Family Law

A long time ago, in a galaxy far, far away, the Thatcher Government fixed its sights on child maintenance. In January 1990, in what was to be her last year in office, Mrs Thatcher (as she then was) spoke about the scandal that ‘…nearly four out of five lone mothers claiming income support received no maintenance from the fathers. No father should be able to escape from his responsibility and that is why the Government is looking at ways of strengthening the system for… making the arrangements for recovering maintenance more effective’ (National Children’s Homes Memorial Lecture, 17 January 1990).

The Government proposals were duly set out in Children Come First, which promoted the creation of a statutory agency (the Child Support Agency (CSA)) to administer child maintenance in a modern and efficient way. Section 8(3) of what was to become the Child Support Act 1991 removed the power of the court to deal with child maintenance, in cases where the CSA had jurisdiction, save for where one of the handful of exceptions at s 8(6)-(9) applied.

However, the road to hell, as the proverb relates, is paved with good intentions. The CSA (latterly the Child Maintenance Service (CMS)) ranks alongside the Poll Tax as arguably the most disastrous achievement of the later Thatcher Years. It has proven inordinately expensive to run, massively inefficient and, despite numerous legislative attempts at reform, remains largely unfit for purpose (see, for example, the recent judgment of Mostyn J in Green v Adams [2017] EWFC 24, [2017] 2 FLR 1413).

Global maintenance

This article considers the global maintenance order, the judicial workaround whereby, in a case where the CMS had jurisdiction to make an assessment but had not already done so, periodical payments are ordered to cover both spousal and child maintenance, to be reduced pro tanto (Latin: ‘for so much’) by any later child maintenance assessment.

The jurisdiction rests on a single case: Dorney-Kingdom v Dorney-Kingdom [2000] 2 FLR 855 in which the Court of Appeal held that a global order must include a substantial ingredient of spousal support (ie it could not be made where the spousal element was only nominal). Per Lord Justice Thorpe:

‘[14] … A practice has grown up, finding its origins before District Judge Segal in the Principal Registry, to make an order for spousal maintenance under s 23(1)(a) of the Matrimonial Causes Act 1973 that incorporates some of the costs of supporting the children as part of a global order. When a ‘Segal order is made an important ingredient is that the overall sum will reduce pro  tanto from the date upon which the Child Support Agency brings in an assessment. The utility of the ‘Segal order is obvious, since in many cases the determination of the ancillary relief claims will come at a time when the Child Support Agency has yet to complete its assessment of liability. It is therefore very convenient for a district judge to have a form of order which will carry the parent with primary care over that interim pending the Agency’s determination.

[15] The proscription on the court making orders for child periodical payments other than by agreement, expressed in s 8(3) of the statute, could be said to be challenged, if not breached, by the mechanism of the Segal order. However, it seems to me to be just within the bounds of legitimacy, since it is no sort of ouster of or challenge to the jurisdiction of the Agency, but merely a holding until such time as the Agency can carry out its proper function. But it seems to me absolutely crucial that if legitimacy is to be preserved, there must be a substantial ingredient of spousal support in the Segal order.’

The case against global maintenance

First, that (according to District Judge Segal) the Court of Appeal had either misunderstood or been misdirected about the practice of making a ‘Segal order’. In an article published shortly after the decision in Dorney-Kingdom (‘Segal Orders’ [2002] Fam Law 923), DJ Segal wrote:

‘[I]t became clear that the Segal order was widely misunderstood, possibly because of an unintentionally misleading precedent in the Solicitors Family Law Association (SFLA) book of precedents. Indeed, no less an authority than the Court of Appeal, in Dorney-Kingdom v Dorney-Kingdom [2000]  2 FLR 855, referred to a Segal order as though it were an order for periodical payments to a parent (usually the mother), which included in the mother’s order the amount that the court thought that the father should pay for the child, but which the court could not order him to pay to or for the benefit of the child, because of the Child Support Act 1991. But a Segal order does not include the child’s periodical payments in the mother’s order. If the Child Support Agency (CSA) has jurisdiction to make an assessment, as it will in the majority of cases, the court cannot include the child's periodical payments in the mother's order, as the Court of Appeal made clear in Dorney-Kingdom. The only exception is this: on an application, early in the ancillary relief proceedings, where there has been no CSA assessment, no first directions hearing and no disclosure, if a parent applies for maintenance pending suit or interim periodical payments, the court may – as a short-term measure – make an order in favour of that parent, which includes an element of support for the child, but I stress that this is a short-term order.’

