Family Law Week July 2013 - 1 July 2013 News 1 Articles

Finance and Divorce June 2013 20

The Revised Public Law Outline 27 .... and this time they mean it

NEWS People married or in civil Care Proceedings: the 30 Operation and Effect of Pre- partnerships are ‘happier’ than Proceedings – What do lawyers singles or cohabitants, says Generation of children put at ONS publication Stripping Away the Veil of 33 risk by legal aid cuts, warn Deceit: Prest v Petrodel family lawyers Measuring National Well-being – What Re B (A Child) – Social 40 matters most to Personal Well-being?, Engineering or Proportionate Response to Risk of Future published by the Office for National The Independent quotes the views of Statistics, based on the Annual several family lawyers who warn that the Children: Private Law update 45 Population Survey collected between withdrawal of legal aid by the Legal Aid (May 2013) April 2011 and March 2012, reveals that Sentencing and Punishment of Offenders Rule 25.1 and the President's 50 married people and those in civil Act from most divorce and children Guidance in H-L - A 'necessary' partnerships rate their 'life satisfaction', evil? private law proceedings is likely to put the sense that their activities are children in danger. Divorcing a bankrupt, Part II: 53 'worthwhile' and 'happiness yesterday' where insolvency law meets significantly higher than cohabiting financial remedies The newspaper reports anecdotal couples, single, divorced and widowed evidence that courts are increasingly Cases people. Single people rated their approving the appointment of legal 'happiness yesterday' on average 0.4 of a Z & Ors v News Group 55 representation of children who are the Newspapers Ltd & Ors point lower than those who are married subject of residence and contact disputes. (Judgment 1) [2013] EWHC or in civil partnerships. Widowed 1150 (Fam) There is also a risk, it is claimed, that in people rate their 'happiness yesterday' Z & Ors v News Group extreme cases children could be taken Newspapers Ltd & Ors score 0.6 of a point lower on average than into care as a result of the trauma caused (Judgment 2) [2013] EWHC married people or people in civil 1371 (Fam) to parents in unrepresented disputes. partnerships. The 'anxiety yesterday' T (Children) [2013] EWCA Civ 56 ratings of single, divorced and widowed 618 The Ministry of Justice responded to The people were also significantly higher O (A Child) [2012] EWCA Civ Independent: 1955 than those of married people (between 0.1 and 0.2 of a point higher). Prest v Petrodel Resources 57 "As part of our legal aid reforms we Limited and others [2013] made sure that family cases involving UKSC 34 Holding other factors equal: children at risk continued to qualify In the matter of B (A Child) 58 for funding. This means cases [2013] UKSC 33 Ÿ People who are married or in a civil including care proceedings, the partnership gave higher ratings for T v M [2013] EWHC 1585 59 unlawful removal of a child, and 'life satisfaction', feelings that the (Fam) child contact cases where there is a W (A Child) EWCA Civ 662 things they do in their lives are risk of child abuse or where domestic 'worthwhile', and 'happiness Re H-L (A Child) [2013] EWCA 60 violence has been an issue will all yesterday' than those in the other Civ 655 generally be covered." B v B [2013] EWHC 1232 (Fam) relationship categories.

The Independent report can be read here. Ÿ Re A (A Child) (Vulnerable 61 People who are widowed, divorced, Witness) [2013] EWHC 1694 or separated gave lower ratings for (Fam) 'life satisfaction', feelings that the Re G and E (Children) (Vulnerable Witnesses) [2011] things they do in their lives are EWHC 4063 (Fam) 'worthwhile', and 'happiness yesterday' than other groups. LCG v RL [2013] EWHC 1383 62 (Fam)

Re L and M (Children) [2013] 64 EWHC 1569 (Fam) UL v BK (Freezing Orders: Safeguards: Standard Examples) [2013] EWHC 1735 (Fam)

M (A Child) [2013] EWCA Civ 65 GENERAL EDITOR Family Law Week is published by 743 Stephen Wildblood QC Law Week Limited Greengate House Deputy Editor 87 Pickwick Road Claire Wills-Goldingham QC Corsham Albion Chambers SN13 9BY

Tel & Fax: 0870 145 3935

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Ÿ People who are married or in civil Moylan J who heard both applications rules in the FPR concerning disclosure partnerships rate their level of prior to the settlement of proceedings and went on to review the Civil 'anxiety yesterday' lower than described the scope of the dispute, Procedure Rules as well as a judgment other groups. referring to the husband's open offer of Mr Justice Kwan in a Hong Kong that the wife should receive £2 million authority. Ÿ People who live with dependent whereas the wife's proposal was that children on average give higher she receive £120 million. The parties In para 17 of the judgment Moylan J ratings when asked if they feel that settled upon a payment to Mrs ordered that Mr Imerman list the the things they do in life are Imerman of £15 million. documents by category with the dates 'worthwhile', compared to people on which the communications were who do not live with children. The first judgment – Tchenguiz- made. Imerman v Imerman [2012] EWHC Ÿ Those living in households with two 4277 – concerns an application by adult In relation to the "nature of the or more people (including children) beneficiaries of certain trusts to be communications" he considered that rate their 'life satisfaction' more joined as parties to the financial the claim for privilege should, follow highly than those living alone. remedies litigation. Applying rules 1.4 the practice as set out in the Civil and 9.26B of the Family Procedure Procedure Rules so that insofar as a Ÿ Overall, the size of the association Rules 2010, Moylan J joined the adult claim for privilege is made in respect of between relationship status and children as parties but made no order any document or class of documents, or personal well-being could be as to costs. He also held that the minor a part of a document, then it must be described as moderate while the children who were beneficiaries would stated in writing that there is such a relationship between children in have to be separately represented right and the grounds on which that the household and personal well- (although not necessarily that they right is claimed. being is small or very small. should be parties) but adjourned consideration of who should represent He went on to stipulate that the The ONS report can be read here. them to a further date to allow the grounds on which the right to privilege trustees to express their views on the was claimed had to be sufficient to point. enable the wife (with the benefit of advice) to determine whether the right Same-sex marriage sets James Turner QC, Richard Harrison could be challenged. He deliberately precedent for sibling QC, both of 1 King's Bench Walk, and did not set out what information would Dakis Hagen of Serle Court be required to satisfy this requirement. marriage and polygamy, says (instructed by Withers LLP) appeared Lord Carey on behalf of the applicant. Charles Richard Harrison QC and Dakis Hagen Howard QC, Harry Oliver, both of 1 (instructed by Withers LLP) appeared BBC News reports that Lord Carey, the King's Bench Walk, and Jonathan on behalf of the petitioner. Charles former Archbishop of Canterbury, has Hilliard of Wilberforce Chambers Howard QC, Harry Oliver and claimed that same-sex marriage sets a (instructed by Hughes Fowler Jonathan Hilliard (instructed by dangerous precedent which could lead Carruthers) appeared on behalf of the Hughes Fowler Carruthers) appeared to sibling marriage or polygamy. respondent. Christopher Pocock QC on behalf of the respondent. and Laura Moys, both of 1 King's Christopher Pocock QC and Laura The House of Lords is due to debate Bench Walk, (instructed by Mills & Moys (instructed by ills & Reeve LLP) the second reading of the Marriage Reeve LLP) appeared on behalf of the appeared on behalf of the beneficiaries. (Same Sex Couples) Bill on the 3rd adult children. June. To read the judgments and/or the The second judgment – Imerman v more detailed case summaries, written Stonewall has referred to the Imerman [2012] EWHC 4047 (Fam) by Thomas Dudley, barrister, of 1 comments as "regrettable". concerns an application by Mrs Garden Court, please click here in Imerman for disclosure of various respect of the first judgment and here The BBC News report can be read communications which were, she in respect of the second. here. argued, potentially relevant to whether certain trusts were nuptial; and, whether the assets of those trusts were, Further Imerman judgments or were likely to be, available resources determine issues relating to to the husband. Mr Imerman representation of trust contended that those communications were subject to "common interest beneficiaries and privilege of privilege". communications Moylan J's judgment highlights the fact Family Law Week has published two that there is no specific provision in the more judgments in the financial Family Procedure Rules 2010 which remedies dispute between Mr and Mrs governs the issue of privilege. In Imerman which was settled by the considering what direction would be parties in February 2013. appropriate in respect of the communications in dispute, the learned judge analysed the general

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Revised Public Law Outline and Philip Marshall QC assume the Local authority failed to published mantle of joint Heads of what is widely support abandoned child, regarded as one of the top family law sets. Ombudsman finds The President of the Family Division has published a new practice direction Deborah Eaton QC took silk in 2008 Kent County Council failed to provide 36C, which introduces a revised Public and specialises in all aspects of Family proper support to a boy when he Law Outline as a pilot which will run Law and is one of a few silks became homeless after his parents had until 1st April 2014. specialising in both high profile abandoned him, a report by the Local children and matrimonial finance Government Ombudsman (LGO) has The commencement of the revised cases. She is a member of the found. Public Law Outline will be phased and Professional Conduct Committee, a will be determined for each area by its Bencher of the Inner Temple and a The LGO has upheld a complaint from local court. Commencement will be on Fellow of the International Academy of the boy that he was let down by the one of four dates: Matrimonial Lawyers. Deborah sits as council, when it failed to deal with his Ÿ a Deputy High Court Judge in the requests for accommodation and 1st July 2013 Family Division and is a Recorder of welfare support over a two year period. Ÿ the Crown Court. 5th August 2013 In February 2011, at the age of sixteen, Ÿ Philip Marshall QC took silk in 2012 the complainant was made homeless 2nd September 2013 and has experience of complex and after his parents left the family home Ÿ "big money" matrimonial disputes at without making alternative 7th October 2013. all levels and has appeared in the arrangements for his welfare. Whilst he House of Lords on three occasions was offered alternative foster On the relevant date for the particular (including in White and Miller, accommodation at the time from the court, the revised Public Law Outline McFarlane). He is a member of the council, the complainant did not feel will operate on all public law family Money and Property (Ancillary Relief) able to accept this for various reasons. proceedings being undertaken in that Sub-Committee of the Family Justice He therefore continued to 'sofa surf' court. Such proceedings include Council. Philip is the National with friends and relatives. applications for care orders, Secretary of the Family Law Bar supervision orders, variations of Association and a Fellow of the The Ombudsman's investigation supervision orders, contact with a child International Academy of Matrimonial (accessible from the 'downloads' in care, change of a child's surname Lawyers. column on this page) found that the whilst they are in care and the little council did not properly assess used education supervision orders. whether the complainant should be a House of Lords gives second 'looked after' child under its care. The The purpose of the revised Public Law council should have clearly explained Outline is to move such cases towards reading to Same Sex the benefits of becoming a looked after a much debated resolution within 26 Marriage Bill child, and the investigation found that weeks, in accordance with both the there was no record of this taking place. recommendations of the Family Justice The House of Lords has rejected by 390 Review and the Children and Families votes to 148 an amendment which As a looked after child, the Bill. would have had the effect of stopping complainant would have been entitled progress of the Marriage (Same Sex to services such as an allocated social An article by Andrew Pack, solicitor, Couples) Bill. worker, as well as proper planning for Brighton and Hove City Council, the transition to adulthood after analysing the changes made by the Following the failure of the proposed leaving care. It is also likely that on revised PLO will be published on amendment, the Bill received a second leaving care he would have been made Family Law Week within the course of reading without a vote. an offer of housing when 18 by the this week. relevant housing authority. The Bill will now proceed to the House To read Practice Direction 36C, please of Lords Committeee stage. Nigel Ellis, Executive Director for click here. To read the Revised Public Investigations at the LGO, said: Law Outline, please click here. The debate can be read in Hansard: for the 3rd June here, and for the 4th June "Because of the fault of the council, here. this vulnerable person was denied access to key welfare services that Deborah Eaton QC and Philip he was entitled to and that the Marshall QC elected joint council has a duty to provide. I Heads of Chambers at 1 believe that if he was given the right information about the benefits King's Bench Walk of being under the council's care, the complainant would have From 4 June 2013 Richard Anelay QC accepted them." steps down after 7 years as Head of Chambers at 1 King's Bench Walk (he will continue to practise from 1 KBW) and leading silks Deborah Eaton QC

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The Local Government Ombudsman Patten LJ, found in respect of the older Richmond, Lord Mance of Frognal, has recommended that Kent County children that the original order and Lord Clarke of Stone-cum-Ebony, Lord Council now confirm the complainant that of Parker J were unimpeachable Wilson and Lord Sumption. as a leaving care child, and inform the and that the children's habitual relevant local housing authority. It residence was in England and Wales. The Court has considered whether it is should also set aside £3,000 for the open to the court in financial remedy injustice caused to him, which should However, the court split in its proceedings to treat the assets of a be used in conjunction with the leaving determination of the habitual residence company of which a spouse is the sole care team to promote his independent of H, born in Pakistan. This issue was controller as being assets to which that living. the subject of a review of existing case spouse is 'entitled' for the purposes of s law, including consideration of the 24(1)(a) Matrimonial Causes Act 1973. The council has agreed to inter-relationship between the relevant recommendations made by the LGO. ECJ and domestic authorities. The appellant wife brought financial proceedings ancillary to her divorce Patten LJ concluded that the need for from her husband. The husband was "multifactorial" enquiries as to the ordered to pay a lump sum of £17.5m Supreme Court to consider relevant circumstances of each case to the wife, which he has not paid. The habitual residence issues in was not inconsistent with there being respondents are all Isle of Man some limits to the concept of residence companies under the control of the ZA v NA appeal and that the construction of a rule husband. The wife obtained an order whereby new born babies could be that real property held by the The Supreme Court has granted presumed to take on the habitual respondents should be transferred to permission to appeal to the mother in residence of the custodial parent(s) was her so as to reduce the lump sum order. ZA & Anor v NA [2012] EWCA Civ to be resisted. He concluded that he The respondents successfully appealed 1396. could not, at the moment, envisage any against that order. case in which a finding of habitual The substantive appeal has been fixed residence could be factually justified in The Court of Appeal judgment is to be heard by the Supreme Court on 22 respect of a child who was born and available here. & 23 July 2013. remained abroad.

Representation is as follows. For the He disapproved the decision of B v H, Supreme Court to deliver appellant mother: James Turner QC, of in which Charles J held that a child was 1 King's Bench Walk, and Alistair judgment on ‘significant habitually resident in England and harm’ and proportionality of Perkins, of 4 Paper Buildings, Wales though he had never been there, instructed by Dawson Cornwell. For and found that the orders in relation to response the respondent father: Henry Setright H had been made without jurisdiction QC, of 4 Paper Buildings, and Edward and must therefore be set aside. Rimer The Supreme Court will deliver Devereux, of Harcourt Chambers, LJ agreed with Patten LJ. judgment in B (A Child) on instructed by Thompson & Co. Wednesday, 12th June. The Court Thorpe LJ dissented in respect of H, comprised Lord Neuberger of Following the parties' separation, the concluding that H took his mother's Abbotsbury, Lady Hale of Richmond, mother took the three older children habitual residence at birth. He Lord Kerr of Tonaghmore, Lord Clarke (all of whom had been born and raised considered that "the defeat of of Stone-cum-Ebony and Lord Wilson. in England) on holiday to Pakistan, to abduction must be supported" and that which the father had returned. Whilst this case fell "narrowly on the right side The appeal was heard on the 25th and there, the mother was forced to resume of an important boundary. 26th February. the relationship and she and the children were prevented from In order to view the Court of Appeal The case concerns whether a child of returning to the UK. A fourth child (H) judgment and a summary of it, please two years of age should be was born. Some months later, the click here. permanently removed from her mother escaped without the children. parents and placed for adoption. In that regard, whether the child was Once in the UK, she obtained orders (ex likely to suffer significant harm within parte) for the children to be returned, Supreme Court to deliver the meaning of s.31(2)(a) of the underpinned by a declaration that all judgment in Petrodel v Prest Children Act 1989, and whether her four were habitually resident in the permanent removal was a jurisdiction of England and Wales. next week proportionate response to any such risk that she did face. The father's challenge to the The Supreme Court will deliver its jurisdiction of the court was heard by judgment in Petrodel Resources 'A', a girl now aged two years old, was Parker J who rejected it and repeated Limited and others v Prest on removed from her parents at birth. The the order for the children's return and Wednesday, 12th June. first Respondent subsequently applied reaffirmed the declaration on the for a care order permanently to habitual residence of the children. The hearing took place on the 5th and separate her from her parents and to 6th March before Lord Neuberger of have her placed for adoption. The The father and children's uncle Abbotsbury, Lord Walker of grounds on which the order was appealed. The Court of Appeal, Gestingthorpe, Lady Hale of sought were principally that her comprising Thorpe LJ, Rimer LJ and

www.familylawweek.co.uk Family Law Week July 2013 - 5 mother ('M') suffered from a Regarding the research findings, that ISWs were instructed in 33% of psychiatric condition that led her to Cafcass Chief Executive Anthony cases. This reduction chimes with the seek unnecessary medical treatment; Douglas said: FJR's recommendation that that both her parents exhibited a "independent social workers should be dishonest approach when interacting "Cafcass' research yet again shows employed only exceptionally". with care personnel and other that the family justice system is professionals; and that it was not responding to the government- The study also found an association appropriate for her father ('F') to care approved recommendations made between the duration of the sample for her of his own accord. It was by the Family Justice Review, even cases and the instruction of experts: asserted that A was at risk of harm in before legislation has been put in those with experts instructed lasted an terms of her emotional and social place. average of 12 weeks longer than those development and also due to the risk without. Reducing delay in care cases she would be presented for "At a time where scarce resources is a key aim of the Family Justice Board, unnecessary medical treatment or must be directed to the right areas, with positive progress already made adopt M's behaviour in doing so. The we agree with the Family Justice towards the proposed limit of 26 weeks Family Division of the High Court Board that the use of expert duration, as set out in the Children and granted the care order. Both parents witnesses should be limited to cases Families Bill. appealed that order on the grounds in which they are absolutely they did not present a risk of significant necessary, in accordance with the The research can be accessed here. harm to A, and that in any event her latest Practice Direction from the permanent removal and placement for President and emerging case law. adoption was disproportionate to any Cafcass Guardians have found the risk that they did present. The Court of input that experts have in their Independent Serious Case Appeal upheld the care order, and the cases to be really helpful. The right Review Panel established parents now appeal that decision to the expert can offer unique insight and Supreme Court. value about into a child's needs. In Michael Gove, the Secretary of State for such cases, Cafcass Guardians said Education, has established a new The Court of Appeal judgment can be that the evidence offered by expert independent Serious Case Review found here. witnesses has increased the speed Panel. of proceedings. Independent panel members Peter "We know the negative impact that Use of expert witnesses Wanless, Nicholas Dann, Elizabeth delay has on children and Cafcass decreases in family courts, Clarke and Jenni Russell will advise will continue to work with agencies and challenge local safeguarding according to Cafcass in the family justice system to children boards (LSCBs) to initiate and ensure that experts are only publish high-quality serious case Research released by Cafcass indicates commissioned where additional reviews (SCRs) in order that, that the instruction of expert witnesses expertise to that of the social nationally, lessons can be learned to in cases in family courts involving care worker and Children's Guardian is drive up the quality of child protection applications is decreasing. Experts required." were instructed in 70% of the cases in services and avoid mistakes being repeated. Cafcass' study sample, in contrast to a The survey found that adult previous study of care applications, psychologists were the most The government's statutory guidance concluded in 2009, which found that commonly instructed type of expert, on child protection, Working together experts were instructed in 92% of cases. accounting for 30% of all the experts to safeguard children, was revised in instructed in the sample cases. Adult March 2013. The guidance makes clear Cafcass says that this finding is in line psychiatrists were next, comprising that LSCBs should have regard to the with government-approved 20% of all the experts instructed. These panel's advice when making decisions recommendations in The Family two types of experts account for half of about SCRs. The independent panel is Justice Review (FJR), published in all experts instructed in the care cases intended to: 2011, which acknowledged the positive that made up the sample. Child contribution of expert evidence, but psychologists and psychiatrists made Ÿ bring rigorous independent scrutiny identified a "trend towards an up 10% of all the experts instructed and to the system increasing and, we believe, unjustified paediatricians, 6%. use of expert witness reports, with Ÿ help LSCBs apply the criteria for consequent delay for children". A complete break-down of the types of initiating SCRs when a child dies or the experts used can be seen in Cafcass' is seriously harmed and there are While the study found that fewer research report. experts were instructed in the sample signs of abuse and neglect cases than has been found in previous Independent social workers (ISWs) Ÿ advise – and where appropriate research, Cafcass Children's Guardians accounted for 7% of all the experts and challenge – LSCBs when they surveyed felt that those who were were instructed in 9% of all the sample decide not to initiate a SCR or instructed were beneficial to cases, cases, demonstrating that there has intend not to publish a report. rating 88% of expert witnesses as been a substantial reduction in the "overall beneficial". instruction of this type of expert in recent years: a review of public law cases which concluded in 2009 found

www.familylawweek.co.uk Family Law Week July 2013 - 6 The announcement, says the DfE, the County Court is being heard in reaffirms the government's public the judge and the advocates commitment to overhaul the system to The purpose of an independent should be robed. protect the most vulnerable children in reviewing officer (IRO) is to ensure that our society, moving the focus from the care plan for a looked after child The supplemental guidance is here. processes and onto the needs of the clearly sets out the help, care and child. support that they need and takes full account of their wishes and feelings. One million children grow up The SCR panel will be operational from Local authorities are required by law to with no contact with their 1 July 2013. appoint an IRO for each looked after child. Since April 2011, changes to care father, reports Centre for planning regulations have Social Justice Adoptive parents’ details strengthened the IRO role. IROs are mistakenly sent to birth now not only responsible for chairing Lone parent families are increasing at a statutory reviews but also for rate of more than 20,000 a year and will family monitoring children's care plans on an total more than two million by the time ongoing basis. IROs should also of the next election, according to a new The Information Commissioner's monitor the local authority's overall report accusing the Government of Office has served a monetary penalty performance as a 'corporate parent' for turning a blind eye to its commitment of £70,000 to Halton Borough Council looked after children (as 'corporate to promote family stability. in Cheshire following a breach of the parents', all those who have Data Protection Act. responsibility for looked children The report, to be published by the should act for the children as a Centre for Social Justice in the week The breach occurred on 25th May last responsible and conscientious parent beginning 10th June , also finds that at year when a council employee sent a would act for their own children). least one million children are growing letter about an adopted child to the up without a father and that some of birth mother, and mistakenly included The survey report Independent the poorest parts of the country have a covering letter giving details of the reviewing officers: taking up the become "men deserts" because so few adoptive parents' home address. The challenge? draws on evidence from primary schools have male teachers. birth mother passed this information to 111 cases across 10 local authorities. her parents who had been trying to Inspectors found that IROs did not Across England and Wales, one in four obtain access to their grandchild. always sufficiently challenge drift and primary schools has no male teacher Subsequently they wrote to the delay in plans for individual children. and 80 per cent have fewer than three. adoptive parents seeking contact. Children's views were not always taken into full account. The IRO role in The report warns that father absence is At the time of the breach the employee assessing the effectiveness of local linked to higher rates of teenage crime, involved was under the impression authority support and plans for looked pregnancy and disadvantage. that adequate checks had already been after children was underdeveloped, it carried out and the correspondence found. In a foreword to the report, titled: was simply for filing and distribution. 'Fractured Families: why stability matters', The report is here. from the Centre for Social Justice (CSJ), The ICO's investigation concluded that Director Christian Guy warns of the the breach was caused by Halton "tsunami" of family breakdown Borough Council's underlying failure Guidance issued on battering the country.He says the to have a clear policy and process for committals in the Family human, social and financial costs are checking such correspondence, and "devastating" for children and adults relevant training for their staff. Division and Court of alike. Yet faced with this national Protection supplemented by "emergency", the response from Since the breach, Halton Borough President politicians of the Left and the Right has Council has implemented a clear been "feeble". checklist of requirements before such The President of the Family Division, correspondence can be distributed, Sir James Munby, has supplemented "Family breakdown is an urgent together with a peer-checking process the Practice Guidance issued on 3 May public health issue. Backing for work carried out by their staff. 2013. The guidance relates to commitment and setting a goal of committals in the Family Division and reducing instability does not equate Court of Protection. to criticising or stigmatising lone Independent reviewing parents or those involved. officers must make more The supplemental guidance clarifies difference to the lives of the form by which applications should "Within this need for new maturity, looked after children, says be shown in the public court list we should also agree that marriage (dependent upon whether the hearing is not a right wing obsession but a Ofsted is to be in public or private). social justice issue: people The supplement also explains the throughout society want to marry In a new report, Ofsted finds that circumstances in which a person who is but the cultural and financial independent reviewing officers are not not a party to the proceedings might be barriers faced by those in the making enough positive impact on the granted a copy of the application notice. poorest communities thwart their quality of care planning and outcomes aspirations." for looked after children. They have Whenever a committal application in been too slow in taking on their the Court of Protection or the Family enhanced responsibilities, it is said. Division or in family proceedings in www.familylawweek.co.uk Family Law Week July 2013 - 7

The report features "league tables" must be in tackling child poverty recognises the importance of showing the parts of the country and ensuring that all children grow continuing care and support that (Lower Layer Super Output Areas, up with the financial means foster families can provide. which have an average population of necessary to have the best chance in 1,614) where fatherless and lone parent life." "I also want to offer a huge thank households are most prevalent. you to the foster carers, care leavers and members of the public who The report also highlights the cost to Cafcass reports year-on-year have got behind the amendment the taxpayer of increasing rates of reduction in care and lobbied their MPs for support. family breakdown. The total cost is estimated at £46 billion a year or £1541 applications in May "This is only a small step on a long for every taxpayer in the country. This road, but it has shone a light on the figure has risen by nearly a quarter in In May 2013, Cafcass received a total of fact that our care leavers must be the last four years and on current 965 applications. This is a 1.8% supported by their ultimate trends, the cost of family breakdown is decrease on May 2012 and the first corporate parents, the Government. projected to hit £49 billion by the end of monthly year-on-year reduction since this Parliament. June 2012. However the year-to-date "If the amendment is unsuccessful figures are still up on last year. in the House of Commons, then we The research also finds that it is the will take the campaign to the House instability of cohabiting couples rather of Lords. than a surge in divorce rates that is Cafcass records a record- fuelling the disintegration of the UK breaking month for private "We will keep trying to make family. Since 1996, the number of law applications positive change and to help provide people cohabiting has doubled to better futures for young people in nearly 6 million. In May 2013, Cafcass received a total of foster care." Cohabiting parents are three times 5,061 new private law cases, more likely to separate by the time a representing the highest ever month on The Fostering Network has pushed for child is aged five than married couples, record. This is anincrease of 1,072 on this amendment as part of the charity's the report states. the same month last year. Don't Move Me campaign. You can visit the campaign website here. Responding to the report, Gingerbread Between April and May 2013 Cafcass chief executive Fiona Weir said: received a total of 9,398 new private law cases which is an increase of 27% Supreme Court unanimously "This report paints a melodramatic from the 7,388 cases received in the allows the appeal of Yasmin picture which is far from the reality same period last year. of modern British family life. The Prest facts are that single parent families The figures can be viewed here. make up one in four households In Prest v Petrodel Resources Limited with children – a proportion that [2013] UKSC 34, the Supreme Court has unanimously allowed the appeal of has barely changed in over a Amendment to Children Bill decade – and the vast majority of Mrs Yasmin Prest, ending 5 years of children in single parent tabled to retain children’s proceedings in which she has sought households grow up perfectly well. foster homes after 18 financial provision from her former husband. "Digging behind the headlines, the An amendment to ensure that young data shows that only 0.7 per cent of people in England can stay with their Mr and Mrs Prest were married in 1993 areas have more than 50 per cent of foster carers after their 18th birthday is and had four children. Mrs Prest households headed by a single being debated in Parliament this petitioned for divorce in March 2008. parent – hardly a 'tsunami of family afternoon as part of the Children and Mr Prest resisted her claims for breakdown'. Although two-thirds Families Bill. ancillary relief (as they were then of children have regular contact called) on numerous bases but the most with both parents after separation, The Fostering Network has worked significant for the Supreme Court we share the concern that too many with Paul Goggins MP to table an hearing was that certain properties children don't get either the amendment, Continuing support for could not be transferred to the wife as emotional or financial support they former foster children, which if passed they did not belong to him; they deserve from the parent they're not into law would allow all fostered belonged to a number of companies living with, and would like to see young people the chance to remain which had their own separate legal government take more steps to with their foster carers until the age of personality and which were not owned encourage both parents to maintain 21 (if both parties were in agreement). by him. His evidence as to his responsibility after separation. connection with the various Vicki Swain, campaigns manager at the corporations was decisively rejected by "The biggest risk facing children Fostering Network, said: Moylan J at first instance. growing up today is poverty, which costs us £29 billion each year, yet "This amendment has already had Lord Sumption, giving the lead the IFS forecasts child poverty will the most MPs sign up to support it judgment of the Supreme Court, held rise significantly over the next out of any of those tabled to the that the properties were held on bare decade. The government's priority Children and Families Bill, which legal title on trust for the husband. The

www.familylawweek.co.uk Family Law Week July 2013 - 8 beneficial interest was capable of Richard Todd QC of 1 Hare Court, "'Piercing the corporate veil' is still transfer and the Supreme Court who represented Mrs Prest, said: likely to be very difficult but the directed that this should happen. The view appears to be that there is 'a decision was supported by all seven "Ultimately the decision represents small residual category of cases' Justices of the Supreme Court. a triumph for the recognition of where this may prove possible. reality." This was not one of them. At first instance Moylan J had held that the word "entitled" in this section was Jeremy Posnansky QC, partner in "However, drawing the inference sufficiently wide to include assets Farrer & Co, who with Caroline that properties held within which a Husband could reasonably Holley of that firm, represented companies can nevertheless be held obtain. This was rejected by the Yasmin Prest, said: on resulting trust for the husband Supreme Court. It upheld the Court of who controls those companies, Appeal's view of the law that the "I'm delighted for Mrs Prest, whose certainly gives encouragement to Matrimonial Causes Act s.24(1)(a) is calm determination to obtain a fair wives, although the cases will be confined to property to which a party and just outcome has been fact specific, and are more likely to has a proprietary beneficial right at vindicated by this decision. be relevant and effective where the least and overruled the alter ego property in question is the doctrine in Nicholas which had "The importance of the Supreme matrimonial home. purported to permit the transfer of Court decision is twofold. company-held assets. "Practitioner antennae will have to "First, it shows that the courts will be even more finely tuned when Lord Sumption noted that "Courts look at the reality of a particular advising on pre-nuptial exercising family jurisdiction do not situation and won't be easily agreements, to ensure that property occupy a desert island in which general misled, so the fact that an asset may owning structures are not likely to legal concepts are suspended or mean be held in the name of a company frustrate entitlement of the spouse something different." doesn't necessarily mean that it's in the event of breakdown; and in owned by the company. the event of separation and divorce, Lord Sumption held in his paragraph then very great care will be needed, 40: Secondly, and of importance to probably alongside other specialist entrepreneurs and company advice, to establish whether "There is nothing in the lawyers, the Supreme Court has financial claims and their Matrimonial Causes Act and largely reinforced the separate enforcement, are viable, depending nothing in its purpose or broader identity of companies and made on the circumstances. Having said social context to indicate that the clear that it will be very rare that the that, the number of cases where this legislature intended to authorise corporate veil can be pierced." will arise is likely to remain a the transfer by one party to the relatively small proportion. marriage to the other of property Tim Amos QC of Queen Elizabeth which was not his to transfer. Building, who represented the "The case does however raise issues Secondly, a transfer of this kind will companies, commented: in other fields, which could cause ordinarily be unnecessary for the concern. Shareholders, lenders, purpose of achieving a fair "The Supreme Court has taken a insolvency practitioners, auditors, distribution of the assets of the restrictive view of both corporate may well need to look far more marriage. Where assets belong to a identity and the interpretation of rigorously at corporate property company owned by one party to the MCA. But this in itself is new in portfolios to establish whether the marriage, the proper claims of family law, in line with the there are competing claims from a the other can ordinarily be satisfied watershed decision of the Court of spouse, whether it is safe to lend on by directing the transfer of the Appeal. The "alter ego" the security of property held within shares." doctrine/practice has indeed the company but possibly subject to ceased, as Patten LJ said it must (at a resulting trust in favour of the Although it was held that it was not paragraph 161 of the Court of proprietor, and may also feel the appropriate for the corporate veil to be Appeal judgment). It is unlikely need to assess the matrimonial pierced in this case, there remains a that a wife will ever be able to situation generally." very limited principle of English law obtain a property adjustment order which applies when a person is under piercing the corporate veil against a Richard Todd QC and Stephen an existing legal obligation or liability husband's company, however Trowell of 1 Hare Court and Daniel or subject to an existing legal restriction much he abuses the company's Lightman of Serle Court (instructed by which he deliberately evades or whose resources and treats it as his Farrer & Co) represented Mrs Prest. enforcement he deliberately frustrates personal piggy-bank." Tim Amos QC, Oliver Wise and Amy by interposing a company under his Kisser of Queen Elizabeth Building control. The court may then pierce the Michael Drake, partner at Collyer and Ben Shaw of Erskine Chambers corporate veil for the purpose of Bristow, considered that this will come (instructed by Jeffrey Green Russell depriving the company or its controller to be regarded as a landmark case, in Ltd) acted for the companies. of the advantage that they would striking a fine balance between family otherwise have obtained by the and corporate law, and producing The judgment and Supreme Court company's separate legal personality. what most will see as a fair and just press summary can be read here. result. He said:

