Dickson v Rennie

Factual and Procedural Background

This case concerns financial provision for a child, specifically relating to child maintenance arrangements between the parents of a daughter born in March 2005. The father, aged 57, has lived primarily in Jersey since 1994, while the mother, aged 44, resided in Southern England. The parties cohabited from early 2004 until March 2006 but did not marry. Following their separation, the mother applied for financial provision under Schedule 1 to the Children Act 1989. In 2007, a district judge made an order for maintenance payments and provision of a house for the mother and child, with the father ordered to pay lump sums and periodical payments.

The father fully complied with the 2007 order for several years. In 2010, he sought to reduce the payments but later withdrew that application in 2012, reaffirming his acceptance of the original order. In 2014, however, the father applied to the Child Maintenance Service (CMS) for a maintenance calculation, which drastically reduced his assessed maintenance obligation based on his UK income from a company registered under the Companies Act 2006.

The mother challenged the CMS jurisdiction and calculations, issuing multiple court applications and a judgment summons for arrears. The court file for some applications was lost. The mother also appealed the CMS decision to the First Tier Tribunal, which remains pending. The dispute centers on whether the CMS or the court has jurisdiction over maintenance and the correct calculation of the father's income and maintenance obligations.

Legal Issues Presented

1. Whether the Child Maintenance Service has jurisdiction under section 44 of the Child Support Act 1991 to make maintenance calculations for the father, who is habitually resident in Jersey but employed by a UK-registered company.
2. Whether the court retains jurisdiction to make or vary maintenance orders under Schedule 1 to the Children Act 1989 when the CMS has jurisdiction and has made a maintenance calculation.
3. The applicability and scope of the "top-up" jurisdiction under section 8(6) of the Child Support Act 1991, including how the non-resident parent's gross weekly income should be determined for this purpose.
4. The proper identification of the "effective date" upon which the CMS maintenance calculation takes effect and the court order ceases to have effect.
5. Whether the court can make lump sum orders in the context of the statutory scheme, including lump sums to cover arrears, hardship, or legal costs related to appeals against CMS decisions.

Arguments of the Parties

Mother's Arguments

• The CMS does not have jurisdiction because the father’s company is not a "company of a prescribed description" as he owns 99.8% of the shares and is the sole director.
• The mother seeks full restoration of the previous court order for maintenance, arguing that the CMS calculation is insufficient to cover the child's needs.
• She contends that the father's true worldwide gross weekly income exceeds the threshold for a "top-up" order under section 8(6) of the Child Support Act 1991.
• The mother requests lump sums to cover arrears resulting from the reduction in maintenance payments and to relieve hardship caused by the reduced household budget.
• She also seeks a lump sum to fund legal costs for her appeal to the First Tier Tribunal against the CMS decision.

Father's Arguments

• The father argues that he falls within the CMS jurisdiction under section 44(2A)(c) because he is employed by a UK-registered company of a prescribed description.
• He relies on the CMS assessment of his gross income, which is substantially lower than the income considered by the court in 2007.
• The father contends that the court’s jurisdiction to make or vary maintenance orders is excluded by the Child Support Act 1991 once the CMS has jurisdiction and has made a calculation.
• He offers to increase his voluntary maintenance payments to £2,000 per month plus £250 monthly for a sinking fund, conditional on the mother withdrawing her appeal and litigation.
• The father opposes lump sum orders for arrears or hardship that would circumvent the statutory scheme but accepts a limited lump sum to fund proportionate legal costs for the tribunal appeal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
CF v KN (Financial Provision for Child: Costs of Legal Proceedings) [2010] EWHC 1754 (Fam), [2011] 1 FLR 208	Obiter observations on whether the court can determine the gross weekly income fact for section 8(6) top-up jurisdiction.	The court considered the point arguable but ultimately rejected it, holding that the gross weekly income must be assessed by the CMS for the top-up jurisdiction to arise.
Re S (Child: Financial Provision) [2004] EWCA (Civ) 1685, [2005] 2 FLR 94	Authority for the court's power to make lump sum orders to fund litigation related to maintenance.	The court accepted the power to order lump sums for proportionate and justifiable litigation costs but declined to order lump sums that circumvent statutory maintenance jurisdiction.

Court's Reasoning and Analysis

The court began by acknowledging the statutory scheme established by the Child Support Act 1991, which delegates jurisdiction over child maintenance calculations to the Secretary of State and the Child Maintenance Service (CMS) where they have jurisdiction under section 44. The father’s case rests on his employment by a UK-registered company, bringing him within the CMS’s jurisdiction despite his habitual residence in Jersey.

The court noted that the 2007 district judge’s order was made without challenge to the CMS jurisdiction, and that if the father’s current position is correct, the CMS would have had jurisdiction at that time, excluding the court’s jurisdiction then as well.

Section 8 of the Child Support Act 1991 clearly excludes court jurisdiction to make or vary maintenance orders where the CMS has jurisdiction and a maintenance calculation is or would be in force, save for limited exceptions such as the "top-up" jurisdiction under section 8(6).

The court carefully examined the "top-up" jurisdiction of section 8(6), which allows the court to make additional maintenance orders if the CMS calculation is in force and the non-resident parent's gross weekly income exceeds a statutory threshold (£3,000 per week). The court held that the gross weekly income must be that assessed by the CMS, not a figure determined independently by the court.

Despite obiter remarks in CF v KN suggesting the court might determine income facts, the court firmly held that the top-up jurisdiction is only available when the CMS has made a maximum maintenance calculation, reflecting income above the threshold. Since the CMS-calculated maintenance in this case is far below the maximum, the top-up jurisdiction is not triggered.

The court recognized the mother’s appeal to the First Tier Tribunal regarding CMS jurisdiction and income assessment, but emphasized that until that appeal is resolved, the court cannot restore the previous maintenance order or make top-up orders.

Regarding lump sums, the court distinguished between lump sums that would circumvent the statutory scheme (such as lump sums to recoup arrears based on the previous court order) and those that fund proportionate legal costs for pursuing appeals. The court rejected lump sums that would effectively reinstate the previous order or bypass CMS jurisdiction but allowed a lump sum of £10,000 for the mother’s tribunal appeal costs on terms.

The court also permitted a small lump sum for urgent repairs to the property provided for the child’s occupation, subject to a builder’s estimate.

The court lamented the disproportionate legal costs incurred by the parties relative to the sums in dispute and urged them to resolve their differences for the benefit of their child, emphasizing the importance of cooperation in their ongoing parental responsibilities.

Holding and Implications

The court DISMISSED all the mother’s applications to restore the previous maintenance order or to obtain lump sums reflecting arrears or hardship caused by the reduction in maintenance payments, on the basis that the court's jurisdiction to make or vary maintenance orders is excluded where the CMS has jurisdiction and a maintenance calculation is in force.

The court granted two specific lump sum orders: one limited sum up to £1,500 for urgent repairs to the property occupied by the mother and child, and a lump sum of £10,000 to fund the mother’s legal costs for her appeal to the First Tier Tribunal, subject to conditions ensuring the proper use and accounting of those funds.

The court emphasized that the mother’s avenue to challenge the CMS jurisdiction and maintenance calculation lies with the First Tier Tribunal appeal process, not the court. The decision does not set new precedent but reaffirms the statutory scheme governing the division of jurisdiction between the CMS and the courts.

Finally, the court urged the parties to seek a negotiated resolution to their financial disputes for the welfare of their child, noting the disproportionate legal costs incurred and the long-term nature of their parental responsibilities.