Jersey Unreported Judgments

Family - appeal against a decision of the Registrar.

[2020]JRC240

Royal Court

(Family)

15 November 2020

Before     :

J. A. Clyde-Smith OBE., Commissioner, and Jurats Crill and Averty

 

Advocate H. B. Mistry for the Appellant

Advocate A. E. Binnie for the Respondent

IN THE MATTER OF ("THE CHILD")

judgment

the commissioner:

1.        This is an appeal against the decision of the Registrar, Samantha McFadzean, of 24^th July, 2020, by which she ordered the Appellant W ("the Father") to make periodical payments to the Respondent X ("the Mother") with respect to their child ("the Child"), who is now [Age Redacted], and this pursuant to Article 15 of and the 1st Schedule to the Children (Jersey) Law 2002 ("the Children Law").  The essence of the appeal is that the orders made are not affordable.

Background

2.         We take the background from the judgment of the Registrar, distributed on 10^th August, 2020 ("the Judgment") and gratefully adopt much of her wording. 

3.        The parties met in 2013 and although they did not agree about the length or quality of their relationship both accepted that:

(i)        the Mother worked for the Father for a period when they first met;

(ii)       they co-habited for a number of months; and

(iii)      at about the time when the Child was conceived in 2018, they were, if not in a relationship, meeting in Jersey and overseas and sleeping together.

4.        After the Child's birth, the Father disputed paternity until incontrovertible evidence of his being the father was established by DNA testing, ordered by the Court in the Autumn of 2019. 

5.        The Father is from Jersey and the Child is his second child; he has a daughter from a previous relationship who he says now lives with him full time. The Father had been through similar litigation in the past relating to his elder daughter and according to the Registrar was sceptical about receiving fair treatment from the Court, based on previous experience, and had complained that the Court may be biased against him and, she said it was fair to say, fathers in general.

6.        The Father's family had been involved for several years until about 2017, in litigation relating to the curatorship of his late father's estate and ensuing trust litigation.  That litigation was relevant to the proceedings only in so much as the Father and his family have previously enjoyed a lifestyle funded by his late father's property empire, which was responsible for the development of several landmark buildings in Jersey and overseas.  They had lived in some comfort and luxury.   The Father complained that the litigation which followed the loss of family assets was bitterly contested and very expensive and left him and his mother in comparatively straitened circumstances.  The Father now lives in a 4 bedroomed rental property, which he shares with his elder daughter. 

7.        The Mother had been living in Jersey off and on since 2007.  She is from [Redacted] where she completed her graduate and post graduate education to qualify as a primary school teacher.  Since arriving in Jersey, she had worked in retail and in the financial services sector, most recently as a fund accountant.  She has no housing qualifications. 

Interim Order and Appeal

8.        There had been an interim order made by the Registrar on 20^th March, 2020, in which the periodical payments by the Father to the Mother had been increased from £440 to £2,000 per calendar month because of the Court's concern about how the cost of housing for the Child could be met in the interim, bearing in mind that the Mother had no source of income other than the help from the Father and her savings had dwindled.  She was not, as yet, entitled to income support.

9.        The Father appealed that interim order to the Royal Court unsuccessfully, not least because Article 68(1) of the Children Law does not permit an appeal in relation to an interim order. The Royal Court made two observations upon which the Father placed some reliance in relation to this appeal:

(i)        At paragraph 33, it said that initially when it had heard the submissions from the Father, it took the view that the sum ordered by way of maintenance against the Father was too high and excessive against the yardstick of the test applied by the old Child Support Agency, now replaced by the Child Maintenance Service ("CMS"), namely 15% of his net income. 

(ii)       It became clear as that appeal progressed that the financial position in relation to the Father was not as clear as the Court had initially thought.  This was an order which was designed to benefit the Child and having considered with care the needs of the Mother and the other financial resources available to her, which were extremely limited, the Court did not regard it as appropriate to interfere.

10.      The Father also seeks to place some reliance upon the criticisms expressed by the Royal Court at paragraph 18, as to the procedure before the Registrar in that the matter had been listed as a Case Review Hearing and the Father had been given no notice until the day before that the Mother was seeking to have the periodical payments reviewed upwards without the issuing of a summons.  The Father complained that he did not learn of the amount of the increase she was seeking until the hearing itself.  The Royal Court said that it would have expected a summons to have been issued at least a few days before the hearing and for the Registrar to have indicated that she was prepared to hear the application that was being made. 

11.      It is fair to point out that the Royal Court also endorsed the criticism made by the Registrar of the Father's failure to comply with his disclosure obligations, noting that disclosure was still incomplete at the date of the hearing of the appeal.   The Royal Court's judgment is recorded at W v X [2020] JRC 071A.

The Mother's position at the final hearing before the Registrar

12.      The Mother had negligible savings or other assets and was effectively totally dependent upon the Father.   She was living in studio accommodation with the Child at a cost of £915 per month.  She put her total monthly needs for herself, based on her living in the studio accommodation, at £2,016 per month.  Her case was that she should have two bedroomed accommodation to share with the Child, which would, in effect, double her monthly rental cost on an unqualified basis, increasing her total needs to £3,348 per month, to include the cost of rent.  Were the Mother to find new employment she estimated that the Child's needs would increase to £1,730 per month, to include £1,500 per month for nursery.  In total, including the estimated cost of nursery, at the final hearing the Mother put her needs and that of the Child at £5,078 per month.  In addition, she sought a lump sum payment of £15,000 for a motor vehicle, £300 for passports for herself and the Child, £350 for a new mobile phone for herself and £620 for dental work. 