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An article, analysing the judgment and balance of probabilities. "Harm" means "The Court reminds us that there its implications for practitioners, ill-treatment or impairment of health or are different and diverse standards written by John Wilson QC of 1 Hare development, and development of parenting and society must Court, will appear very soon. includes emotional development. accept those. Significant harm must mean something unusual and A determination as to whether the something more common place Supreme Court dismisses threshold conditions for a care order than human failure or inadequacy parents' appeal against care have been satisfied depends on an [27]. evaluation of the facts of the case as order found by the judge at first instance; it is "The Justices took the view that the not an exercise of discretion. An interference of the State with The Supreme Court in Re B (A Child) appellate court may interfere with such Article 8 rights in care cases is a UKSC 33 has dismissed an appeal by a decision only if it is "wrong", but it relevant consideration only when parents against a care order made in need not have been "plainly wrong". the court reaches the second stage respect of their daughter on the basis of of its inquiry; the welfare stage as it a risk to her of future psychological or The High Court judge was also entitled is the making of a care order which emotional harm under section 31 of the to conclude that the making of a care would potentially impact family Children Act 1989. order in relation to the child, with a rights [29]. view to her being adopted was The child concerned was removed necessary and did not violate her rights "The Justices surveyed ECtHR from her parents at birth under an or those of her mother and father to decisions, again reiterating that interim care order. respect for their family life under family ties may only be severed in article 8 of the ECHR. very exceptional circumstances, While the child was in interim care, the everything must be done to parents visited frequently and formed Lady Hale, dissenting, took the view preserve personal relations and it is a good relationship with their that this was a case based on the mere not enough to say that a child could daughter. The trial judge found that, if possibility that the child would suffer be placed in a more beneficial placed in her parents' care, there was a psychological harm in the future. There environment. Article 8 demands a risk that as a result of her mother's was no risk that these parents would huge degree of justification that a various conditions the child would be neglect or abuse their child. Even if this child should be adopted or placed presented for and receive unnecessary were sufficient to cross the threshold in care with a view to adoption [34]. medical treatment, that she might grow laid down in section 31(2) of the up to copy her mother's behaviour, and Children Act 1989, it had not been "Whether the threshold is crossed is at the very least be confused at the demonstrated that a care order with a not a discretionary matter. It is a difference between the real world and view to adoption was necessary to value judgement [44]. Whether it her mother's dishonest presentation of protect the child – that 'nothing else was "open" to a judge to reach a it. There would have to be a multi- would do' – when nothing else had certain determination and the disciplinary programme of monitoring been tried. The care order was not, appellate court having to show that and support to avert these risks and the therefore, a proportionate response to the judge was "plainly wrong" were parents would not be able to co-operate the harm which was feared. not helpful tools. The appellate with such a programme because of review of a determination on their fundamentally dishonest and Noel Arnold, Director of Legal Practice threshold should be by reference manipulative approach towards social at Coram Children's Legal Centre, "simply to whether it was wrong" workers and other professionals whom commented: [44]. As for the welfare test, the they perceived to be challenging of appellate court must decide their points of view. Accordingly, there "The depth of analysis given by the whether the lower court's was no other way in which the feared Justices of the Supreme Court determination was wrong [47]. harm to the child could be prevented today, again affirms the very than by a care order with a view to difficult nature of care cases where "Dissenting remarks were made by adoption. The Court of Appeal upheld the local authority seeks to Lord Kerr and Lady Hale. In their that judgment. Both parents appealed persuade the court that a care order view the appellate court reviewing to the Supreme Court. is in the best interests of the child, whether a care order was a yet the local authority relies on disproportionate interference with The Supreme Court by a majority of 4:1 likelihood of harm when Article 8, should consider that (Lady Hale dissenting) dismissed the addressing the court on threshold. decision itself making an appeal. Hale LJ explained in her dissenting assessment of proportionality of the judgment that the "degree of decision of the trial judge [205]. The Court found that the High Court likelihood must be such as to justify judge was entitled to conclude that the compulsory intervention now, for "Coram's Children's Legal Centre threshold conditions for the making of there is always the possibility of welcomes: (a) the SC's a care order had been satisfied in this compulsory intervention later, reaffirmation that any interference case. The Court held that a "likelihood" should the 'real possibility' solidify" with the exercise by the child (and of significant harm under s 31 of the [190]. Hale LJ distils five key the parents) of their rights to 1989 Act means no more than a real considerations for the court where respect for their family, must be possibility that it will occur, but a threshold is in dispute [193]. lawful and necessary and the conclusion to that effect must be based making of an order needs to be a upon a fact or facts established on the proportionate response [32]; (b)

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Lord Neuberger's specific mention to protection under domestic needed, as recommended in this to the Adoption and Children Act legislation and international important report, so that we do not 2002 needing to be construed and agreements. However, in a newly continue to fail these children.' applied bearing in mind the published report – Human rights of provisions of the UNCRC [73]; and unaccompanied children and young CCLC strongly agrees that (c) the Court's emphasis that people in the UK – the Joint Committee unaccompanied children must be able adoption against a parent's wishes has found that immigration concerns to access publicly funded legal should only be contemplated as a are too often given priority. representation throughout the long last resort and when all has else and complex administrative and legal failed [104]. The Committee urges the Government processes they face in their asylum, to examine whether there should be a immigration and trafficking cases and "The Supreme Court referred to the greater role for the Department for when they have problems with the care trial judge's remarks about the Education as the department and support they receive. contribution of the children's responsible for safeguarding children guardian being superficial and a and young people, in overseeing the CCLC also fully supports the lack of resources at Cafcass [19]. support of unaccompanied migrant Committee's recommendation that the CCLC is concerned (as will all in children. It says that the child's best Government should consider an the family justice system be) by interests should form the focus of the alternative, more holistic means of those comments." asylum and immigration process. judicial oversight of unaccompanied Support given should be appropriate to migrant children's cases, through the Frank Feehan QC and Anna McKenna the child's age and situation. development of a new pilot children's of 42 Bedford Row (instructed by court. CCLC is about to commence a Moss & Coleman Solicitors) The Committee is also concerned that UK wide study and report, supported represented the appellant. Alison whilst unaccompanied migrant by EU funding, to explore possible new Russell QC of 1 Garden Court, children require specialist support, models of children's courts and Hannah Markham and Kate including legal advice, the difficulty for decision-making, including best Tompkins of 36 Bedford Row children of accessing good quality legal interests assessment and guardianship, (instructed by HB Public Law, Joint advice, particularly outside London, is which will help to inform the Legal Services for Barnet & Harrow likely to be exacerbated by changes to establishment of a new child- Councils) acted for the first the legal aid regime. appropriate court process. respondent. Paul Storey QC of 29 Bedford Row and Sheila Phil-Ebosie Coram Children's Legal Centre (CCLC) CCLC has long highlighted the of 42 Bedford Row (instructed by has welcomed the report. It agrees with challenges children face in Baxter Harries Solicitors) acted for the the Committee that the Government demonstrating that they are under 18 second respondents. Alex Verdan QC must find better ways of assessing and and the problems of age assessment of 4 Paper Buildings and Elizabeth meeting these children's care and and welcomes the Committee's calls Woodcraft of Tooks Chambers protection needs when taking for: (instructed by Munro Solicitors) acted decisions that will determine and for the respondent Guardian. shape their future. Ÿ improved data collection to be published on children whose age is The judgment and Supreme Court Kamena Dorling, manager of the disputed; summary can be read here. Migrant Children's Project at Coram Children's Legal Centre and co-chair Ÿ clear statutory guidance on how An article, analysing the judgment and of the Refugee Children's social workers should conduct age its implications for practitioners, Consortium, said: assessments; written by Janet Bazley QC and Eleri Jones, both of 1 Garden Court, will 'Unaccompanied refugee and Ÿ a multi-agency age assessment appear very soon. migrant children have often been process; and through experiences unimaginable to most of us. They are alone in the Ÿ further action to ensure that Immigration control takes UK with no one to care for them. children whose ages are disputed priority over children’s best The Committee's report is a timely are never held in adult detention, reminder that the UK is still failing nor placed within the Detained Fast interests, concludes Joint to meet its legal obligations to these Track system. Committee on Human Rights children. Too often their rights are not realised in practice and they are The Committee's recommendations The Joint Committee on Human Rights denied the support and protection support the calls made by CCLC in its has called for extensive reforms in the they so desperately need. recent report Happy Birthday? way that unaccompanied migrant Disputing the age of children in the children are treated on their arrival in 'It is long overdue that children's immigration system, which highlights the United Kingdom. best interests are truly put at the both the human and financial cost of a heart of all decisions made about deeply flawed age assessment process In 2012 around 1,200 such children them, whatever their status. It is that fails to adequately consider the sought asylum in the UK, and around vital that central and local needs of the individuals involved. 2,150 unaccompanied migrant children government take real and prompt were being cared for by local action to implement the many authorities. Such children are entitled practical and systemic changes

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New ‘Fostering for Adoption’ every stage of the decision-making cohabiting opposite sex couples and guidance for social workers processes affecting the child. It also civil partners. It notes that the highlights the need to ensure Government evidence concerning the published by Coram and appropriate support for potential costs of extending civil partnerships to BAAF adopters in the role of foster carers opposite sex couples was ambiguous to help them understand their role and expects clear and accurate New practical guidance has been and the legal uncertainties information about such costs. published to help local authorities involved. implement 'Fostering for Adoption' The Committee considers in detail the with the aim of ensuring more children "We hope this will be a useful position of religious organisations and can live with their potential permanent voluntary aid to this emerging area individual ministers. There are, it carers at the earliest possible stage of of adoption policy and practice. It is believes, clear justifications for the the adoption process. not without its challenges, but it is provisions of the Bill which provide for vital to get it right for looked after the right of religious organisations to The guidance, commissioned by UK children and avoid unnecessary decide whether or not to conduct same children's charity Coram and written delay in achieving the stability, sex marriage. The report considers the by the British Association of security, love and sense of identity difference in treatment of the Church in Adoption and Fostering, has been and belonging that permanence England and the Church in Wales produced for social workers, agency brings." which is, in the Committee's view, decision makers and all involved in justified. permanence planning. John Simmonds, Director of Policy, Research & Development at the British The Government is asked to reconsider Fostering for Adoption, which is Association for Adoption and whether it can bring forward among a range of new measures from Fostering, said: amendments to distinguish more the Department for Education clearly in the Bill between the civil and intended to improve fostering and "The current arrangements expect religious implications of marriages in adoption, allows those who want to children to move from placement to registered religious buildings. adopt children to foster them while placement until a permanent family they are waiting for the court to decide is found, despite everything that The Committee is broadly satisfied if adoption is the right plan for the suggests that this is damaging to with the protections contained in child. This would provide continuity of children. clause 2(2), 2(5) and 2(6) of the Bill for care for the child, as they would not individual ministers concerning the have to be placed with temporary "Fostering for Adoption is intended solemnisation of same sex marriage. foster carers. to minimise these moves and the damage it causes. The publication The report considers that the Funded by the Department for of this guidance sets out how this Government should carry out a full Education, the guidance sets out the can be achieved as a fair, evidence review of pension provisions in principles of Fostering for Adoption, based and just solution - it is a child relation to survivor pension benefit the situations where it could apply, centred opportunity that is not to entitlements of same sex married and what those involved need to do to be missed." couples and civil partners to ensure ensure it works well. that there is no unjustifiable The Guidance can be found here. discrimination in pension scheme An accompanying leaflet 'Becoming a provisions. In doing so, the Committee Fostering for Adoption Carer' explains calls on the Government to provide how potential carers can decide if the precise information about the potential process is right for them. Parliamentary Committee costs of equalising pension rights. welcomes Government Renuka Jeyarajah-Dent, Coram's The report can be read here. Director of Operations and Programme review of extension of civil Lead for the Coram Centre for Early partnerships to opposite sex Permanence, said: couples Ofsted consults on single "This voluntary guidance aims to The Joint Committee on Human Rights inspection regime for local offer a balanced approach, has published its report scrutinising authority services for explaining where Fostering for the provisions of the Marriage (Same Adoption fits into the changing Sex Couples) Bill. vulnerable children landscape of delivery. Its practice employs the same principles of The Committee has welcomed the Ofsted has launched a consultation on early placement as concurrent Government's announcement that it the way it inspects services for planning, which Coram has will review the extension of civil vulnerable children. Inspection of pioneered since 1999. partnerships to opposite sex couples. services for children in need of help The Committee states that it is not and protection, children looked after "The guidance recognises that the convinced by the objections raised by and care leavers proposes a single legal rights of the birth parents and the Government to such an extension. framework for inspecting local child's extended family, who may The Committee urges the Government authority child protection and services wish to put themselves forward as to take into account the potential for looked after children, including permanent carers, are considered at discrimination that may arise between those leaving or who have left care.

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The single framework replaces Court on the substance of the appeal are few in number, not least when previous plans to implement separate was delivered by McFarlane LJ. contrasted with the very large inspections for child protection and However, the President prefaced the number of case decisions being services for children looked after. It judgment with some observations on made, day in day out, by judges in proposes an evaluation of help, the adducement of expert evidence, family cases. This is as it ought to protection and care for children case management and disclosure. be. It shows the system working as including the arrangements for local it should. Recent examples include authority fostering and adoption Referring to the new test in r 25.1 of the Re B (A Child) [2012] EWCA Civ services. Family Procedure Rules 2010 for 1742 and Re G-C (A Child) [2013] permitting expert evidence to be EWCA Civ 301. Neither of these Eleanor Schooling, Chair of the adduced – whether it is "necessary to cases lays down any new Standards, Performance and assist the court to resolve the principles. Each is simply an Inspection Policy Committee of the proceedings" – he said: application of well-established Association of Directors of Children's principles to the facts of the Services has commented: '[N]ecessary' means necessary. It is, particular case. So too was Re F (A after all, an ordinary English word. Child) [2013] EWCA Civ 656, where "Local authorities need more than a It is a familiar expression nowadays this court refused permission to long list of descriptors to assess in family law, not least because of appeal from a case management whether or not a service is good. the central role it plays, for decision of a judge who had There has to be a more precise and example, in Article 8 of the refused to direct the appointment definitive definition of what "good" European Convention and the of an expert in circumstances where looks like to avoid a superficial tick wider Strasbourg jurisprudence. If all the parties were agreed that box approach if we are to be elaboration is required, what there should be an expert report. confident that all children have precisely does it mean? That was a The principles to be applied are access to high quality provision and question considered, albeit in a those set out in Re TG. support. rather different context, in Re P (Placement Orders. Parental 7. Returning to the facts of the "Ofsted will need to be more Consent) [2008] EWCA Civ 535, present case, McFarlane LJ has responsive to the views of the [2008] 2 FLR 625, paras [120], [125]. referred to the fact that the only sector and ADCS will ensure This court said it "has a meaning medical evidence that had been effective feedback and constructive lying somewhere between filed came from various treating suggestions are provided to them. 'indispensable' on the one hand and clinicians and that no outside It is in the best interests of children 'useful', 'reasonable' or 'desirable' expert had been formally instructed and families for Ofsted to be on the other hand", having "the in the proceedings. This is not a responsive to such an approach." connotation of the imperative, what matter that featured large in is demanded rather than what is argument, but it is worth Two other consultations have been merely optional or reasonable or reminding practitioners of the vital launched by Ofsted. They are Good desirable." In my judgment, that is need to avoid blurring the voluntary adoption provision and the meaning, the connotation, the important distinction between Good independent fostering word 'necessary' has in rule 25.1." treating clinicians and experts: provision. The former is a consultation Oxfordshire County Council v DP, document on proposals for revisions to He added: RS & BS [2005] EWHC 2156 (Fam), the inspection of voluntary adoption [2008] 2 FLR 1708, and Oldham agencies. The latter relates to proposals "6. There are, however, some more Metropolitan Borough Council v for revisions to the inspection of general points that merit brief GW and PW [2007] EWHC 136 independent fostering agencies. discussion. In Re TG I encouraged (Fam), [2007] 2 FLR 597. case management judges to apply The closing date for all three appropriately vigorous and robust 8. McFarlane LJ has also referred to consultations is 12 July 2013. case management in family cases; I the circumstances in which, very emphasised the very limited late in the day, a critically grounds upon which this court – important document was disclosed indeed, I should add, any appellate to the local authority. It is President provides further court – can properly interfere with disturbing that this document, guidance on the ‘necessity’ case management decisions; and I which had the effect that one aspect sought to reassure judges by of the appeal fell away, came to of expert evidence pointing out how this court has light only during the hearing before recently re-emphasised the us. There are perhaps two lessons The President of the Family Division, importance of supporting first- here for the future. The first is that, Sir James Munby, has provided further instance judges who make robust when disclosure of medical records guidance concerning the instruction of but fair case management is being sought from a third party, experts in Re H-L (A Child) [2013] decisions. I take the opportunity to an appropriate order of the court EWCA Civ 655. reiterate these important messages. directed to the third party should be obtained at the earliest The case concerned an appeal in care 7. Inevitably there will be occasions opportunity, rather than one of the proceedings by a mother who had been when this court does nonetheless parties (here, the local authority) refused permission to instruct three have to interfere with a case being left to seek voluntary medical experts. Her appeal was management decision. Such cases disclosure. The second is that more dismissed. The lead judgment of the

www.familylawweek.co.uk Family Law Week July 2013 - 13 thought needs to be given than is pension savings compared with 14 per often the case to an appropriately cent of those who have never been It adds in its general comments: focused application for disclosure. divorced. Prudential also found that 22 Too often, applications for the per cent of those who have been "The impact on legal aid providers disclosure of medical or police divorced are retiring with debts, of the loss of further whole areas of records seek the disclosure of compared with 16 per cent who have provision is likely (in line with everything, without any adequate not been divorced, while just 45 per government policy) to reduce thought being given to identifying cent expect to leave an inheritance further the number of providers. the particular class or classes of compared with 52 per cent who have This may have the impact of documents – here, indeed, a not been divorced. causing delay; particularly in particular document – whose public law cases when parties disclosure is really needed. Only one in three (33 per cent) of those entitled to representation are who have been divorced believe they already struggling to find a 9. The final matter relates to the have saved enough for a comfortable provider and are unlikely to be able imperative need for everyone, the retirement, while 42 per cent of those to find a local provider. This Court of Appeal included, to deal who have divorced say they are continues to be a significant with appeals from interlocutory financially well-prepared for difficulty in respect of access to case management decisions in retirement. justice and representation for family cases with the utmost parties to public law proceedings in despatch: see Re C (A Child) [2013] Clare Moffat, pensions specialist at rural areas with expensive and EWCA Civ 431, para [49]. In the Prudential, said: poor public transport networks. present case the decision under challenge was on 27 February 2013. "Women's retirement incomes are "The Family Justice Review in The fact-finding hearing was fixed particularly vulnerable to the November 2011 highlighted that for 16 April 2013. The appellant's financial effects of divorce. Many of the supply of properly qualified notice was not filed until 11 March them may be relying on their and experienced lawyers is vital for 2013. Permission to appeal was husband's pension and in some the protection of children and to the given on 19 March 2013. It was couples the wife may have had little efficient running of public law possible to list the appeal for input to the financial decisions that proceedings. This view has been hearing, just in time, on 10 April have been made over the years." echoed by the senior judiciary, for 2013. Justice was done. The example in the decision of Devon timetable fixed by the case County Council v EB &Ors management judge was not Further legal aid cuts ‘risk (Minors) [2013] EWHC 968 (Fam)." disturbed. But one cannot help injustice and miscarriages of recalling the well-known words of The Council does not agree that the the Duke of Wellington." justice’, says the Family proposed cuts of 10% in the public Justice Council family law representation fee are The judgment can be read in full here necessary, proportionate or will assist The Family Justice Council, chaired by in the efficient and timely the President of the Family Division, administration of justice. Such further Divorce ‘costs £2,600 per Sir James Munby, has published its reduction in remuneration will cause, it year in expected retirement response to the Government's states, considerable difficulty for the Transforming Legal Aid consultation. judiciary, HMCTS, Ministry of Justice income’, according to and Department for Education at a Prudential survey The Council considers that there is a time of significant change and reform lack of robust impact assessment in the family justice system. Nor does Divorce reduces average expected within the document, a lack of any the Council agree that experts' fees retirement income by around £2,600 a assessment of the impact of the should be cut by 20%, fearing an year (16 per cent), according to a changes to legal aid to date, and a lack impact on the availability of experts survey conducted by Prudential. of reliable information or evidence when they are required. People who are planning to retire in regarding past spending, projected 2013 and have been divorced expect to spending, and budgets. The Council's response concludes with retire with an annual income of £13,800 a criticism of the impact assessment compared with £16,400 for those who It says: conducted by the Government and have not divorced. warns: "Those changes already in place Prudential's Class of 2013 survey, will inevitably result in a reduction "The lack of availability of legal aid based on a poll of 1,007 people in overall legal aid expenditure, as as a result of LASPO is already intending to retire in 2013, shows that yet unevaluated and it is affecting family members' access to 40 per cent of those planning to retire in questionable whether further legal advice in care proceedings. 2013 have been divorced, and in reduction will produce the overall This will mean more children general they are less likely to have savings sought. Additional changes accommodated by Local private pensions, more likely to retire to civil legal aid, will drastically Authorities; requiring permanency with debts, and less likely to believe reduce its availability to the through long term fostering or they are financially well prepared for youngest and most vulnerable in adoption with attendant costs retirement. They are also less likely to our society, risking injustice and rather than through kinship care." expect to be able to leave an inheritance. miscarriages of justice which are likely to be wholly The response can be accessed here. Eighteen per cent of previously disproportionate to the money divorced 2013 retirees have no private saved." www.familylawweek.co.uk Family Law Week July 2013 - 14 Coleridge J offers guidance For the full judgment and summary by provide a vital resource to help on approach to ‘lesser issues Richard Tambling of 1 Garden Court, reduce the pain of separation, please click here. and assets’ in financial particularly for children." remedy cases Duncan Fisher OBE, Project Manager Court determines witness list from Family Matters Institute, with a In B v B [2013] EWHC 1232 (Fam) Mr for final hearing in Young track record in starting new projects for Justice Coleridge has made remarks, families and children, said: approved by the President of the case Family Division, which practitioners "This is the first ever "crowd will need to keep in mind when The Independent reports that in the funding" campaign in UK to create dealing with what the judge described High Court last week, Mr Justice Moor a new service for children and it is as 'the lesser issues and assets'. decided upon the witnesses to be called entirely led by teenagers. A key to in the final hearing of financial remedy their success is the support of The parties had broadly agreed that the proceedings brought by his former adults, which is why we are so assets in the case of £40m should be wife. The hearing is listed for October pleased that family judges and split as nearly as possible in half. 2013. lawyers are backing their However, there remained issues as to campaign." which party should retain the castle, Michelle Young has claimed that her how the husband's interest in three ex-husband has secreted assets whilst private equity funds should be shared, he asserts that they were lost in a failed House of Commons to property venture. the valuation of a yacht and how the consider legal aid proposals lesser assets, including cars, should be dealt with. In January Mr Justice Moor jailed Scot Young for a 'flagrant' contempt of court The House of Commons will dedicate one of its backbench debates on 27 June Having applauded the parties and for failing to comply with court orders to debate the government's legal aid their advisers for achieving agreement for disclosure. proposals. on many of the major issues, Coleridge J commented on their approach to the The report in The Independent is here. The Law Society President, Lucy Scott- lesser assets. He said: Moncrieff, has written to a number of MPs expressing concerns about the "The small differences (as a civil legal aid proposals including the proportion of the pot) in the value Children in separating residence test and changes to funding of [the less important assets] does families seek funding to for judicial review. not merit the time (and costs) spent launch new website on them. As the rules now make clear, proportionality is the name of Three groups of teenagers in Hereford, the game when costs are so high PLO roll-out will not affect Milton Keynes and Crickhowell are court bundle claims under and court time is more and more at calling on every person who knows or a premium. A much more rigorous has been a child of separating parents Family Advocacy Scheme approach to case management to make a donation to build a new (especially in the field of the website for children whose parents are From 1 July 2013 rollout of the revised employment of experts) is being separating. The crowd funding Public Law Outline pilot will begin. introduced in other areas of the campaign takes place during June and The Legal Aid Agency states that the family justice system to save July and aims to raise the first £50,000, changes under the new PLO will not precious time and money. This type enough to launch the new website, affect the way court bundle payment of high value litigation cannot KidsintheMiddle.org.uk, by 2014. claims are made under the Family expect to be immune and parties to KidsintheMiddle.org.uk will be the first Advocacy Scheme (FAS). it can expect to be confronted more service for children entirely funded by and more by a refusal by the court teenagers. Court bundle payments are claimed in to participate in these disputes over accordance with the Family the lesser assets and where in each The teenagers – not all from separating Specification to the 2013 Standard Civil case the difference is around 1% of families but all knowing children who Contract. In public law cases, court the net value of the pot or less. have struggled – are reacting to the bundle payments cannot be claimed at Assets falling in this category closure of two other on-line services for more than two interim hearings. These should be bundled up together and children in this situation. Government must be one of the following: an overall value for them all is investing money in new services for Ÿ agreed. If not the court is itself separating parents but is not funding Case Management Conference likely to apply that system in a anything directly for children. broad, even rough and ready, way. Ÿ Issues Resolution Hearing or As Mr Marks QC observes the You can visit Ÿ pursuit of precise accuracy is a www.KidsintheMiddle.org.uk to Hearing listed for the hearing of spurious and vain endeavour watch their video and make a donation contested evidence (paragraph where the figures are in most cases or text "KITM88 £10" to 70070. 7.151 of the Family Specification). derived from professional valuations and opinion and assets A spokesperson for Resolution said: But now, case management hearings are not being sold anyway." under the Public Law Outline pilot can "Campaigns like Kids in the Middle be added to the list. help highlight the issues and

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Mostyn J gives guidance on provides that an application may be the respondent giving rise to the freezing and search orders in made without notice only where conclusion that there is a solid risk there is exceptional urgency; or of dissipation of assets to the financial remedy cases where the overriding objective is applicant's prejudice. Such an best furthered by doing so; or by unjustified dealing will normally In UL v BK (Freezing Orders: consent of all parties; or with the give rise to the inference that it is Safeguards: Standard Examples) [2013] permission of the court; or where done with the intention to defeat EWHC 1735 (Fam), Mr Justice Mostyn paragraph 4.9 applies; or where a the applicant's claim (and such an has taken the opportunity to provide court order, rule or practice intention is presumed in the case of guidance on the use, necessary direction permits. Para 4.9 deals an application under the 1973 Act). safeguards and form of freezing and with the situation where a date for search orders in financial remedy a hearing has been fixed, and a iv) The evidence in support of the cases. The President authorised party who wishes to make an application must depose to clear Mostyn J to promulgate for general use application at that hearing but does facts. The sources of information the examples appended to the not have sufficient time to file an and belief must be clearly set out. judgment. The President also approved application notice." the guidance (in para 51) set out below. v) Where the application for a There are appended to the judgment freezing order is made ex parte the The judgment also re-states principles standard examples of freezing and applicant has to show that the established in Tchenguiz & Ors v search orders. Mostyn J, with the matter is one of exceptional Imerman concerning the illegal authority of the President, states: urgency. Short informal notice acquisition by one party (in this case must be given to the respondent the wife) of documents belonging to "The example for the freezing order unless it is essential that he is not the other party. should be used whether the made aware of the application. No application is made under s37 of notice at all would only be justified The case concerned an application by a the 1981 Act to a High Court Judge where there is powerful evidence wife for the continuation of an ex parte or to a District Judge under s37 of that the giving of any notice would freezing order granted by the High the Matrimonial Causes Act 1973. It likely lead the respondent to take Court in February 2013. A second order will be seen that each example steps to defeat the purpose of the was made which provided that certain order requires that the reason for injunction, or where there is documents which belonged to the giving no, or short, notice is literally no time to give any notice husband should be handed over to the expressly stated on its face. If this, before the order is required to wife's solicitors and retained in sealed or any other standard term, is not prevent the threatened wrongful files until further order. proposed to be included in an order act. Cases where no notice at all can then the departure or omission be justified are very rare indeed. Mostyn J is critical of the practice of must be drawn to the judge's The order of the court should applying ex parte for freezing and attention and must be clearly record on its face the reason why it search orders without justification. He justified." was satisfied that no or short notice says: was given. In para 51 of the judgment Mostyn J "[F]reezing and search orders are summarises the relevant principles and vi) Where no notice, or short almost invariably made ex parte safeguards: informal notice, is given the and, as such, are a violation of the applicant is fixed with a high duty elementary rule of natural justice "i) The court has a general power to of candour. Breach of that duty will audi alteram partem.... preserve specific tangible assets in likely lead to a discharge of the specie where they are the subject order. The applicable principles on "The unilateral step taken at the matter of the claim. Such an order the re-grant of the order after beginning of case echoes down its does not necessarily require discharge are set out in Arena history. Often the respondent is application of all the freezing order Corporation v Schroeder at para 213. enraged by the step taken against principles and safeguards, him and looks to take counter- although it is open to the court to vii) Where no notice, or short offensive measures. Every single impose them. informal notice, is given the subsequent step is coloured by that safeguards assume critical fateful first step. Costs tend to ii) For a freezing order in a sum of importance. The safeguards are set mount exponentially. And even money which is capable of out in the standard examples for after the lawyers close their files embracing all of the respondent's freezing and search orders. If an and render their final bills the assets up to the specified figure it is applicant seeks to dis-apply any personal relations of the spouses essential that all the principles and safeguard the court must be made will likely remain forever soured. A safeguards are scrupulously unambiguously aware of this and nuclear winter often ensues." applied. the departure must be clearly justified. The giving of an Mostyn J sets out the rules applicable to iii) Whether the application is made undertaking in damages, whether urgent applications for such orders: under the 1981 Act or the 1973 Act to the respondent or to an affected the applicant must show, by third party, is an almost invariable "The requirement of exceptional reference to clear evidence, an requirement; release of this must be urgency is expressly stipulated in unjustified dealing with assets clearly justified." para 5.1 of FPR 2010 PD 18A. This (which would include threats) by

