Williams J:
- I am concerned with cross applications in relation to child maintenance which was ordered to be paid by Mr Cusworth KC (as he then was) on 30 April 2020.
- The applicant and cross-respondent is the mother ('M'). She has instructed Payne Hicks Beach, as she did in the previous proceedings, since at least July 2022. She is represented by counsel, Mr Harvey.
- The respondent and cross-applicant is the father('F'). He instructed Farrer & Co in the previous proceedings but acted in person in relation to these proceedings until mid-April 2023 when he re-instructed his solicitors. He is represented by counsel, Mr Dance.
- The parties have two daughters. A shared lives with Order was made by HHJ Oliver in early 2019 (a year prior to the final hearing), pursuant to which the children live with M for the majority of term time and school holidays are shared equally. The elder daughter now attends boarding school and the younger daughter attends a fee-paying school.
- There are three applications before the court:
i) M's application to enforce the child periodical payments order made by Nicholas Cusworth KC in 2020 (the "2020 Order") by such method as the court considers appropriate, made in Form D50K on 3 March 2023; and in the alternative
ii) M's application that F pay top-up maintenance at the rate previously determined by the Court; and
iii) F's application dated 8 June 2023 to vary his child maintenance obligations downwards both in relation to child maintenance and school fees.
- The Order of Mr Cusworth KC arose from contested financial remedy proceedings, a final hearing of which took place in 2020. A written judgment was handed down in 2020and the order was approved by the judge. An application for permission to appeal the capital orders was made by the mother but permission was refused. There was no appeal by the father against the child maintenance provisions. The Court had jurisdiction to make a child maintenance order by reason of a maximum assessment made by the CSA.
- The judge said this as to maintenance:
"As to the level of child maintenance, I have fully in mind the views of Mostyn J as recently expressed in CB v KB [2019] EWFC 78. I also bear in mind the fact that under my order the significant majority of the husband's receipt from all sources over the next 3 ½ years will be employed in meeting the wife's capital entitlement. However, it also seems appropriate to add to what would otherwise be the appropriate level of child maintenance an additional element for extra-curricular expenses, to avoid future dissention between the parties. Payment should be at the rate of £35,000pa per child, and of conventional duration."
- The reference by the judge to CB-v-KB I think refers to Mostyn J's decisions suggesting that where gross annual income does not exceed £650,000 that child maintenance should be calculated by reference to the child support formula and that where it exceeds £650,000 the starting point should be the formula with full discretionary freedom to depart from that having regard to the scale of the excess. As F's income in the 4 years before was very significantly in excess of £650k pa the order of £35,000 per annum would appear to be the result of the exercise by the judge of 'full discretionary freedom'. The order provides for reduction on university education and termination at 18 or ceasing full-time tertiary education or further order. Index linked variation is provided for at #54 and at #55 University/School Fees F is to pay all school fees post summer term 2020 (which were discharged in equal shares). The sum of £35k pa per child = £5,833 pcm now (with index linking) equates to £83/84k pa. School fees which were circa £25k each are now £25k + £50K (the older child is now boarding).
- The order included a Declaration not to apply to the CMS as follows;
Declaration of intention not to apply to the CMS
Although the parties accept that the jurisdiction of the CMS cannot be excluded for more than one year, neither party has any intention of applying to the CMS for a CMS calculation in substitution of the periodical payments payable under paragraph 53 below
- The order included a host of undertakings including one by the father to notify the mother of any receipts from B Ltd– although this did not include borrowings.
Procedural matters
- M's applications for enforcement or for top-up maintenance were considered by Judd J who listed them for 1 day before a Financial Remedy specialist, ideally Mr Cusworth KC. The listing was initially for 15th May 2023 but an application issued by the father resulted in further directions being given by Mr Cusworth KC by consent (undated but likely late May) including that it be heard before 15 August 2023. The father then issued his application for variation. The parties do not appear to have drawn to the court's attention that a further substantive application was issued and was to be heard alongside the mother's. Given the way that application was pursued it clearly required a re-evaluation of the time estimate but no alteration to the time estimate was sought by either of the parties.
- The applications therefore came before me (a non-specialist Financial Remedy judge) in the vacation list although no judge had certified it fit for Vacation and with a time estimate that was plainly inadequate, particularly when it emerged that F's team were considering calling oral evidence. Mr Dance's Position Statement was 20 pages long – PD27A provides for 3. Mr Harvey's Note (not a document recognised by PD27A) was 14 pages – these for a 1 day case. The Essential Reading alone would have taken the best part of the court day and Mr Dance's pursuit of the CMS point added a further dimension. Both counsel seemed to accept that it had not been determined before; Mr Harvey opining this was because most parties recognised that even if successful the payer could be subject to a fresh and back-dated order and so pragmatism had led to the point not being litigated. The father in his statement had identified it was a sterile point but chose to pursue it nonetheless.
- The judges of the High Court have been reminding the profession of the requirements of PD27A and their obligations to ensure that documents and Bundles comply with PD27A and that the court is given an accurate time estimate to include reading time and judgment delivery for 15 or more years: Re X and Y (Bundles) [2008] 2 FLR 2053 being perhaps the first.
- Having raised this with the parties and the possibilities of adjournment and the likely need for a reserved judgment the parties elected to proceed with submissions and a reserved judgment. Both parties elected not to call oral evidence in order to enable this to happen as oral evidence would have meant the estimate was closer to 3 days than to 2. Although the court needs to exercise more care in relation to findings when evidence has not been tested, when the parties have elected not to seek to call oral evidence (because of the fact it would have required an adjournment as it had not been properly addressed by the parties in advance) there is more room for manoeuvre than there would be had the court imposed a summary process on them. In Re C (Children) (Abduction Article 13(b)) HYPERLINK "https://www.bailii.org/ew/cases/EWCA/Civ/2018/2834.html" \o "Link to BAILII version", Lord Justice Moylan emphasised that the Court has to be careful when conducting a paper evaluation, but equally affirmed that that does not mean that no assessment at all about the credibility or substance of the evidence can be made.
- A consequence of the non-compliance with the FPR and the over-loading of the case together with the decision the parties took to proceed enables me to feel more comfortable with a relatively shallow dive into the law and facts and a more summary disposal than I might otherwise have been predisposed to. I see no injustice to either party in that – they had the option of a longer and no doubt more expensive hearing which they declined.
- I set aside some time in January 2024 – which was the earliest slot in my diary after September to complete my reading and to prepare a judgment. Regrettably I was laid low by illness and was unable to work at that time. The parties were given the option of starting the case afresh before Mr Justice Cusworth as he had become by then but they elected (understandably given the additional brief and attendance fees) to stick with the devil they knew.
