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The variation or revocation of a settlement order under the Children Act 1989

Date:29 AUG 2018
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Family analysis: In Re C (A Child) (Schedule 1 Children Act Variation) [2018] Lexis Citation 63, [2018] All ER (D) 32 (Aug) the Family Court examined the power of a court to vary or revoke an order for the settlement of property that had already been made. Charlotte Sanders, associate at Stewarts, discusses the outcome of the case.

What are the practical implications of this case?

The issues raised by this appeal were:
  • Can a court vary or revoke an order for a settlement of property order that has already been made?; if so
  • Whether and how should the court exercise its discretion to do so?
The court held that it had a power, pursuant to s 31(F)(6) of the Matrimonial and Family Proceedings Act 1984, which is given procedural effect by r 4.1(6) of the Family Procedure Rules 2010 (SI 2010/2955), to vary or revoke an order of the court. The court considered the authorities on the issue, which confirm that the power ‘is not unbounded’ (CS v ACS (Consent Order: Non-Disclosure: Correct Procedure) [2015] EWHC 1005 (Fam), [2016] 1 FLR 131)) and that there should be a ‘principled curtailment of an otherwise apparently open discretion’ to factor in considerations of finality, the undesirability of allowing litigations to have two bites of the cherry and the need to avoid undermining the concept of appeal (Tibbles v SIG plc (Trading as Asphaltic Roofing Supplies) [2012] All ER (D) 134 (Apr), [2012] EWCA Civ 518). Tibbles set down firm guidance that the primary circumstances in which the discretion may be exercised are as follows (albeit clarified that it would be dangerous to treat these primary circumstances as though they were a statute):
  • where there has been a material change of circumstances since the order was made
  • where the facts on which the original decision was made were (innocently or otherwise) misstated

The principle that a final order can be varied was also confirmed in Karim v Musa [2012] All ER (D) 379 (Jul), [2012] EWCA Civ 1332, and the Supreme Court cases of Sharland v Sharland [2016] 1 All ER 671, [2015] UKSC 60 and Gohil v Gohil [2016] 1 All ER 685, [2015] UKSC 61 in cases where there had been material non-disclosure.

Having established the jurisdiction, the court considered whether and on what basis an order should be revoked or varied.

The court in this case discharged the maintenance element of the original order and varied the settlement of a property element based on a significant change in circumstances, namely that the parent the child lived with had changed to the father from the mother.

It is interesting to see the court varying an order for a settlement of property under Schedule 1 of the Children Act 1989 (ChA 1989), despite the fact that this is not expressly variable under ChA 1989, Sch 1 (whereas periodical payments are expressly variable). A further point of interest is that despite the original order being varied, the court still provided for a settlement of property in which the mother could live (and the child when he was with her) during the child’s minority, despite the fact that the child did not live with the mother and only spent time with her.
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What was the background?

The case involves a child, C, who was born in October 2014. The mother is British and the father is American. They had ‘the briefest of relationships’ while the father was working in England, as a result of which C was born. In early 2015 the father moved to work in Canada.

There have been two sets of proceedings running in parallel regarding C, namely where C should live and the time he should spend with the other parent under ChA 1989, s 8 and the financial arrangements to be put in place for the benefit of C pursuant to ChA 1989, Sch 1.

The original ChA 1989, s 8 proceedings resulted in a detailed consent order which provided that the care of C was to alternate between the partners and between countries, with him spending eight weeks at a time with his mother in England and four rising to six weeks with his father in Canada.

In the original ChA 1989, Sch 1 proceedings, which commenced in 2015, an order was made for the father to provide financial support for the benefit of C. The father had extremely lucrative but potentially relatively short-lived employment, albeit he stated that he spent his entire income. The mother is an Oxbridge graduate, but she has never had regular paid employment. Her position was that the demands of caring for C had put an end to any career. The judge ordered a settlement of property at a price not exceeding £700,000 net of stamp duty land tax (SDLT), to be occupied by the mother and C until C had achieved the age of 18 or completed his secondary and tertiary education to first degree, whereupon the property would revert to the father absolutely. In addition, an order was made for the father to pay child maintenance at the rate of £5,500 per calendar month until the completion of the purchase of the property and, thereafter, at the rate of £4,500 per calendar month.

The ChA 1989, s 8 proceedings were brought in 2017. At that stage an appointed guardian for C had considerable concerns about the appropriateness of C remaining in the care of the mother. After consideration of the issues the judge made an order that C should live with his father in Canada and spend time with his mother in England. The mother’s appeal to the Court of Appeal was dismissed in April 2018.

The father then made an application to vary the existing ChA 1989, Sch 1 order by discharging it in its entirety.

What did the court decide?

The court concluded that there was no doubt that there had been a very significant change in circumstances, namely that C now lives with the father and only spends time with the mother. However, the judge also stated that the history demonstrates that no regime for C’s care has lasted any length of time and so he could not assume that the current arrangements would necessarily last.

The judge made clear that the objective under ChA 1989, Sch 1 is to provide financial support to the child, not to the parent, and that the concept of C having a home for the time he is with his mother has not necessarily changed (albeit he would spend less of his time there than had been envisaged before). Accordingly, the judge considered it was still appropriate for the father to provide housing in which C and the mother could live. The judge considered that he could see no justification for the child maintenance to continue, that the mother should be in employment and that she should make a financial contribution to meet C’s needs.

In terms of housing, the judge considered that a property settlement that reverts to the father at the end of C’s minority or when he ceases full-time education remained the appropriate arrangement. He considered that C should have his own room in a place that is wholly familiar to him and where his mother lives. However, given that C’s occupation of the property would be limited based on the current arrangements, the judge considered that the amount of funding to be provided by the father needed to reflect the different child arrangements. Accordingly, he considered that a two-bedroom flat or a small house would be appropriate, and that such a property could be purchased for £200,000 net of SDLT.

The court therefore decided that:
  • the order for periodical payments should be discharged;
  • the settlement order should be varied by substituting the sum of £200,000 (the previous figure having been £700,000).

Interviewed by Diana Bentley.

This analysis was originally published on LexisPSL Family (subscription required). Click here to request a free 1-week trial