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In para 56 of the the judgment Mostyn Matthew Reed, Chief Executive of The quickly and easily to access J re-states principles established in Children's Society, said: information about the homes in their Tchenguiz & Ors v Imerman area, and have it regularly updated. concerning the illegal acquisition by 'We have seen some very positive one party (in this case the wife) of steps over the last year, and it is Ofsted has been asked to toughen up documents belonging to the other great that the government is its inspection and intervention powers party. tackling this issue head on. – scrapping 'adequate' and replacing it with 'requires improvement', and Philip Marshall QC and Peter 'More scrutiny of out-of-borough introducing new rules so they give an Newman of 1 King's Bench Walk care placements, plans to improve 'amber' rating if a home is inadequate. (instructed by Jones Nickolds) the qualifications of care home staff If it doesn't improve within a specified represented the wife. Deborah Bangay and more oversight to ensure care time limit, it will be given a 'red' rating QC of 1 Hare Court and Dakis Hagen homes aren't clustered in and close. of Serle Court (instructed by unsuitable areas will all help keep HowardKennedyFsi LLP) represented children safe. Edward Timpson, Children and the husband. Families Minister, said: 'And the new guidance out today is Revised statutory guidance very welcome. But there is still a "For too long children's residential on children missing from long way to go. We would like to care has been ignored – leading to care published see every single child who goes unacceptable failings in the system. missing get an independent return We've worked hard over the last interview, not just those who go year to identify the problems and The Department for Education has missing several times or only those are now taking strong action to published revised statutory guidance missing from care. tackle them. on children missing from care. From September Ofsted will inspect local 'Return interviews not only help Our package of reforms will authorities' performance on how they vulnerable children, they can help remove the secrecy which has are meeting the statutory requirements disrupt abuse and bring shrouded residential care for too to reduce the number of children who perpetrators to justice." many years – shining a light on go missing from care. where local authorities and care The revised guidance is here. homes can do better. The Department says that this builds on significant work already taken to "We are also dealing with the prevent children going missing from unacceptable problem of too many care. The Department has started Children’s residential care to children going missing from care. recording details of every child missing be reformed In the next 6 months local from care, even for an hour (it used to authorities should review how they be 24) and earlier this year changed the work to ensure it is in line with the The Department for Education has rules so for the first time police know revised statutory guidance." where children's homes are located. proposed reforms to overhaul children's residential care. The The reforms take forward the proposals are incorporated in The DfE is also consulting on plans to recommendations of the three expert strengthen safety in homes by: consultations on the Care Planning, Placement and Case Review groups convened by the department to Ÿ (England) Regulations 2010, and on look at quality in children's homes, introducing new rules so that data on missing children and out-of- children's homes work much more the Children's Homes Regulations 2001 (as amended) and the Care area placements. The Department closely with police and LAs to claims that the reforms will: prevent children going missing Standards Act 2000 (Registration) (England) Regulations 2010. In Improve quality Ÿ strengthening the rules so that local addition there is a consultation on the authorities take decisive action statutory guidance on children who run away or go missing from home or •introduce rules so that Ofsted will where children are at risk of going care. only allow new homes to be opened missing, especially when they are in safe areas, run by competent placed away from home. The Department says that the proposed providers reforms will lead to a much sharper Later this summer the DfE will publish focus on transparency, a drive for •ensure homes already open in less further data and analysis to provide higher quality in care homes and safe areas demonstrate they can much more detailed information on the stricter measures to hold local protect children – otherwise Ofsted location and quality of care homes, and authorities and care homes to account will close them how authorities place children. Using for their decisions. this data the Department plans to work •set mandatory limits for staff with local authorities to improve how The plans are part of a package of working in children's homes to they choose and pay for places in reforms which demand much better achieve minimum qualifications children's homes and encourage them decision making from LAs about to work with other areas to find local where children are placed. The process places for children. by which LAs access reports has been clarified, so that councils are able

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Ensure transparency child maintenance than are set by the Baker J determined that 'Re P, whilst formula currently used by the Child •publish full inspection reports not strictly binding on this court, is a Support Agency to calculate payments. including ownership - unless it clear authority which points the way to This is particularly the case when the risks identifying children be followed by the court considering its father has a higher income than the powers under what is now section mother. •set out that homes must clearly 4(2A).' Co-author, Caroline Bryson, Bryson indicate the type and level of Purdon Social Research, said: provision they offer so they are The judgment in the appeal will be equipped to meet the needs of the reported in due course. The High Court "Our study shows that the current children placed with them judgment can be read here. statutory child maintenance system falls far short of public Secure accountability expectations, and the planned changes will move child •introduce new rules so homes maintenance policy still further must tell LAs when children move Government should set and from public opinion about what the into and out of the area enforce child maintenance, state's role should be." •strengthen the rules so a senior believes the British public Teresa Williams, Director of Social official in the LA approves out of Research and Policy, Nuffield area placements that are a NatCen Social Research has published Foundation said: significant distance from a child's new findings from the British Social home - ensuring it is the best Attitudes survey revealing that the "Public opinion is particularly decision for the child. British public believes the government relevant in this instance both should set and enforce child because such a large proportion of maintenance payments, and should 'the public' are directly affected by require higher payments than are child maintenance, and because the Appeal to be heard of court’s currently set by the CSA guidelines: planned reforms to the child maintenance system will put more termination of father’s Ÿ 60 per cent of people say that the law of the decision-making into their parental responsibility should set a minimum amount for hands." child maintenance, rather than The Court of Appeal has given leaving it to parents to decide. Only The survey suggests the public believe permission to a father to appeal against 17 per cent disagree. that both mothers' and fathers' incomes an order, under s 4(2A) of the Children should be taken into account when Ÿ Act 1989, terminating his parental Only 20 per cent of the public agree payments are calculated, and that responsibility in respect of his 8 year that the law should never force fathers with higher incomes should old child. fathers who are not living with pay a higher percentage of their income their children to pay child in child maintenance. In CW v SG [2013] EWHC 854 (Fam) maintenance, compared with 59 per Mr Justice Baker terminated the cent who disagree. Co-author, Ira Ellman, Arizona State parental responsibility of SG in respect University, said: of D who was born to the parties in Ÿ While parents who have lived apart 2004. In 2009 the respondent pleaded from their children (who would "The data show that the British guilty to sexual offences committed on themselves have been required to public thinks non-resident parents two of the applicant mother's pay child maintenance) are a little with a good income should pay daughters and was sentenced to a total less likely than others to favour child maintenance at a level that of 48 months imprisonment. government involvement, still would provide their children not more of them support the just with basics, but with some of Prior to this case, the only reported government setting (45 per cent) the amenities of a comfortable case on the termination of parental and enforcing child maintenance income." responsibility dated back to 1995: Re P payments (46 per cent) than oppose (Terminating Parental Responsibility) the government's role (28 and 27 The British Social Attitudes survey can [1995] 1 FLR 1048 at 1053. In that case per cent respectively). be accessed here. Singer J allowed an application to terminate parental responsibility These findings come at a time when (acquired by a parental responsibility government is planning to reduce its agreement) in relation to a father who involvement in child maintenance had been sent to prison for causing arrangements. Forthcoming policy serious injuries to his child. The judge changes will see parents encouraged to held that the order was justified as the negotiate their own arrangements and father had "forfeited" his parental the introduction of a fee to use the responsibility and, in considering the Child Support Agency. merits of the application for parental responsibility in these circumstances, a The report, funded by the Nuffield court would not have granted the Foundation, found the public would application. require considerably higher levels of

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Marriage rate continues its The report, Child Rights Impact "A spending plan with a long term revival Assessment of Budget Decisions: vision for Britain would have the including the 2013 Budget, and the wellbeing and development of our cumulative impact of tax-benefit children at the heart of it, whereas The latest statistics on the marriage rate reforms and reductions in spending on the Coalition's strategy has been to – provisional figures released by the public services 2010 - 2015 is based on Office for National Statistics for 2011 put families at the frontline of a detailed quantitative analysis of the – show that in that year the number of austerity. When millions of British cumulative effects of cuts in public marriages in England and Wales children are left to grow up in spending and tax and benefit changes. increased by 1.7% to 247,890, from poverty, everyone's future The work was carried out by expert 243,808 in 2010. prosperity suffers." independent economists. It does not take account of the Chancellor's In 2011, the male marriage rate The Children's Commissioner's report announcements in the Spending read here remained at 22.0 marriages per can be . Review statement this week. thousand unmarried men aged 16 and over. For women the rate decreased to The changes will have the greatest 19.8 per thousand unmarried women Third View from the negative impact on families with aged 16 and over, from 20.0 in 2010. President’s Chambers children who are losing, on average, The greatest number of marriages were £41.07 a week. Single parents and those focuses on expert evidence for men and women aged 25 to 29. with disabled children are particularly in care cases hard hit, with the former losing 7.8% of Civil ceremonies accounted for 70% of their income. The income of families In the third 'View from the President's all marriages that took place in 2011, an with children has been reduced by over Chambers', Sir James Munby focuses increase from 64% in 2001. twice as much as similar families again on expert evidence and, in particular, the use of experts in care Statistics showing trends in civil and without children. cases. religious marriage from 1996 to 2011 indicate that in 1994, the earliest date The report says that Universal Credit He says: for which figures are available, 75% of and reforms that will come into force couples marrying in a civil ceremony by 2015 and 2016 will go some way to "We can and must reduce the lived together before getting married. offsetting the negative effects of fiscal excessive length of far too many This percentage increased steadily to measures and benefit reforms for some care cases. In order to achieve this 88% in 2011. families, but will not cancel all the losses that families have experienced we must get a grip on our excessive and in many instances unnecessary A lower percentage of couples having since 2010. use of experts.... a religious marriage cohabited before marrying for all years. However the The report sets out the negative effect "Three things are needed: first, a gap has narrowed over time. In 1994, the changes are having on children reduction in the use of experts; 41% of couples having a religious against the international duties the second, a more focussed approach ceremony lived together before Government has signed-up to. The in the cases where experts are still marriage, almost doubling to 78% in evidence suggests that the Government needed; and, third, a reduction in 2011. has not complied with the obligation to implement children's rights to the the length of expert reports. Let me take these in turn." Other statistics show that the number maximum extent of the resources of couples cohabiting in the UK has available to it. This is in stark contrast The ten-page document explains how doubled since 1996, illustrating that with its stated commitment to reducing the President envisages how these cohabitation is now more common, child poverty. objectives can be met within the new both as a precursor and an alternative regime introduced by the revised PLO. to marriage. Howard Reed, Director of Landman Economics, said: The document is here. "The reductions have a bigger percentage impact on poorer Half a million more children families than richer families, Lady Hale is the new Deputy forced into poverty by 2015, meaning that children in poor President of Supreme Court warns Children’s families lose out most of all. Commissioner Current policies are likely to result Lady Hale said: in an extra half million children in poverty in the next five years." Over half a million more children will "It is an honour and a privilege to be forced into poverty by 2015 because have been chosen to follow Lord Responding to the Spending Review of Government fiscal policies and tax Hope, who has made such a success Statement by the Chancellor, Alison and benefit changes, according to a of the role in the transition from the Garnham, Chief Executive of Child report published by the Office of the House of Lords to the Supreme Poverty Action Group, said: Children's Commissioner for England. Court. I look forward to continuing and building upon the work which he has done to establish this great new institution in our national life."

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Lady Hale became the United Ÿ the introduction of same sex The number of pension sharing and Kingdom's first woman Lord of Appeal marriage, so that same sex couples attachment orders made in divorce in Ordinary in January 2004, before the can marry each other; cases involving children has increased establishment of the Supreme Court in to 2,533 in 2011*, up 8% from 2,353 the 2009, following five years sitting in the Ÿ putting belief celebrants on the same year before. Court of Appeal and five years as a footing as religious celebrants; High Court judge. She is currently the Hugh James say that whilst pensions only female Justice of the Supreme Ÿ the arrangements for authorising sharing orders tend to be used more Court. celebrants to solemnise opposite frequently when a divorcing couple is sex and same sex marriage; approaching retirement age and the Lady Hale specialised in Family and pension fund is a substantial asset, the Social Welfare law, was founding Ÿ civil partnerships changing to rise in the average age of first time editor of the Journal of Social Welfare marriage; buyers and the patchy property market and Family Law, and authored a mean that younger families often have pioneering case book on 'The Family, Ÿ the authorisation of Church of little equity in their homes, and since Law and Society'. In 1984 she was the Scotland deacons to solemnise the recession and rising living costs first woman to be appointed to the Law opposite sex marriage; have eroded other savings, a growing Commission. number of divorcing couples find that Ÿ allowing civil marriage ceremonies pensions are the only asset that can be The role of Deputy President involves to take place anywhere, other than divided. working alongside the President to religious premises, agreed between oversee the judicial work of the Court, the couple and the registrar; Divorced parents might choose to take and liaising closely with Chief the pension lump sum at the earliest Executive who manages the Court's Ÿ allowing the religious and belief possible opportunity at 55 to assist administration. The Deputy President registration of civil partnerships. At with the cost of supporting teenage also shares a wider leadership and the moment, ceremonies to register children and to pay off debts such as ambassadorial role with the President, civil partnerships can only be civil clearing the capital sum on an interest- undertaking a range of engagements to in nature (although it is possible to only mortgage. promote understanding of the role of have a religious or belief ceremony the judiciary and senior appellate to mark the partnership, any such Malcolm Stevens, Head of the family courts in the UK and to foster ceremony would not be recognised team at Hugh James, says: international links. by the state); "Unfortunately this trend does not Lady Hale assumed the responsibilities Ÿ allowing transgender persons to mean that both partners can look of Deputy President on Friday 28 June, stay married when obtaining the forward to a secure retirement. following Lord Hope's retirement the full Gender Recognition Certificate, Such is the financial pressure on day before. She will be sworn in at a which provides legal recognition in divorced parents that increasingly special ceremony on a date to be the acquired gender. that pension pot may already be announced. earmarked as the repayment fund Alex Neil, the Health Secretary is for an interest only mortgage." quoted in The Guardian as saying: Scottish Government publishes same sex marriage "We .... want to protect freedom of speech and religion, and that's what bill the bill sets out to do. That is why it will be up to the religious body or The Scottish Government has individual celebrant to decide if introduced the Marriage and Civil they want to perform same sex Partnership (Scotland) Bill to the marriages and there will be no Scottish Parliament. The Bill and obligation to opt in." explanatory documents are available here. The Bill is here.

The draft Bill proposes a number of amendments to the Marriage Divorcing parents (Scotland) Act 1977 and the Civil Partnership Act 2004. increasingly raid their pension pots The Bill – in contrast to the Marriage (Same Sex Couples) Bill introduced by Divorcing parents are increasingly the Coalition – requires religious being forced to raid their pension pots bodies to opt into the legislation if they due to a lack of assets that will help wish to offer same sex marriages. them with the immediate costs of supporting their children, says Hugh Matters covered by the Bill are: James solicitors.

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The pension provider had provided the parties with an ARTICLES incorrect valuation, which resulted in the wife receiving an overpayment of £97,626 when the pension sharing order Finance & Divorce June 2013 Update was implemented. Scottish Widows tried to reclaim the money.

The Pensions Ombudsman determined:

"I consider that the injustice caused to her by repayment would outweigh the injustice to Scottish Widows and it would be inequitable to require her to repay the money.

.... [T]here is no doubt that the overpayment arose through maladministration by Scottish Widows. Had that maladministration not occurred, Mrs. McNicholas would have known the true value of the pension and would have been able to negotiate either a larger share of the pension or a more favourable division of other assets. She has lost the opportunity to do either of those things, which in itself is an injustice arising as a result of the maladministration. In addition, if she had to repay the overpayment, she would be left in a worse position financially and would thus have suffered a loss as a result of the maladministration, for which she would be entitled to compensation. To require her to repay the sum, and then direct Scottish Widows to pay compensation, would be an unnecessarily cumbersome way to resolve matters.

Finally, this whole process has caused Mrs. McNicholas a great deal of distress and uncertainty. She has been faced with the prospect of having to repay this money and suffered the anxiety of wondering whether the Anna Heenan and David Salter both of Mills & Reeve LLP. arrangements she has made for the future may have to be revisited. I consider a payment should be made to This update is divided into two parts: reflect this."

1. News in brief Scottish Widows were directed: 2. Case law update • Not to take any steps to recover the overpayment from Mrs. McNicholas; News in brief This section of the update highlights some of the news items • Within 28 days to pay to Mrs. McNicholas the sum of that will be of particular interest to practitioners who advise £250 in respect of the distress and anxiety caused to her. on divorce and financial remedy cases. The decision once again emphasises the breadth of the Pension Ombudsman's jurisdiction, even if the Law Society publishes practice note on "unbundling compensation for distress appears rather meagre. family legal services" The note sets out the Law Society's view on good practice For more information, click here. for those solicitors who offer partial retainers (i.e. acting for a client in relation to some matters only). Queen's speech includes criminalisation of forced It is expected that the unbundling of legal services will marriage become increasingly common as clients who are no longer The Crime and Policing Bill, announced in the Queen's eligible for legal aid will be unable to afford to engage a Speech, will make forced marriage and the breach of a solicitor under a traditional retainer. forced-marriage protection order criminal offences.

For more information, click here. For the full story, click here.

Divorcee can keep overpayment of pension made to her on divorce The Pensions Ombudsman has determined that a divorcee can keep the overpayment made to her by Scottish Widows following her divorce.

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Case law update Non-disclosure This section of the update considers non-disclosure, strike Following the hearing, the wife became aware that the out, variation of settlement and joinder of third parties and husband had been planning for an IPO. Media reports permission to appeal. following the final hearing suggested that X Co had appointed bankers to prepare an IPO for 2013. The reports also valued the company at $750m to $1 billion. The wife S v S [2013] EWHC 991 (Fam) (Sir Hugh Bennett) 29 April argued that this was material non-disclosure which vitiated 2013 the agreement. This case considered the wife's application to reopen financial remedy proceedings on the basis of the husband's The husband maintained that he had given full and frank material non-disclosure. disclosure and/or that any non-disclosure was not material:

Background 1. X Co was being prepared for all eventualities (to build The parties were married in 1993 and separated in 2010. the business, a sale to a third party or an IPO); They had three children, one of whom was T. The final hearing in the wife's financial remedy application took place 2. It remained likely that it would take 3 to 7 years for in July 2012 him to exit the business;

One of the most significant assets in the case was the 3. X Co's growth record was not sufficient for an IPO; husband's shareholding in X Co Limited. The husband was the founder of that company and owned 63% of the issued 4. The IPO planning in 2012 was to incentivise X Co's share capital (the remaining shares were owned by Bank A). staff and stir up interest in the marketplace with a view to X Co being targetted for an acquisition; The husband's case at the final hearing had been that he should retain all of his shares in X Co. After the parties' 5. No IPO had taken place in 2013 and none was being separation, the business assets would be non-matrimonial planned for the future; and the husband would be building them up until X Co was floated (i.e. an initial public offering "IPO") or purchased 6. In March 2012 (prior to the final hearing) the husband outright. Therefore, the wife should have no share in the had doubted the merits of pushing for an IPO; ultimate proceeds. On the husband's case, his shares were worth £31.5m. 7. Several steps necessary for an IPO had not and still had not taken place; and The wife argued that that the husband's shareholding in X Co was a matrimonial asset and that she should be entitled 8. The valuations placed on the company by the press to 50% of the net proceeds, regardless of when a sale took were pure conjecture. place. On the wife's case, the husband's shares were worth £47.25m. These arguments were rejected. "It is absolutely plain to me that the husband's evidence… in July 2012... was seriously The husband's evidence at the final hearing was that no IPO misleading. Whatever may have been the husband's or other exit was contemplated for at least three years. misgivings or doubts about an IPO the fact is that planning for an IPO in early 2013 was in full swing from January to The terms of the settlement August 2012." In the course of the final hearing, the parties reached a settlement and the Heads of Agreement were approved by The judge cited Thorpe LJ's judgment in Bokor-Ingram v the judge. The terms were as follows: Bokor-Ingram [2009] 2 FLR 922 in which he said that:

The wife was to receive "11... Any information that is relevant to the outcome must be disclosed. - £10.355m cash and properties (the husband was to retain around £5.64m of cash and properties) 18... The duty to disclose extends beyond what is certain on the date that the order is made to any fact relevant to - A deferred lump sum within 14 days of receipt by the the court's review of the foreseeable future." husband of the cash proceeds of any disposal by the husband of his shares in X Co, calculated as follows: Was the non-disclosure material? The judge concluded that the non-disclosure was material. o 30 % of the cash proceeds after deduction of costs The reason for full and frank disclosure was that "unless the of sale, CGT, £4m (paid into trust for T) and the sum parties give full and frank disclosure of all material facts to of £1,714,286 (see below). each other and to the court, the court cannot 'lawfully or properly exercise its discretion'." It was clear that these facts o £1,714,286 paid to the wife absolutely. would have been regarded as relevant to the exercise of discretion. The husband had laid a false trail and it was The terms of a draft order were agreed and approved by the considered that "The very fact of a) dishonest evidence judge. However, the order was never sealed. and/or b) suppression of documents must indicate some materiality..."

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(b) that the statement of case is an abuse of the court's Did the material non-disclosure vitiate the agreement? process or is otherwise likely to obstruct the just Had the judge known the true facts relating to the IPO disposal of the proceedings; scheduled for early 2013 then he would have progressed the hearing as far as possible and then adjourned it to wait and (c) that there has been a failure to comply with a rule, see whether an IPO did take place in early 2013 and, if so, on practice direction or court order; or what terms. (d) in relation to applications for matrimonial and "If therefore I had adjourned the proceedings in July 2012 to civil partnership orders and answers to such await developments, then it is plain that no IPO has taken applications, that the parties to the proceedings place." The order that would have been made if proper consent." disclosure had taken place would not have been substantially different from the heads of agreement that At first instance, the husband's strike out application was were approved. The order should, therefore, be sealed. dismissed. On appeal, the husband's arguments included:

1. The wife had delayed for nineteen years before Vince v Wyatt [2013] EWCA Civ 495 (Thorpe, Jackson and bringing her claim and this had prejudiced the husband Tomlinson LJJ) 8 May 2013 because he was unable to establish whether any claim for ancillary relief was ever made and, if so, whether it Background was dismissed. The parties were married in 1981, when the wife was 20 and the husband was 22. They separated in around 1984. They 2. The wife's relationship following separation was had one child together and the wife's child from an early tantamount to marriage. Whilst it subsisted, any claim relationship was treated as a child of the family. They had against the husband would have had little credibility. no assets or income and chose to live a New Age or Traveller lifestyle. 3. At any time when the wife's claim was live and should have been advanced, there would have been no order In 1986, the husband began cohabiting with a new partner, because of the "joint impecuniosity". with whom he cohabited for several years, and had another son. He married his current wife in 2006. 4. The husband's present fortune was all achieved years after the breakdown of the relationship, the divorce and The only document that survived in relation to the divorce the wife's new relationship had broken down; proceedings between the husband and wife was the Decree Absolute, dated 1992. It could not be established whether 5. The wife had consulted four different solicitors before the wife had applied for ancillary relief (as it then was) in approaching her current firm and had not raised any her petition or whether any order had been made. Whilst it claims against the husband. was clear that there had been no substantive order in the wife's favour, she might have been the recipient of a Thorpe LJ's judgment nominal periodical payments order, all claims might have FPR, rule 4.4 was intended to bring the court's strike out been dismissed by consent or there might have been no powers in civil and family proceedings into line with each order. other. In both sets of proceedings, the strike out rule was complementary to the court's inherent powers of case In 1993, the wife began cohabiting with a new partner, with management. whom she had two more children. Her new partner was also of modest means. By the time of this hearing, that Thorpe LJ concluded that: relationship had ended. However, no date for the end of the relationship is given in the judgment. "…the judge [at first instance] fell into error in his construction of the Rule and approached his essential In 1995, the husband launched Ecotricity, a highly task too narrowly, partly as a consequence of the way in successful business in the wind industry which was worth which the husband's application was presented. It was many millions. not apt simply to ask was the delay inordinate and, if yes, was prejudice to the husband greater than the The application prejudice to the wife. He had to have regard to all In 2010, the wife issued an application for financial remedy relevant considerations within the history and exercise and applied for an A v A costs allowance. his case management powers not just to protect against the greater prejudice but also to husband the resources The husband made an application under FPR, rule 4.4(1) to of the court. strike out the wife's claim. Rule 4.4(1) provides: It is well known that the judges of the family division are "(1) Except in proceedings to which Parts 12 to 14 apply, working under unremitting pressure and that waiting the court may strike out a statement of case if it appears times for FDR appointments and trials in cases to the court – proceeding at that level are unacceptably long. Part of the case management function is to eradicate hopeless (a) that the statement of case discloses no reasonable claims. Such a robust case management decision is grounds for bringing or defending the application; illustrated by the case of Crossley v Crossley [2008] 1 FLT 1467 where Bennett J refused to allow a wife's claim to

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go to trial in the face of the clear provisions of the pre- We no longer live in an age (if we ever did) in which nuptial agreement. costs can be blithely ignored. The trial of a claim for financial provision may occupy many days of court The facts of this case are extreme. Inpecuniosity has been time. The costs of such proceedings may run into the experience of all the wife's adult life. Both the men hundreds of thousands of pounds, as in this case. with whom she has entered into family life were Indeed they often run into millions of pounds. If the seemingly equally impecunious. Her husband was the claim has no real prospect of success, I find it hard to most improbable candidate for affluence. The wife no believe that the court has no power to such stop such doubt can appeal to his sense of charity but in my proceedings in their tracks. judgment he is not to be compelled to boost the wife's income by the exercise of the jurisdiction under the In my view, the solution to this problem lies in FPR Matrimonial Clauses Act 1973 the existence of which rule 4.4 (1) (b). The wording of this rule is identical to cannot now be plainly established and can only be the wording of CPR rule 3.4 (2). The interpretation presumed. He is not her insurer against life's and operation of these two rules should be eventualities." essentially the same, subject to such variance as arises because the one rule deals with family In the circumstances, the husband's appeal against the A v A litigation and the other deals with civil litigation." order fell away. However, Thorpe LJ was clear that he would have allowed the appeal: 3. The court should adopt the same broad approach to the interpretation and application of FPR 4.4(1)(b) as it "In my judgment in deciding whether to exercise the A v does to CPR 3.4(2)(b). However, unlike in the case of A jurisdiction the judge had to have regard to all the civil claims, there is no limitation period in family cases. factors that bore on his discretionary decision to allow "Nevertheless, in my view the court should not allow the case to go forward. This was not a conventional case either party to a former marriage to be harassed by of an impecunious wife facing an affluent husband and claims for financial relief which (a) are issued many unable to achieve equality of arms without an A v A years after the divorce and (b) have no real prospect of order. A reality that had to be faced was that at trial the success. It must be an abuse of the court's process to husband might well defeat an application fraught with bring such proceedings." The present case was a classic difficulty not only not recovering his own costs but also example of such, both because of the long delay and the paying the costs of the unsuccessful applicant." other circumstances that doomed the wife's application to failure. Jackson LJ's judgment Whilst Jackson LJ agreed with Thorpe LJ's conclusion, he 4. An application to strike out under FPR, rule 4.4 would added some further comment about FPR, rule 4.4 and PD only succeed "in rare and exceptional circumstances." 4A and the relationship between this and the strike out provisions in the CPR (CPR, 3.4(2) and CPR, PD3A). He noted that: DR v GR and others (Financial Remedy: Variation of Overseas Trust) [2013] EWHC 1196 (Fam) (Mostyn J) 10 1. The provisions of the FPR copied the wording of the May 2013 CPR "so far as the subject matter allows. Such This case concerns a wife's application for variation of differences as exist arise from the different nature of settlement. family proceedings and civil proceedings. For example, a provision is needed to exempt litigation concerning Background children from the operation of FPR rule 4.4" The wife was 68 and the husband was 69.They had been married for 31 years. Both had children from their previous 2. One important difference between the FPR and the marriages and they had one child together. CPR was that the FPR did not contain an equivalent of CPR, 24.2, which allows the court to give summary The total assets in this case were just over £2.5m, of which judgment. around £1.3m were held in the Brown Sugar Trust (a post nuptial settlement). The trust structure was as follows: Jackson LJ noted that in civil proceedings it was common for an application for strike out under CPR, - The Brown Sugar Trust owned a Liberian company rule 3.4 to be combined with an application for summary judgment under CPR, rule 24.2. - The Liberian company owned a UK company

"It is perhaps unfortunate that the FPR contains no - The UK company owned two further UK companies rule which is equivalent to CPR rule 24.2. This (Oakleaf Ltd and Deerpark Ltd) omission prompts the following question. Does the omission really mean that in proceedings for - Oakleaf Ltd and Deerpark Ltd owned two retirement financial relief the court must allow a claim which villages and various other assets all situated in the UK. has no real prospect of success to proceed to trial? Such a result would be very odd indeed and Variation of settlement completely out of keeping with the modern The wife applied for variation of settlement under s 24(1)(c) approach to litigation. I find it hard to believe that MCA 1973, which provides: this was the intention of the rule-makers.

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"(1) On granting a decree of divorce, a decree of nullity not participated in proceedings and the companies had of marriage or a decree of judicial separation or at any made their own application to be dis-joined. time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the Mostyn J reviewed the authorities and the requirements of decree is made absolute), the court may make any one or the family procedural rules and summarised the position as more of the following orders, that is to say— follows:

(c) an order varying for the benefit of the parties to "Drawing the threads together it seems to me that the the marriage and of the children of the family or applicable principles on the question of joinder are as either or any of them any ante-nuptial or post- follows: nuptial settlement (including such a settlement made by will or codicil) made on the parties to the i) Joinder either of trustees or of the underlying marriage [, other than one in the form of a pension companies is not an essential pre-condition for the arrangement (within the meaning of section 25D validity of a variation of settlement order. below)];" ii) However, it is mandatory for beneficiaries under The various companies had been joined to the proceedings the age of 18 to be joined unless the court can say that and argued that respect for corporate personalities meant the proposed variation does not adversely affect the that the court could only make adjustments to the rights or interests of any such child. The court has shareholdings of the Liberian company. power to modify this requirement but should be very sparing in its exercise. Failure to comply with this rule Mostyn J noted that in his earlier decision in Hope v Krecji will not nullify any order later made. The application [2012] EWHC 1780 (Fam) he had considered the application to join minor beneficiaries should be made at the first of s 24(1)(a) and s 24(1)(c). He also noted that whilst the appointment following the issue of the application. ambit of s 24(1)(a), which allows the court to order a party to transfer property to which he is entitled in possession or iii) The applicant, respondent, and the trustees and/or reversion, was currently under consideration by the companies themselves can apply for joinder, but in Supreme Court in Petrodel Resources Ltd & Ors v Prest & Ors, each instance both the substantive terms of, and the the Supreme Court had declined to hear argument on the procedure prescribed in, FPR 9.26B must be carefully ambit of s 24(1)(c). complied with.

He commented that if the argument advanced by the iv) The applicant for joinder must show either: companies was correct, "it would mean that this jurisdiction would be almost totally emasculated. This is because it is a) that there is an existing matter in dispute which only in rare cases that the settlement directly owns the requires for its resolution the joinder of the new underlying assets…" party, or

The language of s 24(1)(c) was totally different from that of b) that there is a matter in dispute between a party s 24(1)(a) and the term "settlement" was given a very wide and the proposed new party which is connected to meaning. Mostyn J considered Lord Nicholls' comments in the main matters in dispute between the parties and Brooks v Brooks [1996] AC 375 and concluded that a nuptial that it is desirable to resolve all the issues together. settlement was "any arrangements which makes some form of continuing provision for both or either of the parties to a v) Under the first limb it must be clearly shown that an marriage." The cases of Ben Hashem v Shayif & Anor [2008] existing matter in dispute between the parties cannot EWHC 2380 (Fam) and N v N and F Trust [2005] EWHC be effectually and validly resolved without the joinder 2908 (Fam) made clear that that the power under s 24(1)(c) of the proposed new party. was a wide one. Extrapolating from the reasoning in those cases, Mostyn J commented: vi) Under the second limb it must be shown that there is a separate dispute between a party and the proposed "… I am of the opinion that if under an arrangement new party and that it is desirable to hear the matters 'some form of continuing provision for both or either of together. The question of whether it is desirable to hear the parties to the marriage' (which would include, on the the matters together extends to the commonality of authorities, the provision of accommodation) has been evidence as well as the saving of costs. made from assets held by a group of family companies then the entire set-up, when viewed as a whole, is vii) If better enforcement of an order in a foreign capable of amounting to a variable nuptial settlement. If jurisdiction is relied on under either limb there must the top company is owned by a trust of which the be evidence that joinder would actually make a spouses are formal beneficiaries then the position is a difference. Mere assertion or statements of belief will fortiori." not suffice.

Joinder of third parties viii) An application for joinder must be made on notice The companies and trustees of Brown Sugar had all been under the Part 18 procedure, which requires 7 days' joined as parties to the proceedings. No application had notice. Although the application strictly speaking does been made for joinder and neither the husband nor the third not need to be served on the proposed new party it parties had had notice: counsel for the wife simply turned would be better in the future if it were. The application up with a draft order providing for joinder. The trustees had must be supported by clear evidence.

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Applying these principles here I can see no good reason The wife's housing and income needs (£1,106,000) were why either the trustees or the companies were joined. almost exactly the same as one half of the matrimonial Quite apart from the failure to comply with the property (£1,098,442). The wife was awarded £1,106,000 on prescribed procedure I cannot see how either limb of a clean break basis. rule 9.26B is engaged. The substantive application for variation does not require the joinder of the proposed new parties in order that it can be effectually resolved. CR v SR [2013] EWHC 1155 (Fam) (Moylan J) 22 January There is no separate dispute between the wife and either 2013 the trustees or the companies which it would be This case considered the husband's application for desirable to determine alongside the variation permission to appeal. application. There is no evidence that enforcement of any variation order would be better achieved if the Background trustees or companies were joined. There is a mere The parties married in 1995 and separated in 2011. The assertion to that effect but that is belied by the decision husband was 45 and the wife was 46 and they had three of Mubarak. children, aged 12, 14 and 16.