- Although the three applications are interlinked, and the evidence relates to each the natural order for the determination would seem to be as set out below although the nature of the evidence and a proportionate approach might not necessarily require or facilitate the determination of all those issues.
(a) is the proper interpretation of the Child Support Act such that the issue of the annual review falls within the definition of a maintenance assessment/calculation so as to mean that a previous court order ceases to have effect?
(b) did the CMS issue a child maintenance assessment in July or October 2022 and did the court order cease to have effect?
(c) if the court order ceased to have effect as a consequence of the child support legislation what is the proper approach to an application for a further top up order?
a. If the order ceased to have effect in a way which was unexpected at the time of the order then whilst the approach would be determined by s.25 factors and all the circumstances a most significant factor giving the court a starting point would be the fact that the parties intended the previous order to endure throughout the children's minority (hence its terms) absent an application to vary and so in practice the court would approach the case in much the same way as if it were a variation.
b. Or does the court start from scratch with a fresh evaluation of the section 25 factors including the financial resources of both including M's capital and its income-generating capacity?
(d) If the court order was undisturbed and no new top-up order is required what is the proper approach to the application to vary?
(e) In the light of the findings on the application for a new order or a varied order what should be the order on the enforcement application? Was the father unable to pay the maintenance required?
The Parties' Cases
- The mother seeks the following orders:
i) An order that F pay the arrears of child maintenance, £64,336.70, to be enforced by way of third-party debt orders (was £57,310 at time of issue).
ii) In the event that the Court agrees with F's interpretation of the CMS regulation, a 'Christmas Order' in the terms at (a) which revives following a CMS Maximum Assessment.
iii) An order dismissing F's variation application.
iv) Her costs.
- The father sought:
i) A reduction in child maintenance to the level required by the CMS or he had offered to pay £25k pa for both children (£12k for the elder daughter, £13k for the younger daughter), and
ii) An order that M meet 50% of the cost of the school fees and extras.
- The current value of the child maintenance order after index linking is £7,027pcm (£84,324pa). The school fees are broadly £75,000 pa.
- I do not propose to set out the parties' cases in elaborate detail. The way the case has proceeded – with the express agreement of the parties – has not permitted the time to be spent on the reading, exploration in oral submissions or in judgment preparation some of the finer detail that might have been possible had an accurate time estimate been given to the court.
- In support of the mother's case Mr Harvey made the following essential points in his Note and his oral submissions.
i) Since 2020 the father's financial position has been significantly better than he predicted.
a) Although he predicted reduced bonuses, he received in excess of £7m in 2020/21; in excess of £14m in 2021/22 and £1m in 2022/23.
b) His average income to April 2020 was more than £1m pa, in the years since it has been more than £7m pa.
c) Even after paying all sums due under the order (lump sums, interest on lump sums, child maintenance, school fees) F had a net monthly inflow of more than £60,000. F's assertion that, from that sum, he has been unable to afford to pay the child maintenance is untenable. This is not a case of a father who can't pay, it is a case of a father who has started a new family and would rather stop paying sums that the Court ordered must be paid to his ex-wife for the benefit of his elder children.
d) His inflow of income and borrowing since the order amounts to over £20.2m. He has paid the lump sum and other payments including child maintenance pursuant to the order of £17,545,700 leaving around £2.7m in his hands an average of more than £800k per annum.
ii) The father's case in 2020 was that as he was no longer trading directly his prospects for receiving significant bonuses was reduced and his benefit would come in the increase in the value of his equity. He sought an extended period to pay the lump sum because he did not expect significant bonuses and because he could not borrow against his shares. Neither was accurate and he paid the lump sum 2 years early through bonuses and borrowing, which it turned out he was able to receive within months of the evidence he gave to the court that were not likely sources.
iii) F is an unreliable witness in relation to his finances; his above predictions were wrong and on 21 June 2022 he said he did not expect to receive much "..if anything.." in bonus but in fact he had already been told in May 2022 he would receive £1m [#34, p258] and he sought to persuade M to accept reduced maintenance. Thereafter M sought disclosure which F refused unless ordered by the court. That sum in itself would have enabled him to pay the sums due and so he cannot assert that he was unable to pay the maintenance order in enforcement terms. He has not produced the documents which would enable the mother and the court to see how the vast sums he has received have been expended. In addition, he was paying school fees for his own son which would have discharged the maintenance obligation.
iv) There has been no material change in the Father's finances which assists him. The receipt by the mother of the lump sum was anticipated and cannot amount to a material change. Other than that, the financial information shows the Father's income has been 500% higher than the 3 years before the 2020 order and his capital worth has doubled to nearly £90m.
v) The father cannot rely on the mother's capital position; this was known at the time of the original order and unless he can demonstrate his financial position has changed significantly for the worse so as to require the court to re-assess all of the s.25 factors and the parties' finances in a 'blank canvas' way the mother's capital and liquidity is not relevant.
vi) The points on which the father relies are not material changes:
a) The judge anticipated that the bulk of the father's income would be used to pay out the mother's lump sum.
b) The potential difficulty in selling shares was known in 2020 and relied upon by the father who preferred to pay the mother a lump sum than for her to retain B Ltd shares.
c) The elder daughter being at boarding school was foreseeable.
d) The father's additional obligations to housing his family and the expenses related to his daughter and his son are not material in the context of his income.
vii) If the true interpretation of the CSA is that an annual review discharges the order or that the father applied for and was granted a fresh child maintenance calculation so as to discharge the order, then the court should take the original order as the starting point; there is no need to undertake the s.25 exercise with a blank canvas.
viii) The father's assertion that his maintenance should be assessed in line with James-v- Seymour is not applicable given he earns more than £650k gross per annum and this is a variation application.
ix) The father cannot demonstrate he was unable to pay the child maintenance order and enforcement naturally follows.
