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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> U v V (Family) [2018] JRC 160 (04 September 2018) URL: http://www.bailii.org/je/cases/UR/2018/2018_160.html Cite as: [2018] JRC 160 |
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Family dispute - application to review the maintenance paid for the children downwards.
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Before : |
J. A. Clyde-Smith, Esq., Commissioner, and Jurats Christensen and Dulake |
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Between |
U (the Father) |
Applicant |
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And |
V (the Mother) |
Respondent |
The Applicant appeared in person.
Advocate C. G. Hillier for the Respondent.
Advocate F. C. Binet appeared as amicus curiae.
judgment
the COMMISSIONER:
1. The applicant applies for the maintenance paid by him for the two children of the applicant and the respondent, namely Child 1 and Child 2, to be reviewed downwards.
2. The parties have never been married, and only lived together for a short period. The relationship was volatile from the outset and there have been proceedings between them in relation to the children every year for some eight years. There is deep-seated animosity between them.
3. In the interests of proportionality, we are going to give an overview only of the convoluted history between them over this period leading up to the current application.
4. The parties met in the UK, and the applicant moved to Jersey in June 2011 (proceedings had already been afoot between the parties in England), and the respondent followed him with the children to see if they could make their relationship work. It broke down within a few months and they separated finally in 2012. Neither has Jersey housing qualifications.
5. The applicant left Jersey in April 2014, to live in Country 2. In June 2014, he sold his UK financial services business for £4 million, expecting to receive £2 million net after sharing some of the proceeds with employees of the business and after the payment of a number of obligations. Litigation by the purchaser ensued which was settled early in 2017, but as a consequence, the applicant netted a little more than £1 million from the sale, half of what he was expecting, which was utilised in refurbishing one of his two English leasehold properties and to invest in a company called Company X. Non-compete provisions have prevented him from working in his chosen field.
6. Maintenance and contact proceedings took place in 2014 before the Registrar, in which both the parties were legally represented, and which, according to the applicant, gave rise to legal costs in the sum of £330,000. Those were settled by a consent order dated 10th March 2015 ("the Consent Order") in which it was agreed inter alia:-
"1. The father shall pay the mother for the benefit of the children global maintenance in the sum of £5,000 per calendar month to include rental costs, carers allowance and child maintenance in the sum of £1,500 per child per calendar month in respect of day to day living expenses commencing on the 1st April 2015 by standing order into an account nominated by the mother, the maintenance to continue until the children reach the age of 18 or finish full time tertiary education whichever is the later limited to one three year full-time degree to be started immediately after their A levels or further order.
2. ...
3. Upon the mother and father agreeing the terms upon which a property is purchased by the applicant for the benefit of the children and the terms upon which the possession of any such property will revert to the applicant the global maintenance will be reduced to £3,500 namely £1,500 per child per calendar month in relation to their day to day living expenses together with a carers allowance in the sum of £500 per calendar month for the mother.
4. The maintenance payments shall be adjusted on the date of this order in accordance with the percentage increase in the United Kingdom retail price index (or such other index as may supersede it) over the preceding 12 months.
5. There shall be a review of the maintenance payments in the event of a material change of circumstances of either party.
6. The father shall pay to the mother periodical payments for the benefit of the children in such sum as shall be equivalent to the children's school fees at such schools as the children of the family shall from time to time attend by agreement between the parties. The applicant shall make the payments directly to the school bursar or other person identified on the bill as recipient for the school.
8. The father shall pay to the mother periodical payments for the benefit of the children in such sum as shall be equivalent to the children's reasonable private dental and orthodontic costs. The father shall make the payments as and when they become due directly to the provider of the dental and orthodontic work or other person indicated on the bill as recipient for the dental and orthodontic work."
Thus, the applicant is obliged to pay £60,000 per annum by way of maintenance for the two children, together with school fees (currently £25,000 per annum), which following the sale of his business, he has had to meet from capital.
7. The applicant applied to have the maintenance varied downwards on 23rd February, 2016, but that application was eclipsed by private law proceedings in respect of contact and residence, which were eventually compromised in a very prescriptive consent order governing contact and residence dated 21st September, 2017. Those contact arrangements broke down and the applicant has not had direct contact with the children since January 2018. On the 4th July, 2018, in separate proceedings, the Court ordered that there should be no direct contact between the applicant and the children for the time being, both parties being ordered to use their best endeavours to recommence direct contact as soon as appropriate.