In my judgment the companies succeed on their The former matrimonial home had a net equity of £330,000, application to be dis-joined." but there were mortgage arrears of £13,000. In addition, the parties had credit card debts and school fees arrears Pre-marital wealth totalling £39,000. This case, like a number of other recent judgments, also emphasises the need for evidence and arguments as to At first instance, the wife's net income was found to be just pre-martial wealth to be advanced at an early stage. Mostyn under £2,200 per month. The husband was found to be able J noted that: to take drawings of £5,700 from his company.

"In 1975 the husband was aged 31 and was clearly a man The District Judge had ordered the transfer of the former of some substance. Unfortunately he only advanced his matrimonial home to the wife. She had also ordered the case about premarital wealth very late in the day and in husband to pay global maintenance of £2,750 for the wife such a way that has prevented any kind of careful and children. This left the husband with no capital, as his quantitative appraisal of the scale of such wealth. He business was concluded to have no value, but continued told me that in the divorce proceedings between him liability for his debts. and [his first wife] he would likely have made an affidavit of means and he accepted that it would have The maintenance order made by the judge meant that after been open to him to have applied for the retrieval of the the husband had paid his rent, he was left with a net income court file from his first divorce and to have bespoken a of £1,200 per month. copy of it. This would have told him and me with some precision the scale of his wealth at the time of the Permission to appeal commencement of this relationship with the wife. But he The husband applied for permission to appeal on the basis did not do so and nor did he produce any corroborative that the wife did "too well". The wife received all the capital, contemporaneous documentary evidence of the scale of leaving the husband with liabilities, and there was a such wealth. The inevitable consequence is that this significant imbalance in the parties' income positions. factor must be treated extremely sceptically and conservatively and if an injustice is thereby meted out to There was some debate about the meaning of the first limb the husband then he has only himself to blame." of the test for permission to appeal under FPR, rule 30.7, namely "the court considers that the appeal would have a Mostyn J felt that the only fair way of dealing with the real prospect of success." Moylan J concluded that the test husband's premarital wealth was to identify which of the for permission was that outlined by the Court of Appeal in parties' assets had existed at the start of their relationship Tanfern Limited v Cameron MacDonald & Anor [2000] 1 WLR and which remained in the husband's direct sole ownership. 1311: He noted the wife had also received an inheritance during the marriage. In the circumstances, the total non- "Permission to appeal will only be given where the court matrimonial property was £316,880. considers that an appeal would have a real prospect of success or that there is some other compelling reason The beneficiaries of the Brown Sugar Trust were (1) the why the appeal should be heard Lord Woolf MR has husband, (2) any person who is or has been his spouse and explained that the use of the word of 'real' means that (3) the issue of (1) or (2). Mostyn J noted the need to have the prospect of success must be realistic rather than regard to the interests of other beneficiaries when exercising fanciful…" his powers. He also noted that "the creation of this trust was plainly an agreed part of the financial architecture of this The intention of the FPR rules was to align the procedure for marriage. In her evidence the wife agreed that the object of appeals with the test that applied in relation to appeals from the trust was to benefit all members of the family. On the the Court of Appeal. This was supported by the White Book, other hand the assets of the trust are the product of the joint Vol 1 para. 52.3.7. endeavour of the parties each making the fullest possible contribution in their different ways and are quintessentially A real prospect of success? matrimonial property." The fairest way of balancing these Counsel for the husband placed reliance on the case of A v L two factors was to allow 80p in £1 as matrimonial property. (Departure from Equality: Needs) [2012] 1 FLR 985. Moylan J took the view that there were "significant similarities"

www.familylawweek.co.uk Family Law Week July 2013 - 26 between that case and the facts in this case. "The effect of the District Judge's order in this case is that the wife receives all of the capital of the parties and, even on the basis of assumed drawings of £5,700 per month, there is a significant imbalance in her favour in their income positions."

In the circumstances, "the husband had a reasonable prospect of success in that he has a reasonable prospect of demonstrating that the effect of the orders made by the District Judge places them outside the bracket of reasonable orders."

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The Revised Public Law Outline .... and this It may seem a little perplexing that the documents which are time they mean it often the trigger event [the written agreement that arises from the meeting before action and the minutes of that meeting] won't actually be before the court for the first The President of the Family Division has published a new contested interim care order hearing, and one suspects that Practice Direction 36C, which then introduces a revised this will be the first (of possibly many) points of guidance Public Law Outline ('revised PLO') as a pilot. that is ignored in practice, to prevent inordinate delay of advocates, clients and courts having to read additional The commencement of the revised PLO will be determined papers which would fit into category (c ) at the hearing after by local courts, and will be on one of four dates: the court grants permission for them to be introduced. Ÿ 1st July 2013 It is also worth noting that the local authority threshold document is to be limited to no more than two pages. Ÿ 5th August 2013 The court will direct that the Guardian file an initial case Ÿ 2nd September 2013 analysis, which it appears likely would be before the case management hearing ('CMH') on day 12, which must Ÿ 7th October 2013. incorporate an analysis of the key issues that need to be resolved in the case including: Following comencement, the revised PLO will operate in all public law family proceedings undertaken in that court. (a) a threshold analysis; Such proceedings include applications for care orders, supervision orders, variations of supervision orders, contact (b) a case management analysis, including an analysis with a child in care, change of a child's surname whilst they of the timetable for the proceedings, an analysis of the are in care and the little used education supervision orders. Timetable for the Child and the evidence which any party proposes is necessary to resolve the issues; The purpose of the revised PLO is to move such cases (c) a parenting capacity analysis; towards a resolution within 26 weeks, in accordance with both the recommendations of the Family Justice Review and (d) a child impact analysis, including an analysis of the the Children and Families Bill currently moving through ascertainable wishes and feelings of the child and the Parliament. impact on the welfare of the child of any application to adjourn a hearing or extend the timetable for the proceedings; and Alterations to the structure of social work statements The revised PLO sets out a defined structure for social work (e) an early permanence analysis including an analysis statements and requires that social work statements are of the proposed placements and contact framework. limited to that structure.

They adopt the 'cascading' approach with the most Alteration to the naming and purpose of hearings important information being at the start of the document – It appears that the revised PLO envisages that the first the summary of what is sought and why, and the welfare hearing will be the CMH by day 12, UNLESS the court is checklist – rather than at the end as has become customary. notified of the need for a contested interim care order hearing that needs to take place before day 12.

Alterations to the documentation to be filed at issue of There will be an advocates' meeting no later than 2 clear proceedings days before the CMH, at which the advocates (and any The revised PLO breaks all documents into three categories: litigant in person) will:

(a) Annexe Documents – those which are to be filed and Consider the local authority evidence served and be placed in the court bundle [social work statement, chronology, care plan, threshold document, Identify any disclosure requirements social work assessments which are relied upon in the statement]; Identify the respective positions of each party, to be incorporated into a draft order (b) Evidential Documents – those which are to be served on the parties but not placed into the bundle Identify any proposed experts and draft the questions [previous court orders and facts and reasons/judgments, information from other agencies, The local authority is then to produce a draft case previous court reports]; and management order and lodge this with the court no later than 11.00am on the working day before the (c) Decision-Making Records – those which are to be CMH. made available to the parties on request, but will not form part of the court bundle [letters before Thus it appears that in any case where an interim care order proceedings, child in need plans, key local authority is not sought prior to the CMH, any counsel representing meetings and minutes]. the parent at an advocates' meeting prior to the CMH will not have had that initial hearing to meet with them, take instructions and consider the papers, to consider and advise

www.familylawweek.co.uk Family Law Week July 2013 - 28 them as to whether experts are required and, if s,o what questions would need to be covered. Either the advocates' Court identifies the key issue(s) (if any) to be meeting will be 'in the dark', or applications for funding of determined and the extent to which those issues can be a conference would need to be made, or the solicitor would resolved or narrowed at the IRH need to find time in the first 12 days of the proceedings to have those detailed discussions with the parent. Court considers whether the IRH can be used as a final hearing At the CMH the court will define the key issues in the case, identify the evidence that will be required to resolve those Court resolves or narrows the issues by hearing key issues, set a timetable for the child, and make case evidence management directions to conclude the case within 26 weeks. Court identifies the evidence to be heard on the issues which remain to be resolved at the final hearing The revised PLO envisages the possibility of a further case Court gives final case management directions management hearing (FCMH) but says that this must not including: take place later than day 20. - Any extension of the timetable for the There is no express provision for directions hearing or any proceedings which is necessary court hearing between this FCMH (day 20) and the issues resolution hearing. But then, there was no such express - Filing of the threshold agreement or a statement provision in the Protocol or the previous PLO and that did of facts/issues remaining to be determined not curtail such hearings regularly taking place. - Filing of: The next stage would be an advocates' meeting prior to the issues resolution hearing, and this must be no later than 7 o Final evidence & Care Plan days prior to the IRH. o Case Analysis for Final Hearing (if required) The advocates are given firm instructions and boundaries as to what they must achieve at this advocates' meeting. They o Witness templates are: o Skeleton arguments To review evidence and the positions of the parties - Judicial reading list/reading time, including time To identify the advocates' views of – estimate and an estimate for judgment writing time

- the remaining key issues and how the issues may - Ensuring Compliance with PD27A (the Bundles be resolved or narrowed at the IRH including by Practice Direction) the making of final orders - Listing the Final Hearing. - the further evidence which is required to be heard to enable the key issues to be resolved or narrowed at the IRH Duration of proceedings Prior to the Children and Families Bill becoming an Act of - the evidence that is relevant and the witnesses Parliament, this is the major change in the revised Public that are required at the final hearing Law Outline. The current working target of 40 weeks becomes a hard deadline of 26 weeks. - the need for a contested hearing and/or time for oral evidence to be given at the IRH 6.1 The court is required to draw up a timetable for proceedings with a view to disposing of the LA advocate to - application without delay and with the aim of doing so within 26 weeks. If proceedings can be resolved - notify the court immediately of the outcome of the earlier, then they should be. A standard timetable and discussion at the meeting process is expected to be followed in respect of the giving of standard directions on issue and allocation - file a draft Case Management Order with the and other matters which should be carried out by the court by 11a.m. on the working day before the IRH. court on issue, including setting and giving directions for the Case Management Hearing. In a new development, the revised PLO makes it plain that where hearing oral evidence on a deadlocked issue would The guidance then goes on to deal with the circumstances in resolve the case or crystallise the issues, the Court MUST do which a case might take longer than 26 weeks: so. This has rarely been the case previously, when the IRH tended to go little further forward than identifying that 6.2 Having regard to the circumstances of the there was a dispute and establishing the duration of the particular case, the court may consider that it is final hearing to resolve that dispute. If the parties seek oral necessary to extend the time by which the proceedings evidence to be heard at the IRH, they must notify the court are intended to be resolved beyond 26 weeks to enable in advance and seek any directions that are required. the court to resolve the proceedings justly. When making this decision, the court is to take account of the At the IRH these actions will take place: guidance that extensions are not to be granted

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routinely and are to be seen as requiring specific (1) state the reason(s) why it is necessary to have a justification. The decision and reason(s) for extending further extension; a case should be recorded in writing (in the Case Management Order) and orally stated in court, so that (2) fix the date of the next effective hearing (which all parties are aware of the reasons for delay in the might be in a period case. The Case Management Orders must contain a shorter than a further eight weeks); and record of this information, as well as the impact of the court's decision on the welfare of the child. (3) indicate whether it is appropriate for the next application for an extension of the timetable to be The intention would be that an extension would be for 8 considered on paper. weeks, but the revised PLO makes it plain that where further extensions are required to resolve the case justly, the What is interesting with these aspects is that, much like the court may do so, but that it will need to be clearly recorded Children and Families Bill, there is no attempt to give on the face of the order why such a decision was made. guidance or factors that might justify a case going beyond 26 weeks. To an extent, this is sensible, since drafting such a 6.4 If the court agrees an extension is necessary, the set of factors would either omit something unpredictable intention is that an initial extension to the time limit OR be so widely drawn that almost any case could be may be granted for up to eight weeks (or less if incorporated into it (a common refrain in the Family Justice directed) in order to resolve the case justly, meaning Review is that every lawyer considers their individual case that the maximum time limit for proceedings will be 34 to be 'exceptional' – the illusory superiority effect, where weeks. If more time is necessary, in order to resolve the everyone considers themselves to be above average proceedings justly, a further extension of up to eight intelligence and an above average driver… weeks may be agreed by the court. There is no limit on the number of extensions that may be granted in a Having said that, this places the individual court, grappling particular case. with an application not to conclude the proceedings, but to grant an 8 week extension, somewhat on its own when 6.5 If the court considers that the timetable for the deciding whether to grant or refuse that extension. It may proceedings will require an extension beyond the next well be that the theme is developed further in Court of eight week period in order to resolve the proceedings Appeal judgments. justly, the Case Management Order should —

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Care Proceedings: the Operation and Effect authority's safeguarding concerns are such that [it is] not in of Pre-Proceedings – What do lawyers need the child's interests' to do so (para 3.30). Under the new process, the local authority was first required to take legal to know? advice to establish whether the requirements for court applications and orders are met. It should then send a 'letter before proceedings' to the parents, outlining its concerns and inviting them to a pre-proceedings meeting. The letter entitles parents to level 2 legal aid, currently £364, so that they can obtain legal advice and be accompanied by their lawyer to the meeting. Following the meeting, the local authority was required to send a revised plan for the child, setting out what the parents must do to safeguard the child and the action the local authority would take if they do not keep to this. The letter before proceedings had to be filed with the local authority's care application but the PLO gave no further guidance about how the court should respond to them. Professor Judith Masson, School of Law University of Bristol, and Dr Jonathan Dickens, Centre for Research on Children and Families, University of East Anglia How is the pre-proceedings process working? In April 2010, a team from the Law School at University of The introduction of the new PLO from July of this year is Bristol and the Social Work School at University of East the latest in a series of attempts to ensure that care Anglia began a research project, funded by the ESRC (Grant proceedings are determined in accordance with the No RES 062-23-2226), to examine the operation and impact 'overriding objective' fairly, making proportionate use of the of the pre-proceedings process. The report of the research court's resources and within the child's timescale. There is a has been published and a 4 page summary is also available. new and stronger emphasis on speedy decision-making; the This article provides key points on the operation of the target for completion is 26 weeks (as proposed by the process for lawyers who act in care proceedings. Family Justice Review and included in the Children and Families Bill) but extensions of up to 8 weeks at a time will The research explored practice in six local authorities in be allowed with 'specific justification' so that cases to be England and Wales, and the courts they used, through an decided justly (para 6.2). Local authorities must prepare so examination of local authority files and court bundles; that cases can progress when proceedings are issued, and interviews with lawyers, social workers and managers; a the court must ensure that proceedings are more focused, focus group with judges; observations of pre-proceedings seeking additional assessments only if they are necessary to meetings; and interviews with parents who attended them. determine the issues to be decided. The structure of care There were over 200 cases in the file study, over 50 proceedings is revised: the CMH after 12 days with the interviews with local authority staff, 19 interviews with possibility of a Further CMH before day 20; the court has lawyers in private practice and 24 interviews with parents. more flexible powers, including to give directions without a The file sample cases all started in 2009 with legal advice hearing; and a cafcass/ cafcass Cymru initial assessment is that a case could be made for care proceedings. to be available (possibly orally) at the CMH. Observations took place in 2010 and 2011, and cases were followed up briefly before the end of the study to find out Mere changes in the structure of proceedings have not what happened. previously been able to deliver more timely decisions for children. As the President has indicated, a change of culture The combination of methods means that the study provides is required. Cases will have to be handled differently both a good picture of the use being made of the process, the in local authorities before proceedings start and in/for court practice in pre-proceedings meetings, the experiences of while they are continuing. Care proceedings can be parents, and the impact on cases and on court decision- determined in less time, the work of the Triborough scheme making. Practice varied between, and within, local has shown this with more than half of cases completing in authorities, as should be expected where the social workers under 26 weeks at the last count. The President has recently and managers are seeking to respond to individual parents emphasised the vital importance of the pre-proceedings and their child's circumstances. There was no single stage. Recently published research shows the value of this standard way of working but there were some common work for parents, and highlights the need for courts to take practices, attitudes and difficulties. The size of the study proper account of it so as to avoid additional delays for means that we expect it covers the range of practices, children. experiences and impacts.

What is the pre-proceedings process? What use are local authorities making of the pre- The pre-proceedings process for care proceedings was proceedings process? introduced with the original PLO, in April 2008, with the The local authorities in the study were using the pre- aim of diverting cases from care proceedings, or if that was proceedings process in almost all cases where there was not possible, improving local authority preparation and time to do so. Where the process was not used, care narrowing the issues so that cases could be decided more proceedings were generally issued within 15 days of the quickly, within the 40 week target. A revised version of the legal planning meeting, indicating there was insufficient Children Act 1989 Guidance, Volume 1, Court Orders time for the process. Staff in these local authorities, both (DCSF 2008) set out a new process for local authorities to lawyers and social workers, were generally positive about follow unless 'the scale, nature and urgency of the local

www.familylawweek.co.uk Family Law Week July 2013 - 31 the pre-proceedings process. They saw it as the right, safety etc. It is also common for children's services to focus respectful way to work with parents facing probable care on mothers to the exclusion of fathers. proceedings, and felt that legal advice at this stage was useful for parents, and for them. Parents reported being shocked when they received the letter and alarmed at its contents, even though these Sending a letter before proceedings did not mean the social frequently reflected existing child protection plans and they worker thought that care proceedings could be avoided. had often been informed in advance. Seeing the local Local authorities used two different forms of the pre- authority's concerns in writing brought home the proceedings letter: the standard letter, set out in the 2008 seriousness of their position. The letter was a 'wake up call' Guidance headed 'HOW TO AVOID GOING TO COURT', even though many harboured views that the local authority and a 'letter of intent' indicating that care proceedings had no business interfering in their family and that they would be issued. Letters of intent were less common, were being unfairly targeted. around one in five of the letters seen, but one of the local authorities used them in a quarter of its cases, and they were Despite advice that the letter should be taken to a solicitor frequently used in cases relating to unborn children where and accompanied, usually, by a list of solicitors who did this a child had been removed previously. Attached to the pre- work, a few parents saw no need for this. Others proceedings letter were the local authority's concerns, this experienced difficulty contacting a solicitor, and some had could be a long and detailed list of failings and incidents or to approach several before finding one to act for them. One headlines relating to the main issues. reason for this could have been the limited number of 'matter starts' a firm had, and a practice of rationing these Two features were common in cases where the pre- each month. Another was the limited number of solicitors' proceedings process was used: (1) Almost all the children firms in the locality; mothers found their chosen firm was had child protection plans; this was true for less than half of acting (or had acted) for the father. the cases taken directly to court. Local authorities used the pre-proceedings process as 'a step up' from ordinary child protection planning, to mark the seriousness of their What happens at pre-proceeding meetings? concerns or where parents had not responded sufficiently to It was not unusual for lawyers to get very little notice of the the child protection plan. (2) Thirty per cent of the cases meeting, because these were arranged at short notice or related to unborn babies; the pre-proceedings process because parents had not contacted them promptly. Local provided a framework for working with parents in these authorities were generally very accommodating in cases and enabled parents to have legal advice when crucial changing meeting dates so that a lawyer could attend with matters were discussed such as co-operation with pre-birth the parents. Distance could make it difficult for a parent to assessment or the baby's care after discharge from hospital. meet their lawyer in advance; local authorities responded to These are high risk cases; the vulnerability of new babies this by arranging meetings to allow lawyers and parents to means that lack of parental co-operation with a protection talk before the start. plan may lead to a decision to remove the child. Criticism of local authorities for using Children Act 1989, s.20 Meetings were quite small, most commonly with only seven accommodation (R (G) v Nottingham CC [2008] EWHC 152 participants but local authority staff generally outnumbered (Admin), Coventry CC v C [2012] EWHC 2190 (Fam)) has family members and their advisers. They were relatively made it more important for the local authority to ensure that short; three-quarters lasted only 45 minutes, but in one parents have legal advice. study LA were generally much longer, lasting an hour and a half or more. Parents and professionals generally saw Although the most common use of the pre-proceedings these as social work meetings, and the discussion was process was to avoid care proceedings by improving largely between the social worker/ manager and the parent. parenting and the children's care, it was also used to discuss However, the presence of lawyers made parents and social parents' agreement to alternative care with relatives or workers see these meetings as more serious. foster carers, to assessment or to the provision of services. These issues were not necessarily separate; both alternative In some cases, local authorities arranged review meetings. care and the provision of services might be discussed as a These were used to monitor parents' progress and also to way of avoiding proceedings. One local authority made inform them that proceedings would be started where substantial use of the process to get parents' agreement to concerns had not been addressed. Lawyers also attended assessments by an external agency; this was the main aim in some review meetings. Discussions of the arrangements for nearly half of its pre-proceedings cases. Others did this only the first hearing could ensure that the lawyer was aware of infrequently, and had largely ceased trying to complete the local authority's plans and sufficient court time was assessments that would satisfy the court because of negative booked. experiences in proceedings and the need to control their costs. What do parents' lawyers do at pre-proceedings meetings? The role of the lawyer was to provide advice – before, Who gets pre-proceedings letters? during and after the meeting – and to support parents in the Local authorities were more likely to send letters before process, rather than to provide representation. The parents proceedings to mothers than fathers. Where parents were who were interviewed said that their lawyer's presence living together, a joint letter was usually sent; only 40% of made them feel more confident and able to speak directly. separated fathers were sent letters. There are many reasons This did not necessarily prevent parents feeling pressured why fathers might be excluded – unknown identity or to agree with proposals and plans when the alternative whereabouts, lack of involvement, concern for the mother's appeared to be a court application, but it did provide independent advice about the alternatives. Sally Fry did not

www.familylawweek.co.uk Family Law Week July 2013 - 32 want her baby to live with her mother (who was already months for cases with pre-proceedings but only 2 months caring for her older children under a SGO) while she for cases without. The suggestion that the pre-proceedings completed a substance abuse programme. But fostering process does not give parents sufficient time to show with the grandmother was the best for the baby. Lawyers improvements was not supported by the research evidence generally said very little in meetings, nevertheless they had but incidents before or after the pre-proceedings meeting an important role monitoring proposals, checking that the precipitated application to court in some cases. local authority's requirements were clear, and parents really felt they could comply. There appeared to be little room for Court proceedings were not dealt with more speedily where negotiation but social work managers were willing to accept the pre-proceedings process had been used. Indeed, there some moderation of draft agreements 'at the edges'. was no difference in the average length of proceedings. Lawyers also had a calming influence, and sometimes Courts adopted a start again approach, apparently arranged 'time out' to avoid a damaging loss of control by discounting what had happened during the pre- their client. proceedings stage. This in turn made local authorities very reluctant to commission further assessments before a court Most but not all the parents' representatives were qualified application. Overall, the process met the aim of diverting solicitors, the others were paralegals, legal executives or cases from proceedings, but had no discernible effect on trainees. Effective support was not confined to qualified court proceedings. Similar proportions of cases were solicitors, knowledgeable paralegals, who had the contested and the proportions of the different types of order confidence of their clients and could communicate well with were the same. them could be effective. However, some clients were poorly served by people who appeared to have little understanding of social work practice or their client's position. What are the important messages for parents' lawyers? Parents who receive a pre-proceedings letter have 'a last chance' to avoid care proceedings. Taking this chance means What is the effect of the pre-proceedings process? making changes, particularly co-operating with Children's There were no care proceedings in a quarter of the file cases Services. It is not possible to predict accurately which where a standard pre-proceedings letter was sent. An even parents will succeed. Lawyers will help by making sure higher proportion of observed cases were diverted from clients understand the importance of co-operation and are care proceedings. This is a remarkably positive outcome realistic about being able to keep any agreement they sign. given the nature of the concerns and often the length of the Some clients may need more support than Children's family's involvement with Children's Services. In two-thirds Services appear to offer. Negotiating for additional services of these cases, parental care improved sufficiently for (within reason) may be helpful but will strengthen the local proceedings to be avoided. In half of these the authority's case if parents fail to make use of these. improvements in care and co-operation were substantial. In the other half, improvements were more limited, and other Quite a long period may elapse between the meeting and factors such as the difficulties of bringing a case based on any proceedings. No news may be good news for a client, past incidents or uncertainty about evidence also influenced but only if they are consistently managing to provide good the decision. In the remaining third of cases, alternative enough care and engaging with Children's Services, rather arrangements for the child's care were agreed, or achieved than simply building the local authority's case. by the other parent making a s.8 application. Children generally went to live with relatives but some were fostered The majority of parents who receive a pre-proceedings letter under s.20. Sally Fry did not succeed in controlling her drug do not avoid care proceedings, and most care proceedings use; her baby stayed with the grandmother, who was result in parents losing care of their children. Relative considering a SGO application. placements are increasingly common; over a quarter of cases ended with residence orders (usually to a parent who Improvements in parental care occurred where parents had not had care at the start of proceedings) or special came to understand the seriousness of the concerns, used guardianship, and some children on care orders were the services offered and made some changes in their lives. placed with relatives. Identifying a relative who can care Effective pre-proceedings meetings provided a foundation before proceedings are started can help to minimize the for this. A good relationship with the social worker and disruption for children. motivation to change were crucial. Parents' lawyers acted as Clients may be well served by an unqualified person, but a catalyst – helping clients to see the seriousness of their only if that person has the knowledge, temperament and position and feel that they could do something about it. In a skills to work effectively with Children's Services and with few cases a lawyer's assistance was more direct: Mrs parents in extreme difficulty. Providing pre-proceedings Mahmood's solicitor encouraged her to obtain and extend advice is not a single event, continuity of adviser is likely to injunctions against her husband. This, together with her increase parents' confidence in the person acting for them. participation in a 'Freedom programme' and social work support, enabled Mrs Mahmood to understand the effects of There are very few (if any) parents who benefit from being domestic violence on her children and herself, and to parties to care proceedings. demonstrate this to Children's Services. This took time, the pre-proceedings process lasted 18 months and the child Shorter care proceedings make it even more important that protection plans continued after the process ended. parents are helped to address the local authority's concerns at the pre-proceedings stage. Few parents are able to Where care proceedings were not avoided, the pre- demonstrate change during care proceedings. Shorter proceedings process could result in a substantial delay in proceedings will mean it is even harder to do so. court applications. On average, the period between the legal planning meeting and the care application was almost 6 13/6/13

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Stripping Away the Veil of Deceit: Prest v ing, in one dictionary definition, "readily taking on various Petrodel shapes or forms". Lord Neuberger cited academic commen- tary to the effect that "(t)he inherent imprecision in meta- phors has resulted in a doctrinal mess" and referred to Justice Cardozo's reference to the "mists of metaphor" in company law, which "starting as devices to liberate thought … end up often by enslaving it." "(P)iercing' seems to happen freakishly. Like lightning, it is rare, severe and unprincipled."

Lord Sumption undertook a masterly survey of the relevant authorities and, in doing so, sought to eschew metaphor and imprecision and to penetrate through to the nucleus of legal principle that lies at the core of the "doctrine's" invocation. It is a specific principle that the law defines the incidents of most legal relationships between persons (natural or artifi- cial) on the fundamental assumption that their dealings are John Wilson QC, 1 Hare Court honest. The same legal incidents will not necessarily apply if they are not (see paragraph 18). "Fraud unravels every- In the 24 hours since the Supreme Court published its land- thing". Although the maxim is primarily applied in cases mark decision in Prest v Prestodel Resources Ltd & Others of contract it illustrates a broader principle governing cases ("Prest") there has been a tsunami of commentary upon its in which the benefit of some apparently absolute legal prin- consequences. So great has been the interest generated, ciple has been obtained by dishonesty. The authorities amongst company and insolvency lawyers as well as family show that there are very limited circumstances in which the lawyers, that it is unnecessary, in this article, to recite either law will treat the use of a company as a means of evading the material facts of the case or the convoluted procedural the law as dishonest for the purpose of the maxim. history that followed the presentation by Mrs Prest of a petition for divorce in March 2008. Instead, the focus here In Ben Hashem v Al Sharif [2009] 1 FLR 115 Munby J surveyed is on the Supreme Court's conclusions in relation to the family and non-family cases on "piercing the corporate "piercing the corporate veil", the relevant provisions of the veil" and formulated six principles from these cases: Matrimonial Causes Act 1973 ("MCA"), the employment of evidential presumptions and the finding that the beneficial (i) Ownership and control of a company were not ownership of the residential properties which were the enough to justify piercing the corporate veil; subject of Moylan J's original order lay with Mr Prest. (ii) The court cannot pierce the corporate veil, even in the absence of third party interests in the company, merely Piercing the corporate veil because it is thought to be necessary in the interests of The startling conclusion, as stated by Lord Neuberger, was justice; that there has never in fact been a successful or appropriate invocation of "the doctrine" of "piercing the corporate veil" (iii) The corporate veil can be pierced only if there is in the 80 years since the argument was first considered in some impropriety; Gilford Motor Co Ltd v Horne [1933] Ch 935 – see paragraph 79. Such a conclusion had given rise to the temptation (not (iv) The "impropriety" in question must be "linked to the succumbed to) to give "the doctrine" its quietus. "The doc- use of the company structure to avoid or conceal liabili- trine" is perhaps not even a doctrine. Lord Sumption stated ty"; at paragraph 16 that it referred to the exceptions to the principles set out in Salomon v A Salomon & Co Ltd [1897] AC (v) To justify piercing the corporate veil, there must be 22, namely to those circumstances where a person who "both control of the company by the wrongdoer(s) and owns and controls a company is said in certain circumstanc- impropriety, that is (mis)use of the company by them as es to be identified with it in law by virtue of that ownership a device or façade to conceal their wrongdoing; and control. Whilst Lord Neuberger and Lord Clarke referred to the "doctrine", Lord Mance referred to it as "a (vi) The company may be a "façade" even though it was metaphor" (paragraph 98) and Lord Walker was of the view, not originally incorporated with any deceptive intent, at paragraph 106, that it: provided that it is being used for the purpose of decep- tion at the time of the relevant transactions. The court "…is not a doctrine at all, in the sense of a coherent would, however, pierce the corporate veil only so far as principle or rule of law. It is simply a label – often as it was necessary in order to provide a remedy for the Lord Sumption observes, used indiscriminately – to de- particular wrong which those controlling the company scribe the disparate occasions on which some rule of law had done. produces apparent exceptions to the principle of the separate juristic personality of a body corporate reaf- It was implicit in the above formulation that resort to pierc- firmed by the House of Lords in Salomon v A Salomon ing the corporate veil should only be in circumstances and Co Ltd [1897] AC 22" (emphasis added) where there was no other remedy available against the wrongdoer. The Court of Appeal in VTB Capital v Nutritek The use of words such as "pierce", "lift", "veil", "mask", International Corpn [2012] 2 Lloyds Rep 313 ("VTB") adopted "façade" or "sham" has not assisted. Lord Sumption, at par- Munby J's formulation subject to two qualifications. Firstly, agraph 28, described the latter two terms as "protean" mean- they disagreed that it was not necessary for there to be no

www.familylawweek.co.uk Family Law Week July 2013 - 34 other available remedy before resort should be had to pierc- ceeded on the basis that this was what in fact was being ing the veil. The Supreme Court roundly disagreed with done. For the evasion principle to be engaged the "owner" this. Secondly, the Court of Appeal stated that it was not of the company has to use the company's separate legal enough to show that there had been wrongdoing: "the rele- personality to evade a liability which would otherwise lie vant wrongdoing must be in the nature of an independent on the owner. In Horne and Lipman the real actors had a wrong that involves the fraudulent or dishonest misuse of liability which arose independently of the involvement of the corporate personality of the company for the purpose of the company and the evasion principle was accordingly concealing the true facts." On this point the Supreme Court engaged. At paragraph 34: in VTB agreed with the Court of Appeal. "These considerations reflect the broader principle that Lord Sumption concluded that two distinct principles, the the corporate veil may be pierced only to prevent the concealment principle and the evasion principle, lay behind abuse of corporate legal personality. It may be an abuse the words "façade" and "sham". At paragraph 28: of the separate legal personality of the company to use it to evade the law or to frustrate its enforcement. It is not "The concealment principle is legally banal and does not an abuse to cause a legal liability to be incurred by the involve piercing the corporate veil at all. It is the company in the first place. It is not an abuse to rely upon imposition of a company or perhaps several companies the fact (if it is a fact) that a liability is not the controller's so as to conceal the identity of the real actors will not because it is the company's." deter the courts from identifying them, assuming that their identity is legally relevant. In these cases the court Having cited with approval the principles set out by Munby is not disregarding the "façade" but only looking behind J in Ben Hashem v Al Sharif Lord Sumption summarised his it to discover the facts which the corporate structure is understanding of the limited place for "piercing the corpo- concealing. The evasion principle is different. It is that rate veil" at paragraph 35: the court may disregard the corporate veil if there is a legal right against the person in control of it which exists "I conclude that there is a limited principle of English independently of the company's involvement, and a law which applies when a person is under an existing company is interposed so that the separate legal person- legal obligation or liability or subject to an existing legal ality of the company will defeat the right or frustrate its restriction which he deliberately evades or whose en- enforcement. Many cases will fall into both categories, forcement he deliberately frustrates by interposing a but in some circumstances the difference between them company under his control. The court may then pierce may be critical. This may be illustrated by reference to the corporate veil for the purpose, and only for the those cases in which the court has been thought, rightly purpose, of depriving the company or its controller of or wrongly, to have pierced the corporate veil." the advantage that they would otherwise have obtained by the company's separate legal personality. The princi- It should be noted (see paragraph 103 per Lord Clarke) that ple is properly described as a limited one, because in the distinction between these two principles was not dis- almost every case where the test is satisfied, the facts cussed in the course of legal argument before the Supreme will in practice disclose a legal relationship between the Court. company and its controller which will make it unneces- sary to pierce the corporate veil. Like Munby J in Ben With the concealment principle the company is a "façade" Hashem, I consider that if it is not necessary to pierce the and, whilst being wary of metaphor, the court "lifts the corporate veil, it is not appropriate to do so, because on corporate veil". With the evasion principle the company's that footing there is no public policy imperative which involvement is a sham and the court "pierces the corporate justifies that course." veil." On Lord Sumption's analysis in Gilford Motor Co v Horne relief was granted against Mr Horne on the conceal- At first instance in Prest Moylan J had held that there was no ment principle and against "his" company on the evasion "impropriety" sufficient to permit the corporate veil to be principle. To that extent the corporate veil was pierced. pierced. The Court of Appeal agreed, as did Lord Sump- However (paragraph 29): tion. He explained this, by reference to the concealment and evasion principles, at paragraph 36: "It does not follow that J M Horne & Co Ltd was to be identified with Mr Horne for any other purpose {other "The husband has acted improperly in many ways. In than granting an injunction to prevent Mr Horne's the first place, he has misapplied the assets of his compa- breach of covenant}. Mr Horne's personal creditors nies for his own benefit, but in doing that he was neither would not, for example, have been entitled simply by concealing nor evading any legal obligation owed to his virtue of the facts found by Farwell J, to enforce their wife. Nor, more generally, was he concealing or evading claims against the assets of the company." the law relating to the distribution of assets of a mar- riage on its dissolution. It cannot follow that the court Similarly, in Jones v Lipman [1962] 1 WLR 832 the relief should disregard the legal personality of the companies granted against Mr Lipman was done on the concealment with the same insouciance as he did. Secondly, the principle and the relief against "his" company was done on husband has made use of the opacity of the Petrodel the evasion principle. Group's corporate structure to deny being its owner. But that, as the judge pointed out at para 219"is simply In all the other cases that were considered, in Lord Sump- [the] husband giving false evidence". It may engage tion's view, the proper analysis was that relief was being what I call the concealment principle, but that simply given on the concealment principle rather than the evasion means that the court must ascertain the truth that he has principle so that the issue of piercing the corporate veil concealed, as it has done." simply did not arise, even when the court in question pro-