- The father's case articulated in his witness statement and in Mr Dance's Position Statement and his oral submissions is broadly as follows.
i) Although in his statement the father said the issue over whether the original periodical payments had ended by the issuing of further assessments was "…probably a sterile argument.." he submitted that the effect of the CSA was to discharge the 30 April 2020 order. The Recital was one of current intention and he was entitled to change his mind and apply to the CMS if he was unable to pay the maintenance. His call to the CMS was an application within the meaning of Reg 3(2) which generated a fresh child maintenance assessment.
ii) If the maintenance order was discharged by his application, then the mother's application for a back-dated child maintenance order is a new one and must be assessed by reference to the s.25 MCA factors and on the basis of the parties' respective finances at that time. It is thus not a variation.
iii) The father submits that his financial and personal circumstances have changed significantly and in adverse ways since the final order was made, as has the mother's. He shares the care of the children, the school fees have increased, he has 2 children with his current partner (1 only in April 2020) and is married (although his children do not know that).
iv) His son has needs which ideally would mean he attended a school costing £85k per annum which he cannot afford when meeting all the costs of the children's education.
v) The father says he was unable to contribute to the purchase of his new property as he was paying the lump sums under the terms of the final order.
vi) The father says he has to pay his mother's mortgage.
vii) He estimates his net income going forward at more than £400k pa. He says "As has always been the case, my income has fluctuated dramatically it being explicitly tied to the fortunes of B Ltd but also to my own performance" The approximate net figures F gives (which are not entirely aligned with the Judgment) are
2018/19 – c.£180k
2019/20 – c.£980k
2020/21 – c.£4m
2021/22 – c.£7.5m
2022/23 – c.£575k
viii) He says that the large and unexpected bonuses in 2020 and 2021 were one-offs related to Covid and to his entitlement to a percentage of gross revenue which is no longer the case. It would be unfair to average his income over time as there have been unique circumstances in the last 2 good years. His net income excluding bonus is around £120,000 and the child maintenance alone is 70% of this. With school fees he has a £40k shortfall before he meets his own needs and those of his new family. He is reliant on bonuses.
ix) His gross income for 2023 is about £770k which is less than the James-v-Seymour figure and so his liability should be assessed on CMS principles. The current figure exceeds the figures that would generate by some 4 times.
x) He estimates his outgoings going forwards at £451k including the fees for D his son at his preferred school. His needs have increased substantially. He cannot afford to place D his son at the school which would best meet his needs. His wife is unwell and needs medical support. The father has not manufactured a case in order to apply to vary.
xi) The mother has £15m in liquid capital and she should deploy that to support the children particularly as the father shares care of the children now. With the elder daughter at boarding school there is no longer a resident and non-resident parent situation.
xii) He had to raise debt in order to pay out the mother's lump sum as bonuses and dividends or share sales were not viable. The volatility of the market is such that a good trading year such as 2020/21 may not be repeated; indeed in 2021/22 B Ltd made a loss and in 2022/23 B Ltd is on an even keel. He cannot raise sums by selling shares as his attempts to do so have borne very limited fruits and the loan was offered to dissuade him from seeking to sell shares and made in two tranches of around £4m in August 2020 of which almost all was paid to M and around £3m in March 2023 of which £2.43m was paid to M (£570,000 was therefore retained by F at a time when he was in arrears of child maintenance). F predicts it will take him several years to pay back those sums and whilst he expects the payment deadlines to be extended, he may need to pay interest. F prioritised payment of the mother at his own expense.
xiii) His financial difficulties came to a head in May 2022 because he had paid M out early using his income from the previous two years, his outgoings were significant he had an additional tax liability of £200k and his bonus was only going to be £1m. He thus had to borrow money from his mother totalling £140k although has repaid £64k.
xiv) In May 2022 he entered his income into a CMS calculator, and it came up with £1,200pcm and so he paid M £1,500pcm in July, August and September. He then rang the CMS and was told over the phone his calculation was £1,216.67 pcm which he understood to be a fresh assessment (although it was the same as that contained in the annual review of February 2022). In line with that he paid M £1,216.67pcm. On 26 Jan 2023 he spoke to the CMS again and was told the sum of £1,216.67 was the amount he should pay. He says he understood this to be the only amount he was obliged to pay.
xv) Overall,- he maintains he cannot afford to pay £83k pa in child maintenance on top of the school fees and other sums.
xvi) In any event child maintenance should as a matter of principle be needs based and the mother has no need for child maintenance as she can use her own surplus capital to meet her needs and their needs: Waggott.
xvii) The original maintenance order was not based on any detailed assessment of need other than incorporating some extra-curricular activities and no particular principle or mathematical approach. To the extent that the eldest daughter is now at boarding school the extra-curricular element falls away. The sum is inescapably high in comparison to other awards. The mother's assessment of the children's needs is exaggerated – taxis of £8,400 for the eldest daughter to get to school and £10,000 for an au pair when M does not work.
xviii) F is doing his best to juggle many commitments, but his financial situation does not support his ability to meet the order at its previous level.
Background
- The Father was the largest single shareholder in B Ltd. The Father in 2020 relied on the fact that B Ltdhad no underlying income stream and that its income comes from the traders' profits. The judge noted that historically they had done that very effectively. The judge also noted that whilst such firms do not last much more than 10 years that B Ltd owners had plans to grow it and increase profitability rather than sell or liquidate it. That seems to have come to fruition over the period since 2020. These are all relevant to the consideration of the father's current case on the level of income he receives or may reasonably expect to receive. The judge made relatively limited commentary on the credibility of the parties although noted [#43] that the Father could legitimately be criticised for failing to disclose a rise in the value of B Ltd.
- The father's income up to that point was
i) 2016 – c.£5m gross
ii) 2017 – c.£2m gross
iii) 2018 – c.£2.5 m gross
iv) 2019 – c.£0.4m gross
v) 2020 – c.£1m gross
- The father's case at that point in relation to his future income was that he would not be receiving large bonuses as he was not trading but that "His benefit comes in the increase in the value of his equity through the successful trading of those that he recruits" [#21]. The judge also noted that in the year 2019 when he received his lowest 'income' that his shareholding in the business increased by a gross figure of over £12.5m.
- At paragraph 6 the judge said that they were agreed that any capital award paid by reference to the sharing principle would meet the mother's needs without her needing to return to work. There was no suggestion that her award would in some way be relevant to the determination of child maintenance and child maintenance was assessed by reference to the father's income not the mother's putative income based on the receipt of her capital award. Her future earning capacity was not a live issue. At paragraph 7 the judge referred to the fact that the F's income had been significantly reduced from its previous level and so it was on the basis of this significantly reduced income that the level of child support was set.
- The judge concluded that the fairest way of measuring the value of B Ltd was a NAV which was the lower of the valuations contended for by the father and the mother. The value that was attributed was taken at a point which the judge considered fairly reflected the variations in the share price over a period of time. The father's proposal at that time was that "the husband offers only £11m, and so staged that in all probability he is hoping to pay these sums from his remuneration, however received, as opposed to by the sale of shares."[para 63] The gross value attributed to the shares in the judgment was £43.4m. The judge also accepted that B Ltd's restrictions on liquidity were because they wanted to increase trading levels and the judge expected the father would have some scope for flexibility.