13.      The Mother was thought to be eligible for income support from October 2020 and that would depend upon the amount of maintenance paid by the Father.  She had calculated, for example, that if the Court ordered the Father to pay child maintenance of £1,400 per month, she would receive no more than £56 per week or £242 per month, based on her remaining in a studio apartment.  Her position was that she should not be obliged to apply for income support, given the financial resources which she said were available to the Father.  

14.      The Mother had resigned from her employment during maternity leave, an act which the Father said was designed to inflate her claim against him.  She did not consider that she could return to her previous office-based employment because of issues with her back and eyes.  Her back issue arose during pregnancy and there was evidence of both ailments in her medical notes.  However, she is a trained teacher, and having made enquiries, considered that she could expect approximately £36,000 per annum (gross) from such employment.  She felt that she and the Child had had a very difficult year or so battling with the Father, first in relation to paternity and now in relation to maintenance, and that the stress of these proceedings had adversely affected her mental health to the extent that she did not feel up to working at the moment.  She explained that she and the Child are without family or support in Jersey and that she would like to stay at home with the Child until she is of school age. 

15.      The Mother accepted in evidence that she may choose to return home to [Redacted], but she said that the cost of living in [Redacted], whilst not as expensive as Jersey, was still considerable.    

The Father's position at the final hearing before the Registrar

16.      Whilst challenging the Mother's budget, the thrust of the Father's challenge was two-fold,  firstly, that her claim for housing was inflated and secondly, that she was able to return to work and that if she did so, she could meet the greater part of her needs herself.  

17.      The Father offered £425 per month maintenance for the Child, based on his declared earned income of £48,000 per annum (£3,200 net per month) from Company A, a property development business in which he owned 65% of the shares and is the managing director.  The balance of the issued share capital is owned by Company B, the shares of which are held by a discretionary trust of which he says his mother is the settlor and sole beneficiary.  His mother is the sole director of Company B, to which he owes £60,000, which he described as "a commercial loan" taken out to consolidate and pay off existing debts including credit card debts.  The debts included £50,000 of outstanding legal fees for these proceedings, which in turn included £10,000 for his English counsel, who sat in Court throughout the proceedings before the Registrar.  

18.      The Father's earnings are supplemented by the receipt of £2,800 per month by way of repayment of a loan due to him by Company A, about £88,000 of which was still outstanding at the time of the final hearing.  It will therefore be repaid in approximately two years' time, when his income will be limited to the £3,200 earned monthly from his business. 

19.      His evidence, in line with that of Advocate Marcus Stone a non-executive director of Company A, was that Company A simply cannot afford to pay him a greater income, because a residential housing project which it is developing is leveraged to such an extent that any profit needs to be rolled up and on to the next development.  He complained of delays on issues of planning which materially affected his business.   

20.      The Mother argued that one of the developments, which consisted of four residential properties, on the market for £8.5 million, must result in a profit for the Father, and Company B, but her principal case as to the Father's ability to pay the capital sums and level of maintenance claimed, was predicated on his spending which she said is evidence of him having access to greater resources than those to which he deposed. 

21.      In addition to £425 monthly contribution for the maintenance of the Child, the Father offered to take out a straight line reducing term insurance policy for the benefit of the Child in the sum of £100,000, to cover the period of the Child's periodical payments order, and he sought an order from the Court that the Mother could not seek an increase in the periodical payments at least for four years and orders for confidentiality in respect of the terms of his proposal.

The Law

22.      In the Judgment the Registrar referred to paragraph 4(1) of Schedule 1 to the Children Law, which sets out the matters which the Court must consider when determining a claim under paragraph 1(1) or 1(2) of Schedule 1:

"(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; and

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

23.      Any parent of the child is a person referred to in sub-paragraph (4). The Registrar then referred to her judgment in the case of E v F [2019] JRC 218, in which she concluded that the starting point of the Court in determining the appropriate level of periodical payments for a child should be the considerations enumerated in paragraph 4(1) rather than the CSA (now CMS) guidelines.  Quoting from the judgment at paragraphs 14-18:

"14     In simple terms, the mischief of the CSA guidelines (whose calculations have for some time informed Jersey practice) was intended to remove from the English and Welsh courts the statutory power or obligation to determine child maintenance (in the case where the payer was earning less than £2,000 per week net and was within the jurisdiction of the court) no doubt so as to limit argument and expedite payment for the benefit of the children concerned, but also (in principle) to facilitate enforcement by the CSA whose remit it was to secure payment on behalf of parents with whom a child resided.  The decision if FG V MBW was a "top-up" case where the payer had income which did not fall within the parameters to which the CSA guidelines were intended to apply and, accordingly, the court had jurisdiction to consider the appropriate level of maintenance payable under Schedule 1 of the Children Act 1989.

15       The problem with adopting the CSA guidelines as a starting point is that they sit at odds with the matters to which the court must have regard under Articles 4(1) and 6 of our Law.  Were the court to limit its analysis to the payer's net income, it could entirely disregard the financial position of the resident parent, which would be neither fair nor appropriate and might result in the court disregarding other resources available to either parent, for example, trust or dividend income or income accruing from time to time on capital.  Slavish adherence to those same guidelines might also result in, for example, a wealthy resident parent seeking financial support for a child from a parent who was less able to make a contribution to that child's needs.

16       In the court's view, before considering whether it might be appropriate to consider or, indeed, apply the CSA guidelines which are both 'mathematical and formulaic', but which neither extend to this jurisdiction nor are reflected in the Law, the court must consider Articles 4(1) and 6 of the Law i.e. the financial position, needs and obligations of each of the parents (or payers) and the child under Article 4(1) and, if applicable, the quantum of any order for child maintenance which it is being asked to vary and any change of circumstances which it should take into account under Article 6.