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The properties in question had been vested in the companies long before the marriage broke up and for In Lord Sumption's view, if there was no justification as a reasons of wealth protection and the avoidance of tax. matter of general legal principle for piercing the corporate Whatever the husband's reasons for organising things in veil he found it impossible to say that a special and wider this way there was no evidence to show that he had been principle applied in matrimonial proceedings by virtue of seeking to avoid any obligation which was relevant to the s.24(1)(a). At paragraph 37: financial remedy proceedings. "An "entitlement" is a legal right in respect of the The other members of the Court broadly agreed with Lord property in question. The words "in possession or Sumption's analysis. Lord Neuberger was of the view that reversion" show that the right in question is a in both Horne and Lipman the concealment principle was proprietary right, legal or equitable. This section is engaged but not the evasion principle so that there was no invoking concepts with an established legal meaning need to pierce the corporate veil. Having given and recognised legal incidents under the general law. consideration to consigning the "doctrine" to history he Courts exercising family jurisdiction do not occupy a concluded that it would be wrong to do so as it represented desert island in which general legal concepts are a "potentially valuable judicial tool to undo wrongdoing in suspended or mean something different. If a right of some cases where no other principle is available" provided property exists, it exists in every division of the High that it is possible to discern or identify an approach to Court and in every jurisdiction of the county courts. If piercing the corporate veil which accords with normal legal it does not exist, it does not exist anywhere." principles, reflects previous judicial reasoning (so far as it can be discerned and reconciled), and presents a practical And at paragraph 41: solution (paragraph 80). On that basis he accepted the formulation by Lord Sumption at paragraph 35 of his "The recognition of a jurisdiction such as the judge speech. Lady Hale (with whom Lord Wilson agreed) sought to exercise in this case would cut across the expressed some doubt as to whether or not every case could statutory schemes of company and insolvency law … be classified using the concealment and evasion principles These schemes are essential for the protection of those and stated that these principles may in fact be examples of dealing with a company, particularly where it is a the broader principle that the individuals who operate trading company like PRL or Vermont. The effect of the limited companies should not be allowed to take judge's order in this case was to make the wife a secured unconscionable advantage of the people with whom they do creditor. It is no answer to say, as occasionally has been business. Similarly, Lord Mance was not prepared to said in cases about ancillary financial relief, that the "foreclose all possible situations which may arise". He court will allow for known creditors. The truth is that in described piercing the corporate veil as "a final fall-back" the case of a trading company incurring and discharging and cases where it was likely to be appropriate were likely large liabilities in the ordinary course of business, a to be "novel and very rare" (paragraph 100). Because the court of family jurisdiction is not in a position to conduct distinction between the concealment principle and the the kind of notional liquidation attended by detailed evasion principle had not been the subject of argument or internal investigation and wide publicity which would submissions Lord Clarke was of the view that it should not be necessary to establish what its liabilities are." be definitively adopted until such time as it had been the subject of detailed submissions before the court. Lady Hale and Lord Wilson agreed: Lord Sumption's analysis of the meaning of the words "entitled, either in possession or reversion" was supported by a consideration The Matrimonial Causes Act of the statutory history of the phrase which Lady Hale The principal issue before the Court of Appeal was whether traced back to 1857 (see paragraph 87). There was nothing or not Mr Prest was "entitled" to the properties legally in the language, the history of the phrase or of Law owned by the companies for the purposes of s.24(1)(a) of the Commission report leading to the Matrimonial Proceedings MCA. Although Moylan J held that the former matrimonial and Property Act 1970 to suggest that the words should be home was beneficially owned by Mr Prest he made no read to include "property over which the first-mentioned findings as to the beneficial ownership of the other party has such control that he could cause himself to become properties in respect of which a claim was made. Mrs Prest entitled, either in possession or reversion." Nor could it be relied upon the long standing Court of Appeal authority of said that s.24(1)(a) was intended to give the Family Division Nicholas v Nicholas (1984) FLR 285 and upon Mubarak v an express power to pierce the corporate veil in Mubarak [2001] 1 FLR 673. Moylan J had found that Mr Prest circumstances where no other division could do so. had complete control over the companies and was in a position to procure the transfer of the properties to Mrs The courts' powers under the MCA were limited. Reliance Prest. In those circumstances, Moylan J held that Mr Prest could be placed on s.25(2)(a) which required the court, was "entitled" to the properties for the purposes of s.24(1)(a). when exercising its powers under s.24, to have regard to the The majority in the Court of Appeal (Rimer and Patten LJ) "income, earning capacity, property and other financial concluded that Nicholas and Mubarak had nothing to say resources which each of the parties to the marriage has or is about the ordinary meaning of s.24(1)(a). If the assets likely to have in the foreseeable future" so that Mr Prest's belonged beneficially to the companies then Mr Prest was ownership and control of the companies and his practical not "entitled" to them within the meaning of s.24(1)(a). In ability to extract money or money's worth from them were the opinion of Rimer LJ the equation that "power equals relevant to the court's assessment of what his resources property" was heretical. It ignored the fundamental really were. This consideration may affect the size of any principle that the only entity with the power to deal with lump sum or other financial order made but it did not assets held by it is the company. "Entitlement" can only follow that his worth could be boosted by his access to those mean "beneficially entitled". The Supreme Court agreed.

www.familylawweek.co.uk Family Law Week July 2013 - 36 assets or that those assets were made specifically More recently, in NG v SG (Appeal: Non-Disclosure) [2011] transferable to the other party pursuant to s.24(1)(a). EWHC 3270 Fam Mostyn J began his judgment with these words: Similarly, a wife may be able to pray in aid s.37 of the MCA in order to reverse transactions made by a husband for the "The law of financial remedies following divorce has benefit of a company which he owned or controlled. At many commandments but the greatest of these is the paragraph 40: absolute bounden duty imposed on the parties to give, not merely to each other, but, first and foremost to the "Section 37 is a limited provision which is very far from court, full frank and clear disclosure of their present and being a complete answer to the problem, but it is as far likely future financial resources. Non-disclosure is a as the legislature has been prepared to go." bane which strikes at the very integrity of the adjudica- tive process. Without full disclosure the court cannot The transactions in this case between the companies and the render a true and certain and just verdict. Indeed, Lord husband preceded the breakdown of the marriage by many Brandon has stated that, without it the court cannot years and so there was no room for an application of s.37. lawfully exercise its powers (see Jenkins v Livesey However, Lady Hale expressed the view that, if there was a (Formerly Jenkins) [1985] AC 424. It is thrown back on transaction that was apparently caught by s.37, the excep- inference and guess-work within an exercise which in- tion for bona fide purchasers for value contained in s.37(4) evitably costs a fortune and which may well result in an might not apply to a company where the controlling mind unjust result to one or other party." of the husband was acting with the intention of defeating a wife's claims. Mostyn J, in that case, conducted a review of the relevant authorities and, at paragraph [16] sought to draw the threads together. He said: The drawing of adverse inferences in the Family Division It has often been stated in recent years that the Family "Pulling the threads together it seems to me that where Division applies precisely the same law as is applied in the court is satisfied that the disclosure given by one other Divisions of the High Court. There is not, for exam- party has been materially deficient then: ple, one law of "sham" for the Family Division and another for the Chancery Division (see Munby J in A v A & St (i) The court is duty bound to consider by the process George's Trustees [2007] EWHC 1810 (Fam), [2007] 2 FLR of drawing adverse inferences whether funds have 467). Indeed, this is the bell-beat of Lord Sumption's speech. been hidden; In Mubarak v Mubarak [2001] 1 FLR 673 Bodey J whilst expressing the view that in an ideal world the Family Divi- (ii) But such inferences must be properly drawn and sion and the Chancery Division should adopt a common reasonable. It would be wrong to draw inferences that approach, stated that different considerations do frequently a party has assets which, on an assessment of the pertain: the company approach, on the one hand being evidence, the court is satisfied he has not got; predominantly concerned with parties at arm's length in a contractual or similar relationship; the family approach, on (iii) If the court concludes that funds have been hidden the other hand being concerned with the distributive pow- then it should attempt a realistic and reasonable quan- ers of the court as between husband and wife applying tification of those funds, even in the broadest terms; discretionary considerations to what will often be a mainly, if not entirely, family situation. (iv) In making its judgment as to quantification the court will first look to direct evidence such as docu- Lord Sumption recognised that this difference of context mentation and observations made by the other party; could have particular application in family cases to the treatment of evidence and the drawing of adverse inferences. (v) The Court will then look to the scale of business activities and at lifestyle; In J v J [1955] P 215 Sachs J said: (vi) Vague evidence of reputation or the opinions or "In cases of this kind; where the duty of disclosure comes beliefs of third parties is inadmissible in the exercise; to lie on a husband; where a husband has – and his wife has not – detailed knowledge of his complex affairs; (vii) The Al-Khatib v Masry technique of concluding where a husband is fully capable of explaining and has that the non-discloser must have assets of at least twice had the opportunity to explain, those affairs, and where what the claimant is seeking should not be used as the he seeks to minimise the wife's claim, that the husband sole metric of quantification; can hardly complain if, when he leaves gaps in the court's knowledge, the court does not draw inferences in (viii) The Court must be astute to ensure that a non- his favour. On the contrary, when he leaves a gap in discloser should not be able to procure a result better such a state that two alternative inferences may be than that which would be ordered if the truth were drawn, the court will normally draw the less favourable told. If the result is an order that is unfair to the inference – especially where it seems likely that his able non-discloser it is better that the court should be legal advisers would have hastened to put forward af- drawn into making an order that is unfair to the claim- firmatively any facts, had they existed, establishing the ant [in the light of the citation of J v J [1955] P 215 it more favourable alternative." would seem that a 'than' is missing prior to 'that' in this citation]."

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Lord Sumption echoed these sentiments and observations. co-operate with these proceedings is a course ultimately He cited with approval, and subject to a modification, the adopted on the direction of the husband. It is a fair dicta of Lord Lowry in R v Inland Revenue Commissioners, Ex inference from all these facts, taken cumulatively, that p TC Coombs & Co [1991] 2 AC 283, 300: the main, if not the only, reason for the companies' failure to co-operate is to protect the London properties. "In our legal system generally, the silence of one party in That in turn suggests that proper disclosure of the facts face of the other party's evidence may convert that would reveal them to have been held beneficially by the evidence into proof in relation to matters which are, or husband, as the wife has alleged." are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence. Thus, depending on the circumstances, a Beneficial ownership of the properties prima facie case may become a strong or even an The Supreme Court's conclusions as to the beneficial overwhelming case. But, if the silent party's failure to ownership of the properties other than the former give evidence (or to give the necessary evidence) can be matrimonial home will have come as a surprise to many credibly explained, even if not entirely justified, the practitioners. Moylan J did not make findings to the effect effect of his silence in favour of the other party may be that the properties were beneficially owned by Mr Prest. If either reduced or nullified." he had done so there would have been no problem about applying s.24(1)(a) of the MCA. Rimer LJ, in the Court of The modification concerned drawing adverse inferences in Appeal, said at paragraph 84: claims for financial remedies (paragraph 45): "The judge added that there was "also the separate issue "… which have some important distinctive features. of whether the companies hold the shares and the There is a public interest in the proper maintenance of properties on trust for the husband as his nominee". If the wife by her former husband, especially (but not only) the answer to that was yes, the route to the order sought where the interests of children are engaged. Partly for by Mr Todd was straightforward: because if such shares that reason, the proceedings although in form and / or properties were so held, they were plainly adversarial have a substantial inquisitorial element. "property to which [the husband was entitled], either in The family finances will commonly have been the possession or reversion" within the meaning of section responsibility of the husband, so that although 24(1)(a). In the event, the judge declined to answer that technically a claimant, the wife is in reality dependent latter question in the affirmative." on the disclosure and the evidence of the husband to ascertain the extent of her proper claim. The concept of Rimer LJ, understandably, concluded that Moylan J, by the burden of proof, which has always been one of the implication, accepted that the properties, apart from the main factors inhibiting the drawing of adverse former matrimonial home, were beneficially owned by the inferences from the absence of evidence or disclosure companies. How could the Supreme Court get round this? cannot be applied in the same way to proceedings of this Lord Sumption, interpreted Moylan J's decision on the basis kind as it is in ordinary civil litigation. These that, given his conclusions about s.24(1)(a), determining the considerations are not a licence to engage in pure beneficial ownership of the properties was not a question speculation. But judges exercising family jurisdiction that he needed to decide so that, on that basis the question are entitled to draw on their experience and to take in fact remained open. At paragraph 46, Lord Sumption set notice of the inherent probabilities when deciding what out the chronology in relation to the acquisition of the an uncommunicative husband is likely to be concealing. various properties between 1995 and January 2004. It was I refer to the husband because the husband is usually the significant that PRL did not commence trading until 2001. economically dominant party, but of course the same It was necessary to consider each property individually. applies to the economically dominant spouse whoever it Three of the properties had been transferred into PRL for a is." nominal consideration of £1 during 1995 and 1996. The source of the original payment for the three properties could only be Mr Prest personally and on that basis, there being no The conduct of Mr Prest and the companies explanation from him to the contrary, the company held The criticism of Mr Prest and the companies was extremely those properties on resulting trust for him as beneficial harsh. Mr Prest's conduct was "characterised by persistent owner. Two further properties were acquired by PRL from obstruction, obfuscation and deceit and a contumelious Mr Prest in August 1998 and August 2000 for substantial refusal to comply with rules of court and specific orders (per consideration. As PRL had not at this time commenced Lord Sumption at paragraph 4). He showed an "evident trading the money PRL provided, in the absence of any determination to frustrate the wife's claims on him" satisfactory evidence to the contrary from Mr Prest, must (paragraph 11). The defective character of the evidence as also have come from him and so, again, the presumption of to his financial position was "almost entirely due to his resulting trust applied and he was to be treated as the persistent obstruction and mendacity" (paragraph 43). beneficial owner. The final two properties were acquired Neither Mr Prest nor the companies had complied had by Vermont for substantial consideration in 2001 and 2004. complied with orders for the production of completion However, Vermont did not commence trading until 2010. statements in relation to the purchase of the properties in The funds for the 2001 purchase came from PRL at a time dispute and the companies failed to file a defence to Mrs when it had not started trading and so, again, in the absence Prest's claims or to comply with orders for disclosure of any explanation to the contrary from Mr Prest, the monies (paragraph 47). He said: for the acquisition of this property came from him and a resulting trust applied making him the beneficial owner. "The judge's findings about the ownership and control Although the property acquired in 2004 was acquired with of the companies mean that the companies' refusal to money provided by PRL which had started trading in 2001

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(i) the ownership of residential investment property in party in a marriage it is that there may be considerable London appeared to have nothing to do with the oil trading dangers in failing to comply with one's duties of full and business in which PRL was then engaged, and (ii) by 2004 a frank disclosure and in breaching court orders. However, consistent pattern could be discerned by which the husband there was sufficient evidence in this case to raise inferences caused properties to be acquired with funds provided by going beyond speculation that the relevant monies for ac- himself. If the final property was an exception to this quisition had come from him. This was a case where all practice it was a break from the past and, in the absence of but one of the properties had been acquired at a time when any explanation from either Mr Prest or the companies Lord the companies were not trading and consequently not in a Sumption concluded that he was the beneficial owner of this position to provide capital of their own for the purposes of property as well. the acquisition of properties. The only property acquired after PRL started trading was treated as being sui generis with the earlier acquisitions in the absence of evidence to the General points contrary. In addition, the companies were not property A belated attempt to argue that the companies constituted a investment companies so that the acquisitions fell outside nuptial settlement was not permitted to proceed by the the normal run of their businesses. Supreme Court. However, the question as to whether a company, like a pension scheme in Brooks v Brooks [1996] AC On the above basis, therefore, Prest was very much decided 375, remains an open question. Another question that on its own facts. The decision may have been very different arises is as to where, at the end of the day, the result in the if (i) the properties were acquired at a time when the compa- Supreme Court leaves Mrs Prest. Lady Hale, at paragraph nies had their own resources to do so, (ii) the companies 96, expressed her fervent hope that Mrs Prest would gain were properly described as property investment companies some benefit from the outcome of the litigation "although in and were acting in the course of business, (iii) the properties the light of the mortgages which apparently encumber the were outside the jurisdiction of England and Wales and (iv) properties I am not optimistic that she will." The actual Mr Prest and the companies had given proper explanatory extent of the equity that will be released to Mrs Prest as a disclosure in accordance with their obligations. result of the judgment of the Supreme Court is far from clear. It is a commonplace in tax cases that go to the highest court that one loophole will be closed only for another to open There was a failure on the part of the husband and the elsewhere. The Supreme Court has done the profession a companies to provide any proper disclosure as to the extent great service in setting out with such clarity the law in to which these properties were encumbered. At paragraph relation to piercing the corporate veil and as to the proper 33 of the judgment of Thorpe LJ in the Court of Appeal it is interpretation of s.24(1)(a). However, it may be that this recorded that Moylan J was able to value the London prop- clarity of exposition will act also as a road map for dishonest erties at £11.3 million gross and £9 million net. At para- husbands going forward. They are likely to ensure that the graph 76 Rimer LJ repeated that the properties had a pitfalls that brought down Mr Prest are avoided in their combined gross value of £11.3 million but there was an cases. indebtedness to Ahli United Bank (UK) plc of £1.9 million and an indebtedness to BNP Paribas which, on one view, Family law practitioners are going to need to have a good may have been about $7.6 million (say £4,850,000). Howev- grasp of basic company law principles. There will un- er, it is clear that the exact extent of the indebtedness is doubtedly be other conundrums that require resolution. By simply not discernible. way of example, a husband "lends" £1 million to a company controlled by him and this "loan" appears in his director's loan account and then the company purchases a property Some conclusions which by the time of the divorce is worth £10 million. It The outcome in Prest came as a very great (and welcome) would appear that in those circumstances the most that the surprise to many family practitioners, not least because wife would be able to go after would be the director's loan there was, perhaps, an assumption that Moylan J had found account with perhaps notional interest on the loan. If the that the companies were in fact the beneficial owners of the director's loan account was transferred to her as a chose in properties. In particular, many practitioners had assumed action she may be able to sue the company for the £1 million that the Supreme Court would be far from unanimous in its and then enforce any resulting judgment against the proper- conclusions (whatever they were to be). In a sense it was a ty. However, this is not ideal. Similarly, it would be open pyrrhic victory for Mr Prest (sorry the companies) in that to the wife to seek a transfer of the shares in the company they succeeded on all the main legal arguments but lost on but that may be of little value and unenforceable if the the facts. It remains to be seen whether it is also a pyrrhic company is registered abroad. victory for Mrs Prest. As Nicholas Mostyn QC observed in TL v ML [2005] EWHC It also remains to be seen whether or not this does in fact 2860 (Fam), [2006] 1 FLR 1263, when third party interests are represent a great victory for wives more generally. The engaged in financial remedy applications it is important Supreme Court carried out a very specific fact based analy- that (usually) the wife pleads her case properly and fully so sis of the seven property transactions and they were able to that the nature of the claim being brought can be under- establish, particularly in the absence of evidence to the stood. Mrs Prest pleaded in this case that all seven proper- contrary, that all the monies for the acquisition of those ties were beneficially owned by Mr Prest. It will be properties had come from Mr Prest so that he was benefi- imperative going forward that any claim against a third cially entitled to them under the presumption of resulting party is properly pleaded. Similarly, on the subject of trust. Certainly, his failure (and that of the companies) to disclosure it will be important to see the company accounts engage and to provide proper disclosure has cost him and to have sight of the minutes of board meetings and of dearly. If there is a lesson for the economically dominant any resolutions in respect of property acquisition together

www.familylawweek.co.uk Family Law Week July 2013 - 39 with documentary evidence as to the flow of money for the purposes of acquisition.

Finally, as to "piercing the corporate veil" it is now entirely clear that the Family Division is in no better position than any other division when it comes to attempting to do so. Insofar as there are dicta to the contrary they should not now be followed. However, the helpful identification of the concealment principle and the evasion principle may assist practitioners in establishing that a true and accurate analy- sis of what precisely a husband and his companies have been up to and whether in those circumstances it is possible simply to look behind the façade and see what the true actors are up to. Certainly, the prospects of successfully piercing the corporate veil going forward would appear to be slender.

The principles enunciated in the Supreme Court may also have relevance in ToLATA cases where a property has been acquired by a company rather than an individual. No doubt we shall be seeing more cases where a company is interposed in circumstances where the parties are cohabit- ing but neither in a marriage or a civil partnership.

John Wilson QC 13th June 2013

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Re B (A Child) – Social Engineering or also had a criminal history in relation to fraud and Proportionate Response to Risk of Future perverting the course of justice and had been imprisoned. The father had a very long history of criminality and drug Harm? abuse. He has four other children by another woman but has had marginal involvement with them.

The child, A, was removed at birth and placed into foster care, and the parents had supervised contact with her five days a week. It was not asserted that the child had suffered harm attributable to the parents' care, rather that the child was likely to suffer significant harm due to the risks posed by the parents. The local authority's care plan was for adoption (although the placement application was not yet before the court).

The expert and professional advice differed: an expert in social work and A's guardian, with some support from the Lucy Faithfull Foundation, recommended placement with the parents, with support. The local authority, the two psychiatrists and an assessor from the Marlborough Family Service all considered that this should not happen due to the significant risk of harm to A.

The judge found that the threshold was crossed in that, at the time A was taken into care, there was a risk of significant harm to A from the care likely to be given to her by her parents. The risks were of harm to A, likely to be caused by the mother's somatisation disorder and factitious illness disorder, i.e. that the mother might present A for medical treatment and that A might receive medical treatment that was unnecessary, that A might grow up to believe the way Janet Bazley QC and Eleri Jones, barrister, both of 1 Garden Court Chambers the mother presented herself for treatment was appropriate, and might model herself on it. By a majority of 4:1 (Lady Hale dissenting) the Supreme The judge further found that safeguarding packages would Court in Re B (A Child) [2013] UKSC 33 dismissed the need to be put in place if A were to be reunited with her appeal of the parents against a final care order, with a view parents but that they did not have the capacity to engage to adoption, in relation to their child, now 3, who had been with professionals in such a way that an environment could removed at birth on the basis of risk of future significant be brought about where A would be protected from harm. emotional and psychological harm. Neither parent accepted the need for any therapeutic intervention. The judge found that the father would not be Key Issue: The Supreme Court's judgment addresses the able to protect A from harm by the mother and therefore following issues: that A could not be placed in his sole care. 1. Threshold: significant harm, causation and likelihood The judge did not doubt that the parents love A, they were committed to her 'in spades' and had formed a good 2. The impact of ECHR Article 8 in relation to threshold relationship with her. He also noted that neither parent had and the proportionality of a care order with view to been seen to put a foot wrong in relation to their direct adoption dealings with A. However, in weighing up the balance, the judge endorsed the local authority's care plan and made a 3. The role of the appellate court and the test to be applied care order. 4. Whether in the circumstances of this particular case, the judge was right to find that threshold was crossed and Court of Appeal to make a final care order. On appeal (B (A Child) [2012] EWCA Civ 1475), it was argued that the risks identified were not sufficient to Facts constitute significant harm, that they were not imminent, and that it was disproportionate to respond to them by The mother had had significant difficulties in her early life permanent removal of the child. Various criticisms were and had been abused physically, mentally and sexually by made of the judge's treatment of the evidence and for not her step-father, with whom she had had a relationship and allowing the father to be assessed as a sole carer. Black LJ, a child. That child was subject to private and public law in the leading judgment, after careful analysis of the proceedings and later removed from the family. evidence and criticisms made, concluded that the judge had been right and dismissed the appeal. Lewison and Rix LJJ The mother had been assessed by a psychiatrist as a very concurred but were deeply troubled by the case. Lewison vulnerable and damaged individual with multiple LJ associated himself with Rix LJ's concluding sentence: psychological problems, including severe somatisation disorder, compulsive lying and deception of others. She

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"I also wonder whether this case illustrates a powerful exercise of judgment, an 'appraisal' or 'evaluation', and but also troubling example of the state exercising its therein lies the value of the trial judge's experiences in the precautionary responsibilities for a much loved child in courtroom [57]-[58], [109]. The judge does not exercise the face of parenting whose unsatisfactory nature lies discretion in determining whether threshold is crossed, it is not so much in the area of physical abuse but in the more a value judgment [44], made on the import of the facts found subjective area of moral and emotional risk." [150] [109], [199].

It was on the basis of the public importance and concern about the point made by Rix LJ that permission to appeal to (i) Threshold: the gateway the Supreme Court was given. Threshold, once crossed, is a 'gateway' [129]. It must be opened before a care order is possible.

Supreme Court The now well known words of Hedley J in Re L (Care: The overall judgment of the Supreme Court is a collection of Threshold Criteria) [2007] 1 FLR 2050 at 2063 are repeated by five individual decisions, four concluding that the appeal Lord Wilson at [27], Lord Neuberger at [67] and Lady Hale should be dismissed, and that of Lady Hale, who would at [179]-[181]] (and indeed Black LJ at [116] of her decision have allowed the appeal. The key issues identified above in the Court of Appeal). Hedley J begins by citing the words are each addressed in turn below with a summary of the of Lord Templeman in In re KD [1988] 1 AC 806 that 'It guidance provided in the various decisions. matters not whether the parent is wise or foolish, rich or poor, educated or illiterate, provided the child's moral and physical health are not in danger. Public authorities cannot 1. Threshold improve on nature'. Hedley J continues that 'society must Lady Hale provides a guide (endorsed by Lord Neuberger be willing to tolerate very diverse standards of parenting, [56]) for courts to consider where threshold is disputed including the eccentric, the barely adequate and the [193]. In summary, the guidance is as follows: inconsistent ... it is not the provenance of the state to spare children all the consequences of defective parenting'. i) The court's task is not to improve on nature or even to Hedley J then cites the words of Lord Nicholls of secure that every child has a happy and fulfilled life, but Birkenhead in Re H [1996] AC 563 that 'threshold may be to be satisfied that the statutory threshold has been comparatively low. However it is clear that it must be crossed. something unusual; at least something more than commonplace failure or inadequacy.' ii) When deciding whether the threshold is crossed the court should identify, as precisely as possible, the nature of the harm which the child is suffering or is likely to (ii) The nature of the harm and (iii) 'significant harm' suffer. This is particularly important where the child has The court must consider the nature of the harm and whether not yet suffered any, or any significant, harm and where it is significant [206]. the harm which is feared is the impairment of intellectual, emotional, social or behavioural Pursuant to section 31(9), 'harm' means 'ill-treatment or the development. impairment of health or development...' and 'development' includes 'emotional...development'. Section 31(10) states iii) Significant harm is harm which is "considerable, that 'Where the question of whether harm suffered by a noteworthy or important". The court should identify child is significant turns on the child's health or why and in which respects the harm is significant. This development, his health or development shall be compared may be particularly important where the harm in with that which could reasonably be expected of a similar question is the impairment of intellectual, emotional, child', albeit with sensitivity to the cultural, social and social or behavioural development which has not yet religious circumstances of the child and family [178]. Lord happened. Wilson concludes that, whereas the concept of 'ill-treatment' is absolute, the concept of 'impairment of health or iv) The harm has to be attributable to a lack, or likely development' is relative to the health or development which lack, of reasonable parental care, not simply to the could reasonably be expected of a similar child (described characters and personalities of the child and/or parents. as little more than common sense) [25]. Otherwise, the court The court should identify the respects in which parental wished to avoid an attempt at explaining the word care is falling (or likely to fall) short of what it would be 'significant' and did not wish to add a gloss to the statute reasonable to expect. [26]. Lady Hale considered the dictionary definition of 'significant' helpful, namely 'considerable, noteworthy or v) Where actual harm has not been suffered, the court important', stating that there would be no point in a must consider the degree of likelihood that it will be threshold if it could be crossed by trivial or unimportant suffered in the future. This will entail considering the harm [185]. Her Ladyship offers further guidance as to degree of likelihood that the parents' future behaviour 'harm' at [192]. will constitute a lack of reasonable care. It will also entail considering the relationship between the significance of the harmed feared and the likelihood that it will occur. (iv) Likelihood and causation Simply to state that there is a "risk" is not enough. The Lord Wilson reiterated that which was reaffirmed in Re J court has to be satisfied, by relevant and sufficient (Children) (Care Proceedings: Threshold Criteria) [2013] UKSC evidence, that the harm is likely: see Re J (Children) 9, that a likelihood of significant harm means 'a real (Care Proceedings: Threshold Criteria) [2013] UKSC 9. possibility, a possibility that cannot be ignored having regard to the nature and gravity of the feared harm in the Deciding whether threshold is crossed is not a question of particular case' [187], but a conclusion to that effect must be law, nor one of primary fact, rather a decision involving the based on a fact or facts established on a balance of

www.familylawweek.co.uk Family Law Week July 2013 - 42 probabilities [24]. This will include assessment of parental [196], [215]) i.e. 'where nothing else will do' [130], [145], character, likely behaviour and attitudes [66], [71]. [198], it is a 'last resort' [74], [77].

