“Top-up” child periodical payments orders – legal framework
S 8 of the Child Support Act 1991 (CSA 1991) circumscribes the role of the courts in deciding child maintenance. This act trumps the provisions in the MCA 1973 and Children Act 1989 s 15 / Schedule l save in certain circumstances (e.g. where an existing maintenance order has been made less than one year earlier - s 4 (10) (aa) CSA 1991). The combined effect of s10 CSA 1991 and § 3 (1) of the Child Support (Maintenance Arrangements and Jurisdiction) Regulations 1992 (SI 1992/2645) is that from the effective date of a maintenance calculation made pursuant to CSA 1991, any existing court order ceases to have effect.
Put simply, if the Secretary of State has jurisdiction to make a maintenance calculation with respect to qualifying children, then no court shall exercise any power which it would otherwise have to make, vary or revive any maintenance order in relation to the child and the non-resident parent (NRP).
Three exceptions to this rule are specified in s 8 CSA 1991: -
- if the NRP’s income exceeds a certain defined threshold (s 8 (6) — previously £2,000 per week net, and currently £3,000 per week gross);
- if payments are sought to meet periodical payments for education or vocational training (s 8 (7)); and
- if the child is disabled (s 8 (8)).
So, for a so-called “top-up” order (s 8 (6)), is it necessary for the Child Support Agency actually to have made a maximum assessment? A footnote to s 8 CSA 1991 in Family Court Practice 2014 confidently asserts: - “There is no reason why application cannot be made (including for interim financial provision) where a maximum assessment has not yet been made”, citing the authority of Charles J in CF v KM (Financial Provision for Child: Costs of Legal Proceedings)  EWHC 1754 (Fam)  1 FLR 208 in support. However it is clear from a reading of § 4 and 5 of the judgment in CF v KM that the matter remained undecided, the point not having been neither raised at nor considered before the, Charles J ultimately simply commenting that the point was “arguable”. So the first learning point for any lawyer here is: “read the case”!
On 10 December 2014, the matter was settled by Holman J in the case of Dickson v Rennie  EWHC 4306 (Fam).
The two parents of a 9 ½-year-old girl were arguing over the court’s jurisdiction, and over quantum of “top-up” child maintenance. In previous proceedings in 2007, when the child was aged 2 ½, District Judge Walker had made findings that the father, who was living in Jersey, was a “person of significant wealth”, assessing his net income as being £130k pa. There was “no suggestion whatsoever” that the CSA 1991 was engaged, each party accepting the court’s jurisdiction to make that order. The court ordered a house to be settled upon trust for the child, and child periodical payments of c. £3.3k pcm (index-linked). In the years since 2007, the father promptly discharged all child periodical payments due from him.
Change in circumstances
The mother gave birth to another child with her new partner in April 2011, and the father applied to vary downwards the child maintenance, before subsequently consenting to a dismissal of that application, and agreeing to pay the mother’s legal costs.
In March 2014, the father applied to what was now the Child Maintenance Service (CMS), for a maintenance assessment. His gross income was found to be c. £20k pa — a “stark and startling” difference from the previous figure. This resulted in a maintenance calculation of just £1.4k pa, although the father was in fact paying c. £12k pa voluntarily.
The mother’s applications
The mother applied, in person, to the family court, it being unclear precisely what for, as both the court and the mother lost the paperwork. In any event, during the ensuing proceedings the mother sought to enforce arrears and she sought a lump sum payment. When the mother finally instructed lawyers, her counsel argued for a “full restoration” of DJ Walker’s order. Holman J inferred that this must therefore be treated as an application under s 8 (6) CSA 1991. The mother had also applied to the County Court in Southampton for judgment summons for the relatively small sum of c. £3.9k, a live issue in those proceedings being the “effective date” of the CSA calculation. Holman J invited the mother to reﬂect upon the wisdom of such an application when substantial voluntary overpayments were being made by the father.