- The judge said
I find that a fair spread of the husband's liability will be that he should pay £2,787,595 by 1st September 2020, £5m by 1st September 2021, a further £5m by 1st September 2022, and then a final payment of £4m by 1st September 2023. I consider that he will be able to withdraw those sums from his interest in B Ltd with no more than proportionate disruption to the overall business of the company, when balanced against the desirability of providing the wife's award to her and achieving a clean break as soon as practicable. I am satisfied from his evidence to me that this will be practical for him, and whether it be by dividend, bonus or share sale, or a combination of the 3, is a matter for him [no provision for release in respect of early payment].
- Spousal PPs were to be paid at 2.25% of the outstanding balance and terminated on payment in full of the lump sum emphasizing that the capital sum was relevant to spousal maintenance but was not considered of any relevance to child maintenance.
- By the date the first lump sum (c£2.7m) fell due, F had paid £7.3m. By December 2021, he had paid the full £16.78m balancing lump sum; two years ahead of schedule. Thus the judge's prediction as to liquidity proved accurate and the father's fear that he would need significantly more time to raise the funds was inaccurate. The father's tendency to under-estimate (in relation to his non-disclosure/mis-characterisation of his finances in summer 2022) suggests that some caution needs to be applied to his assessments of his lack of funds or liquidity. F's newfound liquidity came from the very two sources he had downplayed before the Court in 2020:
i) F received very significant bonuses totalling over £22.5m gross / c£11.8m net; and
ii) F has received an interest free loan of more than £7.5m from B Ltd – he has made no repayments.
At para 69(c) the judge records that B Ltd had said they would not permit borrowing against his shares (although this seems to be in the context of borrowing from a third party and giving a charge over his shares) but nonetheless the possibility of borrowing from B Ltd was not identified as a route by which the F could pay the lump sum; the 3 options were share sales, bonuses and dividends. In fact he has raised it from bonuses and borrowings; the two sources he most downplayed as future routes for generating finances in his hands.
- F's shares are now worth almost £90mmore than double the value attributed to them at final hearing. Whilst the value of F's shares do not translate directly into income or liquidity they are a reflection of his wealth which is relevant when one comes to consider what his financial resources have been out of which maintenance could be paid and what his financial resources may be going forward for the purposes of future maintenance.
- In February 2021 the CMS reviewed F's child maintenance.
- In July 2022, F reduced the child maintenance by 77% [375]. On 21 June 2022, F asserted that
"I do not expect to receive much, if anything, by way of a bonus this year"
- On 10 October 2022, F further reduced the child maintenance to £1,216.67 per month.
- In December 2022, F erroneously transferred £50,000 to M. Upon request, M transferred the entirety funds back to him, notwithstanding that the arrears under the order then stood at more than £30,000 [74-75]. Notwithstanding M's good faith, F failed to pay any child maintenance in December.
- At the end of February 2023 M says F paid his mother £101,000. F says £64,000 [259#36].
- M issued her application on 3 March 2023 together with a draft order for F to file evidence by 24 April 2023.. On 3 May 2023 Judd J approved that draft order that F make financial disclosure, including the retrospective date of 24 April 2023. On 3 May 2023 F applied for a re-timetabling of that direction to allow him time to comply, and for a direction for mutual financial disclosure. On 8 June 2023 – F filed his application for downward variation and for school fees to be shared.
The Legal Framework
Enforcement
- The procedure provided for by FPR 33.3 and which was elected for by the mother in practice requires the father to prove that he was unable to pay.
Child Support
- The main legislative scheme is the Child Support Act 1991 and the Regulations made thereunder. Section 8 of the Child Support Act 1991 ("CSA 1991") provides that the court retains jurisdiction to make a maintenance order where the non-resident parent's (F's) gross income exceeds £156,000 per annum.
(6) This section shall not prevent a court from exercising any power which it has to make a maintenance order in relation to a child if—
(a) a maintenance calculation is in force with respect to the child;
(b) the non-resident parent's gross weekly income exceeds the figure referred to in paragraph 10(3) of Schedule 1 [£156,000 pa](as it has effect from time to time pursuant to regulations made under paragraph 10A(1)(b)); and
(c) the court is satisfied that the circumstances of the case make it appropriate for the [non-resident parent] to make or secure the making of periodical payments under a maintenance order in addition to the child support maintenance payable by him in accordance with the [maintenance calculation] .
- The Child Support (Maintenance Arrangements and Jurisdiction) Regulations 1992 (CSR 1992), regulation 3(2), made under s.10 CSA 1991 provide:
(2) Subject to paragraphs (3) and (4), where a maintenance calculation is made with respect to-
(a) all of the children with respect to whom an order falling within paragraph (1) is in force; or
(b) one or more but not all of the children with respect to whom an order falling within paragraph (1) is in force and where the amount payable under the order to or for the benefit of each child is separately specified, that order shall, so far as it relates to the making or securing of periodical payments to or for the benefit of the children with respect to whom the maintenance assessment has been made, cease to have effect [on the effective date of the maintenance calculation]
Applications to Vary:
- Section 31(1) Matrimonial Causes Act 1973 provides that the court may vary an order to which the section applies. By s.31(2)(b) it applies to any periodical payments order. Section.31(7) provides:
"In exercising the power [to vary] the court shall have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family…, and the circumstances of the case shall include any change in any of the matters to which the court was required to have regard when making the order to which the application relates,"
- S.31(7)(a) which requires the court to consider whether a party can adjust without undue hardship to the termination of periodical payments relates to spousal periodical payments only; the link being to the party in whose favour the order was made this referring back to s.23(1)(a-c) and s.25A(2)
- The well-established approach to applications to vary most orders is encapsulated in relation to periodical payments in Garner v Garner [1992] 1 FLR 573:
"Almost invariably, an application to vary an earlier periodical payments order
will be brought on the basis that there has been some change in the circumstances since the original order was made; otherwise, except in exceptional circumstances, the application will, in effect, be an appeal. If an order is not appealed against, or is made by consent, then the presumption must be that the order was correct when made. If it was correct when made, then there will usually be no justification for varying it unless there has been a material change in the circumstances."
- It is undoubtedly correct that on a variation application as on an initial application the court has a wide discretion; it must consider all the circumstances of the case. The Court of Appeal has described it as 'almost unfettered' [Harris] and the court is not required to proceed from the starting point of the original order but looks at the matter de novo [Flavell] and will take into account the facts, reasoning and outcome of the original order.