Lady Hale notes that the Children Act does not set limits Lord Neuberger makes further reference to this issue [103]- upon when the harm may be likely to occur [189]. There [104] when considering the principle of adoption. His may be protective factors and so the degree of likelihood Lordship reminds us that 'a court must never lose sight of must be such as to justify compulsory intervention now the fact that [the child's interests] include being brought up [190]. by her natural family, ideally her natural parents, or at least one of them'. Lord Wilson further rejected the notion that there was a requisite mental element to accompany the actions or Lord Neuberger also stresses that the Adoption and inactions which have caused, or are likely to cause, the Children Act 2002 must, if possible, be construed and significant harm to the child. Section 31(2)(b)(i) requires applied bearing in mind the provisions of the UN only that the harm or likelihood of harm should be Convention on the Rights of the Child 1989 [73], [78]. 'attributable' to the care given, or likely to be given, to the child not being what it would be reasonable to expect a parent to give to the child. The causation required is only as 3. The appellate court between the care and the harm [31]. The court should be (a) The test to be applied able to identify what that deficiency in care might be and The Supreme Court is unanimous in its decision that the test how it is likely to happen [191]. to be applied by the court is whether or not the decision below was 'wrong', or where there was a serious irregularity, the wording found in CPR 1998 r52.11(3) [44]- (v) Degree of likelihood [46], [61], [91], [110], [138]-[139], [203]. The adverb 'plainly' Lord Neuberger emphasised at [56] that 'significant harm' is was considered to add nothing to the test. However Lord interrelated with the likelihood of it being suffered, so the Wilson suggests that the principles of Lord Fraser in G v G more significant the harm, the less the required level of [1985] are not to be jettisoned, as the factors which often likelihood and vice versa (see also Re S-B [2009] UKSC 17, vitiate the exercise of a discretion – namely that the judge [2010] 1 AC 678 at [9]). Lady Hale supports this at [188] and considered an irrelevant matter, failed to consider a relevant is clear that a court must indicate how likely it is that the matter, erred in law or applied a wrong principle – may well harm will materialise [210]. generate a conclusion that the determination was 'wrong' and should be set aside and reversed, or remitted for consideration afresh. By contrast, a judge's failure to give 2. ECHR Article 8 adequate reasons for his determination is likely to lead to its (a) Threshold being set aside as 'unjust' within the meaning of rule Article 8 of the European Convention on Human Rights 52.11(3) [46]. ('the Convention') addresses 'interference' with the right to respect for family life. A decision about the threshold does We are reminded that the appellate court should not not engage Article 8 since a conclusion that the threshold is interfere just because it would itself have preferred a crossed merely opens the gateway to the making of orders different answer [38], [112]-[114], [202]. [29], [62], [129], [186]. Once the court proceeds to make statutory orders, Article 8 comes into play. An appellate court must factor into its review of a trial judge's determination the advantages which the judge had (b) Proportionality of care order with view to adoption over it in appraising the case, namely in seeing and hearing The care order with a view to adoption represented an the parties and other witnesses, (Biogen Inc v Medeva plc interference with the exercise by A, the mother and the [1997] RPC 1 and Piglowska v Piglowski [1999] 1 WLR 1360 at father, of their rights to respect for their family life. It could 1372) [41], [108]. In cases concerning children, this is all the only be justified if it was in accordance with law and more important, as decisions require the judge to have 'necessary' in a democratic society for the protection of the regard to the future and multi-factorial possibilities [42], right of A to grow up free from harm. However the [59], [200]. interference must be proportionate to identified risks. Johansen v Norway (1996) 23 EHRR 33 and YC v United Kingdom (2012) 55 EHRR 967 were cited, albeit the latter (b) Decisions where Convention rights are engaged uses the language of 'justification' rather than Lord Wilson made it clear that the task of the trial judge in 'proportionality' [32]-[33], [75]. Domestic law runs broadly applications for care (or supervision) orders – and in parallel to this and makes clear that: equivalent applications for private law orders where there is a suggested inference with Article 8 rights – is more than (i) It is not enough that it would be better for the child to just an exercise of discretion [45]. The judge is obliged by be adopted than not [34]; see also Re S-B [2009] UKSC 17; section 6(1) of the Human Rights Act to determine the application in a way which is compatible with those rights. (ii) Parental consent can be dispensed with for adoption Therefore the review which falls to be conducted by the but only if the child's welfare requires this, and the court appellate court is two-fold: it must focus not just on the must be satisfied that there is no practical way of the judge's exercise of discretion but also on his compliance or authorities (or others) providing the requisite assistance otherwise with an obligation. A contrast is drawn with, for and support to help the parents discharge their example, the review of a case management decision within responsibility to the child [105], [197]-[198]; and care proceedings, see Re TG (A Child) [2013] EWCA Civ 5 at [38]). (iii) The interests of the child must render it necessary to make an adoption order (at [34], [76], [82], [135], [195]- In respect of such decisions involving Convention rights, the Supreme Court was divided. The majority – Lord

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Wilson, Lord Neuberger and Lord Clarke – all considered people who would need to access A to mitigate the risk or that the appellate court simply undertakes a 'review' of the effect of any harm she might suffer. This was considered decision in relation to proportionality. The Convention defective parenting which a judge could reasonably itself does not require a right of appeal, just that any hearing conclude satisfied the section 31(2) threshold [71]. must be fair and impartial in accordance with Article 6 [85], and it is accordingly a matter for Parliament how the court discharges its domestic duty under section 6(1). Therefore ( the approach should be in line with CPR rule 52.11(1), b) The care order namely a review, unless in the circumstances it is in the All save Lady Hale considered that the judge was right to interests of justice to hold a re-hearing [35]-[36], [86], [136]. have made the care order with a view to A's adoption [48], The appellate court is not required to re-hear all the [106], [133], [134]. Lord Wilson stated that the principal evidence relevant to the Convention issue [36] nor to decide reasons for this were: de novo whether the requirements of Article 8 were satisfied Ÿ [83]. This is to be contrasted with situations in which a court The personalities of the parents and psychiatric entertains a challenge to an administrative decision i.e. a conditions of the mother raised a real possibility that, in decision of the executive rather than one of a judge [84], their care, A would suffer impairment of her emotional [204]. development. Ÿ Once the appellate court is satisfied that the conclusion was The character of the parents disabled them from offering based on justifiable primary facts and assessment, the the elementary cooperation with professionals which standard to be applied by the appellate court in determining A's safety in their home would require – the level of the whether the trial judge was entitled to reach his conclusion dishonest, manipulative, antagonistic obstructionism of on proportionality is the same: was the conclusion 'wrong' the parents in this case was of a different order, [46], [91]? precluding the success of any rehabilitative programme or the avenue of additional measures of support – this Lord Kerr and Lady Hale disagree with the majority in was the 'inescapable difficulty' as phrased by Lord Kerr relation to the issue of addressing the breach of a [132] Convention right. Lord Kerr's view is that the decision- Ÿ maker, at whatever level the decision is made, must starkly There was therefore no 'halfway house' and adoption confront the question, 'is this necessary': if the appellate was the only viable option. court decides that it would not have concluded that it was necessary, even though it can understand the reasons the In contrast, Lady Hale considered that there was little first instance court believed it to be so or if it considered that evidence about what was meant by a 'plan and strategy' the decision of the lower court was perfectly tenable, it which would need to be devised to protect A if she were cannot say that the decision was proportionate [115]. It is returned to her parents' care. It was noted that there was a not a matter of a review of the trial judge's decision on degree of cooperation by the parents [217]-[218], more so proportionality rather the appellate court reaching its own with professionals than social services [219]. Lady Hale was conclusion on the issue [120]. particularly concerned that no pre-proceedings letter had been sent to the parents. Ultimately Lady Hale considered Lady Hale concurs with Lord Kerr and states that, whilst the that it had not been sufficiently demonstrated that it was court must give due weight to the enormous benefit of the necessary to bring the relationship between A and her trial judge in reading and hearing the evidence and beware parents to an end. In the circumstances of this case, Lady of being over-critical of the way in which a judge has Hale felt that it could not be said that 'nothing else will do' expressed himself, the court which makes the final decision when nothing else had been tried. The harm that was feared is the public authority which is responsible for the invasion was subtle and long term and may never happen. There was of Convention rights. Accordingly the appellate court must a need for some protective work, but precisely what that decide for itself whether the order is compatible with those might entail, and how the parents might engage with it, had rights [205]. However, Her Ladyship considers that it will not been properly examined [223]. only make a difference in cases where the appellate court cannot state whether the judge was right or wrong. Accordingly it was Lady Hale's view that the judge was indeed wrong to hold that his decision was a proportionate response to the risks which he had identified. Lady Hale 4. The circumstances of this case would have allowed the appeal and sent the case back for a (a) Threshold fresh and in-depth enquiry by the new guardian as to the Although Lady Hale expressed some hesitation [214], [211], necessity for, and viability of, the sort of measures which the Justices were unanimous in their conclusion that the were only beginning to be explored by the previous judge was right to consider that threshold was crossed [48], guardian [224]. [64], [98], [131]-[132], [134]. Lord Neuberger understood the concern which Lady Hale Lord Neuberger stated that it was a question of fact and expressed [67] but did not view the enquiries Lady Hale degree in this case as to whether the defective parenting wished to be made on any remission as realistically open to which A would receive if she remained with her parents fell an appellate court in light of the various conclusions outside the wide spectrum of the acceptable 'very diverse reached by the judge [99] and considered that there was also standards' (see above, Re L [2007]) and the judge's a 'floodgates' argument: to allow the appeal on the ground conclusions in this respect His Lordship could not fault. It that the parties should be given a second chance to explore was not just the harm, however, but the fact that the parents matters more fully with a view to achieving a different would, or appeared very likely to, impede the professional result, would justify remittal for fuller consideration in any

www.familylawweek.co.uk Family Law Week July 2013 - 44 case where a party was dissatisfied with a trial judge's Lady Hale considered that the appeal should be dismissed. decision based on the assessment of the future. Finality is Lady Hale felt more should be done to identify and put the important, not just in the public interest, but for the good of right support in place (and to make it work). A (and her parents) [101]. Lord Wilson also cautions against delay [48]. What is notable from the various judgments is the unease with which the ultimate decision has been reached. A very clear message is given that adoption is the last resort and Conclusions and practical considerations everything else possible must be tried to see if there is an The decision in Re B will undoubtedly have an effect at all alternative; the court must not engage in any form of 'social levels. Useful guidance has been provided in relation to the engineering'. approach to be taken to threshold, when the State should intervene, the issue of proportionality and the role of the Given the new 26 week deadline for cases, steps taken appellate court. pre-proceedings will be all the more important, as emphasised recently by the President of the Family In relation to threshold, the nature of the significant harm Division. It will be crucial that parents are given a pre- should be clearly identified, particularly where the child has proceedings letter so as to get legal advice early on and not suffered such harm and where the harm is emotional or consider their position in relation to cooperation with social psychological. A common sense approach should be taken services. [For an article on this aspect see Care Proceedings: to 'significant harm'; there is no mental element or intention the Operation and Effect of Pre-Proceedings – What do required – the causation required is only as between the care lawyers need to know? written by Professor Judith Masson and the harm. The court should also consider the degree of and Dr Jonathan Dickens.] The 'inescapable difficulty' in Re likelihood of harm in the context of the severity of the harm B was the problem with parental cooperation. If there had feared. been evidence of a way to lower the barriers erected by the parents, Lord Wilson suggests the judge might have Article 8 of the Convention is not engaged when deciding directed an adjournment – even only a few months – to whether threshold is crossed, this being based on an explore the possibility and that such an approach 'might evaluation of facts found. When considering whether or not have been the proportionate response to the positive to make a care order, especially with a view to adoption, features of the parents' case'. Article 8 rights of the parent(s) and child(ren) are engaged and the interference must be necessary i.e. proportionate to Janet Bazley QC and Eleri Jones the risks identified. Adoption is a last resort and the court must be satisfied that there is no practical way for the 15/6/13 authorities or others to provide the support required to enable the parents to care for the child.

On appeal from decisions which do not engage the Convention, the test is that in CPR rule 52.11(3), i.e. whether the decision was 'wrong' or there was a 'serious irregularity'. Where the decision engages a Convention right and the appellate court must consider the issue of proportionality, the Supreme Court was divided. The majority concludes that the appellate court simply undertakes a review of the decision as per CPR rule 52.11(1) and the test is whether the decision was 'wrong' (or there was a serious irregularity). Lord Kerr and Lady Hale consider that each court has its own independent duty to consider whether the decision was proportionate and whether the Convention right was breached. Lord Neuberger notes the difference of approach by Lord Kerr and Lady Hale but considers it would be a very rare case that their approach would result in a different outcome [95]. Lady Hale agrees that it will only make a difference in limited circumstances [205].

The Supreme Court reiterates the advantage the first instance judge has in hearing and reading all the evidence, of 'living and breathing the case' and the limited extent to which an appellate court will interfere, given that a judge's expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance, of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation. Whether the re-stating of the test as 'wrong' rather than 'plainly wrong' will have a practical effect remains to be seen.

On the facts of this case and in view of the findings of the judge, all concluded that threshold was crossed and all but

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Children: Private Law update (May 2013) and the weight which should generally be attached to them, and, incidentally, promotes consistency in deci- sion-making.

iii) The guidance is not confined to classic primary carer applications and may be utilised in other kinds of reloca- tion cases if the judge thinks it helpful and appropriate to do so.

iv) The guidance suggests that the following questions be asked and answered (assuming that the applicant is the mother):

a) Is the mother's application genuine in the sense that it is not motivated by some selfish desire to exclude the father from the child's life?

Alex Verdan QC of 4 Paper Buildings b) Is the mother's application realistically founded on practical proposals both well researched and investi- In this review I will focus on recent judgments concerning gated? the following topics: c) What would be the impact on the mother, either as • Leave to remove from the jurisdiction the single parent or as a new wife, of a refusal of her realistic proposal? • Interim contact and fact finding hearings d) Is the father's opposition motivated by genuine • No order as to contact and domestic violence concern for the future of the child's welfare or is it driven by some ulterior motive? • The termination of and making parental responsibility orders e) What would be the extent of the detriment to him and his future relationship with the child were the application granted? Leave to remove from the jurisdiction In Re TC and JC (Children: Relocation) [2013] EWHC 292 f) To what extent would that detriment be offset by (Fam) Mostyn J provides a useful summary of the jurispru- extension of the child's relationships with the maternal dence in relocation cases setting out the governing princi- family and homeland? ples, and some key observations of the recent leading authority from the New Zealand Supreme Court. v) Since the circumstances in which such decisions have to be made vary infinitely and the judge in each case has The case concerned an application by the mother for permis- to be free to decide whatever is in the best interests of the sion to permanently remove two young children aged 3 ½ child, such guidance should not be applied rigidly as if and 2 years of age to Australia. The parties met in Australia it contains principles from which no departure is permit- in 2001 where they married and then moved to the UK in ted. 2010. The marriage subsequently broke down and the moth- er abducted the children to Australia. Hague proceedings vi) There is no legal principle, let alone some legal or followed in Australia and the children were then returned evidential presumption, in favour of an application to to the UK. relocate by a primary carer. The old statements which seem to favour applications to relocate made by primary The unusual facet about this case is that both parents agreed carers are no more that a reflection of the reality of the that whatever decision the court made as to where the human condition and the parent-child relationship. children were to live, the unsuccessful parent would go and live in that jurisdiction as well. vii) The hearing must not get mired in taxonomical Mostyn J undertook a careful analysis of the jurisprudence, arguments or preliminary skirmishes as to what label and set out the governing principles to any relocation appli- should be applied to the case by virtue of either the time cation at [11]: spent with each of the parents or other aspects of the care arrangements. i) The only authentic principle to be applied when deter- mining an application to relocate a child permanently Mostyn J also pays heed to the recent decision of the Su- overseas is that the welfare of the child is paramount preme Court of New Zealand (relocation never having been and overbears all other considerations, however power- considering in the Supreme Court of England and Wales) in ful and reasonable they might be. the case of Kacem v Bashir [2010] NZSC 112. Whilst the legislative language is different, the principles of para- ii) The guidance given by the Court of Appeal as to the mountcy governing these applications is the same. Interest- factors to be weighed in search of the welfare para- ingly, Mostyn J quotes key sections from the New Zealand mountcy, and which directs the exercise of the welfare judgment, which emphasize that there should be no be a discretion, is valuable. Such guidance helps the judge to presumption in favour of an application to relocate: identify which factors are likely to be the most important

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"At the highest level of generality the competition in a facts, considering all relevant s 5 principles and other relocation case is likely to be between declining the factors, and then to make a judgment as to what course application for relocation because the children's interests of action will best reflect the welfare and best interests of are best served by promoting stability, continuity and the children. While that judgment may be difficult to the preservation of certain relationships, as against al- make on the facts of individual cases, its making is not lowing it on the ground that the interests of the children assisted by imposing a gloss on the statutory scheme." are thereby better served. Put in that way, it is difficult to see how any presumptive weight can properly be This case law serves to reinforce the way in which the courts given to either side of those competing but necessarily of England and Wales determine these applications in that abstract contentions. To do so would risk begging the there is no presumption in favour of the applicant mother, very question involved in what is necessarily a fact-spe- and that the court will start with a 'blank sheet', and the cific inquiry. guidance provided by previous decisions can only be 'aids to the determination of the ultimate question which is of Everything will depend on an individualized assess- course: what is in the best interests of these children.' ment of how the competing contentions should be re- solved in the particular circumstances affecting the In determining this application Mostyn J considered the particular children. If, on an examination of the particu- governing principles he identified at paragraph [11], and lar facts of a relocation case, it is found that the present opined that the key consideration in this instance was the arrangements for the children are settled and working impact on the mother of refusing her application to relocate, well, that factor will obviously carry weight in the eval- and that would bear far more heavily on her than the other uative exercise. All other relevant matters must, of way round. This decisive factor pushed the court to favour course, be taken into account and given appropriate the mother's proposal and to find that to be in the children's weight in determining what serves the child's welfare best interests. and best interests, as s 4(5) puts it. The key point is that there is no statutory presumption or policy pointing one The court made the following order: way or the other. All this seems to us to follow from ss 4 and 5 of the Act as a matter of conventional statutory (i) Mother's application to relocate to Australia is grant- interpretation." [24] ed;

Mostyn J further refers to key sections of the judgment in an (ii) Shared residence order in Australia with the chil- effort to dispel concerns that these decisions are unpredicta- dren's time to be divided equally between the children ble, because of the width of the judge's discretion in decid- on an alternate weekly basis in term time and on dates ing them. Mostyn J uses the decision to try and show that to be agreed in holiday time; the judge's decision 'is not really 'discretionary' at all, at least not in the sense of a judge making a decision from a range (iii) Any dispute as to the living arrangements to be of legitimate solutions none of which can be said to be adjudicated by the family court of Australia. wrong.'

The New Zealand Supreme Court explains: Interim contact and fact finding hearings In the case of Re H (A child) [2013] EWCA Civ 72 Black LJ ''But the fact that the case involves factual evaluation provides practitioners with a helpful review of the authori- and a value judgment does not of itself mean the deci- ties and key considerations for the court in making interim sion is discretionary. In any event, as the Court of Ap- orders as to contact and residence and fact finding hearings. peal correctly said, the assessment of what was in the best interests of the children in the present case did not This was an appeal brought by the mother concerning an 8 involve an appeal from a discretionary decision. The year old boy (H) against a relaxation of restrictions to inter- decision of the High Court was a matter of assessment im contact that prevented the father from taking the child to and judgment not discretion, and so was that of the his home. The mother sought to argue that the exercise of Family Court." [34] the judge's discretion had been flawed in the light of allega- tions of violence perpetrated against the children by the When addressing the alleged unpredictability and the father, and the judge directing that the issue of the progres- width of "discretion" they stated at paragraph 35: sion of interim contact was to be determined on submissions prior to the final hearing. "These and other concerns … are inherent in the exercise in which judges administering ss 4 and 5 of the Act are The Court of Appeal re-emphasised the approach taken to involved. Lack of predictability, particularly in difficult appeals made against case management decisions by refer- or marginal cases, is inevitable and the so-called wide ring to the recent decision of Re TG (A Child) [2013] EWCA discretion given to judges is the corollary of the need for Civ 5 when it was decided that robust but fair case manage- individualised attention to be given to each case. As we ment decisions would be supported by the Court of Appeal have seen, the court is not in fact exercising a discretion; and would only be interfered with in limited circumstances it is making an assessment and decision based on an where: evaluation of the evidence. It is trite but perhaps neces- sary to say that judges are required to exercise judg- "it is satisfied that the judge erred in principle, took into ment. The difficulties which are said to beset the field are account irrelevant matters, failed to take into account not conceptual or legal difficulties; they are inherent in relevant matters, or came to a decision so plainly wrong the nature of the assessments which the courts must that it must be regarded as outside the generous ambit make. The judge's task is to determine and evaluate the of the discretion entrusted to the judge." [35]

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permission to change the children's surnames to prevent the In respect of interim contact and finding of fact hearings father from locating them. Black LJ provided a detailed summary of the jurisprudence. Black LJ makes clear that the starting point is Practice Direc- Theis J reminded herself of the relevant key considerations tion 12 J Family Procedure Rules 2010, which does not in determining such draconian applications: prevent a judge from making an order for contact without making findings of fact in relation to disputed allegations of 'In considering the applications before the court the domestic violence, but the court is to determine as soon as court's paramount consideration is the welfare of each of possible whether it is necessary to conduct such hearing the children, having regard to the welfare checklist in before it can go on to consider disposal issues (paragraph section 1 (3) Children Act 1989. I am acutely conscious of 13). Although paragraph 15 of PD12J contemplates a two the importance for children, when their parents sepa- stage process of fact finding and then welfare hearing the rate, of remaining in contact with the non-resident par- Court of Appeal's interpretation was not that two separate ent, but this has to be subject to the welfare needs of each hearings were required but rather: child and the facts of each case. I also recognise the draconian nature of the order being sought by the moth- ''PD 12J should be read, in my view, as imposing an er. The court should be very slow to make such an order, obligation on the court to determine whether findings unless the welfare of each of the children demands it. need to be made about factual issues at all and whether, The Article 8 rights of the parents and the children are if so, that should be done in a separate fact finding clearly engaged in this case. They can only be interfered hearing or as part and parcel of a composite fact finding with if it is proportionate to do so, on the facts of the and welfare hearing. If it decides a separate fact finding particular case.' hearing is necessary then it has to give directions for that and it must be sure to fix the welfare hearing there and The judge found that the three older children had suffered then.'' [54] harm from previous episodes of violence in the home and that there was a risk of future harm to all the children. The In this case the appeal could only succeed if it could be mother had a genuinely held fear as to what the father established that the exercise of the judge's discretion in might do, and this would have an adverse impact on the relation to case management or contact was flawed. The children's emotional stability should there be any direct or judge correctly considered the provision in PD12J, albeit not indirect contact. Accordingly, the judge ordered that there making explicit reference to it, and carried out a balancing be no direct or indirect contact save letter box contact twice exercising in considering the risk of contact progressing, per annum to be held by Cafcass and accessed by the mother against H's need to have a proper relationship with his in accordance with the children's best interests. father in normal circumstances. The court also granted the mother's application for a change The Court of Appeal referred to Munby J's (as he then was) of the children's surname in light of the father's expressed judgment in Re C (Children) [2012] EWCA Civ 1489 high- intentions to find out where the children and mother live. In lighting the breadth of the family judge's discretion to deter- applying the welfare test for each child, and whilst acknowl- mine the way in which an application should be pursued, edging the importance of the children's identity, the court and whether an issue is to be dealt on the basis of written considered it in the children's welfare to secure their safety. evidence or oral submissions only. The father also made an application for a risk assessment by At the end of her judgment Black LJ provided the following a consultant psychiatrist, which was refused with reference guidance as to appeals regarding the exercise of a tribunal's to r. 25.1 Family Proceedings Rules 2010, the court finding discretion: that such expert evidence was not 'reasonably required to resolve the proceedings.' (this being the applicable rule ''We should resist the temptation, as Lord Hoffmann when the case was heard, since amended to evidence told us in Piglowska, to subject the judge's judgment to 'necessary to assist the court to resolve the proceedings'). "a narrow textual analysis", particularly when it was an The judge had found there to be little evidence of any real extempore judgment delivered at an interim hearing change by the father, the court having the benefit and as- that lasted for much longer than the time allocated for it sessment of the Children's Guardian for assistance. in the list. We should read Judge Powles' reasons "on the assumption that, unless he demonstrated the contrary, the judge knew how he should perform his functions Termination of and making parental responsibility orders and which matters he should take into account". It has Baker J's decision in the case of CW v SG [2013] EWHC 854 not been demonstrated to me that Judge Powles erred in (Fam) and the Court of Appeal's judgment in W (Children) making the order that he did which was within the [2013] EWCA Civ 335 provide practitioners with a helpful bounds of his discretion, supported by the evidence and review of the principles governing applications to terminate explained in his judgment.' and make parental responsibility orders. CW v SG concerned an application by a mother for an order terminating the father's parental responsibility in respect of No order as to contact and domestic violence D, a boy aged 6 ½ years old and a second application was by AB v BB and Others [2013] EWHC 227 (Fam) concerned a the father for a specific issues order requiring the mother to father's application for contact to his four children C 6 years, supply him with school reports. D 4 years, E 3 years and F 2 years. The mother sought an order for no contact against a background of a prolonged The relationship between the parents was a turbulent one. history of domestic violence for which the father had re- The father has been convicted for sexually abusing the ceived numerous convictions. The mother further sought mother's other two children: A and C aged 10 and 9 years

www.familylawweek.co.uk Family Law Week July 2013 - 48 old. The father expressed a wish to have contact with D, which prompted the mother to make an application for an Later, he added (on page 1054): order terminating the father's parental responsibility. "I believe that there is no element of the band of respon- The matter was transferred to the High Court because the sibilities that make up parental responsibility which this application appeared to raise a potential new point of law; father could in present or in foreseeable circumstances the eighteen year old decision of Re P (Terminating Parental exercise in a way which would be beneficial for the Responsibility) [1995] 1 FLR 1048 being the only reported child. I therefore conclude that it is appropriate to make case concerning an application for the termination of paren- an order as sought under section 4…bringing to an end tal responsibility, and the father seeking to distinguish this the parental responsibility agreement entered into…." case from that decision on the basis that it was no longer good law, it being argued that it was incompatible with the Baker J found Re P to provide invaluable guidance and Human Rights Act 1998 and the Adoption Act 2002. In Re P, remained good law, and that such applications are to be Singer J provided the following guidance: determined by the paramountcy test that Singer J referred to. "I start from the proposition that parental responsibility – both wanting to have it and its exercise – is a laudable In applying the welfare checklist, Baker J found that D had desire which is to be encouraged rather than rebuffed. suffered harm as a result of the turbulence and disruption So that I think one can postulate as a first principle that endured by the family during the mother's relationship with parental responsibility once obtained should not be ter- the father and the criminal trial. Moreover, D expressed a minated in the case of a non-marital father on less than clear wish to have no involvement with his father. The court solid ground, with a presumption for continuance rather further took into consideration the mother's capacity to than for termination. meet D's needs. It found that if the father were to retain parental responsibility, the mother would be placed under The ability of a mother to make such an application a very great strain and, all things considered, would find it therefore should not be allowed to become a weapon in 'well-nigh impossible to send a regular report to the father the hands of the dissatisfied mother of the non-marital concerning D's progress'. Moreover, if the father were to child: it should be used by the court as an appropriate make an application for parental responsibility now it step in the regulation of the child's life where the circum- would be inconceivable that it would be granted. All these stances really do warrant and not otherwise. factors pointed the court to terminating the father's parental responsibility under s. 4(2A) and dismissing his application I have been referred in outline to four authorities as to for a specific issue order. the circumstances in which a court will make an order for parental responsibility [here the learned judge iden- The judge did not accede to the mother's application to tified the well-known authorities dealing with such ap- make a s. 91(14) order, reminding himself that such orders plications]…. should only be made with great care and sparingly, and the issue had not been fully argued having only arisen during Such applications for parental responsibility orders are the course of the hearing. governed by the considerations set out in section 1(1) of the Children Act, namely that the child's welfare is the There is currently no appellate court guidance on terminat- court's paramount consideration. I can see no reason ing parental responsibility. why that principle should be departed from in consider- ing the termination of a parental responsibility order or W (Children) [2013] EWCA Civ 335 concerned an appeal by agreement. a father against an order for direct contact and parental responsibility in respect of R aged 6 years old. Key concepts to the consideration of the making of an order are evidence of attachment and a degree of com- The magistrates had dismissed the father's application on mitment, the presumption being that other things being the basis of a Cafcass recommendation which reflected the equal a parental responsibility order should be made fear held by the mother of the impact of contact on R, which rather than withheld in an appropriate case." would be such as to cause harm or risk of harm and it was simply a risk that could not be contemplated. Pertinently, Applying those principles to the facts of that case, Singer J the magistrates were satisfied that if the father were to concluded (at page 1053): exercise his inherent powers of parental responsibility this would significantly and adversely affect R's future stability "I have to say, notwithstanding the desirability of foster- and well-being. The father had had no active direct relation- ing good relations between parents and children in the ship or fact to face contact with R since the very early interests of children, I find it difficult to imagine why a months of his life. court should make a parental responsibility order if none already existed in this case. I think the continuation The father appealed this order and the matter came before of a parental responsibility agreement in favour of the HHJ Vincent who upheld the magistrates' decision, and father in this case has considerable potential ramifica- added that the central reason the magistrates could have tions for future adversity to this child. I believe it would relied on was that the father did not have an existing, or be a message to others that he has not forfeited responsi- sufficient, relationship with R. bility, which to my mind it would be reasonable to regard him as having done. I believe that it might be The Court of Appeal did not allow the appeal in respect of deeply undermining to the mother and her confidence in contact, that being a matter of the finding of fact by the the stability of the world surrounding (the child)." magistrates, but did allow the appeal in respect of parental

www.familylawweek.co.uk Family Law Week July 2013 - 49 responsibility finding the magistrates to have fallen into a parent to shirk that responsibility and simply to say error by firstly not having a recommendation before them 'no' to reasonable strategies designed to improve the from Cafcass for the refusal of the application. Secondly, the situation in this regard." magistrates did not consider the leading authority in respect of parental responsibility (it not being put before them) Re C McFarlane LJ continued to emphasize in this case the impor- & V [1998] 1 FLR 392. Thorpe LJ quoted the key passage of tance of each parent exercising their responsibility for the Ward LJ's judgment from that case: child in an appropriate way and to promote both parent's role in the child's life [16]: "These are wholly separate applications and it should be understood by now that a parental responsibility order 'This case before us is one riven with very substantial is one designed not to do more than confer on the natu- difficulties. Both parents, as my Lord, Lord Justice ral father the status of fatherhood which a father would Thorpe observed during submissions, are human be- have when married to the mother. There is also a sad ings, each with benefits and detriments, capacities and failure fully to appreciate, when looking at the best incapacities to bring to the task of establishing a healthy interests of the child (which are paramount in this appli- relationship between their son and each of his two par- cation, as elsewhere) that a child needs for its self-esteem ents. The stand-off in the case is not one readily capable to grow up, wherever it can, having a favourable posi- of resolution as a legal dispute with lawyers and judges tive image of an absent parent; and it is important that, in a courtroom. It is a problem of human relationships, wherever possible, the law should confer on a concerned and in the end it only will be resolved or ameliorated by father that stamp of approval because he has shown a change in the key human relationship between the himself willing and anxious to pick up the responsibility parents, assisted one hopes by the wider family. The of fatherhood and not to deny or avoid it." granting of equal status, namely that of parental respon- sibility to this father, is not simply a matter of ticking a Thorpe LJ reached the conclusion that the magistrates had box; it is to do with status. He now has the status of a not considered the dicta of Ward LJ and had misdirected father with parental responsibility but the word, I would themselves in law. stress to both him and the mother, is not the word "rights" which they will read into the lines of that phrase, McFarlane LJ added that in circumstances where contact but the word "responsibility", which is plainly written was not to be ordered the issue of parental responsibility on the label. They each have a responsibility now to look should be given greater prominence. McFarlance LJ referred to each other, to look to their child, to see whether there to his recent decision of Re W (Direct Contact) [2013] 1 FLR are ways, despite the stand-off, despite the court order, 494 at [76]: in which this boy can be brought up to have the favour- able positive image of the absent parent to which Ward "Where there are significant difficulties in the way of LJ refers. It will not be easy. It will take both of them to establishing safe and beneficial contact, the parents understand and empathise with each other and to begin share the primary responsibility of addressing those to meet each other even a quarter of the way will be a difficulties so that, in time, and maybe with outside help, step in the right direction. One hopes the wider family the child can benefit from being in a full relationship will assist them.' with each parent." 18.6.13 And then 78:

"Parents, both those who have primary care and those who seek to spend time with their child, have a respon- sibility to do their best to meet their child's needs in relation to the provision of contact, just as they do in every other regard. It is not, at face value, acceptable for

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Rule 25.1 and the President's Guidance in The latest edition of The Family Court Practice (2013, at H-L - A 'necessary' evil? p.2015) contains an editiorial note which suggests that the new provision is no more than a cosmetic change, and makes reference to the old test of what is 'reasonably required'. But if that is the case, what is the point of the new wording?

