CA v DR (Schedule 1 Children Act 1989: Pension Claim)

Factual and Procedural Background

This case concerns an application for financial provision for a child pursuant to Schedule 1 and section 15 of the Children Act 1989. The child, aged 4, is the subject of proceedings initiated by the mother against the father. The parents were in a relationship from 2012, cohabited from 2014, and separated in April 2019, after which the mother and child moved to separate accommodation on the same property site. Proceedings were issued in August 2019 and, following an unsuccessful private financial dispute resolution attempt, the matter was allocated to a High Court Judge due to the father's substantial wealth and the complexity of issues raised.

The parties have been unable to agree on the appropriate level of financial provision for the child. The mother seeks an uplift in her budget to include provision for a private pension funded by the father through periodical payments, which the father contests as beyond the court’s jurisdiction. There has been acrimony between the parents and no meaningful contact between the father and child during the proceedings. It is agreed that the mother and child should relocate to the Kent area for family support and schooling.

The father, aged 49, has two children from a previous marriage and significant wealth estimated at approximately £190 million. He leads a lifestyle involving motorsport and philanthropy and accepts he can afford any reasonable order. The mother, aged 40, has not worked since the child’s birth and is financially dependent on the father. Both parties describe a previously lavish lifestyle, including expensive property and travel. Since separation, the mother and child have lived in less suitable accommodation and require a new home in Kent.

Legal Issues Presented

1. Whether the court has jurisdiction under Schedule 1 of the Children Act 1989 to order financial provision for a private pension for the mother as part of periodical payments for the child.
2. What is the appropriate level of financial provision for the child's housing and maintenance, including lump sum and periodical payments?
3. How should the court balance the father's significant wealth and lifestyle with the mother’s and child’s needs under the statutory framework?

Arguments of the Parties

Applicant's Arguments (Mother)

• Seeks a housing fund of £2 million plus purchase costs, a lump sum of £380,000 for various expenses including a car, and periodical payments of £238,000 annually, which include pension contributions for her retirement.
• Argues that the court should revisit the principles established in Re P (a child) [2003] EWCA Civ 837 to allow provision for a private pension, citing public policy concerns about reducing future state burden and avoiding her financial destitution.
• Claims a lifestyle consistent with the father's wealth and asserts the child should not feel disadvantaged compared to the father's other children.
• Requests autonomy in choosing the new home, subject only to reasonableness regarding financial investment.

Respondent's Arguments (Father)

• Offers a housing fund of up to £1 million inclusive of purchase costs, a lump sum of £60,000 for incidental expenses, and periodical payments of £96,000 annually including a carer’s allowance.
• Contends the court has no jurisdiction to order pension contributions as part of Schedule 1 claims and maintains such provision is unreasonable.
• Proposes leasing a car for the mother every four years rather than outright purchase, to manage depreciation and maintenance costs efficiently.
• Advocates involvement in the selection of the new property with disputes to be resolved by the court, emphasizing the need for reasonableness and financial prudence.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging the substantial wealth of the father and the wide discretion afforded under Schedule 1 of the Children Act 1989 to make financial provision for a child of unmarried parents. The court carefully examined the lifestyle and financial circumstances of both parties, noting the mother’s devotion as primary carer and the father’s acceptance of his financial obligations.

In assessing the appropriate housing fund, the court balanced the mother’s aspirational figures against the father’s offers and market realities, concluding that a sum of £1.6 million was appropriate to secure a suitable family home in Kent. The court ordered that the father bear the additional costs of purchase, including stamp duty and conveyancing.

Regarding lump sum provision for furnishing and equipping the home, the court reduced the mother’s claim from £150,000 to £100,000 as a reasonable sum. The court declined to make a separate capital provision for Montessori equipment, treating such expenses as ongoing costs within the child’s budget.

The court accepted the father’s proposal to provide a car via leasing arrangements every four years up to a value of £110,000, with the mother having choice over the vehicle specification within that limit. The court declined the mother’s request for a lump sum to cover outstanding finance on the final vehicle, reasoning the father’s obligation ends with the child’s dependency.

The court ordered the father to pay for the mother’s private medical treatment for a back condition, considering the cost reasonable and the treatment necessary to support her role as carer.

In evaluating the periodical payments, the court rejected the mother’s claim for pension contributions, relying on binding Court of Appeal authority that Schedule 1 claims do not permit provision for a carer’s pension or savings beyond the child’s dependency. The court noted the mother’s own evidence that she expects to seek employment or income in the future and the father’s agreement not to reduce payments if she earns income.

The court fixed periodical payments at £150,000 per annum (excluding school fees), sufficient to provide a good standard of living in mortgage-free accommodation. It also ordered the father to pay the child’s private school fees and reasonable extras, with prior agreement required only for items exceeding £1,000 per term.

The court emphasized the child’s welfare as paramount and framed its financial provision to reflect the father’s lifestyle while recognizing the statutory limits on provision for the mother as carer. The court acknowledged the acrimonious parental relationship but encouraged cooperation for the child’s benefit.

Holding and Implications

The court’s final decision is summarized as follows:

• Housing Fund: £1.6 million plus stamp duty and conveyancing costs to be paid by the father for a suitable home in Kent to be occupied by the mother and child during the child’s minority or full-time education.
• Lump Sum: £109,000 for furnishing the home and the mother’s private medical treatment.
• Car Provision: A car to be provided or leased every four years up to a value of £110,000, with the mother choosing the vehicle.
• Periodical Payments: £150,000 per annum (index-linked) for the mother and child, excluding school fees, payable until the child completes a first university degree, including a single gap year.
• School Fees: The father to pay private school fees and reasonable extras, with prior agreement required only for extras exceeding £1,000 per term.
• Pension Claim: The claim for pension contributions to the mother was dismissed as beyond the court’s jurisdiction under Schedule 1.
• Costs: The father to pay the mother’s legal costs up to £97,000, including a shortfall in outstanding fees, to enable her to begin independent life debt-free.

The ruling directly affects the parties by setting clear financial obligations of the father towards the child and mother within the statutory framework for unmarried parents. No new precedent was established; the court adhered to established case law limiting financial provision to the child’s dependency period and excluding pension provision for the carer. The decision underscores the distinction between Schedule 1 claims and matrimonial financial claims, reaffirming the limits of judicial discretion in this context.