8. The children live in Jersey with the respondent and attend School A. They currently live as paying guests in the house of a friend of the respondent, which they often have to vacate if asked, during the school holidays, when usually they will go to live with the maternal grandmother in Country 3. The respondent is now qualified to work in Jersey, but has not so far found employment.
9. During 2017, the applicant fell into arrears both in terms of maintenance and the school fees but towards the end of that year, the applicant's investment in Company X came good, and he has been able to sell his shares, paying off the arrears of maintenance and other debts (although the respondent says there are still arrears owing). He has met his obligations under the Consent Order this year. He is now in the course of establishing a new financial services business in Country 2, from which he hopes to start deriving an income in about a year's time.
10. The applicant seeks a downwards review of the maintenance for the children, for reasons which can be summarised as follows:-
(i) There has been a substantial reduction in his assets, and he currently lacks income.
(ii) The respondent is able to work, particularly now the children are in full-time education, and has a duty to do so in order to contribute to the cost of maintaining the children. She is fluent in another language and he said had previously held several senior roles as assistant to the heads of hedge funds, earning some £70,000 per annum including bonuses.
(iii) The unsustainably high level of maintenance the applicant is now paying compared to the level of maintenance likely to be awarded by an English court.
11. A source of considerable friction has been the respondent's relationship (she says now terminated) with a wealthy Jersey person who did not wish her to work, so that she could be available to travel extensively with him. The applicant did not regard as genuine the financial arrangements she had apparently entered into for the occupation of property belonging to that individual's father, and was concerned that through the maintenance for the children, he was indirectly supporting what he felt was the respondent's extravagant lifestyle.
12. Having sold his shares in Company X, the applicant's current financial position is as follows:-
(i) He has cash of £903,000.
(ii) He owns a vehicle and a boat valued at £44,000.
(iii) He owns two leasehold apartments in a converted stately home in the UK, currently being marketed for £1.2 million, but which he valued at £995,000. Both leases needed to be extended in order to effect a sale, which would cost £100,000, and there is a mortgage on both properties of £505,047.
The applicant's total net assets are worth approximately £1.4 million.
13. Freed now of his non-compete obligation, he is establishing a new financial services business in Country 2 which will require regulatory and operating capital of some £650,000. No suggestion was made by the respondent that the applicant should not establish this new firm, which will enable him once again to start earning an income, which he hoped might be £120,000 per annum after the first year. He expected the new business to become cash flow positive in January or February of next year.
14. With the cost of the lease extensions, the maintenance of the children and their school fees, his living expenses and other outgoings, he estimated that the cash he currently holds will be depleted to some £8,000 by July, 2019.
15. The respondent owns a leasehold one bedroomed flat in the UK, which is let out. The lease will need to be extended at a cost of £30,000 if it is to be sold. There is a mortgage of £130,000 and she estimates the current value of the leasehold interest at £300,000 with the lease extended.
16. When the applicant paid the arrears of maintenance due in the early part of this year, the respondent purchased a second-hand Range Rover for £57,500 with a three year loan from Acorn of £34,000. The applicant was critical of this expenditure, and the respondent told us that it was an error of judgement on her part which she now regretted. She said the car was now being marketed for sale.
17. Apart from the rental income on her flat, the respondent is currently entirely dependent upon the maintenance paid by the applicant for both her needs and those of the children. She says she has made efforts to find work, but she has not worked now for some 11 years and needs to re-train; something she has not undertaken to date. Whilst she has the support of her mother for parts of the year, her mother is now elderly. Her health has deteriorated and she cannot drive. In view of the children's school and extra- curricular activities, the mother can only work part-time, and she made the point that what she might expect to earn from part-time work would barely cover the cost of the provision of child care for the children when they were not in school, such as in school holidays.
18. The parties have never married, and so the matter of financial provision for the children is governed by Article 15 of the Children (Jersey) Law 2002 ("the Children Law") which provides that "the Court may make such orders for financial relief with respect to any child in accordance with Schedule 1".