Fortunately, practitioners now have the benefit of a recent decision in the Court of Appeal (Re H-L (A Child) [2013] EWCA Civ 655 – see below) which in language and tone, indicates a much more restrictive approach to applications for permission, and which can be seen as building on the guidance given by the President In the Matter of TG (A Child) [2013] EWCA Civ 5 (January 2013).

The President's guidance in TG (A Child) The latter case involved a child who at 12 days of age was found to have sustained four left rib fractures, two right rib fractures, two skull fractures and a number of subdural and intraretinal haemorrhages. The appeal arose out of the Christopher Rank, barrister, Cornwall Street Chambers refusal by Judge Bellamy (sitting as a High Court Judge) to give the father permission to adduce expert evidence from Family lawyers everywhere are bracing themselves against a bio-mechanical engineer. Although the old r 25.1 was still the tsunami of changes to law and practice which cover in force, the President heralded the imminent arrival of the virtually the whole spectrum of family work, starting with new rule in uncompromising terms. His Lordship said: the availability of funding, and ending with a litigation timetable under which in both private and public law work, '...It is a matter for another day to determine what the outcome is expected to be determined within 26 weeks exactly is meant in this context by the word 'necessary', from the issue of proceedings. but clearly the new test is intended to be significantly more stringent than the old. The test of what is This changing landscape has been evident for years, 'necessary' sets a hurdle which is on any view witnessed by the increasingly clinical approach to case significantly higher than the old test of what is management and the unstoppable momentum generated by 'reasonably required.' a specialised and well-trained judiciary, pro-actively driving cases forwards in the interests of a timeous outcome It will be recalled that in this case the appeal was dismissed for all children. on a number of grounds, the court endorsing the reasons given by Judge Bellamy for refusal to give permission to A main objective of these reforms is to cut out delay instruct the expert. A key point was that the court did not wherever possible, and at the same time to reduce need expert engineering evidence to demonstrate that a significantly legal costs. Those twin objectives are baby strapped into a bouncy chair was incapable of underpinned by the overriding objective, provided for at generating the forces required to tip it over. Furthermore Family Proceedings Rules Part 12, and P.D. 12A. This is not there was no witness account of what had happened, an optional consideration: rendering it unlikely that this type of expertise could significantly assist the court. '…the Court must seek to give effect to the overriding objective when it...exercises the case management Looking to the new rule in the context of biomechanical powers…' engineering, Sir James Munby posed the question of whether such evidence might, in the future, satisfy the referred to in the P.D. Amongst the precepts appearing 'necessary test'. His answer was: there are the requirements of proportionality, the expeditious dealing with cases, and the saving of expense. 'I would not wish to rule out the possibility, though I suspect that in the present state of the relevant science such cases will be at best infrequent in the family courts. Rule 25.1 Family Procedure Rules 2010 As of today, it remains the fact that there is no case of Of more recent interest is the change in rule 25.1 of the FPR which we are aware where such evidence has been 2010 requiring permission to rely upon expert evidence, found to be of any significant assistance...' pointedly described as a 'Duty to restrict expert evidence', and which will further assist in reducing cost and delay. The facts and decision in H-L (A Child) The new rule came into force on 31st January 2013 and reads In Re H-L (A Child) [2013] EWCA Civ 655 (13th June) the as follows: Court heard an appeal from Newcastle-upon-Tyne County Court, involving an application for permission to instruct 'Expert evidence will be restricted to that which in the three expert medical witnesses, namely, a geneticist, a opinion of the court is necessary to assist the court to haematologist, and a paediatrician to provide a general resolve the proceedings.' [emphasis added] overview.

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Existing medical evidence which had been filed came from a number of treating clinicians, but no external medical expert had been formally appointed. The child subject to the proceedings was 2 years of age and had been born with a rare genetic bone disorder affecting the development of What does 'necessary' mean? her back and rib bones. In November 2012 she was noted The President gave helpful guidance as to the meaning of to have a number of significant bruises to her face and body. the word 'necessary'. He endorsed the definition given by There followed a working diagnosis of non-accidental the Court in Re P (Placement Orders: Parental Consent) injury, with care proceedings commencing shortly [2008] EWCA Civ 535, [2008] 2FLR 625: afterwards. A key issue was whether a child suffering with such a bone disorder might be more susceptible to bruising '[It] has a meaning lying somewhere between than might otherwise be the case. The local consulting 'indispensable' on the one hand and 'useful', 'reasonable' geneticist had stated that there was no possibility of a causal or 'desirable' on the other hand'', having ''the link. connotation of the imperative, what is demanded rather than what is merely optional or reasonable or desirable''. The application for the instruction of three medical experts In my judgment, that is the meaning, the connotation, was opposed by both the local authority and the Guardian. the word 'necessary' has in rule 25.1.' His Honour Judge Wood concluded that the factual parameters of the case did not satisfy the test of necessity Sir James Munby also made it abundantly clear that the new embodied in rule 25.1, and therefore refused permission. test is intended to be significantly more stringent than the Before the appeal hearing further disclosure occurred which old (referring to his comments in Re TG (above)). confirmed the diagnosis of spondylocostal dysostosis, thus partly negating the need for a report from a geneticist. The In the light of these two weighty Court of Appeal decisions, diagnostic expert also confirmed that he might be able to the learned editors of The Family Court Practice will surely answer a few targeted questions based on matters of re-write the note to r25.1 at the earliest opportunity. principle, without the need to consider the papers in detail, and on a tight deadline so that the answers might be available before the start of the fact finding hearing which Some conclusions was due to be heard in Newcastle County Court in six days There will doubtless be other appeals involving the new time. rule, one or more of which may well fall for consideration in the Supreme Court. Nevertheless the more recent appeal Of particular interest to practitioners is that their Lordships cases offer useful guidance to practitioners as to the way regarded the case as a useful vehicle to examine the wider ahead, and the writer tentatively offers the following implications of rule 25.1 within the overall context of the thoughts in respect of the approach likely to be taken by the wider reforms to the Family Justice System, including the family courts. target of achieving final resolution within 26 weeks. (1) The new rule will be seen as imposing a much more The appeal was allowed but only to the extent that the stringent test to be satisfied before permission is likely to expert geneticist should be permitted to file a short report be given. This new approach can be seen as an responding to the 'targeted paper exercise' outlined by the important part of the drive to ensure that decisions in mother's solicitors. It seems clear that their Lordships gave care cases are made expeditiously in accordance with this limited permission on the basis that the chosen expert the 26 weeks timetable. could respond very quickly, without a detailed report, and within a timescale which would not jeopardise the overall (2) In considering whether expert evidence is necessary, 26 weeks target. To have refused that limited permission the court will review what other evidence is available, may have infringed Article 6 ECHR, and also the overriding and whether that evidence will enable the court to make objective in rule1.1 of FPR 2010. findings of fact without reference to a particular expert or experts. In assessing alternative evidence, regard In summary, Lord Justice McFarlane said: will be had to the available lay-evidence , the scope and quality of evidence given by social workers and Cafcass '...it is plain to me that that instruction, on those terms, is officers, and the evidence of other professionals, proportionate to the need to provide some authoritative including Guardians. clarity from a witness who is in a position to give such answers and is therefore ''necessary'' in the manner that Although not conventional 'experts', professional is described more fully in the President's judgment...' witnesses do carry a level of expertise which is likely to be more highly valued in the future. In their own fields Permission to instruct a haematologist and a paediatrician such witnesses will properly be regarded as having was refused. The Court took the view that the appeal in extensive and valuable knowledge within the field of respect of those experts did not ' begin to get off the ground'. child care, including the educational and emotional The judge was entitled to 'conclude that the need for the development of children. This has always been the case, instruction of an expert from either of those disciplines was with the difference in the new era that the courts will not established on the facts of this case...'. The reasons need to have greater reliance upon them, in the absence given at first instance, that there was no positive evidence to of traditional experts. suggest that issues relating to blood clotting disorder could not be given by the local paediatric haematologist, and that (3) Unproven and untested scientific evidence, for submissions about bruising, could be dealt with by other example bio-mechanical engineering evidence(TG), is evidence, were endorsed by the Court of Appeal. less likely to be permitted, although expert evidence of

www.familylawweek.co.uk Family Law Week July 2013 - 52 a kind which has been tried and tested by the courts, for (5) It is perhaps an obvious point, but if there are cogent example expert medical evidence in cases of alleged arguments which raise realistic issues under Articles 6 non-accidental injury, should continue to find favour and 8 of the ECHR, the court is more likely to grant where it is found to be necessary. On this point, the permission for expert evidence. Even in this case, time, comments of the President in TG should be noted: cost, and questions of proportionality will have to be weighed in the balance. Presumably, if the court '.....The Judge will need to be alert to the risks posed concludes that refusal of permission would breach an by what may turn out to be 'bad science'. On the applicant's human rights, it follows that expert evidence other hand the judge must always be alert to the will be regarded as necessary. possibility that some forensically unfamiliar or even novel expert discipline may provide the key to On the question of whether the child in H-L was more prone explaining what at first blush appears to be a familiar to manifest bruising than a child without his genetic type of case.' disorder, it was said to be unsatisfactory for the local consultant clinical geneticist (who admitted that the (4) The court may be more amenable to granting question was outside his knowledge) to answer the question. permission if it can be shown that the nominated expert can report within the timetable ordered within the Lord Justice McFarlane said: proceedings. Lord Justice McFarlane noted in H-L that the chosen expert agreed to answer 'two or three 'If the mother and those acting for her wish to challenge targeted questions' within a tight deadline, such that the or seek elaboration upon that opinion during the course finding of fact hearing in six days time could be of the trial Dr Wright is in no position to take the matter accommodated. any further. That is, in my view, a situation which potentially falls short of the requirements of ECHR, Art Another important consideration, as always, will be the 6 and the overriding objective in rule 1.1 of FPR 2010.' cost of instructing an expert. A combination of high cost and delay in producing a report did not help when 19/6/13 considering the application for bio-mechanical engineering evidence in TG. In that case Sir James Munby referred to the estimated cost of between $18,500-$22,000, with a time-scale which would have produced a final report on the last working day before the start of the finding of fact hearing.

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Divorcing a bankrupt, Part II: where implemented: Hill v Haines [2008] 1 FLR 1192 (CA) at [7]-[8] insolvency law meets financial remedies (although, interestingly, it was suggested in Independent Trustee Services v GP Noble [2012] EWCA Civ 195 [2012] 3 FCR 1 by Patten LJ at [43] that setting aside a final order does not automatically re-vest assets previously transferred by a party pursuant to that order, which appears not to be consistent with Hill v Haines).

Lump sums work differently. The beneficial interest in the money which one party is ordered to pay does not pass at the moment the order takes effect (Burton v Burton [1986] 2 FLR 419 per Butler-Sloss J (as she then was) at 425). Although in Re Mordant; Mordant v Halls [1996] 1 FLR 334 (Ch D) money which had been paid to the husband's solicitors to satisfy a consent order, but not yet paid to the wife, did not vest in the trustee in bankruptcy.

As explained in Part I of this article, pension rights do not vest in the trustee in bankruptcy and therefore the implementation of pension sharing orders is unaffected by Henry Clayton, Barrister, 4 Paper Buildings the making of bankruptcy orders. Also previously addressed were periodical payments: these remain This is the sequel to my article "Divorcing a bankrupt: payable by a bankrupt, but the assessment of quantum is where insolvency law meets ancillary relief" published by not binding on the bankruptcy court which will make an Family Law Week. That article focused on what happens income payments order leaving the bankrupt with such where a party becomes bankrupt during proceedings and amount as it considers he reasonably needs to provide for covered the following: himself and his family.

• How bankruptcy works; Applications by the trustee in bankruptcy to set aside • What financial remedies can be ordered against a final orders bankrupt; Even if your final order is made and implemented prior to the paying/transferring party becoming bankrupt that • Grounds for setting aside a bankruptcy order. does not necessarily mean that the disposition is completely protected. The trustee in bankruptcy has two This article addresses what happens if the party who is to means of clawing back money for the benefit of the pay money or transfer property becomes bankrupt after creditors: the making of a final order. It will cover: (a) Transactions at an undervalue (Insolvency Act 1986 • Bankruptcy between final order and implementation; s.339);

• Applications by the trustee in bankruptcy to set aside (b) Preferences (IA 1986 s.340). the final ancillary relief order; S.339 states that "where an individual is adjudged • The impact on deferred interests in property of a bankrupt and he has, at a relevant time, entered into a bankruptcy arising subsequent to an ancillary relief transaction with any person at an undervalue, the trustee order of the bankrupt's estate may apply to the court for an order under this section."

Bankruptcy between final order and its implementation The "relevant time" is 5 years prior to the presentation of Let us suppose you have conduct of a matrimonial finance the bankruptcy petition, if at the time of the transaction the case where the husband is carrying significant personal person was insolvent or became insolvent as a result of the debt but there are other assets from which to meet your transaction. "Insolvency" means unable to pay one's debts client, the wife's, housing needs. You arrive at a consent as they fall due (commercial insolvency) or liabilities order before the husband or his creditors petition for his exceeding assets (balance sheet insolvency) - these bankruptcy. Is your client's award safe? Not necessarily. It requirements are presumed to be met in the case of a really depends upon the type of asset which was the transaction at an undervalue if entered into with an subject of the order: associate (s.341(2)); this includes a spouse or civil partner (s.435). In other cases, where the bankrupt was not insolvent prior to or as a result of the disposition, the Property adjustment orders confer an equitable interest relevant time will be 2 years. from the time the order takes effect (making of Decree Absolute) – this is a manifestation of the maxim 'equity The definition of 'an undervalue' is (s.339(3)): treats that as done which ought to be done' – which means the transferee is not affected by the transferor's bankruptcy after this time whether or not the order has actually been

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(a) "...a gift ……. on terms that provide for him to money or transfer of property – i.e. This is not an receive no consideration; undervalue (at [35]);

(b) ... a transaction …. for consideration the value of (d) If the ancillary relief order was the product of which, in money or money's worth, is significantly less collusion between the spouses designed to adversely than the value of… the consideration provided..." affect creditors then the order would be set aside (at [46]; (for what may amount to collusion see Re Jones (A S.340 applies to preferences: "where an individual is Bankrupt); Ball v Jones [2008] 2 FLR 1969 – in which the adjudged bankrupt and he has at a relevant time given a argument that such a disposition would amount to a preference to any person". Where the transferee is an preference was also rejected); associate the relevant time is 2 years. Where the transferee is not an associate the relevant time is 6 months (e) An agreement to compromise ancillary relief (s.341(1)(b)(c)). It is also a requirement that the transferor proceedings cannot constitute a transaction for the was at that time insolvent or made insolvent as a result of purposes of s.339 (at [31]). the transaction. The last point demonstrates how important it is, in cases If the trustee is successful in demonstrating the undervalue where bankruptcy is a risk, to get an agreement approved or preference then the court shall 'make such order as it by the court as soon as possible. thinks fit for restoring the position to what it would have been' (s.339(2); s.340(2)). Risk of future bankruptcy The court therefore has a discretion. Although not a Family practitioners are used to drafting orders which divorce case, Trustee in bankruptcy of Claridge v Claridge provide for a party to have a deferred interest in real [2011] EWHC 2047 (Ch) is an example of a court finding property – whether by chargeback, Mesher or Martin order that there was a transaction at an undervalue but deciding – usually when a primary carer needs the use of additional to make no order. Another is Singla v Brown [2008] 2 FLR capital during the minority of children of the family. 125 in which the bankrupt had accepted a notice from his Where there is a risk of bankruptcy this may be partner reducing his beneficial interest in the couple's inadvisable. home, but in circumstances where he made no capital contribution or mortgage payments and had only been The case of Avis v Turner and another [2007] EWCA Civ legal co-owner because the mortgagee required it. 748 established that, where a party has a deferred interest in property and is subsequently made bankrupt, the An example of a divorce settlement being set aside as a trustee in bankruptcy is entitled to apply for an order for transaction at an undervalue is Segal v Pasram and another sale before any of the trigger events in the order/charge [2008] 1 FLR 271 (Ch D). The husband and wife executed a have occurred. What is worse, s.335A Insolvency Act 1986 deed purporting to transfer his half share in the applies, so that after one year the interests of the creditors matrimonial home to her for consideration of £1,000 and outweigh all other considerations unless the circumstances her giving up her ancillary relief claims (though divorce of the case are exceptional. Clearly, this could completely proceedings were not issued until years later). He was invalidate the basis upon which an order was made (but made bankrupt 8 months later. After a delay of 6 years the not likely to be in such a way as to amount to a Barder trustee in bankruptcy sought to have the transfer set aside. event). It was held that the limitation period for a recovery of real property by a trustee in bankruptcy is 12 years. The risk of bankruptcy may arise out of facts such as one party carrying a lot of debt which they will struggle to pay In Hill v Haines (above), it was clear at the time of the final out of income, or perhaps a gambling addiction. I suggest hearing that the husband would become bankrupt. The it does not necessarily mean balance sheet insolvency. It District Judge made an order that the husband's share in may be better in that sort of case to accept a lower capital the matrimonial home should be transferred to the wife settlement, without the Mesher or chargeback, and strive within 7 days of Decree Absolute. He did not execute the for an immediate capital clean break. transfer but he was made bankrupt shortly thereafter. The District Judge subsequently executed the transfer documents. The trustee in bankruptcy applied the following year for the transaction to be set aside as a transaction at an undervalue. The trustee succeeded in the Chancery Division but the decision was overturned by the Court of Appeal who was held that:

(a) The disposition was made at the time the court order took effect (at [7]-[8]);

(b) The compromise of ancillary relief claims does amount to consideration (at [29]-[30]);

(c) Absent the usual vitiating factors of fraud, mistake or misrepresentation the compromise of a party's statutory rights would be balanced by the payment of

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CASES applicant. NGN advanced a public interest argument and the applicant contended that the circumstances were exceptional and that any identification of the children Z & Ors v News Group Newspapers Ltd & Ors would cause them serious detriment. (Judgment 1) [2013] EWHC 1150 (Fam) At the particular stage that the trial had reached, Cobb J found that the balance was “exquisitely finely poised” but The applicant was the father of five of eight children whose that, having applied the relevant principles and considered mother was being tried in the Crown Court for serious all matters, the applicant had discharged the heavy burden benefit fraud. The charges arose from claims made by her in of proof required for the making of the reporting restriction. relation to supposed multiple complex disabilities and needs of the children. He set out four specific reasons for so doing;

An order for reporting restrictions made earlier in the - The central role of the children in the case which would criminal proceedings under s.39 Children and Young involve “constant” references to their private lives and Persons Act 1933 had been successfully challenged by News upbringing. Group Newspapers Ltd (“NGN”) on the basis that that provision only applied to children concerned in the - That the trial was about to focus on detailed proceedings as defendants, victims or witnesses. In this examination of the children’s medical records which case, although the children’s medical and other conditions would constitute a serious intrusion into their private would be the subject of “lengthy and detailed analysis”, lives and was therefore a powerful Article 8 they were not “caught” by the Act. consideration

Accordingly, the father of the five younger children applied - That when considering the Article 8 rights of the to the High Court for an injunction. children the court must have regard to their “unusual stated vulnerabilities” In determining the application, Cobb J noted that the inherent jurisdiction enabled the court to conduct the - That, in terms of proportionality: (i) he recognised that exercise of balancing the competing ECHR rights under the order would be a considerable interference with Articles 8 and 10. Article 10, (ii) that although there was a “hierarchy” amongst the children in respect of the need for He adopted the test articulated by Lord Steyn in Re S [2004] protection, it was necessary and proportionate to protect UKHL 47 namely that: the Article 8 rights of the most vulnerable to preclude the identification of all the family, (iii) that the balancing - neither Article has precedence over the other exercise he had conducted pertained to the particular point reached in the criminal trial. - where the articles are in conflict, intense focus on the Cobb J then considered the impact that a conviction comparative importance of the specific rights claimed is might have upon the balancing exercise he had necessary conducted, observing that in such circumstances, there should probably not be “reporting restraint”. - the justification for interference with each right must be taken into account Accordingly, whilst making the injunction, he invited the parties to make further representations before him at the - the proportionality test must be applied to each. point at which the trial judge started summing up, in order He also considered s. 12(4) of the Human Rights Act that he could make a further decision in time for the verdict. 1998, the relevant press code of practice and the applicable case law. He expressly adopted the analysis Summary by Katy Rensten barrister, Coram Chambers of Jackson J in A Council v M, F and others [2012] EWHC 2038 (Fam) which set out the need for close attention to be paid to the circumstances of each case; the need to Z & Ors v News Group Newspapers Ltd & Ors remember that Article 8 rights concern “a few”, whereas (Judgment 2) [2013] EWHC 1371 (Fam) Article 10 rights are typically of importance to “the many (whose rights should not be eroded by “hard cases This application arose out of a reporting restriction granted of individual misfortune”) but that, equally, no by Cobb J in Z and Ors [2013] EWHC 1150 (Fam). hierarchy of rights exist, such that in “highly exceptional” cases there can be “inroads” made into the The injunction prevented the press reporting in such a way fundamental right to report criminal proceedings. as to identify the 8 children of a family where the mother was on trial for serious benefit fraud and where the trial In applying these principles to reporting the criminal involved detailed analysis of the medial records of process, he bore in mind the importance to democratic vulnerable children. society of reporting such trials; the need to guard against the “instinctive desire to extend a protective wing to shield the Cobb J had found that, at the particular juncture reached in children of parents who are accused of criminal activity”; the criminal trial, the balance lay finely in favour of the that press freedom should only be displaced in exceptional Article 8 rights of the children over the wider Article 10 circumstances and that the burden of proof lay with the rights protecting freedom of expression. He had, however,

www.familylawweek.co.uk Family Law Week July 2013 - 56 indicated that the balance might be shifted in the event of between the supervising agency and the applicant, and the mother being convicted and, accordingly, had invited given the withdrawal of continuing funding for the parties to make further representations to him at the supervision under the Cafcass scheme." point at which the trial judge started summing up, in order to consider the issue in time for the verdict. Thorpe LJ, giving the leading judgment in the Court of Appeal, stated: Upon the matter being restored, whilst it was accepted that no party sought variation of the reporting restriction if the "That was not the essence of the recommendations mother were to be acquitted, the Respondents sought before him, and in such a situation a trial judge has to variation in the event of a conviction. Cobb J gave a short knock at every door, has to explore every option, before judgment, focussing on whether or not Article 10 should making such a significant shift in the continuing prevail in such circumstances. relationship between a parent and young children."

Having heard argument, including reference to the nature Permission was granted, the appeal allowed, the indirect of the press reporting had taken place thus far under the contact order set aside and the supervised contact order terms of the restriction, Cobb J reminded himself of the need restored. to guard against assumption that reporting would be “sensational” and of the duty on the press (of which they The court also considered the father's appeal against the hardly needed reminding in the current climate) to maintain dismissal of his application to change the name of one of the the highest professional standards. children. The judge had simply said "no order" without any explanation. The court granted permission to appeal on this Having acknowledged the exceptional nature of the case point too, allowed the appeal and remitted the matter to the and, whilst regretting that the consequence of naming the county court. In doing so, Thorpe LJ made the observation: defendant would identify the children (who were wholly innocent) he nevertheless concluded that the “marginal re "[It]is impossible to see that the father's resisted weighting of factors in the event of a conviction would tilt application was destined to succeed. Indeed, the the balance in favour of freedom of expression”. indications are that the father will face considerable problems at the remitted hearing in the light of the Although the balance had tipped in favour of allowing adverse stance taken by the Cafcass officer." reporting, it did not eradicate the Article 8 rights of the children. Accordingly, “intense focus” was required to Summary by Akta Chipalkatty, barrister, Church Court strike the right balance, leading Cobb J to vary the order but Chambers to impose restrictions including precluding the publication of photographs, disclosure of the forenames of the children and applicant father and of the medical O (A Child) [2012] EWCA Civ 1955 conditions/disabilities of the children. Appeal by a father against an order permitting the mother Cobb J concluded by noting that (in the event of a conviction to remove their 9 year old daughter from the jurisdiction to leading to the regrettable consequences of the variation of the Republic of Ireland. At the original hearing, the judge the reporting restriction) it would be the mother’s had granted leave on the basis of the child's welfare and also responsibility alone for having caused the “misery, shame the financial security that the relocation would provide as and disadvantage, which is the inevitable cause of her part of the mother's employment repatriation package. offending." Summary by Katy Rensten barrister, Coram Chambers The child's wishes and feelings as expressed to CAFCASS some months before the hearing, were that her circumstances should not change.

T (Children) [2013] EWCA Civ 618 Following the first decision, the father, who was in arrears with payments of child maintenance, offered to make all The father had established contact through the courts with payments outstanding, and make secure future periodical the children, H and Y. Since there was a perceived risk that payments, as well as a substantial contribution to the the father might take the opportunity to remove the children mother's costs. The first instance judge was therefore asked to his homeland of Algeria, HHJ Hughes QC had ordered to reopen the case and reconsider the position. Having that there should be supervised contact. heard evidence focused on the financial situation, the court still found that it was in the interests of the child to move On 13 June 2012 the matter came before HHJ Compston. The with her mother, who still wished to pursue her judge decided to reduce contact from supervised to indirect employment in Ireland. contact once a month on the basis that the state could not be expected to supervise contact any longer and that there By the time of the appeal, the mother had confirmed that in were no members of the mother's or father's family or fact she had taken early retirement. The evidence filed friends able to supervise. showed that she had known about that option at the time of the first hearing, and therefore the father submitted that she The main ground for the application for permission to had deliberately concealed that from the Court. At appeal, appeal was that the reduction in contact was the father further submitted that the judge had been wrong to refuse an application for an updated CAFCASS report, or "premature without the necessary investigation of to refuse separate representation for the child. practicalities, given the breakdown of the relationship

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The Court of Appeal dismissed the appeal, finding that the status as sole shareholder and controller of the company, judge had been absolutely right to focus on the practicalities but in the particular circumstances of the case [9]. and the importance of financial security as well as emotional security for the primary carer. In relation to the fresh After surveying the authorities, the Court holds that there is evidence filed, it did not add anything and would not have a principle of English law which enables a court in very led the judge to a different conclusion. limited circumstances to pierce the corporate veil. It applies when a person is under an existing legal obligation or Summary by Jacqui Thomas, barrister, 37 Park Square liability or subject to an existing legal restriction which he Chambers deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The Prest v Petrodel Resources Limited and court may then pierce the corporate veil but only for the others [2013] UKSC 34 purpose of depriving the company or its controller of the advantage which they would otherwise have obtained by This appeal arises out of proceedings for financial remedies the company's separate legal personality. In most cases the following a divorce between Michael and Yasmin Prest. The facts necessary to establish this will disclose a legal appeal concerns the position of a number of companies relationship between the company and its controller giving belonging to the Petrodel Group which were wholly owned rise to legal or equitable rights of the controller over the and controlled by Michael Prest, the husband. One of the company's property, thus making it unnecessary to pierce companies was the legal owner of five residential properties the veil. In these cases, there is no public policy imperative in the UK and another was the legal owner of two more. The justifying piercing the corporate veil. But the recognition of question on this appeal is whether the court has power to a small residual category of cases where the abuse of the order the transfer of these seven properties to the wife given corporate veil to evade or frustrate the law can be addressed that they legally belong not to the husband but to his only by disregarding the legal personality of the company is companies. consistent with authority and long-standing principles of legal policy. [35] The principle has no application in the Under Section 24(1) (a) of the Matrimonial Causes Act 1973 present case because the husband's actions did not evade or ("the 1973 Act"), the court may order that "a party to the frustrate any legal obligation to his wife, nor was he marriage shall transfer to the other party...such property as concealing or evading the law in relation to the distribution may be so specified, being property to which the first- of assets of the marriage upon its dissolution [36]. Some of mentioned party is entitled, either in possession or the concurring judgments reserve the possibility of a reversion." In the High Court, Moylan J concluded that there somewhat wider test, but not in respects which affect its was no general principle that entitled him to reach the application to the present case. companies' assets by piercing the corporate veil. He nevertheless concluded that a wider jurisdiction to pierce The Court rejects the argument that a broader principle the corporate veil was available under section 24 of the 1973 applies in matrimonial proceedings by virtue of section Act. In the Court of Appeal, three of the companies 24(1) (a) of the 1973 Act. The section invokes concepts of the challenged the decision on the ground that there was no law of property with an established legal meaning which jurisdiction to order their property to be conveyed to the cannot be suspended or taken to mean something different wife. The majority in the Court of Appeal agreed and in matrimonial proceedings [37]. Nothing in the statutory criticised the practice of the Family Division of treating history or wording of the 1973 Act suggests otherwise [86- assets of companies substantially owed by one party to a 9]. General words in a statute are not to be read in a manner marriage as available for distribution under section 24 of the inconsistent with fundamental principles of law unless this 1973 Act. result is required by express words or necessary implication [40]. The trial judge's reasoning cut across the statutory JUDGMENT scheme of company and insolvency law which are essential The Supreme Court unanimously allows the appeal by for protecting those dealing with companies [41]. Yasmin Prest and declares that the seven disputed properties vested in the companies are held on trust for the It follows that the only basis on which the companies could husband on the ground (which was not considered by the be ordered to convey properties to the wife is that they courts below) that, in the particular circumstances of the belong beneficially to the husband, by virtue of the case, the properties were held by the husband's companies particular circumstances in which the properties came to be on a resulting trust for the husband, and were accordingly vested in them [43]. After examining the relevant findings "property to which the [husband] is entitled, either in about the acquisition of the seven disputed properties, the possession or reversion". Lord Sumption gives the leading Court finds that the most plausible inference from the judgment and Lord Neuberger, Lady Hale, Lord Clarke and known facts was that each of the properties was held on Lord Walker add concurring judgments. resulting trust by the companies for the husband. The trial judge found that the husband had deliberately sought to REASONS FOR THE JUDGMENT conceal the fact in his evidence and failed to comply with There are three possible legal bases on which the assets of court orders with particular regard to disclosing evidence the companies might be available to satisfy the lump sum [4]. Adverse influences could therefore be drawn against order against the husband: (1) that this is a case where, him. [45]. The Court inferred that the reason for the exceptionally, the Court may disregard the corporate veil in companies' failure to co-operate was to protect the order to give effective relief; (2) that section 24 of the 1973 properties, which suggested that proper disclosure would Act confers a distinct power to disregard the corporate veil reveal them to beneficially owned by the husband [47]. It in matrimonial cases; or (3) that the companies hold the followed that there was no reliable evidence to rebut the properties on trust for the husband, not by virtue of his most plausible inference from the facts [49-51].

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This is the press summary provided by the Supreme Court. • A "likelihood" of significant harm means no more than a real possibility that it will occur, but a conclusion to In the matter of B (A Child) [2013] UKSC 33 that effect must be based upon a fact or facts established on the balance of probabilities. "Harm" means ill- The case concerns the application of the criteria for making treatment or impairment of health or development, and a care order under section 31 of the Children Act 1989 when development includes emotional development. Whereas the risk is of future psychological or emotional harm and the the concept of "ill-treatment" is absolute, the concept of role of the appellate courts once the trial judge has made an "impairment of health or development" is relative to the order. The child concerned was removed from her parents health or development which could reasonably be at birth under an interim care order. The mother was for expected of a similar child [24, 25, 178]. many years in an abusive relationship with her step-father. She also has criminal convictions for dishonesty and a histo- • Courts should avoid seeking to explain the meaning of ry of making false allegations. She has been diagnosed with the word "significant". However, the severity of the somatisation disorder, a condition which involves making harm required is inversely correlated with the likelihood multiple complaints to medical professionals of symptoms of the harm, i.e. the less likely the harm is to occur the for which no adequate physical explanation can be found. In more serious the harm will need to be [26, 56, 188]. the course of the proceedings she was also diagnosed with Article 8 of the ECHR is not engaged when a court factitious disorder, a related psychiatric condition involving assesses whether or not harm is "significant" for these the deliberate exaggeration or fabrication of symptoms and purposes; that provision will only be engaged in a case the recitation of a false medical history. In 2009 she escaped such as this if there is an interference with the right to the abusive relationship with her stepfather, leaving behind respect for family life, which can only occur at the stage their ten year old daughter, and quickly formed a relation- of determining whether or not a care or supervision ship with the father of this child, who has been convicted of order should be made [29, 62, 189]. many serious offences. He has four older daughters, with whom he has an amiable relationship but his involvement • The character of the parents is relevant at every stage in their lives has been marginal, not least because of the of the inquiry, including the assessment of whether the many years he has spent in prison. threshold conditions set out in section 31(2) of the 1989 Act have been satisfied because the character of the While the child was in interim care, the parents visited parents may affect the quality of their parenting [31, 71]. frequently and formed a good relationship with their The conduct of the parents giving rise to harm or the daughter. They had shown their commitment to her 'in likelihood of harm is not required to be intentional or spades'. The trial judge found that, if placed in her parents' deliberate; the harm or likelihood of harm need only be care, there was a risk that the child would be presented for "attributable" to the care given by the parents or the care and receive unnecessary medical treatment, that she might likely to be given by them not being what it would be grow up to copy her mother's behaviour, and at the very reasonable to expect a parent to give to the child [31]. least be confused at the difference between the real world and her mother's dishonest presentation of it. There would • A determination as to whether the threshold have to be a multi-disciplinary programme of monitoring conditions for a care order have been satisfied depends and support to avert these risks and the parents would not on an evaluation of the facts of the case as found by the be able to co-operate with such a programme because of judge at first instance; it is not an exercise of discretion. their fundamentally dishonest and manipulative approach An appellate court may interfere with such a decision towards social workers and other professionals whom they only if it is "wrong", but it need not have been "plainly perceived to be challenging of their points of view. wrong" [44, 61, 110, 139, 203]. In determining whether Accordingly, there was no other way in which the feared the threshold conditions for a care order are satisfied harm to the child could be prevented than by a care order and whether it is appropriate to grant a care order, an with a view to adoption. The Court of Appeal upheld that appellate court must have regard to the advantages judgment. Both parents appealed to the Supreme Court. which the judge at first instance had over an appellate court, including the judge's ability to assess what may JUDGMENT happen to the child in the future on the basis of the oral The Supreme Court by a majority of 4:1 (Lady Hale evidence given by the candidates for the care of the child dissenting) dismissed the appeal. [40¬42, 58-60].