- The approach of the court in looking to see whether the applicant for a variation has established a material change in circumstances is inevitably context specific and to some degree subjective. They will though be ascertainable by reference to the criteria the court was required to consider at the time the order was made and in particular the financial resources and obligations of the parties at the time and in the foreseeable future and whether there has been a material change from that starting point. A court considering an application to vary will potentially be confronted with a huge variety of cases ranging from those where the application to vary follows rapidly on from the original order and is little more than an attempt to re-run arguments made at the original hearing through to applications brought many years after and where there has been a hugely significant change (such as the earning capacity of one party being destroyed by illness) and everything in between. The approach the court will take will thus vary accordingly from a summary dismissal through to a complete re-working of the s.25 MCA exercise. The approach which the court takes will be guided by its evaluation of the justice of the case and whether justice requires one approach or the other or something in between. Where the evidence does not support a material change then the court is likely to adhere closely to the original order as a starting point and potentially an end point. Where the evidence demonstrates a really material change the original order may be little more than a contextual detail and of little relevance. As Mr Dance's Position Statement records the court has "enormous flexibility" to determine the nature of a substantive hearing on an application to vary, in particular as regards an application made relatively soon after the original order, such as to deal with a case proportionately and fairly in line with the overriding objective Morris v Morris [2017] 1 WLR 554.
- In James-v-Seymour [2023] EWHC 844 (Fam) Mostyn J made clear that his CSA formula approach did not apply to variation applications.
"If the application is for a variation of an existing child maintenance order, the AFM should not be used. The terms of section 31(7) Matrimonial Causes Act 1973, and of para 6(1) of Schedule 1 of the Children Act 1989, require identification of the changes of circumstances since the original order was made. This means that the value of the original order adjusted by inflation should normally be used as the CSSP."
Mr Harvey notes that Seymour was the successor to the CB-v-KB case that Mr Cusworth KC referred to in his judgment dealing with child maintenance. Mr Dance submits that Mostyn J was not dealing with cases where the income threshold had subsequently been missed which he says is the case in this instance and thus the Seymour approach and the CMS formula should be the starting point.
Discussion
- I have read the parties' witness statements and their Forms E along with other documents from the Bundle (534 pages), read the Skeleton Argument and Note and listened to submissions. I do not consider it necessary to set the evidence out separately; that which is most relevant is incorporated in the summary of the parties' submissions and this discussion.
- Returning to the 'natural' order of consideration set out above, what then is the position in relation to the issue of whether the maintenance order has ceased to have effect by reason of a child maintenance calculation having been made? Is the father right that the effect either of the annual review or his 'application' by telephone generated an assessment so as to have the effect of terminating his obligations under the order, replacing it solely with a CMS liability and requiring the mother to apply afresh for a new 'top-up' order?
- A maintenance calculation is defined in s.54 CSA 1991 as a calculation of maintenance made under this Act which refers back to s.4 CSA 1991, and so the maintenance calculation emerges following an application to the Secretary of State for a maintenance calculation to be made. It seems that the scheme also provides for an 'Annual Review'. Neither party provided me the legislation, Regulations or Guidance which clarified what an annual review amounted to for the purposes of determining whether a 'maintenance calculation' had been made. Did each annual review result in a 'maintenance calculation' such that any order ceased to have effect on the effective date of the maintenance calculation? If that were so the annual review issued in or about March 2021 would have had the effect of discharging the child maintenance order. Or did an annual review which resulted in a different sum being due lead to the issuing of a maintenance calculation but an annual review which resulted in the same sum being payable not amount to a maintenance calculation?
- The Child Maintenance Calculation of March 2020 appears at [81] and states that it relates to 'a child maintenance application' made for the children. It records 'We've now worked out how much children maintenance [the Father] must pay'. The sum is recorded as weekly maintenance payable of £280.
- On 26 February 2021 a document entitled 'Annual review of child maintenance' was issued by the CMS stating, 'We've now completed the annual review of your child maintenance'. The sum payable was £280pw.
- On 28 February 2022 a document entitled 'Annual review of child maintenance' was issued by the CMS stating, 'We've now completed the annual review of your child maintenance'. The sum payable was £280pw.
- In his letter of 21 June 2022, the father said
I have started the application to the Child Maintenance Service for them to assess the level of child maintenance payments in case we cannot agree the £1,500 per month figure. If we cannot reach an agreement, then I will pursue the assessment through the Child Maintenance Service and make payments in line with the calculation they provide.
- On 27 Jan 2023 the father said this
I have been in contact with the Child maintenance service about change in financial circumstances and change in household (the birth of my 4th child) On both occasions they made an assessment (last year and the latest one 26th Jan this year) and re-iterated the amount I should pay in total was £1,216.67/ month.
- On 27 February 2023 a document entitled 'Annual review of child maintenance' was issued by the CMS stating, 'We've now completed the annual review of your child maintenance'. The sum payable was £280pw.
- The content of the father's email of January 2023 and the fact that the document which emerged on 27 February 2023 was the same as previous annual review documents does not suggest that a formal application had been made as presaged in the June 2022 letter or as required by s.4 CSA 1991 but rather some internal CMS process had again been completed. This is more in accordance with the narrative of the father's statement and the absence of any documentation emerging from the CMS which referred to a new application or which notified of a new maintenance calculation arising from a new application. Mr Dance in his Skeleton appeared to accept that there had to be an application by the father to generate a child maintenance calculation which would discharge the maintenance order.
- Given the absence of any real attention to this in the father's arguments which would enable me to give fuller consideration to the issue, I am left with the tentative conclusion that the Annual Reviews do not constitute a maintenance calculation within the meaning of CSA 1991 ss4 and 54 and Reg 3(2) CSMAJR and this would not mean the April 2020 maintenance order ceased to have effect. Although the issue may strictly be a matter of law the father has not equipped the court with either the evidence or the submissions which enable me to confidently determine the point.
