the evidence, that the majority of the mother's friends now live in central London, as do members of the father's family, and by the father's own acceptance in evidence that the mother's expressed wish to live in central London is genuine.
89. The judge appears similarly to have attached little if any weight to the father's saying in evidence that he would like to build up a relationship with L through contact, which could realistically be far more simply fitted round the father's heavy business schedules if L lived somewhere relatively near to his home in Mayfair.
90. The second such area of the case, on which the parties spent much time below, concerned their competing contentions as to the detailed composition of an appropriate budget for L and the mother. Here, although the father's proposals were somewhat under-pitched, it is clear that the mother's claims were significantly over-pitched: accommodation at up to a £2.3 million: a vehicle at £55,000: an education fund of £700,000: and income provision of £170,000 per annum.
91. The judge plainly thought this was an excessive shopping-list, observing that "... caution is required when dealing with those who are zealously motivated by the prospect of extensive financial gain..." He said the mother was "... determined to push [her cause] to its limits, though of course she saw this as being for L's sake".
92. In such circumstances, having made findings in these two areas adverse to the mother's case, it is understandable that the judge should have been inclined to think down the quantum of her claims, wishing also to guard no doubt against allowing a "... disguised element of providing for the mother's benefit rather than for the child" - as cautioned against by Hale J in J v C (above).
93. That this is what happened in the result can be demonstrated by the accommodation provision of £450,000 allowed by the judge, which he said would give the mother "... ample choice" of properties in London or Berkshire. He did not however make findings as to whether such property should reasonably contain two or three bedrooms, nor as to whether it should be in what might be called prime central London, or merely in London generally. Had he done so and had he concluded that central London was a reasonable aspiration for the mother of this particular child, as was the case in my view, then he would surely have concluded that £450,000 did not constitute a sufficient housing fund.
94. I agree with Thorpe LJ that the nature and whereabouts of housing should be the first issue for resolution, from which estimations of other reasonable needs will more logically follow. This was the starting point adopted by the judge. Given, however, that in my view he under-pitched significantly the provision for housing, it is understandable that his awards under the other headings of furnishing, income and arrears were also correspondingly low, given the sort of social life into which the child of this father should be enabled to grow and for which she needs to be prepared by her primary carer.
95. On this particular point, I cannot agree with paragraph 40 of the judgment, wherein the judge appears to be attaching weight to the fact that, because L has no right to support from the father beyond the end of her minority or education or training, the father may then choose to withdraw or reduce his support, causing her to have to adapt to a much lower quality of life. True there is this risk; but equally it may not happen at all. The point is speculative at this distance in time. Taken to its extreme, it would mean that every child ought to be supported only at the sort of rate to which he or she might have to adapt on reaching adulthood, if then financially abandoned. To the extent that the judge may have allowed this consideration to reduce the income provision which he felt appropriate for L, then in my view he was in error.
96. Standing back to consider the overall award in the round it does seem to me, with respect to the learned judge, that it fell below the ambit of his undeniably wide reasonable discretion and so can and should be reviewed by this court. I agree with the orders proposed by Thorpe LJ. Although they can doubtless be said to appear very high for the support of a child still under three, they are nonetheless in my judgement the appropriate orders having regard to the considerations at paragraphs 76 and 77 above, including especially the exceptional wealth of this particular father.