REASONS FOR THE JUDGMENT The High Court judge was also entitled to conclude that The High Court judge was entitled to conclude that the the making of a care order in relation to Amelia, with a threshold conditions for the making of a care order had been view to her being adopted was necessary and did not satisfied in this case [48, 64, 131]: violate the rights of Amelia, M, or F to respect for their family life under article 8 of the ECHR [48, 98, 131-133]: • Before a care order may be made under section 31 of the 1989 Act, the judge has to be satisfied that: (a) the • A high degree of justification is needed under article 8 child is suffering or is likely to suffer significant harm; if a decision is to be made that a child should be adopted and (b) the harm or likelihood of harm is attributable to or placed in care with a view to adoption against the the care likely to be given to the child if a care order is wishes of the child's parents. Domestic law runs broadly not made, not being what it would be reasonable to in parallel with article 8 in this context: the interests of expect a parent to give to the child, or to the child's being the child must render it necessary to make an adoption beyond parental control [23, 177]. order. A care order in a case such as this must be a last resort [34, 74-78, 82, 130, 135, 198, 215].

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• Section 6 of the Human Rights Act 1998 does not The appeal was dismissed by Coleridge J who in addition require an appellate court to determine afresh issues considered comment of Bennett J in the case of Rose v Rose relating to Convention rights; an appellate court, [2003] EWHC 505 (Fam): including the Supreme Court, is required only to conduct a review of the lower court's decision [36-37, " …it is absolutely essential in ancillary relief cases that 83-90, 136]. The making of a care order, however, is not the court should be able to put a stop to applications a purely discretionary decision; a trial judge has an seeking to reopen matters already decided by a court, obligation under section 6 of the 1998 Act to ensure that whether by consent or after a contested hearing, if the he/she does not violate article 8 of the ECHR. court is satisfied that no useful purpose will be served by Accordingly, it is not appropriate for an appellate court reopening the matter." reviewing such a decision to apply the test normally used when reviewing a purely discretionary decision, Summary by Martina van der Leij, barrister, Field Court i.e. whether the lower court exceeded the generous Chambers ambit within which reasonable disagreement is possible [45]. The appropriate test is whether the lower court was "wrong" [47, 91-92, 139]. Lady Hale and Lord Kerr disagree with this analysis, taking the view that an W (A Child) EWCA Civ 662 appellate court reviewing whether a care order violates article 8 of the ECHR must consider that issue for itself At the conclusion of a fact-finding hearing in the course of on the basis of the material put before it (whilst care proceedings, HHJ Brown made findings against the attributing appropriate weight to the reasons given by parents that the injuries the child had suffered were non- the lower court) [115-120, 204-205]. accidental, that the perpetrator of the injuries was one of the parents and that the parents had failed to seek timely • There are a number of features relative to the medical attention for some of the injuries. Permission to personalities of Amelia's parents, and to the psychiatric appeal had been granted. conditions of M, which raised a real possibility that, in their care, Amelia would suffer impairment of her The child had injuries to its mouth and the judge rejected the emotional development. The key feature of this case parents’ version of events that the child had injured itself. which justified the judge's decision not only that the The mother had noted blood on the child’s lip while it was threshold conditions for making a care order were sleeping but did not wish to disturb the child to check the satisfied but that such an order was appropriate was that cause of the blood. The judge found that the injuries, when Amelia's parents were unable to offer the elementary taken together, allowed him to reject accidental causes for cooperation with professionals that her safety in their the injuries. The child also had bruising to the forehead and home would require. Adoption was the only viable the judge rejected the explanation given by the parents. option for Amelia's future [48, 99-100, 132, 106]. An expert was instructed to consider the possible Lady Hale took the view that this was a case based on the explanation for the fractures to the skull and back that might mere possibility that the child would suffer psychological be attributed to a bone fragility. The judge concluded that it harm in the future. There was no risk that these parents was no more than a mere possibility that any condition would neglect or abuse their child. Even if this were existed but the parents complained that the judge had gone sufficient to cross the threshold laid down in section 31(2) of further than the expert’s evidence had allowed him to. the Children Act 1989, it had not been demonstrated that a care order with a view to adoption was necessary to protect The finding by the judge that the child had suffered the child – that 'nothing else would do' – when nothing else fractures was criticised for placing insufficient weight on had been tried. The care order was not, therefore, a the totality of the medical evidence in the context of the proportionate response to the harm which was feared. surrounding circumstantial evidence. The judge found the father’s account unreliable and the parents accepted and This is the summary provided by the Supreme Court. regretted failing to obtain medical attention after the falls that were alleged to have caused the fractures.

T v M [2013] EWHC 1585 (Fam) The judge found that the parents had failed to obtain timely medical attention in respect of the other injuries but the The Husband (H) applied to vary a maintenance order 4 parents complained that the injuries could not be dated, that months after judgment in the substantive ancillary relief the child was unwell and did not like to be handled and that proceedings, where the Wife (W) had been cross examined there was insufficient reasoning behind the judge’s findings. for 3 out of the 4 days allocated. The main thrust of his application to vary was that W earned considerably more Hallett LJ stated that there was some force in the disquiet as than she owned up to and that if this was investigated to the judge findings that the mouth injuries were non- again, the court would be bound to vary the maintenance accidental but that in her judgment the mother’s account downward. was implausible. Hallett LJ was not surprised that the judge and expert had rejected the mother’s explanation that the H's application was struck out under FPR 4.4 (1) (a) "that the child fell with such force from a sitting position onto a toy statement of case disclosed no reasonable grounds for to cause significant damage. The injuries to the forehead bringing the application" by the same judge who had heard were similarly dealt with by the Court of Appeal in that it the final AR hearing. H appealed. was inherently unlikely that the child would have hit itself twice causing bruising on each occasion.

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It was held that the judge had been perfectly entitled to find B v B [2013] EWHC 1232 (Fam) that the existence of a condition was a mere possibility and that he had not ignored the evidence or misunderstood it. The parties had broadly agreed that the assets in the case of Hallett LJ agreed with the judge that the parents’ £40m should be split as nearly as possible in half. However, explanations for the fractures was unconvincing because it there remained issues as to which party should retain the was difficult to accept that the mechanism said to have castle, how the husband's interest in three private equity caused the injuries was in fact capable of doing so. funds should be shared, the valuation of a yacht and how the lesser assets, including cars, should be dealt with. Upon Appeal dismissed. determination of those issues, a balancing payment would be due to the wife; in addition, periodical payments for the Summary by Richard Tambling, barrister, 1 Garden Court benefit of the children required determination.

The marriage lasted for 20 years and the parties had two teenage children. The wife was now almost 54 and had been Re H-L (A Child) [2013] EWCA Civ 655 a solicitor when the parties married and then brought up the children from 1995. The husband, now almost 57, was a This appeal concerned a point left open by Re TG (Care fund manager in a private equity investment house and had Proceedings: Case Management: Expert Evidence) [2013] EWCA worked there for nearly 30 years. Civ 5, [2013] 1 FLR 1250, namely what is meant by the word ‘necessary’ in the context of the test to determine when The parties' wealth had allowed them to purchase expert evidence should be permitted. Since 31 January 2013, properties in the UK (including the castle) and in Verbier. the test in r. 25.1, Family Procedure Rules 2010 has been They owned a yacht and mooring In Palma said to be worth whether it is ‘necessary to assist the court to resolve the £600,000 and owned several luxury cars, private number proceedings’. plates and enjoyed a high standard of living.

The case involved a baby with a rare genetic disorder who In his judgment, Coleridge J provides an illuminating had suffered suspected non-accidental bruising. The only insight into the workings and structural makeup of the medical evidence available to the court was from the operation of the private equity investment house and treating clinicians. Counsel for the mother had applied for helpfully sets out his approach when the court has to decide various expert assessments centered around the which party should retain a much loved asset. significance, if any, of the child’s medical condition in relation to the bruising. The applications were refused on However, Coleridge J goes on to make remarks that the basis that the circuit judge felt that they did not meet the practitioners will need to keep in mind when dealing with test of ‘necessary’. what the judge described as 'the lesser issues and assets'. This is particularly so, because Coleridge J notes that the Sir James Munby, P, giving the first judgment of the Court President had seen and approved of his remarks in of Appeal, stressed that ‘necessary’ should be given its paragraph 54 of the judgment. The judge commented that ordinary meaning. Drawing on Re P (Placement Orders: the parties were to be applauded for achieving agreement Parental Consent) [2008] 2 FLR 625, in which the same word on many of the major issues and were not to be criticised for in a different context had been held to have a meaning the disagreement over the apportionment of the private “lying somewhere between ‘indispensible’ on the one hand equity funds. However, it was appropriate to issue a mild and ‘useful’, ‘reasonable’, or ‘desirable’ on the other hand”, rebuke about their approach to the lesser assets. The small having “the connotation of the imperative, what is differences (as a proportion of the pot) in the value of the demanded rather than what is merely optional or yacht, the approach to cars and to the credit cards and the reasonable or desirable”, he concluded that the word should like, did not merit the time (and costs) spent on them. have the same meaning in r.25.1. Coleridge J goes on to state that the rules are clear and that McFarlane LJ, giving the second judgment, concurred with proportionality is the 'name of the game' when costs are so the President’s judgment on how the word ‘necessary’ high and court time is at a premium. The judge notes that a should be interpreted. He considered this in the context of much more rigorous approach to case management the facts of the case. The unanimous decision of the Court of (especially in the field of the employment of experts) is Appeal was to allow the appeal on a limited basis that the being introduced in other areas of the family justice system judge hearing the fact-finding would otherwise be without to save time and money and that this type of high value a suitably qualified expert to comment on the central litigation cannot expect to be immune. Parties should question of whether the child’s genetic condition could have therefore expect to be confronted more and more by a caused the bruising and the expert sought was able to refusal by the court to participate in disputes over lesser complete a paper-based assessment in a timeframe suitable assets and where in each case the difference is around 1% of for the fact-finding hearing. the net value of the pot or less. The approach that the court Summary by Sally Gore, barrister, 14 Gray’s Inn Square will start to take is that assets falling into that category should be bundled up together and an overall value for them all agreed. Otherwise, the court is likely to apply that system in a broad and rough and ready way.

Summary by Richard Tambling, barrister, 1 Garden Court Chambers

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Re A (A Child) (Vulnerable Witness) [2013] detrimental impact to her of doing so. Were she to be called EWHC 1694 (Fam) to give evidence, the Official Solicitor wished for questions to be put by a single individual, potentially the witness intermediary. The local authority and the Guardian invited This judgment provides further consideration of a long the court to conclude that with appropriate support and running private law dispute, previously reported as In the safeguards, G should give evidence. Representatives of the matter of A (A Child) [2012] UKSC 60. This particular family members were broadly neutral on the issue. judgment relates to the question of whether or not X, a 21 year old woman who made allegations in 2009 that whilst Pauffley J first considered whether G was competent by way she was a child she had been sexually abused by the father, of s.96(2) of the Children Act 1989. She could not should give evidence at a finding of fact hearing listed to understand the hesitance of the Official Solicitor on this consider those allegations. The context of the case was a question, given the unity of opinion from the experts. She private law application by the father to have direct contact found that G was undeniably competent. with his daughter, A, which was being prevented by reason of the allegations. She then turned to the discretionary exercise and the guidance which flowed from the decision of the Supreme Psychiatric evidence in relation to the impact upon X of Court in Re W. She outlined the two considerations which giving evidence had been obtained which highlighted the she needed to bear in mind: i) the advantages that the risks to her health. evidence would/might bring to the determination of the truth, and ii) the damage that the evidence giving process The Court reiterated the comments of Lady Hale in the might do to G's welfare. Supreme Court judgment above, as follows: She noted that it was highly significant that the local "The Court's only concern in family proceedings is to get authority's case on threshold was founded upon G's at the truth. The object of the procedure is to enable allegations. She also noted that it was relevant that one of witnesses to give their evidence in the way which best the experts gained the distinct impression that G often said enables the Court to assess its reliability. It is certainly she had forgotten information as a means of avoiding not to compound any abuse which may have been demands and not necessarily because she had forgotten. She suffered" (Lady Hale, para 36). considered that G might not provide much more detail than she gave in the ABE interviews that the Official Solicitor Applying the guidance in Re W (Children) [2010] UKSC 12 urged the judge to rely on, but considered that there was no taking the psychiatric evidence into account, the court held way of knowing whether this was the case. that X should give evidence at the hearing, but this would be done with the assistance of an intermediary, and the She noted that she would be able to control questions that extent of X's participation would be kept under constant were put and ensure that G was protected from review to balance the welfare and rights of all those in- inappropriate questioning, but concluded that there was volved in the case. little way of telling how things would work out until the cross-examination process was underway. Summary by Jacqui Thomas, barrister, 37 Park Square Chambers As to the question of whether the process of being cross- examined would have a detrimental effect on G's health and trigger further thoughts of self-harm, the judge noted that Re G and E (Children) (Vulnerable Witnesses) the psychologist had considered that if the judgment was [2011] EWHC 4063 (Fam) that G was not telling the truth this might have a detrimental effect on her mental health, but not significantly In public law proceedings, G, a 17-year old girl who had greater than if she had not given live evidence. She also significant learning difficulties and functioned at the level of noted that G wanted to give evidence and that G might an 8-year old, was represented through the Official Solicitor, perceive not giving evidence in person to mean that others who had raised concern over whether she should give oral did not believe her. evidence about sexual abuse allegedly perpetrated on her by her father. She emphatically concluded that the only sensible conclusion arising out of the balancing exercise based A chartered clinical psychologist, with special expertise in around those considerations was that G should give oral evaluating individuals with learning difficulties, had evidence. provided a number of reports within the case, the most recent of which commented that, with special measures in She proposed that the barristers would initially be able to place, G would be able to cope with the court experience. cross-examine in the normal way, but that she would consider the possibility of a witness intermediary based on However, the Official Solicitor nonetheless applied for the quality of the evidence given and the extent to which G permission to instruct an independent psychiatrist on the was showing signs of discomfort. She further set out that basis that the previous assessment was inadequate. she proposed that G would have adequate and regular Permission was given and the conclusions of the second breaks. expert accorded very largely with those of the first. Summary by Gillon Cameron, barrister, 14 Gray's Inn At the preliminary hearing to deal with this question, the Square Official Solicitor accepted that G was competent to give evidence, but raised concerns about the potential

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LCG v RL [2013] EWHC 1383 (Fam) The father asserted that shortly before 5 January 2013 the children hid their and the father's passports in an attempt to This was an application by a Spanish mother (LCG) under frustrate their departure. On the 5 January 2013 the father the Child Abduction and Custody Act 1985 (incorporating contacted the mother and indicated that the children did not the Convention on the Civil Aspects of International Child want to return. The mother was clear that the children must Abduction 1980 ("The Hague Convention")), and under return. The father in the words of Cobb J "stalled". On 10 Article 11 of Council Regulation (EC) 2201/2003, for the January the mother received an e-mail from the father in return of her four children to Spain. The application was which he indicated that he had commenced proceedings to opposed by the father (RL), a British national. The children secure protective orders in England. On 21 January 2013, the concerned were T, a girl who was 12, L, a boy who was 10, mother made her application seeking the return of the A, a boy who was 8 and N, a boy who was 4 years old. children to Spain. She made a 'without notice' application before Theis J on that day, and a range of customary Cobb J heard the case over three days and heard evidence directions and location orders followed. Further directions from the parties on limited issues and from the CAFCASS were given at the return date on 29 January 2013, including officer who had prepared two reports. He noted that a direction for a CAFCASS report, given the ages of the certainly from 2002 the family routine was that the mother children and their apparently strongly-held views would take the children to Spain for holidays during each (evidenced by the hiding of the passports referred to above) summer without the father and T and N were bi-lingual in not to return to Spain. Spanish and English; L and A less so. In July 2012, L and A were attending the local junior school. T attended P senior The first issue for Cobb J to determine was the question of school where she had obtained a scholarship and was said habitual residence. The mother submitted that the father to be top of her class. Cobb J noted that T had experienced had expressly agreed that the move to Spain would be best bullying at P school which reached its peak in April 2012 for the children and had agreed with the plan that she and when T joined a week long residential school trip. This was children should relocate to Spain. The mother highlighted a relevant to the issues which fell to be determined. number of pieces of evidence and/or factors which supported this assertion. These included T's unhappiness at The parties met when the mother came to live in England in school and the parents' growing realisation of the effect this the mid-1990s to study English and to work. The parties was having on her and that this could not continue. In never married. The relationship was turbulent from 2000 relation to the period since July 2012, the mother relied on and deteriorated significantly after L's birth in 2002/3. The the father's conduct (as detailed in the judgement) as relationship finally ended in early 2012 and both parents evincing his earlier explicit acceptance and/or his accepted that the children were starting to suffer agreement/acquiescence to the children being in Spain. psychologically as a result of their exposure to the discord in the home. Cobb J found that the parties regularly The father disputed that the children had acquired a discussed their long-term options in early 2012 albeit these habitual residence in Spain by the 5 January 2013 and discussions were fragmented and bad-tempered. On 6 June asserted that the children were habitually resident in 2012 the mother purchased one-way tickets to Spain for England & Wales at that date. He maintained that they had herself and the children. never been habitually resident in Spain, and he had not consented to the children permanently relocating to Spain The mother maintained she proposed to separate from the in July 2012. father by returning to Spain and the father had agreed to this. The mother highlighted various actions taken by her Cobb J set out a number of findings as to the state of affairs including giving notice to the children's schools as evidence between the parties prior to and after July 2012 and in of this plan and the father's agreement to it. On 24 July 2012, particular their intentions at these times. He found that i) the father drove the mother and children to Luton airport, with considerable misgivings, the father agreed with the from which the mother and children flew to Spain. It was mother that she could go to Spain, ii) the parents came to the the father's case (on paper) that he had agreed to the mother conclusion in April 2012 that T was not able to remain at P taking the children to Spain for the summer holiday albeit school and for the mother it removed one of the last few in evidence he accepted that he did not know when the potential reasons for remaining in England, iii) the father children would be back. did accept (and believe) that the mother and children were leaving 'indefinitely', iv) that the mother and father did tell The mother and children moved in with the maternal L in June that he would be leaving permanently to live in grandmother and steps were taken to redecorate and Spain and v) that at the point at which the mother and furnish their bedrooms. Arrangements were made for the children left England, the father genuinely did not know children to commence bi-lingual school and the children when he would see them again. settled well and made friends. The father provided financial support to the mother in Spain and sent out winter clothes In respect of the period after July 2012 Cobb J accepted that and their favourite toys. He had limited contact with the the father did not object to the children's continued presence children in the early days after their departure for Spain and in Spain, nor did he ask the mother to bring the children his first visit took place in November 2012. It was agreed back. Cobb J also accepted that the children had settled in that the children would return to England to spend their maternal grandmother's home, in school, had made Christmas with their father and it was accepted that both friends (certainly T and L) and the case needed to seen in the parties expected the children to return to Spain on 5 January context that they were Spanish National with a Spanish 2013. mother and Spanish extended family. Finally, Cobb J accepted that the father accepted the position of the children living in Spain, albeit perhaps resentfully at times.

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Cobb J then turned to consider the applicable law as set out between the children and their new home State. He in the provisions of Article 3 of the Hague Convention. He acknowledged however that a move, particularly one noted that if he concluded on the evidence that there has involving a move of country, created a hiatus in the been a wrongful retention of the children by the father, then children's lives, and 'integration' had to be viewed in that he was obliged to "order the return of the child forthwith" context. (Article 12) unless one of the exceptions in Article 13 applies. To answer this question Cobb J accepted that he Cobb J concluded that even if he was wrong about the needed to be satisfied as to the mother's case that on 5 transfer of habitual residence the father's conduct viewed January 2013 the children were habitually resident in Spain. both before the departure for Spain and afterwards reflected Determination of these questions were materially at the very least an acquiescence in that state of affairs for complicated in this case as the father did not have parental the purposes of satisfying Article 10(a) BIIR and the test of responsibility for T and L but had parental responsibility for acquiescence applicable to an Article 13(b) defence could be N and A and in Cobb's view, the need to consider the established in this case whether by reference either to the different (albeit overlapping) approach of the English first three paragraphs of the test of Lord Browne-Wilkinson Courts and the European Courts to the evaluation of in Re H (Abduction: Acquiescence) [1997] 1 FLR 872 (at p.884), habitual residence, and the extent to which he should be and the focus on "whether the applicant acquiesced in fact" governed by each. or in any event in respect of the fourth paragraph of this test.

Cobb J then accepted that if the children (or any of them) It therefore followed that the retention of the children on 5 were determined to be habitually resident in Spain on the January 2013 was in breach of the mother's rights of custody key date, he then had to consider whether any of the three under the law of Spain and under Article 12, Cobb J was older children objected to returning, and if so whether they obligated to return the children unless he found that one of were of an age or maturity at which their views should be the exceptions under Article 13 existed. taken into account. If an affirmative answer was revealed to those questions in respect of any of the children, he would The father submitted that the older children objected to a then be required to exercise discretion to decide whether to return to Spain and had attained the age and degree of return that child. Further, in light of the case being maturity at which it was appropriate for their views to be presented by the father, Cobb J also needed to consider taken account of. This was a question of fact uniquely for the whether any of the children would be placed in an discretion of Cobb J who adopted the principles intolerable situation by being required to return. summarised by the then President of the Family Division, Sir Mark Potter, in De L v H [2010] 1FLR 1229. In respect of Cobb J accepted that the children lost their habitual the important distinction between the child's objections to residence in England on or shortly after 24 July 2012 and remaining in the requested State with the Abductor, as was satisfied that they acquired a habitual residence in against returning to the State of habitual residence, Cobb J Spain during the autumn of 2012 so as to be habitually also had regard to the decision of the Court of Appeal in Re resident in Spain by 5 January 2013. Cobb J reviewed the K (Abduction: Case Management) [2011] 1FLR and Re W [2010] applicable case law in this area and highlighted in particular 2 FLR 1165. the broadly consistent application of the 'integration' European test (Mercredi v Chaffe (Case C497/10) [2011] 1 Cobb J then moved on to consider the detailed evidence FLR 1293: see below) and the English test of a "person's from CAFCASS as to the wishes and feelings of the older abode in a particular place or country which he has adopted children and concluded that T was of an age and maturity voluntarily and for settled purposes as part of the regular at which account should be taken of her views. He also order of his life for the time being, whether of short or of observed that T had many (negative) strong feelings about long duration" (per R v Barnet London Borough Council, ex her mother at that time which were different from the parte Nilish Shah [1983] 2 AC 309, and Re J (A Minor) objections she had to returning to Spain. However, he was (Abduction: Custody Rights) [1990] 2 AC 562 sub nom C v S (A satisfied that T did object to returning to Spain and in Minor) (Abduction) [1990] 2 FLR 442, at 578 and 454). particular that objection was based on her view that the quality of education is inferior. In respect of L and A, they Cobb J accepted that the views of the father could be taken at 10 and 8 respectively, were thoughtful and intelligent into account in the determination of whether there had in boys, who had reached an age and level of maturity at fact been a change of habitual residence, and given the which account should be taken of their views which in this position of the father in the family, he accepted that any case though fell short of a clear objection to returning to such objection (though on his finding there had been no Spain. objection) would have weighed significantly. Cobb J noted that any agreement to a move needed to be clear but not In so far as the case for "intolerability" this was based upon necessarily adjudged by reference to the exacting standards an allegation by father that the children were essentially applied to the test relevant to an Article 13(a) 'consent' case neglected in Spain and would be placed in a position of in Re P-J (Abduction: Habitual Residence: Consent) [2009] intolerability if returned to the same neglectful environment EWCA Civ 588 [2009] 2 FLR 1051 at §48. He was satisfied and/or a sibling split would create an intolerable situation. that the father's agreement to the move to Spain was clear, Cobb J rejected outright the argument in respect of the first unconditional and was a true bilateral agreement. It was limb and highlighted that the threshold for proving such an therefore less important for him to consider the 'integration' exception remains high notwithstanding the removal of argument but in considering the approach of the court in Re judicial gloss on the words of the exception by the Supreme A (Area of Freedom, Security and Justice) (C-523/07) [2009] 2 Court in the recent cases of Re E (Children) (Abduction: FLR 1 at §44 and Mercredi v Chaffe. However, Cobb J was Custody Appeal) [2011] UKSC 27, [2011] 2 FLR 758 and Re S satisfied that the children had begun to be integrated into (A Child) (Abduction: Rights of Custody) [2012] UKSC 10, their new Spanish lives, establishing a relevant nexus [2012] 2 FLR 442. In respect of the second limb whilst

www.familylawweek.co.uk Family Law Week July 2013 - 64 acknowledging that in an appropriate case the separation of ""...[T]he consequence is that this case looks somewhat a sibling group can give rise to an Article 13(b) exception different from how it appeared initially to the treating this was fact specific and in the present case this limb would physicians. Had the case been presented purely on the not apply (see below). basis of their interpretations the focus of the court would have been significantly different." In light of his finding that T objected to returning to Spain it was therefore open to Cobb J to decline to order her return However, taking into consideration the oral evidence and to Spain while ordering the return of her younger brothers, the written evidence of the parents and that of other and/or whether (if that were his view) the separation of the witnesses in the case, Baker J still found that the fractures of siblings would place them all in an intolerable situation. In M's 5th and 6th ribs were sustained non-accidentally whilst considering how to exercise his discretion Cobb J followed M was in the care of one or both of her parents. The judge the guidance set out in the speeches of the House of Lords was unable to find exactly when or how she sustained the in Re M (Abduction: Zimbabwe) [2007] UKHL 55, [2008] 2 FLR fractures, nor was he able to identify which of her parents 251. He concluded that on the facts of this case it would not was responsible. be right to give determinative weight to T's views and observed that among other factors, he attached weight to Summary by Akta Chipalkatty, barrister, Church Court the likelihood that T would comply with the order of the Chambers court, the father would do his best to facilitate the return of the children in the most effective way and the heavy weight to be attached to the convention where there has been a UL v BK (Freezing Orders: Safeguards: Stand- wrongful retention following the conclusion of a holiday. ard Examples) [2013] EWHC 1735 (Fam) Cobb J was also influenced by the desirability, if not the need, to maintain the sibling group together. He therefore The wife obtained an ex parte freezing order against her ordered the return of the four children to Spain. husband. Prior to the application she had illegally obtained documents from the husband's safe and briefcase. On the Alison Easton Coram Chambers Summary by , barrister, return date of the freezing order Mostyn J considered the law and practice relating to such orders. He considered there were serious breaches of both in the wife's application and discharged the order. He declined to make a new order Re L and M (Children) [2013] EWHC 1569 and accepted an undertaking from the husband. (Fam) Mostyn J summarised in the judgment the principles and In this case Baker J heard a retrial of a finding of fact. There safeguards relevant to freezing injunctions. Standard were significant skull and rib fractures to M, the younger examples for such orders are appended to the judgment. child. There were not expressed any other allegations or concerns as to mistreatment to either child. 1. The court has a general power to preserve specific tangible assets which are the subject matter of the claim. A significant number of medical experts had already been Such applications do no necessarily require the same instructed, but an additional expert had been instructed safeguards as a freezing order. upon appeal from the original finding of fact hearing. This expert drew attention to assumptions which had been pre- 2. Where a freezing order capable of covering all the viously been made: Respondent's assets it is essential that all principles and safeguards are applied. "namely (1) that all of the lines (or "lucencies") seen on the images of M's skull were fractures; (2) that all these 3. All applications for freezing orders the Applicant must fractures occurred at the same time and that the show clear evidence of unjustified dealing with assets fractures and the frontal tissue swelling were related in giving rise to the conclusion that there is a solid risk of time, and (3) that, given the extent of the fractures, there dissipation of the assets to the Applicant's prejudice. would have been inevitable associated brain injury. He frankly suggested that none of these assumptions 4. The evidence must set out clear facts and their necessarily stood up to logical analysis." source/basis.

Baker J was clear that 5. Ex parte application must be confined to cases of exceptional urgency. The Respondent must be give "[i]n difficult cases of non-accidental injury, it will short, informal notice unless it is essential he is not made continue to be the case that expert evidence from a aware of the application. variety of disciplines will be necessary to assist the court to resolve the proceedings." 6. Ex parte or short notice application impose on the Applicant a high duty of candour. Breach of that duty This would be in line with the amended rule 25.1, but this will likely lead to the discharge of the order. particular case demonstrates the impact experienced experts can have. Baker J found that there were four 7. All the safeguards must be applied on short/no notice fractures to the child's skull as opposed to the ten originally applications. The Applicant must draw the court's alleged, thereby putting a different light on the extent of the attention to any variation of the safeguards and justify child's injuries and the role of the perpetrators. them.

www.familylawweek.co.uk Family Law Week July 2013 - 65

Mostyn J issued a warning that failures to comply with the principles and proceedings may lead to (a) a refusal to make The father appealed on the basis that he did not breach the the order sought and/or (b) wasted costs orders against the undertakings, the oral evidence could not satisfy the stand- solicitors involved. ard of proof and the judge should have adjourned to allow him to be represented. In relation to illegally obtained documents Mostyn J re-iter- ated the principles set out in Imerman. The husband had The Court of Appeal found: issued proceedings in the Queen's Bench Division relating to these documents. These proceedings would be decided 1. The judge had been very careful procedurally. He noted in the QBD as a preliminary issue. in particular that the father was aware of the adjourned date, having been present when the hearing date was Summary by Ayeesha Bhutta, barrister, Field Court given and having been personally served with the order Chambers listing the hearing. The father had been aware of the consequences of breach of the undertakings which he had given freely. M (A Child) [2013] EWCA Civ 743 2. The judge was entitled to disregard any procedural defect Within Private Law Children Act proceedings the father if no injustice was caused (Practice Direction para 10 gave undertakings to ensure that the child, the proceedings County Court Rules Order 29 which was in force at the and employees of the local authority involved were not time). disclosed on his facebook account or elsewhere. 3. The evidence before the court was more than sufficient to Subsequent to the undertakings, the mother issued a notice satisfy the standard of proof. to show good reason why an order should not be made for the father's committal to prison. At the first committal hear- 4. The judge had determined that the father was deliberately ing, the father was present and represented. The committal avoiding attending court and that an alleged contemnor hearing was adjourned to a date given at that hearing. At cannot avoid the consequences of his actions by failing the subsequent hearing the father failed to attend. His solic- to attend. It was not appealable on the facts of this case itors had no instructions and applied to withdraw. The that the judge determined that he should proceed. judge allowed the solicitors' application, it being clear that the father did not want to be represented by them which he Appeal dismissed. confirmed at appeal. The judge heard oral evidence from the mother and a social worker, found breaches had oc- Summary by Laura McMullan, barrister, Coram Chambers curred to the requisite criminal standard and committed the father to three months' imprisonment, suspended for two years on each breach concurrently, for the breach of two undertakings.

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