17       The required assessment is more nuanced than a simple percentage calculation.  I propose identifying the appropriate figure by applying the Law.  I take into account the contradiction between avoiding a 'mathematical and formulaic' approach but still adopting the CSA guidelines as a starting point.  I also recognise that, as Advocate Brown said in closing, a child is 'entitled to jam on his bread' but this must be, in the court's view, only where this can be reasonably afforded by his parents. Having arrived at what the court considers as a reasonable figure, I propose using the CSA guidelines as a cross check.  Where there is a significant disparity between those figures, in the court's view, and in the absence of other Jersey statutory guidance, I should make a bespoke assessment with regard principally to our Law - in line, in effect, with Mr Justice Charles' conclusion in FG v MBW.

18       I recognise that this means that those representing parents will find it more difficult to give clear advice as to the level of maintenance likely to be ordered by the court but provided that, where possible, the child's reasonable needs are met and the maintenance can be afforded without causing real hardship, the parties should still be able to reach a compromise.  I am not convinced, however, that strictly following the CSA formulaic approach, designed for a different jurisdiction, with a different cost of living, is properly meeting the needs of the Jersey children with whose interests I am concerned."

24.      We endorse this approach.  The reference to the child being "entitled to jam on his bread" being "only where this can reasonably be afforded by his parents"  is in line, as the Registrar said, with what was said by Mrs Justice Hale (as she then was) in her judgment in J v C [1999] 1 FLR152 at page 160  that a child is entitled to be brought up in circumstances which bore some sort of relationship with the father's current resources and the father's present standard of living and that public policy required that where a parent could provide resources which reduced or excluded the need for that child to be supported by public funds, he should be obliged to do so.

Findings

25.      The Registrar then went on in the Judgment to make a number of findings, which we would summarise as follows:

(i)        The Registrar started with the reasonable needs of the Child.  Whilst in matters of financial relief for a child, the welfare of the child is not the Court's paramount consideration (see the definition of "upbringing" in Article 1(1) of the Children Law), it is as Mrs Justice Hale said in J v C at page 156 a relevant consideration when assessing whether or how to order provision and as Thorpe LJ said in Re P (Child: Financial Provision) [2003] 2 FLR 865 at paragraph 44, it is in the generality of cases a constant influence on the discretionary outcome.  Without going into the detail of the Registrar's analysis, she concluded that the cost of caring for, feeding and housing the Child (and the mother) and ensuring that the Child had all the basics and a little more came to about £3,000 per month, based on the Child being housed in two bedroomed accommodation.

(ii)       Accepting that Company A was highly leveraged and that for the business to enjoy any success, profits needs to be rolled into the next development, the Father did not have available capital to acquire a home for the Child's use, but he was lucky enough to live in a rented four bedroomed property, which amply met his and his elder daughter's needs.  It was not reasonable, therefore, to expect the Mother and the Child to continue to live in a studio apartment, and whilst a one bedroomed flat would probably suffice in the very short term, the Child will soon be a toddler, and would need her own room.  In line with J v C, the Child is "entitled to be brought up in circumstances which bear some relationship with the Father's current resources and the Father's present standard of living."  Two bedroomed accommodation was therefore necessary.

(iii)      Whilst the Mother's capital claims were arguable, at least in principle, on a Schedule 1 application, the Registrar was not satisfied that the Father had available capital to meet the cost of a car, any more than he had capital to provide a home, but this may change.  Whilst she was prepared to require him to borrow if he must to meet the Child's needs, she did not think that it would be fair to ask the Father to borrow capital to buy a car, which is not essential.  The Father had been challenged about driving an £88,000 Porsche whilst at the same time disputing the Mother's capital claims, but he deposed to the Porsche being owned by Company A (on hire purchase) and the Registrar accepted that this was the case.   He also told the Court that the business had a pool of cars which were available for the use of him and his employees, which the Registrar accepted as being not unusual, but said it was a shame that the Father could not provide the Mother with the use of one of those pool cars when it is required to transport the Child.  As it was the Mother and the Child would have to rely on public transport. 

(iv)      The Registrar then went on to consider how the cost of meeting the Child's needs could be funded, which she said was the more difficult aspect of the claim.  She found that the Father earned £48,000 gross per annum, and that in addition, he currently takes £2,800 from the business by way of repayment of his director's loan, which equates to a net income of £6,000 per calendar month.  As against that, he had accepted that his outgoings were put at £107,472 per annum in his original affidavit of means filed in early 2020, reduced to £87,710.01 in a C4 dated June 2020, which he accepted were a little excessive, but he claimed his spending was not on luxuries.  However, he had been taken by the Mother's advocate through his credit card and bank statements and accepted that he had, for example, just after the Child was born, spent £3,400 on a weekend away in a 5 star hotel (including tickets for an expensive sporting event) for himself and his elder daughter.  He spent £1,760 on a Christmas meal out for his staff in December 2019, giving nothing to the Child, other than the £444 maintenance which he was then paying, and further spent £1,000 in April 2020 on a bicycle, so that he could ride with his elder daughter every day during lockdown.  A number of other examples were identified as what the Mother's advocate described as a luxury lifestyle.  The key findings of the Registrar are contained, in our view, in paragraphs 57 - 60 of the Judgment, which we set out:

"57     Ideally, the Father would be able to meet the child's needs, which I found to be £3,000 per month from income or other resources, leaving the Mother to care full time for [the Child].  I do not consider that this Father has the resources to fund this claim in full.  He has other obligations and another child but he cannot pray in aid his level of personal debt and the highly leveraged business at the same time as enjoying a lifestyle which is so far removed from [the Child's] lived experience.  As the late Singer J found in SW v RC [2008] 1 FLR 1703, 'when a person paying maintenance for a child could not do so out of income, there was no reason in principle why the child's maintenance should cease or be reduced.  Maintenance paid from accumulated or borrowed money (both resources of a capital nature) was maintenance in the form of income in the hands of the parent with care' and that it was for the Father 'to demonstrate that his credit raising abilities (which clearly involved a degree of borrowing from Peter to pay Paul) had reached their limit whether as to duration or as to  amount'.  It is not unusual for a family court to make an order that requires a spouse or parent to borrow to fund a claim, whether for maintenance or, for example, to meet a lump sum order.  The Father no longer offers a lump sum, and told the court that none can be afforded, but the court notes that he has very recently been able to borrow £60,000 from [Company B]; the court does not accept his Counsel's presentation of that as a commercial loan.  While properly documented, it is, in effect, a loan from the paternal grandmother.  It is therefore treated as a soft loan.  However, the court cannot treat the paternal grandmother's capital or interests as a resource available to the Father until the money is in his hands.

58       The court has sympathy with the Mother and has already found that she has a back problem which may impede her ability to work in an office job.  The court noted a heightened level of anxiety in her evidence and her demeanour.  She is clearly distressed and emotionally overwrought and that cannot serve [the Child's] welfare.  This Mother is her sole carer; the Father plays no part in [the Child's] life.  The court does not however think that it is realistic for the Mother to expect to rely on the Father (or indeed, the public purse) exclusively to meet [the Child's] needs in circumstances where the Mother has not been able to conclusively demonstrate that the Father's resources far exceed his stated income, whether earned or otherwise.

59       I find that the Mother can earn £36,000 per annum for full time work but that she should be given a twelve month period of grace in which to find new accommodation and gainful employment, and recover from the stress of these proceedings at which point, [the Child's] needs will increase to include nursery fees.  The Father's case is that the Mother should work but he must accept that by working, the costs of housing and caring for [the Child], at least until she starts school [Redacted], will increase.

60       I find that the Father's presentation of his financial position is, in broad terms, accurate but that he has resources, including a personal borrowing capacity, whether from credit cards or, indeed, his mother to whom he may be required to turn to meet [the Child's] needs.  He also has the benefit of being able to, at least in part, resource his lifestyle from his business and his use of the Porsche, owned by [Company A], is one example of how he does that."

26.      The Father had agreed at the hearing before the Registrar to pay to the Mother £2,000 per month until October 2020, when she could make a claim for income support, and the Registrar accepted that, in this case, the Child's needs could not be met without reliance on the taxpayer, at least in the immediate future.  Her final conclusions are contained within paragraphs 63-70 of the Judgment as follows:

"63     As I have indicated above, I consider that the Mother should look to return to work over the next twelve months.  I accept that she is not in an emotionally fit state to do so at the current time.  I order that the Father should pay the Mother £2,000 per calendar month until her claim for income support is paid, hopefully in October 2020.  From the date of the payment, maintenance will reduce to £1,750 per month and the Mother will be eligible, on my calculations to about £244 per week income support, based on her renting a two bedroom property.  This will enable the Mother to meet [the Child's] basic needs though will fall slightly short of the £3,000 per month needed to house, feed and clothe [the Child].

64       When [the Child] starts school, the Father's maintenance obligations will reduce to £1,000 per month plus 50% of [the Child's] after school/childcare costs which are not otherwise eligible for contribution from the state. These may, of course, be limited, if the Mother chooses to re-enter the teaching profession with its rather more family friendly hours.  This should mean that, based on full time salary of £36,000 gross, the Mother's claim for benefits will be much reduced.

65       If the Mother returns to work before [the Child] starts school, the Father will make an additional contribution of £250 per month towards the cost of childcare, until [the Child] starts school.

66       If the Father is able to supply the Mother with two bedroom accommodation either by providing her with a home built by [Company A], or, if housing regulations otherwise make this possible, rented by him for [the Child's] use, his maintenance obligations will reduce to £250 per month plus the contribution to nursery fees/child care costs of £250 per month.

67       I order the Father to pay the capital sum of £400 to the Mother within 28 days of the date of receipt of the sealed act of court to pay for [the Child's] Jersey passport and a new mobile phone for the Mother, which I consider to be a necessity as the sole carer of a small child without family support on the island.

68       I dismiss the Mother's other capital claims, and for the avoidance of doubt, her claim for a carer's allowance, including her physiotherapy costs, which I consider on the facts of this case to be unaffordable.  It is not for this father to meet the costs of the mother's dental work.  In case it should be thought that the court is dismissing these claims out of hand and creating a precedent, the reader is reminded that each case turns on its own unique facts.  Had the mother been able to satisfy me that the Father had a clear source of income over and above those to which he deposed, I might have been persuaded to consider an enhanced claim.  I do not find that anything more than ordered is affordable for the Father.

69       As a cross check, I have considered the likely CMS level of payment which is considerably less than the level of initial payment ordered.  The order made is initially at an enhanced level because the court must ensure that [the Child] is properly housed and the Mother is unable to access sufficient monies from the public purse to meet [the Child's] needs.  The court has to weigh up the unfairness to the Mother in expecting her to work to assist in supporting [the Child] with the unfairness to the Father in the entire burden of the cost of supporting [the Child] falling on him.  While I find that the Mother should be able to remain at home with [the Child], were it affordable, this is not possible or fair on the facts of this case.

70       The payment I have ordered the Father to make is a burden but one that I find affordable, if he uses debt.  As it is his habit to do so, and there is a good prospect of his investment in his business succeeding over the course of the next few years, I anticipate that he will be able to service this debt without causing a significant impact on his lifestyle, in the same way as  he has been able to afford luxurious breaks over the last few years and has recently chosen to expend significant funds on legal fees."