19. Paragraph 1(1) of Schedule 1 provides that an Order or Orders may be made requiring either or both parents of a child to:-
(i) Make periodical payments;
(ii) Secure such periodical payments;
(iii) Pay such lump sum; and
(iv) Transfer property to which the parent is or the parents are entitled as may be specified in the order to the applicant for the benefit of the child or to the child personally.
20. Paragraph 1(2) of Schedule 1 provides that an Order for periodical payments "may be varied or discharged by a subsequent order made on the application of any person by or to whom payments were required to be made under the previous order."
21. In exercising its powers to vary an order for periodical payments, "the court shall have regard to all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order." (Paragraph 6(1) of Schedule 1)
22. Paragraph 4 of Schedule 1 provides that when exercising its powers to order or vary maintenance, the Court shall have regard to all the circumstances, including:-
23. In an application for a variation of maintenance, the Court does not approach the issue de novo. The starting point must be the agreement reached between the parties on 10th March 2015, and made into the Consent Order, so that the Court's role is to determine what variation, if any, would be fair and reasonable, taking into account the change in circumstances since then (see Q v R [2018] JRC 041 at paragraphs 38 and 29, and L v D and R [2004] JLR 334 at paragraphs 15-17.
24. The principles to be applied in an application under Schedule 1 are very comprehensively summarised in the recent judgment of Registrar O'Sullivan in E v F [2018] JRC 067A. She points out that the principles adopted by the English courts as set out in the Court of Appeal case of Re P (Child Financial provision) [2003] 2 FLR 865 have been adopted by the Jersey Courts, namely:-
25. The Registrar referred to I v J (Family) [2013] JRC 156, where the Court endorsed the proposition that the "prevailing trend is to meet genuine needs in a generous way wherever possible" and the use in Jersey of the 2000 CSA Guidelines as a guidance for maintenance (see S v G [2003] JRC 091A). The CSA Guidelines provide that a father of three should contribute 25% of his annual net income, decreasing to 20% in respect of two children and 15% in respect of one child. She referred to paragraph 50 of E v F (Family) [2014] JRC 184, where the Court said this:-
26. It was accepted in that case that the Court can properly take into account the needs of the parent with whom the children reside, but the Registrar referred to this extract from the decision in the case of N v D [2008] 1 FLR 629 at paragraphs 23 and 27:-
27. In this case, the applicant has no income (other than interest on his cash, most of which is committed to his new business), and so the CSA guidance is of no assistance. He hopes to be generating an income in the second year of his new business. The reality is that the applicant has for some time been paying maintenance out of capital, which is, of course, a financial resource available to him, albeit diminishing. As Singer J said in SW v RC [2008] EWHC 73 (Fam) "maintenance can be paid from accumulated capital or borrowing."
28. Advocate Binet, appointed amicus curiae because the respondent was not legally represented until the actual hearing before us, referred us to the case of FG v MBW [2011] EWHC 1729 (Fam) which involved a not dissimilar situation in which an applicant was transitioning from one business to another, and during that period of transition would have to meet any maintenance payable out of his capital of £130,000. The issue was between the desirability of preserving the applicant's capital or reducing the maintenance for the child. On the facts of that case, the Court decided that if the applicant wished to preserve capital, then he should make reductions in his expenditure, rather than reduce the maintenance for the child, but acknowledging that this would steadily diminish the applicant's capital, the Court ordered a review in two years' time, notwithstanding litigation costs that would impose upon the parties. The Court also found that fairness between the parents required the mother to increase her resources by finding employment.
29. In addition to providing the Court with assistance on the law to be applied in this case, Advocate Binet also devoted time and energy to meeting with the parties in order to narrow the issues between them. She clearly did this with great skill, for which we would like to commend her, in that the parties have agreed upon the following:-
(i) THAT the children are to remain living in Jersey until the end of the summer term 2019;
(ii) THAT the respondent will relocate to England with the children in the summer holidays of 2019 (in sufficient time for the children to start at an agreed school.)
(a) The respondent seeks to live in London where she believes she will have greater work opportunities and seeks to avoid a commute. The applicant has no difficulty with a move to London but is concerned about the affordability of London accommodation.