Jurisdiction of the Family Court
Although he was not habitually resident in the jurisdiction, the CMS had accepted the father’s argument that he was “employed by a company of a prescribed description registered under the Companies Act 2006” (s 44 (2A) (c) CSA 1991), and it had assumed its statutory jurisdiction. The court expressed its surprise that this argument was being run for the first time some seven years after the initial proceedings. The mother was in any event appealing to the First Tier Tribunal within the statutory appellate structure, arguing that the company was not a company “of a prescribed description” because the father, the sole director, owned 99.8% of the issued shares, and the company was but a vehicle for the father to be paid for work in the UK. Quantum was also being appealed.
In the family court the mother asserted that the court had a stand-alone jurisdiction to ascertain the level of the father’s income under s 8 (6) CSA 1991 and to make a top-up order.
The court was referred to comments of Charles J in CF v KM (Financial Provision for Child: Costs of Legal Proceedings)  EWHC 1754 (Fam)  1 FLR 208. Holman J stated that it was clear from a reading of § 4 and 5 of the judgment in CF v KM that the matter remained undecided. Charles J had concluded that the point was “arguable”, but had noted that the point had been neither raised at, nor considered prior to, that hearing. Holman J stated that the observations of Charles J in CF v KM (supra) at § 4 were “plainly entirely obiter”. It was “crystal clear” that s 8 (6) had to be referring to income that had been assessed or calculated according to the statutory scheme. Patently “section 8 (6) is not intended to provide some form of disguised ‘appeal’ just because it is, or may be, arguable, or even demonstrable that the NRP’s income exceeds the maximum figure” (§ 31). It would be “completely adventitious” for s 8 (6) to permit such a challenge only where it was arguable that the maximum income figure had been reached, but not otherwise.
The drop in the mother’s maintenance income from the father was described as a “devastating blow”, which the court could do “absolutely nothing” to remedy. The correct avenue for redress was the mother’s forthcoming appeal to the First Tier Tribunal.
The lump sum application had three limbs.
Lump sum order – building works
The small element to cover building works required to repair the home in which the child lived, and which been settled on trust in the 2007 proceedings, was agreed subject to provision of receipts, no decision therefore being required.
Lump sum order – debts and alleged maintenance arrears
The second element “to cover the shortfall in maintenance to date” was disallowed, the court finding a “striking” correlation between the mother’s debts and “the so-called ‘arrears’” of maintenance. Entertaining such an application “would be very blatantly to flout the barrier or shutter erected by Parliament between the functions of the CMS and the court” (§ 38).
Lump sum order – costs of appeal in separate First Tier Tribunal proceedings
The third element was for provision for costs of the appeal to the First Tier Tribunal. In that the First Tier Tribunal is unable to award costs, the amount attributable to preparation of the costs schedule for that hearing was disallowed (§ 39).
The court (applying Re S (Child: Financial Provision)  EWCA Civ 1685,  2 FLR 94, and CF v KM (supra)) limited provision for costs to the “reasonable and ...proportionate” sum of £10,000 (c. two-thirds of the sum claimed), as pursuit of the appeal was “very much in the overall interests of this child” (§ 40). The mother was required to account to the father for the costs, refunding any unspent sums.
Capitalisation of Child Maintenance?
Finally, the application to capitalise projected maintenance to the end of the child’s tertiary education was rejected, in light of the impending tribunal proceedings, on grounds of “lack of clarity as to what the ultimate legal levels of maintenance are”, in addition to any jurisdictional matters (§ 42).
Concluding Judicial Remarks
The court was critical of the “folly with which intelligent parents ... can allow themselves to be sucked into a vortex of litigation in which the sums expended in legal costs” (being c. £60k) lose all proportion to the amounts in issue” (less than £l00k child maintenance over ten years, plus the lump sums) (§ 35). Holman J concluded his judgment by stating “this is a court of law, not of morals. [T]he current legal obligation of this father is apparently a very low one... but there are, in fact, moral and parental issues engaged in this situation, as well as legal issues”. Holman J begged the parties to reach a fair and sensible negotiated outcome of the other proceedings in the First Tier Tribunal and in the County Court.
Tanfield Chambers, London
16 February 2015