27.      The order of the Registrar was in the following terms:

"IT IS ORDERED that:-

1.     Until [the Mother] receives her first payment of income support, the [Father] will continue to make periodical payments to the [Mother] for the benefit of [the Child] at a rate of £2,000 per month;

2.   From the date of receipt of the first income support payment, the [Father] will pay periodical payments to the [Mother] for the benefit of [the Child] at a rate of £1,750 per month until [the Child] starts primary school; in the event that the [Mother] returns to full time employment before [the Child] starts primary school, the [Father] will pay to the [Mother] for the benefit of [the Child], an additional £250 per month towards nursery or child care costs until [the Child] starts full time primary education;

3.   From the date when [the Child] starts primary school, the [Father] will pay periodical payments to the [Mother] for the benefit of [the Child] at a rate of £1,000 per month plus 50% of any after school or holiday care;

4.   In the event that the [Father] is able to provide or pay for reasonable two bedroom accommodation, close to a bus route and within walking distance of a primary school (such offer not to be unreasonably refused by the [Mother], and if in dispute, to be referred to the court), the [Father's] maintenance obligation will reduce to £250 per month, plus a contribution of £250 per month towards childcare."

Test on Appeal

28.      The test on an appeal from a decision of the Registrar is well established following the authority of Downes v Marshall [2010] JLR 265 where the Court said this:

 "An appeal against a decision of the Family Registrar should only be allowed if there has been a procedural irregularity or if, in exercising his discretion, the Registrar had taken into account irrelevant matters, ignored relevant matters or otherwise arrived at a conclusion which the Royal Court considered to be wrong. That test was not precisely the test applied in respect of appeals from the Royal Court to the Court of Appeal, as it reserved a wider discretion for the Royal Court to intervene, but it nevertheless placed greater weight on the Registrar's exercise of discretion."

Grounds of appeal

29.      We take each of the grounds of appeal in turn.

Procedural irregularity

30.      Advocate Mistry submitted that Rule 18 of the Children Rules 2005 had not been complied with at the hearing before the Registrar.  Rule 18 provides, so far as relevant:

"18     Documentary evidence

(1)       Subject to any directions which may have been given pursuant to Rule 13, 15, or 16 and to paragraphs (4) and (5), a party must in any proceedings file and serve on the parties, any welfare officer and any person appointed under Article 75 -

(a)        written statements of the substance of the oral evidence which the party intends to adduce at a hearing of, or a directions appointment in, those proceedings, which must -

(i)         be dated,

(ii)        be signed by the person making the statement, and

(iii)       contain a declaration that the maker of the statement believes it to be true and understands that it may be placed before the Court; and

(b)        copies of any documents, including experts' reports, upon which the party intends to rely at the hearing, at or by such time as the Court directs or, in the absence of direction, before the hearing or appointment.

(2)       ...

(3)       At a hearing or a directions appointment a party may not, without the leave of the Court -

           (a)        adduce evidence, or

           (b)        seek to rely on a document,

in respect of which that party has failed to comply with the requirements of paragraph (1).

(4)       ...

(5)       ..."

31.      At the hearing before the Registrar, the Mother gave evidence without first having filed a written statement in compliance with Rule 18, and as a consequence, he said that both he and the Father were taken by surprise.  

32.      In his skeleton argument, Advocate Mistry did not elaborate on the way in which they had been taken by surprise, but in his oral submissions to the Court, he said that the Mother gave evidence for the first time about her health problems and about the cost of her accommodation.   

33.      This alleged procedural irregularity was the subject of an exchange between Advocate Mistry and the Registrar at the hearing, the latter pointing out that Rule 18 was expressly subject to directions on the admission of evidence given by the Court pursuant to Rule 13.  She said it was not the Court's practice normally to require or request affidavit evidence in children proceedings, or indeed in family proceedings at all, because it can quite often enflame discussions between the parties.  Advocate Binnie supported the Registrar's explanation as to the practice of the Family Court in relation to filed and affidavit evidence, which she said was entirely acceptable.  It had been a routine practice of the Family Court for some time and it had run entirely efficiently in this way.  The emotions of the parties involved in these proceedings should not be understated, and the Registrar had abundant knowledge and experience in deciding when a case may benefit from not reducing evidence into a witness statement.  In any event, the evidence of the Mother had been based on her original sworn affidavit.

34.      The Court pointed out to Advocate Mistry that he and the Father had indeed been given notice of the Mother's health problems:

(i)        in the Mother's affidavit of means;

(ii)       in her position statement, and

(iii)      through her medical records that were contained within the court bundle.

35.      Furthermore, the Mother's accommodation costs, which comprised the major component of her needs, were set out in her monthly income needs statement showing the cost of her current bedsit of £915 per month, including rates and water, and the cost of two bedroomed accommodation at a total monthly cost of £1860. 

36.      In this case, there had been a written statement by the Mother in the form of her sworn affidavit of means, which formed the basis of the evidence she gave, and in directing the parties to file affidavits of means, pursuant to Rule 13, the Registrar was determining the way evidence was to be admitted in this case, and therefore Rule 18, which is expressly subject to directions given under Rule 13, had not been infringed.   

37.      In our view, when dealing with a claim for periodical payments under Schedule 1, ordinarily an affidavit of means followed by a position statement on the part of both parties, as was directed in this case, is a proportionate way to proceed.  Even if we are wrong, the breach is a very technical one in that Advocate Mistry and the Father were not taken by surprise, and furthermore, following his exchange with the Registrar, he did not seek an adjournment in order to deal with the Mother's evidence. 