- If I am right in understanding Mr Dance's position, then if the father has to establish as a fact that he has made an application which has led to a child maintenance calculation then on the basis of the father bearing the burden of establishing those facts I am not satisfied on balance that such an application has been made. As I have noted before, the parties' preparation for the case and their acceptance of a summary process necessarily means the enquiry has not turned over very many stones but the lack of details about the application, in particularly any documentary record confirming a new application made and particularly given the father's relative lack of reliability, or tendency to 'spin' facts in a way which supports his then position when it comes to his assertions about important matters of finance, lead me to conclude that I am not satisfied (if such is necessary) that a relevant application has been made for the following reasons:
a. no document emerged either to him or to the Mother to confirm that a maintenance assessment had been issued at that stage. It seems highly improbable that an event which would have the consequence of discharging a court order could properly occur through a unilateral telephone conversation.
b. the father's evidence in his statement could as easily be reflective of a discussion about whether the maximum assessment would be disturbed by a change in circumstances and with the net result being that the maximum assessment remained undisturbed and no new assessment resulted from it.
c. the father's credibility is subject to some concerns. At best it may be characterised as spin, through suppression through to misleading non-disclosure. His assertion in the summer of 2022 that he was not expecting a substantial bonus and that was a reason for revisiting the child maintenance, when he was expecting to receive a £1 million bonus and did not disclose that to the mother, is one example; as are the bleak prospects for raising money that were put before Mr Cusworth KC which were subsequently shown to be inaccurate both by the very substantial bonuses subsequently earned but also by the taking of a loan of in excess of £7 million when Mr Cusworth had been told that a loan would not be possible. Dancing on the head of a pin of course Mr Cusworth was told that no loan could be secured against his shares. In fact within weeks of the judgment the Father began to take loans from B Ltd.
- Given the father said in April 2020 that he had no '… intention of applying to the CMS for a CMS calculation in substitution of the periodical payments payable under paragraph 53 below' that seems not only to be the right outcome evidentially but also the right decision in terms of the justice of the matter.
- The effect of the argument that a review amounts to an assessment would be that notwithstanding that section 8 of the CSA 1991 preserves the jurisdiction of the Court in cases where there has been a maximum assessment, each maximum assessment issued on an annual review acts as an automatic discharge of the child maintenance order forcing everyone to go back to the beginning, issue a Form A, exchange disclosure, and have up to three hearings, before a Court can again determine the maintenance order it should make. As judges have a somewhat longer attention span than a goldfish circumnavigating his bowl, it seems inevitable that such a process would (absent a material change in circumstances) result in maintenance order v.2 being issued at the same level as v.1 (index linked), or on further order or on further order etc etc. At some stage with fuller argument perhaps it will be necessary to establish whether that time consuming and wasteful process is required by the legislation but as Aragorn said outside the Black Gates of Mordor "Today is not that day". If in fact the position is that only a fresh application can generate a child maintenance assessment which discharges a child maintenance order, then as I have said above I am not satisfied that the father has established that such an application and assessment was made.
- Happily that unfortunate lack of clarity as to the legal position matters not as there is an alternative route to a conclusion. As the father identified in his statement it is a rather sterile argument in the end, because the court can in the event that the maintenance order had ceased to have effect issue a fresh maintenance order under s.8 CSA back-dated to 26 February 2021, which would be the date the maintenance order ceased to have effect if the father's argument that the review amounted to a maintenance calculation within the meaning of CSA 1991 ss4 and 54 and Reg 3(2) CSMAJR was correct; or to June 2022 when he said there was an application and assessment. That he continued to pay the maintenance as per the order from Feb 2021 through Feb 2022 until May 2022 would suggest the father himself did not think that the Annual Review had brought the child maintenance order to an end. This of course would be consistent with the Recital to the April 2020 order in which he said he had no intention '…of applying to the CMS for a CMS calculation in substitution of the periodical payments payable under paragraph 53 below'.
- A point raised by Mr Dance which might be relevant to this strand is that if the child maintenance order has ceased to have effect the court is not in the territory of 'variation' and looking for a material change in circumstances but is right back at square 1 in having to undertake an entirely fresh 'blank canvas' evaluation by reference to the section 25 MCA criteria where material change of circumstance is irrelevant and where the court must start from scratch. As the father has not satisfied me that the maintenance order has ceased to have effect we are in variation not virgin territory. But even were the father's case correct, I do not accept that in determining the right level of maintenance the court would go back to square one. In substance the application is for a variation arising out of an alleged change in circumstances. It would be wholly disproportionate for the court to start from scratch in such circumstances (and in particular where the parties have recited an intention not to apply to CMS so as to discharge the order and have continued as if it remained in force) and I do not accept that the law is such an ass in this case (although as the Supreme Court identified at para 30 of the Potanin case it sometimes can be) and, taking into account the discretion the court has as to its processes and the proportionality of its approach, I am satisfied that the proper approach to an application brought in these circumstances is to take the original child maintenance order as the starting point and to approach the case on the basis of a variation application, where the court is looking at all the circumstances with first consideration being the welfare of the children, but where the central focus of the enquiry is whether the father has established a material change in the circumstances since April 2020 which lead the court to conclude a downward variation is just and appropriate. Given the father invited me to continue without oral evidence (which really would not be appropriate on a blank canvas s.25 evaluation) and without detailed submissions on the CMS framework, I do not consider this approach does any injustice to the father.
- How the court approaches the evaluation of the s.25 MCA factors is not fixed but takes account of the context in which the application is made; 'all the circumstances of the case' enables a broader perspective to be taken. Of course in most cases when the application is before the court for the first time this is likely to involve a more detailed consideration of the current and future financial resources and needs, but in a case such as this where several days of court time have been devoted to the determination of the parties' finances, if the matter returns the court is likely to pay considerable regard to the outcome of that process and may properly consider that a blank canvas approach was not appropriate because the canvas had already been painted in many respects which remain relevant. To that extent even if the application technically fell into the category of an application for child maintenance rather than an application for a downward variation, the approach in practice might be largely the same as the court must have regard to all the circumstances of the case , first consideration being given to the welfare of while a minor any child of the family' although the court would as required ensure that it did not focus exclusively on 'any change in any of the matters' but had regard to all the circumstances.
- On the basis of my conclusions earlier I am dealing with a 'true' variation application rather than a technically 'de novo' maintenance application and in considering whether there has been a material change in the circumstances one is taking account of all the circumstances but focussing in on the facts of this case as to
- Income, earning capacity property and other financial resources which each of the parties have or is likely to have in the foreseeable future but where the father's income and earning capacity is front and centre
- The financial needs, obligations and responsibilities which each of the parties have, in particular the father's needs and the children's financial needs.
Father's Financial resources
- It is an oddity of this case that the father, who has proven so efficient in the world of trading at predicting the future so as to make very substantial profits and to grow his interest in B Ltd from an initial stake of £2m, has been less successful at predicting his own future finances. In 2020 he predicted his future income would not be comparable to the past, suggested it would be difficult to liquidate his interest in B Ltd so as to release capital and that B Ltd as a proprietary trading company had a shelf life that was expiring and that its future was unpredictable. As it happens he was wrong on all of those as his bonuses were very substantially larger than the 3 years before 2020, he was able to pay out the mother's lump sum in a period of just over a year rather than 3 years provided for and the valuation of his shareholding has doubled, B Ltd continuing to prosper greatly within its highly competitive environment.