(b) The respondent has proposed three potential schools for the children. The applicant has yet to respond to these suggestions but makes the point that his ability to meet school fees will depend on his income such as it may be nearer the time.
(iii) THAT the children will continue to attend School A until the end of the summer term 2019. It has been further agreed that the applicant will have no responsibility for any fees to School A after the end of the summer term 2019.
(iv) THAT the applicant will undertake to be positive about the children's attendance at School A whilst the children remain there.
(v) THAT the respondent will find work in respect of which:-
(a) She agrees to use her best endeavours to obtain employment in Jersey pending relocation. That said, she does not believe that she will be able to find something temporary which will work around the children and around her undertaking whatever retraining she may need to undertake for longer term work in England.
(b) She proposes that, in any event, she will start work in London from October 2019, by when the children will be settled in their new home and school.
(c) The applicant says that the respondent could and should earn something now and also says that she could work from when she relocates to England rather than waiting until October 2019.
(vi) THAT the respondent undertakes to have an action plan for obtaining work in England, such plan to include identifying the type of work she might be able to do and by embarking on whatever courses/training might be needed over the next twelve months.
(vii) That all financial contributions are to be reviewed in June 2019 (taking into account the applicant's income generated in the forthcoming twelve months). The parties have made some tentative proposals for the purchase of a property in England in due course for the benefit of the children. Further consideration cannot be given to this until the parties have freed up capital from their existing properties and until such time as they have a better understanding of their respective income positions going forward.
30. In relation to the last point agreed, the applicant at the hearing offered to lend the respondent the funds necessary for her to extend the lease on her property (on terms as to security) so that all three of their properties can be sold and the proceeds put towards the purchase of a house in England for the benefit of the children. Where that property will be is an issue for discussion. The applicant told us that he has no objection in principle to London, but points out that the very high cost of property there can only really be justified if the respondent's earning capacity justifies her living there.
31. Further matters were agreed in relation to the children which although not directly relevant to the issue of the maintenance review, we think it is in the interests of the children to record as follows:-
(i) THAT there is to be a very clear action plan to restore and re-build the children's relationship with the applicant as quickly as possible (taking into account the input of the guardian and the family therapist).
(ii) THAT the respondent is to undertake to do all that she can (taking into account the guidance of JFCAS and the family therapist) to facilitate contact between the children and the applicant and to assist in handovers, including helping with travel so that the applicant does not have to do all of the accompanying of the children on flights (i.e. if they are to go to the UK for the weekend he will fly to collect them and the respondent will fly to bring them back).
(iii) The respondent will assist with travel (taking into account the views of the family therapist and JFCAS) for as long as she is not working and providing the specific travel arrangements (ie flight times) are agreed between her and the applicant. Further the applicant would be expected to meet the costs of each travel and any consequent expenses (i.e. additional flights/ stop-overs if for example the applicant were to miss his flight). Any breach of this agreement would result in an immediate cessation of the respondent assisting with travel.
(iv) THAT both parties will undertake to use their best endeavours to improve the relationship between them and to work with the family therapist, the goal being to be able to spend time together in the company of the children.
(v) THAT both parties undertake to treat one another with respect, not to denigrate the other and to use best endeavours not to raise issues from the past.
(vi) THAT, taking into account the guidance of the JFCAS Officer and the family therapist, the respondent will undertake to facilitate and encourage the relationship between the children and their paternal grandparents/wider family.
32. The agreement reached by the parties is very helpful, and it addresses concerns felt by the Court over the sustainability of the current level of maintenance. The respondent acknowledges that the accommodation arrangements for the children as guests in a friend's home are not ideal for them; they need to have the stability of their own home. Her lack of housing qualifications makes the cost of leasing accommodation here in the non qualified market very high. Furthermore, this is a case, in our view, where the mother should increase the resources available to her by obtaining employment and the prospects for that would appear to be greater in England than here. We endorse, therefore, the agreement reached between the parties which we consider to be in the interests of the children.
33. Whilst it will be a matter for the parties to agree where in England the children and the respondent will live, which will tie in, no doubt, to their schooling, issues which we hope and trust will not be left to a court to decide, we make the perhaps obvious point that one cannot expect to live in an expensive location such as London unless one can afford it. It would seem to us that choosing such a location would only be reasonable if the respondent was able to secure highly paid employment there. London would, of course, be quite a change in the environment to which the children have become used.