Conducting her own research

38.      In the Judgment, at paragraph 27, the Registrar said this:

"37     The Mother was criticised by Advocate Mistry for failing to include in the bundle any property details.  I agree with the Father that this was a curious omission, given that the costs of housing [the Child] represent a large proportion of the Mother's claim, particularly in circumstances in which I made it clear at the interim stage that the enhanced level of maintenance was intended to ensure that [the Child] was appropriately housed, there being no alternative options available."

39.      To the word "omission", the Registrar added the following foot note:

"Nonetheless, I was able, through my own research, to verify the quantum of the Mother's housing claim".

40.      Advocate Binnie accepts that the absence of supporting evidence for the Mother's claim for accommodation was an oversight on her part, although she pointed out that there were two pieces of evidence before the Court to place it in context, namely the cost of the studio apartment the Mother was living in at £915 per month and the cost of the Father's four bedroomed house at £2,700 per month.  The fact that this was a four bedroomed property was, she said, disclosed only during the course of the hearing.  In any event, she said, evidence of the cost of rental accommodation was duly provided in an adjournment of the final hearing, just as evidence on behalf of the Father, such as copies of some of the annual accounts of his companies, was provided during other adjournments.

41.      As the Registrar said, the cost of accommodation was a major component of the Mother's statement of monthly needs and the Father had ample opportunity to adduce his own evidence as to the cost of that accommodation if he intended to challenge this.  He did not do so and did not ask for an adjournment in order to do so.

42.      We were not given any authority on the research point, but we accept that ordinarily courts do not conduct their own research into evidence as that is a matter for the parties, but if and to the extent it finds it appropriate to do so, the Court would ordinarily give the parties notice, so that they can comment upon that evidence before the Court places any reliance on it. 

43.      In our view, the Registrar was not conducting her own research into evidence in that sense, but was seeking simply to verify the quantum of the Mother's claim for accommodation before relying upon it.  No doubt if her research had not verified the Mother's claim as to quantum, the matter would have been referred back to the parties for further consideration. 

44.      Furthermore, apart from raising this criticism of the Registrar, Advocate Mistry did not apply to adduce further evidence before this Court to show that the quantum of the Mother's claim for accommodation was wrong. 

45.      In our view, the actions of the Registrar in this respect were appropriate and in accordance with the overriding objective. 

Ignoring relevant matters

46.      Advocate Mistry submitted that the Registrar ignored the guidance given by the Royal Court on the appeal against the interim order as to the appropriate yardstick for maintenance.  As we noted earlier, it is the case that the Royal Court on that occasion said that the interim periodical payments order made by the Registrar was excessive as set against the CMS yardstick of 15% of his net income of £72,000 a year, but it became clear to the Royal Court as the appeal progressed that the financial position in relation to the Father was not as clear as it had originally thought, and it reached no determination on the issue of the quantum of the periodic payments and offered no guidance to the Registrar.   

47.      Advocate Mistry went on to submit that the Registrar made a number of findings of fact in the Judgment which she then ignored.  We find that a difficult submission to understand, in that the Registrar's findings are logically set out in the Judgment and led to the ultimate conclusions she reached as set out above.  She did not ignore her finding that the Father's stated net income was £72,000 per annum and the financial position of Company A, but decided that the Father had other resources from which to fund the periodic payments, namely his ability to borrow as he had in the past.  She found that these payments were, in the circumstances of the Father, affordable and Advocate Mistry submits that she was wrong in reaching this conclusion.  In our view, this is the real argument in this appeal. 

Taking into account irrelevant matters

48.      A similar point arises in relation to this ground of appeal.  Advocate Mistry submitted that the Registrar should not have taken into account:

(i)        the evidence of Advocate Stone as to his annual fee for acting as a non-executive director, and assuming that the Father's income position and resources were better than presented to the Court.

(ii)       The assumption that the Father had resources including personal borrowing from credit cards or his mother to meet the Child's needs. There was simply no analysis of where the money would come from.

(iii)      Whilst in principle it was not unusual for the Family Court to make an order that requires a spousal parent to borrow to fund a claim, this was not looked at in the light of the factors in Schedule 1 of the Children Law or on affordability.

(iv)      Whilst the Mother had complained of health problems, this was not evidenced by way of an expert's report and there is no evidence to suggest that these medical issues impeded her from working or that she should be given 12 months in which to resolve these issues.

(v)       There was no evidence to support the Mother's claim that she needed at least £3,000 per calendar month to meet the Child's basic needs, plus a little more, because the Registrar from her own admission had to research the housing market herself to deal with this issue.

49.      We find it difficult to see how these are matters which can be regarded as irrelevant for the Registrar to take into account, bearing in mind the very wide terms of Paragraph 4(1) of Schedule 1, which requires the Court to take into account "all the circumstances" including those specified in Article 4(1)(a) and (b).  In our view, these points are all arguments more properly deployed in support of the argument that the decision was wrong. 

A wrong decision

50.      The central complaint of the Father is that this award is unaffordable and on the strength of his stated monthly earnings of £4,000 gross and the loan repayments of £2,800, which equates to a net monthly income of £6,000, we would agree that £2,000 per month or one third of that income is too high. 

51.      However, as the Royal Court in the appeal noted the Father's financial position is not straightforward in that:

(i)        His annual declared expenditure exceeds his stated income by a material margin.

(ii)       He is managing director and majority shareholder of a property development company which, although highly leveraged, is in business in a substantial way.  His mother effectively owns the balance of the shares.   

(iii)      He lives in a four bedroomed house and drives an expensive car.