Secondly, that while a global maintenance order is often useful (ie setting the total amount which will be paid by way of spousal and child maintenance), it may lead to unfairness in fixing the global amount which will be paid, regardless of what assessment the CMS makes. In other words, if the global order is £1,000 per month and the CMS in due course assesses child maintenance at £400 per month, the paying party might pay £400 through the CMS and £600 (ie £1,000 less £400) by way of the order. However, if the CMS assesses child maintenance at £50 per month (eg because of the payer’s income or because of the number of nights he spends with the children), the payer would still pay £1,000 in total: £50 through the CMS and £950 (ie £1,000 less £50) by the court order. An application to review the total amount payable would involve a potentially lengthy and expensive application to vary pursuant to s 31 of the Matrimonial Causes Act 1973.

Thirdly, that the court does not have jurisdiction to make an order simply because that order is useful. Otherwise, the court could make interim lump sum orders: per Wicks  v Wicks [1998] 1 FLR 470: ‘…although there was undoubtedly a need in some cases to make interim capital provision, the court had no jurisdiction to do so’ (since that decision, the law has moved on in terms of the ability to make interim provision: BR v VT [2015] EWHC 2727 (Fam)).

Fourthly, global orders for maintenance often lead to problems in practice, especially where there is no apportionment between the spousal and child maintenance elements; where for example, a child changes residence or where the term for the spousal component differs from the child maintenance component of a global order.

AB v CD

These arguments were considered by Mrs Justice Roberts in case of AB v CD (Global Maintenance Orders) [2017] EWHC 3164 (Fam), which is (to the writer’s knowledge) the first case in which the jurisdictional basis of a global maintenance order was challenged.

The facts of the appeal can be stated briefly: both parties were lawyers; the husband was a partner specialising in commercial and corporate law; the wife’s background was in employment and discrimination law but she was not currently working.

Following a four-day final hearing, His Honour Judge Everall QC (hereafter ‘the judge’), divided the net capital assets of £1.8m in the wife’s favour (approximately 61%) and ordered global maintenance at a level (£3,250 pm) which, once school fees, housing costs and employment costs were met, would leave the wife with a substantially greater net income than the husband.

The husband appealed on three grounds: first, that the court had no jurisdiction to make a global maintenance order; secondly, that the court erred in setting the level of periodical payments; thirdly, that the court erred in its capital distribution and should now consider making a Mesher order to partially redress the balance.

In a detailed judgment which considered the jurisdiction to order global maintenance, Mrs Justice Roberts found as follows:

‘[Did] not purport to restrict the right of any person to apply for a maintenance assessment. Indeed, it recognises that right and the supremacy of a child support maintenance assessment. However, it goes on to do what the child support scheme does not cover. It adjusts the absent parent’s overall financial obligations in the light of the child support maintenance assessment. This is a power that is left to the courts. The court order anticipates that a child support maintenance assessment may be made and makes provision to avoid the need for the parties to return to court in order to vary the order for spousal maintenance. This it achieved by tying the payments of maintenance to the parent with care to the absent parent’s liability in respect of their children, so that if the latter increased the former reduced. There is general support for my conclusion that this is not caught by section 9(4) of the Child Support Act 1991 in Smith v McInerney [1994] 2 FLR 1077’ (pars 46)

In the circumstances, the appeal was dismissed, both in relation to the first, jurisdictional ground (para 49) and (for other reasons) the other two ground (para 68).

Conclusion

The significance of the decision in AB v CD is as follows:

• First, that the first decision of a higher court to consider the jurisdiction to make a global maintenance order (as opposed to Dorney-Kingdom, where the jurisdiction was not at issue) has concluded that the orders are permissible;
• Secondly, the practice of making global orders which have a long-term effect is upheld, in spite of the extra-judicial comments of District Judge Segal (who may be considered the originator of the practice), to the effect that Lord Justice Thorpe’s comments in Dorney-Kingdom were per incuriam; and
• Thirdly, the increasing importance which is being attached to the drafting of standard orders. See also Mostyn J in CH v WH [2017] EWHC 2379 (Fam) in which the power to order an indemnity was also approved.