DN v UD€ (Sch 1 Children Act: Capital Provision)

Under Children Act 1989, Sch 1, financial provision is directed to the child’s needs and dependency. It may include provision for the primary carer where that is necessary for the child’s care, including housing and a carer’s allowance. The court must assess the case broadly and consider all the circumstances, including the child’s welfare and the parents’ resources and standard of living.

Capital provision extending beyond minority or tertiary education is exceptional. It requires a continuing vulnerability or dependency attributable to the child’s circumstances. Exceptional wealth alone is insufficient. In an appropriate case, protection from a parent’s likely financial control may justify an outright capital award.

The mother applied under s 15 and Sch 1 to the Children Act 1989 for financial provision for three children, including housing, periodical payments, lump sums, security and capital provision. The father accepted that he could meet any reasonable award, so the principal disputes concerned reasonableness, jurisdiction and the appropriate form of relief.

The issues included whether the family home should be retained and settled on trust, whether orders could be made for children who had reached 18, whether capital could be provided beyond dependency, and whether the children’s vulnerability arising from the father’s abusive and controlling behaviour constituted exceptional circumstances.

1. Jurisdiction. An application made under Sch 1 before a child reaches 18 gives the court jurisdiction to determine the application, including after the child reaches 18. The court therefore retained jurisdiction to make orders for TD, who had turned 18 during the proceedings. It had no jurisdiction to make orders on the mother’s application for DD, who was already over 18 when the application was issued. The proposed Convention-rights interpretation could not properly be undertaken on the arguments presented and might require a declaration of incompatibility.
2. Scope of benefit. Provision for the child may necessarily confer a consequential benefit on the primary carer. Housing for the child may therefore require housing for the carer, and a carer’s allowance may form part of periodical payments. The court must guard against disguising provision for the mother as provision for the child.
3. Assessment. The court applied Sch 1, para 4 and considered all the circumstances, including welfare, the children’s established standard of living and the father’s resources. In a high-value case the court should take a broad and realistic view rather than undertake sterile item-by-item analysis. It awarded £200,000 per annum, apportioned between the children and the carer’s allowance, with indexation and backdating.
4. Housing. The London Apartment was the children’s established family home and met their physical and emotional needs. In light of the father’s controlling behaviour and attempted eviction, the home had to be independent of his continuing control. It was ordered to be settled on trust for the mother and children until six months after completion of tertiary education, including a gap year.
5. Post-dependency capital. The usual rule is that capital provision should end with minority or tertiary education. The exception is confined to special or exceptional circumstances relating to the child. The children’s continuing vulnerability, emotional injury and the probable risk of future financial coercion by the father justified capital provision designed to give them financial independence. A fund of approximately £650,000 for each child was appropriate, subject to the final mechanism being settled.
6. Other relief. The court awarded sums for a replacement car, security, refurbishment of the Russian home, reasonable expenses incurred for the children’s benefit and defined capital needs. It rejected claims concerning DD, the mother’s jewellery and expenses for the mother’s own Russian litigation. The non-molestation order was extended for two years.

First-instance determination in the High Court (Family Division). The judgment records earlier fact-finding and case-management decisions within the same proceedings, including the fact-finding judgment of Recorder Genn and interim orders, but no appeal from those decisions.