(iv)      His lifestyle includes expenditure (outlined in the Judgment) that is luxurious, certainly in comparison to the lifestyle of the Mother and the Child.  As the Registrar noted at paragraph 55 of the Judgment, the Father is entitled to spend as he chooses "but he cannot spend as he does without being expected to divert some of his spending to his responsibility towards the care of [the Child]".

52.      As the Registrar found at paragraph 52, the Father uses debt to finance his spending, whether on luxuries for himself and his elder daughter or to generate capital for Company A and the key issue for the Registrar was whether it was appropriate to have recourse to that as a financial resource which the Father has or is likely to have in the foreseeable future.

53.      The Registrar accepted that Company A was highly leveraged, and that, for the business to enjoy any success, profits needed to be rolled into the next development.  The evidence on this was given by Advocate Marcus Stone, who is a non-executive director.  He had a long association with the family, and in particular the Father's mother, and was in that role in part because it assisted the company in borrowing funds and partly to represent the interests of the Father's mother.  The company had secure borrowings of some £7.8 million with further unsecured borrowings.  The Father had guaranteed these debts.  Of the two developments in hand, one was on hold pending a planning appeal due to be heard this December.  The other comprised four units, one of which at the time of the hearing was under offer.  As at the date of this appeal, Advocate Mistry informed us that two of the four units were now under offer at £1.5 million and £1.6 million respectively, and they were due to complete at the end of October.  Profit would arise on the sale of the fourth unit, which would have to be applied towards the other development (itself subject to secured borrowings) assuming planning.  He said the lenders had approved the income drawn by the Father, but there was no more money available for the time being.  His assessment was that the company was teetering on a knife edge.  Things would substantially improve, and the company become viable, once the apartments it was hoped would be developed at the development currently on hold had been sold, in probably four years' time.   

54.      Advocate Stone was due an annual fee of £50,000 for acting as a non-executive director which he had waived because of the financial position of the company, and there was another non-executive director of a construction company within the group who had not drawn any remuneration for the same reason. That there were two non-executive directors expecting to receive remuneration, in the Registrar's view supported the Mother's contention that the Father's income position and resources were rather better than the picture presented to the Court, which was supported by the level of his expenditure. 

55.      Whilst Advocate Mistry made the bare assertion that there was no evidence to support the Registrar's findings that the basic needs of the Child were £3,000 per calendar month, he did not descend into detail and put forward no basis upon which it could sensibly be challenged.  The Registrar went through each item, finding some reasonable and others not reasonable, and reaching a conclusion which we accept as being fair. 

56.      As to how the basic needs of the Child should be funded, the Registrar in our view addressed this issue with care and in a balanced manner, in that:

(i)        Whilst ideally the Father should be able to meet the Child's needs from his income and other resources, leaving the Mother to care for her full time, she did not consider that he had the resources to fund this claim in full.  She recognised that he had other obligations and another child, but he could not pray in aid his level of personal debt and a highly leveraged business at the same time as enjoying a lifestyle which is far removed from the Child's lived experience. (Paragraph 57)

(ii)       Whilst finding the Father's presentation of his financial position in broad terms to be accurate, she found he had resources, including a personal borrowing capacity, whether in credit cards or indeed his mother, to whom he may be required to turn to meet the Child's needs.  He also had the benefit of being able to (at least in part) resource his lifestyle from his business, and his use of the Porsche owned by Company A being one example of how he did that. (Paragraph 60)

(iii)      She found it was not realistic for the Mother to expect to rely on the Father (or, indeed, the public purse) exclusively to meet the Child's needs in circumstances where the Mother had not been able to conclusively demonstrate that the Father's resources far exceeded his stated income, whether earned or otherwise. (Paragraph 58).  Advocate Mistry submitted that this finding was directly contradictory to the finding of the Registrar that the Father had resources beyond his stated income which could be used to meet the Child's needs.  In our view, the two findings are not contradictory, in that the Registrar was simply stating that in her assessment such proof would be required if the Father was to be expected to meet all of the Child's needs exclusively.  In any event conclusive proof of a resource is not required for the purposes of Paragraph 4(1) of Schedule 1.

(iv)      She found that the Mother can earn £36,000 a year (gross) for fulltime work but should be given 12 months in which to both find new accommodation, gain fulltime employment and recover from the stress of these proceedings. (Paragraph 59)

(v)       She found that this was a case in which the Child's needs could not be met without reliance on the taxpayer, at least in the immediate future. (Paragraph 62)

(vi)      Her award of £2,000 per calendar month fell short of the £3,000 per calendar month needed to house, feed and clothe the Child.

(vii)     Apart from the £400 to pay for the Child's Jersey passport and a new mobile phone for the Mother, she dismissed the Mother's other capital claims, as being unaffordable (Paragraph 68).  Whilst she was prepared to require the Father to borrow to meet the Child's basic needs, she did not think it was fair to ask him to borrow capital for needs which were not essential (Paragraph 46).

57.      As to the period of grace of 12 months, we disagree that the Registrar required expert evidence to support it.  She had the evidence of the Mother, who she heard on oath, and her medical notes.  We also bear in mind that the Registrar had the benefit of seeing both of the parties giving evidence before her and was, therefore, able to say this at paragraph 58:

"58     The court has sympathy with the Mother and has already found that she has a back problem which may impede her ability to work in an office job.  The court noted a heightened level of anxiety in her evidence and her demeanour.  She is clearly distressed and emotionally overwrought and that cannot serve the child's welfare.  The Mother is her sole carer; the Father plays no part in the child's life."