- That feature (together with others such as his description of a £1m bonus as not being 'substantial') lead to me to consider very carefully the father's assertions about his current and predicted future financial condition.
- He says 'It is difficult to estimate my income for the next 12 months as it depends on my and B Ltd's performance, but my best estimate at this stage is that I will be paid my salary plus a bonus of c.£500,000 gross in the financial year 2023/2024.'
- Given the conservatism of the father's historic predictions in particular the inaccuracy of his prediction for his bonuses in the future I do not think it is safe to place too much weight on the father's own self-serving assessments. In 2020 he had received bonuses totalling around £3m in the preceding 3 years (2018-2020 inc). If one were to have taken the father's assessment of his future bonuses one might have predicted substantially less than £3m. As it happens the bonuses he was paid amount to over £22m so diametrically the opposite of his prediction (although included within that is 2022 and 2023 which were both significantly less).
- The father's case on the variability of the trading success of B Ltd in itself illustrates the problem of viewing his income through the lens of a 1 year period. As he himself says his income fluctuates dramatically. It seems clear that a better gauge of the father's income is looked at over periods of 3 or 5 years. If one applies that rule to the father's income one sees I think a more reliable indicator of income and by that measure the father's estimation of his net income being limited to £430,000 a huge underestimate - although that is in the territory of the 2019 figure. If the father were to have a good year in 2024/25 - akin to 2021/22 or 2016 his bonus might be £5-14m; if he had a year closer to 2017 or 2018 it might be £2m.
- The overall conclusion that seems clearly to emerge from the 8 years of information available is that the father's income will range from lows of around £0.6m gross to highs of £5m plus and where a net income averaging over a 5 year period of £1.7 m would not be unusual (his average net income in 2018-2023 is just over £2m, (para 23(vii) above) and his average gross prior to the judgment would be broadly the same [Judgment para 18] – roughly £1.4m net).
- If his average net income going forward is anything close to the averages he has experienced in the past, then his assertion that maintaining these levels of payments are unaffordable does not stand up to scrutiny. Even if they are substantially lower - £1m net – he would have a substantial surplus. He may currently be experiencing a cash flow issue he being in a trough but the likelihood is that the trough will end as it has in the past and the cycle will revert to the upward leading to a significant peak.
- Given his own outgoings are estimated at £451k and adding in child maintenance of £83k and school fees of £75k odd his total expenditure would be around £610k leaving a very substantial surplus with a net annual income of £1.7m; or even with a net annual income of £1.4m or £981k. Only if the father is having one of his worst years does he face a problem and if he had a run of bad income years that might become critical but that is not the pattern of the previous 10 years and on balance is unlikely to be the case in the future. Only if one narrows the focus to a particular year – a bad year (that being relative by most standards) then one can see the father has a problem but looked at on the basis of the father's own evidence of a wildly fluctuating income ranging from 8 figures to 6 figures it does not bear scrutiny and it is for the father to lay in provision from the good years to cover the bad years. Part of the problem the father has (at least superficially) is that his rush to pay off the mother has used up his very substantial bonuses thus depriving him of the accumulation of funds that would have enabled him to pay the child maintenance through the leaner years. That was his choice, and the child maintenance and education provision is not to be reduced by the mother benefiting in early lump sum payment and whatever advantage the father found in paying her early (see below).
- The father has borrowed over £7.5m interest free from B Ltd. How B Ltd will treat this in future is a matter of conjecture. On the face of it B Ltd seek its repayment although they have indicated the term of the loan can be extended. Given the working capital of the firm and operational expenditure [para 19 F's Statement] that B Ltd was able to advance this sum simply to enable the father to pay the mother off early and with no commercial advantage to it, suggests B Ltd is able to operate without impact with such a loan outstanding and begs the question of how it might be treated in the future; might it be converted into a bonus, might repayment not be sought? The taking of significant loans by directors or significant shareholders seems a not uncommon vehicle to extract value from a company.
- Given the father's financial acumen I find it hard to accept the suggestion that the early payment to the mother was done altruistically. What the actual reason was I do not know as the evidence is not there, but it seems probable that the father saw some clear financial benefit to himself in paying it off early whether that related to reducing the interest payable or some intrinsic value to him in the mother no longer having any power over him in disclosure terms I know not, but the father does not appear to be a man who would act to his financial detriment in order to benefit the mother. Thus, in acting as he did in the deployment of the sums he received I conclude it is likely he saw some medium to long term advantage which exceeded the short term disadvantages of deploying his bonus and loans in the way he did.
- At the time of the hearing in April 2020 the most significant resource which occupied the majority of the parties' focus and attention was the interest in B Ltd. At that time, it was worth £40m odd. It has prospered greatly, and the father's shares have increased in value to nearly £90m. Whether that is passive growth or growth generated by the father's and others' activities is neither here nor there. The mother has her capital in liquid form; had the father elected to accept her offer of retaining shares she might be on paper significantly more wealthy and he might be significantly more liquid but that was an election of his. It is a matter for him as to how he releases some of that value. This is a financial resource which is available to him - how he chooses to make it liquid is a matter for him but the court must place weight on the fact that his financial resources have more than doubled in the 3 years to a very significant sum which dwarfs the sum the mother has in liquid capital. I have no idea what discount might appropriately be applied - no evidence was adduced by the father nor any submission made but it seems improbable that it would be something in the region of 80% to get him down to a realisable sum - somewhere close to the £15m the mother has.
- Thus if one adopts a broader and I think more accurate perspective of the father's income and financial resources that he has or is likely to have, his case that his finances have deteriorated to such a material degree that the child maintenance order should be varied for that reason are not established.
- Although I do not need to determine the issue, if the father is right that the child maintenance has been discharged by operation of the legislation then the question arises of how the court should approach a reassessment. The father contends that the court must start from scratch and use the CMS formula as the starting point. Even if one were to start from scratch taking an average for his past income and future expected income brings us back to a figure in excess of £1.7m and so well outside the CMS formulas and the Mostyn formula but rather into the territory that Mr Cusworth KC was originally in when he made the index linked order of £35k pa. I see no reason to depart from that starting point and thus the index linked re-assessment brings us to the same sum as the original order would produce.