34. That leaves the Court with the issue of the maintenance payable between now and the move to England in a year's time.
35. The applicant proposes that he should only pay half the school fees for the children and that the maintenance should be reduced to £3,000 per month (£1500 per child), to be paid directly to the landlord of any non-qualified property that the respondent may rent (in an arm's length transaction), her current arrangements apparently coming to an end at the end this autumn. The applicant calculates that if this matter were being dealt with in England, then based on his hopeful income in the second year of his new business and applying the Child Support Agency calculations, he would be ordered to pay £1,700 per month in total for both children.
36. Bearing in mind the starting point of the agreement reached in 2015 for the applicant to pay the children's school fees and the fact that they are fully settled there, we think it vital that their ability to remain at School A for one further year, with a planned move to further education in England, should not be placed in jeopardy by an order that may leave their school fees unpaid because of the respondent's inability to meet the other half. Taking into account the cash resources currently available to the applicant and the respondent's lack of resources, we determined that he should continue to pay the school fees for this final year.
37. In terms of maintenance, the respondent must increase her resources by obtaining employment, which she has agreed to do, and it is our expectation that she will be in gainful employment within a year. However, she does not have employment now. She is required to spend the summer holiday with her mother in Country 3 under the current arrangements for her accommodation in Jersey, and must be given time to re-train and obtain employment. To arbitrarily cut the maintenance for the children now would put their welfare at risk. Again, when you have regard to the applicant's current cash resources, such a move would not be fair or reasonable.
38. However, the applicant's financial future is very uncertain. He is investing in a new financial services business, and hopes to do well, but there is no certainty that he will be earning £120,000 per annum in the second and following years. By next summer, his current free capital will have been depleted. The current order, in our view, is not sustainable beyond next summer, when there must be a full review as now agreed by the parties. The respondent asked the Court to quantify the maintenance payable following relocation to England next summer, but Advocate Hillier acknowledged that it would be impossible for us to do so when we have no idea where in England the children and the respondent will be relocating, where the children will be schooled and what the financial resources of both the applicant and the respondent will then be.
39. If the parties are unable to put the interests of the children above their own and agree these matters, or at the very least agree where the respondent and the children will live and where the children will be schooled, then it seems to us that jurisdiction over any issues in dispute will fall to be dealt with by the English agencies or courts.
40. The respondent also asked that the maintenance for the ensuing year should be paid in one lump sum, no doubt because of the history of arrears in 2017, but we do not think it is in the interests of the children for the respondent to have £60,000 up front. The applicant does now have the cash resources available to him to meet this commitment for this period.
41. The Consent Order will not therefore be varied, but there will be a full review next summer. Bearing in mind the history of acrimony between the parties, and in order to avoid a hiatus next summer, creating damaging uncertainty for the children, planning for the relocation must commence this autumn, if not earlier, and the parties should have reached agreement on where the respondent will reside and the schools the children will attend in England by the end of this year. Rather than dismiss the applicant's application for a review, we are going to adjourn the matter until 13th November 2018 at 10am. so that the Court can review what progress has been made.
42. The role of the Amicus Curiae will continue as she has given valuable assistance to date and:-
(i) Fourteen days prior to the review date in November the parties will file a brief update of their financial positions, such update by the applicant to include details of his new business, his remaining capital and any progress with the sale of his two properties and the update of the respondent to include details of the efforts she has made to retrain and obtain employment, her accommodation arrangements, her efforts to sell her Range Rover and jewellery and to sell her London property.
(ii) Seven days before the review date in November the Amicus will file an update as to the progress made between the parties in particular as to where in England the respondent and the children will be relocated and where the children will be schooled. She will also file the bundle for the hearing.
43. In correspondence received from the applicant after this judgment was issued in draft, he complains, inter alia, that the respondent has failed to respond to repeated efforts on his part to communicate with her over the children. We have not heard the respondent's response to this complaint and it may be that she feels the need for a break so shortly after the hearing. We can only stress that come this autumn the interests of the children demand that communication between the parties over the future of the children takes place in a constructive manner and we expect both parties to put the children's interest above their own in this respect.