58.      Even though the initial award of £2,000 per calendar month, to be later reduced, is high set against the cross check of the CSM guidelines, as Charles J said in FG v MBW (Financial Remedy for Child) [2011] EWHC 1729 (Fam) at paragraph 141, in setting the relevant standard of living:

"...It is more appropriate to look at the standard of living during the relationship and the expectations of the parties during it for any child they may have and thus for L (albeit that the relationship ended shortly after his birth), and the father's present and expected standard of living for himself and all his children."

59.      In this case, the time spent by the parties in a relationship was limited (a factor of little relevance as made clear in J v C (Child: financial provision) [1999] 1 FLR 152 at 154B) and we are concerned with the Father's present and expected standard of living for himself and his children.

60.      In this case, the Registrar was faced with a Mother living frugally with the Child in a studio flat with, at this stage, no means of support other than the Father and reliant on public transport.  In contrast, the Father was living in four bedroomed accommodation, was driving an expensive car, was the managing director of a property development company the majority of which he owned and which although highly geared was in business in a substantial way, and was spending materially more than his stated income financed through personal borrowings on credit cards or other sources, such as his mother, who recently lent him £60,000 through Company B , which the Registrar, rightly in our view, regarded as a soft loan.  As the Registrar pointed out in paragraph 57, she could not treat his mother's capital or interests as a resource available to the Father until the money was in his hands, but she was somebody who had provided financial assistance in the past and to whom applications for assistance could be made in the future.

61.      The Registrar was right, in our view, that the Father cannot enjoy a lifestyle so far removed from that of the Child and he must be expected to direct some of that money to his responsibility to contribute towards the support of the Child.  It is also important to understand the structure of the Registrar's decision as explained in paragraph 69 of the Judgment.  The level of payments were set at an initially enhanced level in order to ensure that the Child was properly housed, but would reduce when the Child starts full time education to a level which we note is close to the amount Advocate Mistry indicated to the Court during the hearing the Father was prepared to pay.   

62.       From the time the Child starts full time education, the Registrar's expectation was that the Mother would be in more suitable accommodation and in fulltime employment, earning some £36,000 per annum (gross), and the burden of meeting the Child's needs would then be shared between the parents on the basis of the Father contributing £1,000 per month, plus 50% of any after school or holiday care. 

63.      The Registrar found that the Mother should be given a period of 12 months' grace in order to find new accommodation and gainful employment but noted that in the event of employment taking place before the Child started fulltime education, her needs would increase by the cost of fulltime nursery (estimated at £1,500 per month or £18,000 per annum); hence, the Father's contribution increasing by £250 per calendar month in that eventuality.  We assume that once the Child starts fulltime education, the cost of her care will be considerably less (especially if the Mother is herself a teacher).  Accordingly, whilst the Registrar allowed her this period of grace before starting fulltime work, the key factor in reducing the periodic payments to £1,000 per calendar month was not the Mother gaining employment, but the Child starting fulltime education as it is from that point that the cost of her care would greatly reduce.

64.      Ultimately, it came down to what the Father could afford.  He had been able, in the past, to fund a lifestyle that exceeded his stated income by a considerable margin through borrowing and the question was whether it was reasonable for him to use that resource, his ability to borrow, to pay for the Child's basic needs until she started full time education and by diverting some of that expenditure for that purpose.  In our view, the Registrar's decision that he could afford to do so was fair and reasonable in the circumstances.

65.      The Registrar summed up the position at paragraph 70 of the Judgment which we set out again:

"The payment I have ordered the Father to make is a burden but one that I find affordable, if he uses debt.  As it is his habit to do so, and there is a good prospect of his investment in his business succeeding over the course of the next few years, I anticipate that he will be able to service this debt without causing a significant impact on his lifestyle, in the same way as  he has been able to afford luxurious breaks over the last few years and has recently chosen to expend significant funds on legal fees."

66.      We do not consider this conclusion to be wrong.  Applying the test in Downs v Marshall, we find that there has not been a procedural irregularity and in the exercise of her discretion, the Registrar had not taken into account irrelevant matters or ignored relevant matters or otherwise arrived at a conclusion which we consider to be wrong.    

67.      Finally, the Registrar stated that she had not been addressed on the Father's application for an order that the Mother could not seek an increase in the periodical payments for at least for four years and she made no such order.  We note that no reciprocal order that the Father could not apply to reduce the periodic payments during the same period was offered.  We were not addressed on this either and no justification was put forward for making such an order.  There was no history of unreasonable applications being made by the Mother such that might justify an order under Article 66(8) of the Children Law.  Furthermore, no-one knows how circumstances may change in the future and there would have to be very good reasons for preventing applications being made in respect of financial provision for a child and none were proffered. 

68.      The appeal is therefore dismissed. 

Variation

69.      The Father had filed an application for the variation of the periodical payments ordered by the Registrar on 24th July, 2020, should the appeal fail.  However, the starting point in any application to vary is the previous order, in this case an order made only a few months ago (paragraph 6 of Schedule 1 of the Children Law and see U v V (Family) [2018] JRC 160 and W v O [2004] JLR Note 53).  Advocate Mistry accepted that there had been no change in the circumstances since 24^th July, 2020.  The same arguments were deployed in the application to vary as had been deployed in the appeal and as the Court has upheld the decision of the Registrar, it follows that it is not going to vary that order downwards a few months later, when the circumstances of the parties remain the same. 

70.      Accordingly, the application to vary the order of 24^th July, 2020, is dismissed.

 

 

Authorities

Children (Jersey) Law 2002

W v X (Family) [2020] JRC 071A

J v C [1999] 1 FLR152

Re P (Child: Financial Provision) [2003] 2 FLR 865

Downes v Marshall [2010] JLR 265

FG v MBW (Financial Remedy for Child) [2011] EWHC 1729 (Fam)

U v V (Family) [2018] JRC 160

W v O [2004] JLR Note 53