The mother's finances
- The father laid considerable emphasis on the alleged disparity between his illiquid, cash poor position and the mother's liquid capital (and capital derived) income rich position. The flaw with this contention though is that it does not constitute a material change in her position; she is in precisely the position the court expected her to be. Her capital position has been filled by the father's early capital payments, but she is in no better position than that on which Mr Cusworth KC made his order. I do not consider that there has been a relevant change in the mother's financial position on which the Father can rely to support his variation application.
- Nor do I consider there to be any 'material' change linked to the father's reliance on the time split between the mother and father altering. This was firstly a known fact at the time of the order of April 2020 as was the change in schooling. Boarding for older children is commonplace and self-evidently more expensive. I do not therefore consider that these facts have altered in a way that was not predicted or foreseen since the original order was made and the father cannot rely on these as a material change in the context of the facts as a whole.
- Nor if one were looking at all the circumstances of the case in a blank canvas case would there be an adverse comparison. What is the value of F's shares (growing at 33% per annum) compared to £15m in cash growing at, say 4% per annum?
- I do not consider it necessary to engage with the point raised by Mr Dance that as the mother has surplus capital beyond that required to meet her own needs this should be brought into account in meeting the children's needs - it was a point that was capable of being made in 2020 and was not - it is not open to the father now to argue that because the mother has received the capital envisaged in that judgment that there is now no need for child maintenance when the father conceded that top-up child maintenance was appropriate then and no appeal was made against the level at which it was set. As it happens the mother has £15m in cash – the father has nearly £90m in the net value of his shares.
The father's needs and obligations
- It is clear that the father's position has changed to an extent since 2020 in that he has another child, his son has needs, and his wife is unwell. His financial needs have increased quite significantly if one compares the 2020 Form E and his current Form E. However whether that is a material change has to be gauged against the financial resources which are available to meet those needs and obligations.
- His total outgoings now only marginally exceed the lowest level of his estimated income which itself is vastly below his historic position. Of this £451k, £134k is school fees including £50k per annum for his son which he says he no longer pays; £14,400 taxis for his children, £24k for children's holidays, £61k for staff including a nanny (there does not appear to be any apportionment of these expenses with his wife). His Form E in 2020 included his outgoings at £184k - the significant increases include staff £25- 62k, his mother at 24k, school fees from £28k - 134k, holidays 11k - 36k, taxis for his son at 14.4k. The father's assertion he could not afford to pay towards the purchase of his new home is inaccurate. He elected to pay the sums to the mother substantially earlier than was ordered rather than contribute to the property purchase. It seems the father took a mortgage to pay for his mother's home of c.£850k and pays £24k pa on her mortgage. In addition, he pays the mortgage on his own home of c.£2m with annual repayments of around £80k on that. It is not clear what if any contribution his wife makes to the outgoings. It seems rash to commit to such large outgoings without being tolerably sure of having the income to service them alongside other commitments and the father does not appear to be rash when it comes to finances but rather a carefully calculated risk taker.
- I am not in a position to gauge the relative importance of F's son remaining at the private centre but many (indeed most children) will find themselves in the state sector and he should receive appropriate support. The children's education should not be affected by the father's choices in relation to his second family. I note that the father does not say that if the mother contributed 50% or indeed all of the girls' school fees that he would place his son in the private sector although it may be said this is implicit in his withdrawing him from it. In any event on my assessment of the father's financial resources either from income or otherwise the medium term position is that he can afford the fees; it is simply a question of asset management as to how he achieves that.
- The assertion that the mother is no longer the resident parent and the father the NRP would appear to be more an issue for the CMS, but the fact of boarding does not necessarily mean a child does not still have a main home and thus a resident parent.
- The father's attack on the sum originally awarded by Mr Cusworth KC is not open to him. No appeal was made about the basis of the calculation or the sum although the mother did seek permission to appeal in relation to the valuation of B Ltd and it is not open to the father to argue that the original sum was wrong in principle. Given the father's own figures for taxis for his son are nearly double the eldest child's Ubers to boarding schooland his figures for a nanny and cleaner are 6 times the mother's for an au pair (and his wife is the mother of his two children) this seems an ill-aimed criticism.
- I do not accept that any of the matters the father relies on in relation to his needs and obligations amount to a material change when viewed against the measure of his average past and likely future income and the financial resource that B Ltd represents.
Enforcement
- Has the father established that he was unable to pay the sums due from June 2022 onwards? On the evidence of the sums in his bank accounts he clearly was able to pay it - it was a question of what he prioritised. His own budget for flights etc would have made up a large part of it if he was really stretched. The receipt by him of £1m bonus in 2022 must have given him the ability to pay. He has repaid his mother £64,000 of the sums borrowed in priority to child support when he is paying her mortgage for her at £24k pa according to his Form E. In December 2022, F erroneously transferred £50,000 to M. Upon request, M transferred the entirety funds back to him, notwithstanding that the arrears under the order then stood at more than £30,000.
- It is clear that the father was able to pay the child maintenance it was his decision as to priorities which led him to withhold payment.
Conclusion
- Taking account of all the circumstances, including whether the father has shown a material adverse change in his financial position or his needs and obligations or a corresponding positive change in the mother's financial position, I am driven to conclude that there is no basis established for re-visiting the maintenance order that Mr Cusworth KC ordered in April 2020.
- Taking into account the father's own evidence of the fluctuating nature of the rewards he receives from B Ltd and the very significant increase in the value of his interest in it the father's overall financial position has altered in his favour over the years since 2020. The reward cycle may currently be in a trough but history supports the conclusion that looked at over 3 or 5 year periods the father's income and capital are still moving in an upward trajectory in his favour. The spin he places on his own appraisal of his finances is a legitimate reason for the mother to be cautious about his assertions without clear evidence to back them over an appropriate period of time. I can see why she takes that view.
- Having regard to the materially better financial position he is in viewed over the medium to long term rather than the short term the change in his needs and obligations is not material.
- There is nothing which amounts to a material change in the position of the mother or the children having regard to what was known or anticipated in 2020 and the father's current finances.
- The father's contention that he cannot meet the payments by reason of an adverse change in his financial resources or an increase in his financial obligations is not established so as to justify a downward variation. His application is refused.
- If I were wrong on the issue whether the child maintenance order had ceased to have effect by reason of a child maintenance calculation having been made and the court being required to consider an application for a fresh top-up order, I would having regard to all the circumstances be persuaded that the order made by Mr Cusworth KC was still the proper starting point and would have issued a fresh order back dated to 1 July 2022 or whichever date is the relevant date for the ending of the order.
- The mother's application for enforcement of arrears is granted. The father must pay the arrears within 28 days. They stood at £57,310 at the point of issue and will have increased since.
- That is my judgment.
