Mr Nicholas Allen KC (sitting as a deputy High Court judge).

Summary

Enormously helpful review of Sch 1 authorities re (i) the jurisdiction to make a Schedule 1 award after a clean break in divorce proceedings, (ii) the relevance of parental conduct in Schedule 1 proceedings, (iii) dependence and the reversion of capital and (iv) costs.

The case is possibly the only case where private family, public family, family finances and Schedule 1 collide. In addition, the mother was a litigant-in-person and a serving prisoner, her victim having been the parties’ child, while the other represented party, the father, needed significant special measures. Accordingly, the judgment also features principles of case management, access to justice and fair hearing.

Facts

F and M's relationship began in 2010; there was a pre-marital agreement in 2011 a few weeks before the marriage. The parties separated in 2013. The decree nisi was made in 2014 and made absolute in 2015. This was a short marriage. On 26 February 2015, there was a final financial remedy order by consent. The order was a simple dismissal of both parties’ respective claims and a clean break.

In c.2016 M made false allegations that F had sexually abused Child A. Child A, in ABE interviews, made similar allegations against F. On 20 June 2019, M was arrested; Child A was removed from M's care by a PPO and placed in foster care. On 24 July 2019, at the threshold hearing, the alleged sexual abuse was not proven. Parts of the amended threshold schedule were proven. The threshold judgment stated in respect of M:

‘This is the most sustained conduct of improper parental influence and manipulation I have seen for some time. It is an extreme example.’

And:

‘The conduct by Child A's mother has had very real consequences for Child A.’

M’s application to appeal was refused.

In December 2019, indirect contact between F and Child A began, progressing to direct unsupervised contact. M then committed a criminal offence; Child A was the victim. Child A was diagnosed with PTSD and has required ongoing psychiatric support. M received a long custodial sentence. Overnight stays with F were steadily increased, and by August 2022, Child A was returned to F’s care. In September 2023, the care order was discharged. The judge made a ‘live with’ order in favour of F, and ordered indirect contact (on a one-way basis) between M and Child A but in all other respects, no contact. Given M’s custodial sentence, F is and will remain solely responsible for Child A.

Schedule 1

F made an application following M’s father’s death, over seven years since the financial remedy order. F understood M and her brother to be the sole beneficiaries of their late father’s estate. F sought capital sums to provide housing and, expenditure, and costs with no capital reversion. M proposed no financial provision and no order for costs.

Jurisdiction

The judge found that the circumstances of this case were exceptional and, therefore, had jurisdiction to make a Schedule 1 after a clean break in divorce proceedings; see [53]–[55].

Legal framework

Schedule 1 paragraph 4(1), the welfare of the child is the overarching factor and would be at the forefront of the judge’s mind; see [56]–[58].

Conduct

Parental conduct in a Schedule 1 application is even less likely to be relevant than in an MCA 1973 application; however, particularly egregious conduct can be taken into account, making the MCA 1973 s 25(2)(g) and its case law relevant; see [61].

Lump sums

The courts have made lump sum orders for a wide range of purposes; see [77].

Reversion of capital

Lump sum orders do not revert to the paying party. However ‘property related orders’ do ordinarily revert to the paying party save in special/exceptional cases.

Dependency

Any assessment of what properly constitutes ‘special’ or ‘exceptional’ circumstances must focus on dependency rather than vulnerability, as not everyone with a vulnerability is ‘dependent’ in the sense of requiring financial support; see [79]–[89].

Conduct and long-term financial provision

As a consequence of UD v DN (Schedule 1, Children Act 1989; Capital Provision) the relevance of the conduct of the paying party to the question of long-term financial provision is solely to the extent it creates an ongoing dependency and/or financial need; see [79]–[89].

Adverse inferences

After evaluating the evidence, a judge can draw adverse inferences where necessary and relevant; see [104]–[114].

Correct approach

Re P (Child: Financial Provision) [2003] EWCA Civ 837 remains the seminal authority, HHJ Hess in SP v QR [2024] EWFC 57 reiterates that Schedule 1 cases are not limited to the ‘affluent to fabulously rich’. Schedule 1 awards can properly be made in modest assets cases. The principles are set out by Peel J in Y v Z (Schedule 1) [2024] EWFC 4 at [35(i)–(xi)]; see [118] in this judgment.

Summary of findings

1. It was unlikely F would get a mortgage; but for M’s conduct, F would have a higher earning capacity; it would therefore be inequitable to ignore conduct. The court should strive to meet Child A’s housing needs in a mortgage-free property.
2. M was the direct cause of Child A’s PTSD and trauma, which means that upheaval if F could not afford the mortgage would be particularly damaging to Child A. The circumstance of the case meant the judge would exercise his discretion to provide long-term capital to Child A. M posed, and would continue to pose, a threat to Child A. Child A should be considered dependent; this finding was supported by the evidence seen in the public law proceedings and in F’s evidence. Capital should not revert to M on Child A’s majority as there were special circumstances.
3. Child periodical payments would not be ordered as there was no CMS maximum assessment, and the court did not have jurisdiction. However, M to pay lump sum for therapy for Child A.
4. Costs: The ‘general rule’ did not apply, and there was a ‘clean sheet’. There was no reason to depart from the principle. The case was not so out of the ordinary that indemnity costs were appropriate. M to contribute to F’s costs – the contribution was the estimated surplus of inheritance after the Schedule 1 award.
5. Publication: The transparency in the Family Court was best served by the publication of this judgment subject to anonymisation.