G v S [2017] EWHC 365 (Fam)

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The Swedish mother and the American father (whose family was of Swedish origin) had a child together in 2014. The relationship between them was short lived; after the separation the couple began acrimonious legal proceedings concerning the child.

The child lived with the mother and spent holiday time with the father in Switzerland at the father’s two homes there, and also term time weekends from time to time in both England and Switzerland. The father was seeking to spend more time with the child and had in addition applied for a change of surname. He had also applied for residence and for leave to remove the child to Switzerland, but then informed the court that he was not intending to pursue these applications.

In the mother’s Schedule 1 proceedings, the father was running a ‘millionaire’s defence’, accepting that he could meet any order that the court might make.

The father was a member of a very wealthy family; he was the beneficiary of two very substantial trusts, in 2014/15 receiving income of about £2.75 million net; he did not work. The mother’s case was that he had, in addition, received a substantial inheritance from his father. The mother was a pilot, flying long-haul and based at Heathrow; since the child’s birth she had worked part-time. She was now earning about £35,000 pa and had savings of £76,000, plus a half share in a modest property in Sweden. The child was one of the beneficiaries under a trust established by the father’s late brother.

Following a round table meeting, heads of agreement were drafted; the parties had agreed that they were bound by principles set out in Xydhias v Xydhias [1999] 1 FLR 683. The key provisions were a Schedule 1 housing fund of £2.1 million; a £50,000 ‘kitting out’ fund; £50,000 for a car to be replaced every 4 years; maintenance of £160,000 pa (£87,000 general maintenance plus £73,000 for nannies) index-linked; nursery and school fees; private health cover and the father’s payment of £41,000 ‘historic’ legal fees following the return of a car in Sweden. Although the substance of the agreement remained unchallenged, there were a number of outstanding issues to decide at the hearing when the draft order based on the agreement was reviewed.

The father’s draft order restricted the possibility of a relocation by preventing the mother from obtaining a replacement property outside England and Wales, in any circumstances, before the child completed her primary education (the original restriction was until completion of her tertiary education). The mother argued that any such restriction was inappropriate in principle, given the possibility that the mother might need to transfer her job or her home. The heads of agreement referred to ‘a mutual confidentiality agreement along the lines of the Mostyn J draft’. The draft consent order included provisions in the form of undertakings. The mother argued that the ‘non disclosure’ or ‘privacy provisions’, set out within the agreement, went beyond Practice Direction 12G- Communication of Information.

The key outstanding issues were whether the mother intended to remain in London, the degree of privacy attaching to the agreement, the possibility of the mother employing a nanny unable to provide a P60, and whether the father or the mother should pay for any future costs of sale of the Schedule 1 housing.

The High Court judge ruled that the consent order could not prevent relocation and that the heads of agreement did not require this; he also ruled that the court could not go beyond PD12G; he made various other rulings about the contents of the consent order.

The objective of the parties in constructing their agreement in the way that they had, had plainly been to provide both materially and emotionally for the child. Central to this was the provision of a secure home. The court did not consider that the parents had truly intended to chain the child to a country to which she had no family connection. What they had intended to achieve was stability for their daughter in her early years and hopefully beyond. It was distinctly possible that the mother would need to relocate. To erect an obstacle to this would be entirely counter productive for the mother and it was easy to see how this would resonate into the child’s life in a way that was inimical to her own welfare interests. If the parties were unable to agree on any prospective relocation the court would be asked to resolve it, thus the child’s best interests would be safeguarded.

The court had approached this issue by considering the framework of the heads of agreement as a whole and had therefore given expression to what it believed had been the primary objectives of the parties. Had it come to the conclusion that a strict construction of the heads of agreement truly represented both the agreement’s philosophy and objectives then the court would have concluded that this aspect of the agreement was ‘wrong in principle’. Where a court determined that an agreement between the parties was irreconcilable with the best interests of a subject child it was likely, in the court’s view, that Xydhias principles would be disapplied.

Paragraph 11 of the order should simply record that: ‘M may not move to another jurisdiction with L without F’s agreement or the permission of the court. In the event of a move the court shall have jurisdiction to review the terms of housing and maintenance provisions in this order.’ 
For the avoidance of doubt and consistent with the above reasoning, the order should be sufficiently flexible to cater for the possibility of more than one move, if in the future this was required to meet the child’s needs. In addition, the Schedule 1 housing had been addressed by undertaking rather than an order, accordingly there needed to be clear provision within the body of the order confirming that the court retained the jurisdiction to vary.

If undertakings were not freely given, as the court was told was the position here, that must be the end of the matter. It was trite law that breach of an undertaking had exactly the same consequence as breach of a court order i.e. potentially imprisonment. The court could only make orders of the type contemplated in the heads of agreement if satisfied that they were supported by cogent evidence and reflected the correct balance of the competing Article 8 and 10 rights, in which neither had precedence. The court was simply not in a position to undertake this exercise. In addition, the provisions, whether expressed as orders or undertakings, were far too ambitious in their reach. They contemplated retrieval of information from third parties; deletion of emails; and a general duty to take reasonable steps to prevent various court orders entering into the public domain. Also the court had been asked to make restrictive orders relating to documents in the private law proceedings which the court had not seen and which, rightly, had not been filed in these proceedings. The court had no hesitation in concluding that the restrictive orders should be confined to those set out in the guidelines.

The mother had both the privilege and the responsibility of being the child’s primary carer. In order to discharge that responsibility she required a budget that reflected her position and that of the father both socially and financially. The mother should not be burdened with financial anxiety where this was simply not necessary. Equally, it must not be lost sight of that these financial arrangements were structured to provide for the child’s comfort, security and general well being, in so far as these laudable objectives could be achieved by financial provision. There was absolutely nothing to question the mother’s probity. The father, if nothing else, should respect that. Accordingly, the court was satisfied that the order could permit flexibility to the mother to provide such invoices relating to the nanny expenses as she was able to.

There was a disagreement as to the costs of the sale and purchase of a replacement property. For properties of this value in central London, these costs were very significant. If they were to be discharged from the sale proceeds they would have a significant and disadvantageous impact on the available funds to provide alternative accommodation. The dominant feature here was the scale of the father’s assets and his lifestyle generally. Where the ‘millionaire’s defence’ was relied upon, this feature inevitably became the lode star in such disputes. The court could see no reason for depleting the funds to provide alternative accommodation for the child where the father had assets on this scale.

It was the strength of Xydhias agreements that they were not constrained by the language of the statutes by which they were framed. The insertion of innocuous, anodyne or ultimately meaningless phrases could hold significance for the parties themselves, which to the observer added nothing at all. Every counsel who had ever constructed an agreement would immediately appreciate this. However, it was often precisely these phrases that enabled parties, at the end of a relationship, to yield, accommodate and to compromise. Into this agreement this phrase had been inserted: ‘the Applicant agrees and confirms that she has no intention of seeking a further lump sum from the Respondent’. The inclusion of this in the order in some form was now at issue, because such claims could not be dismissed, notwithstanding that the mother had, in effect, received the lump sum she was entitled to. The disputed phrase did not contribute anything to the impact or effect of the order but nor did it detract from it. It served only to record the mother’s litigation intentions at this point. It presumably meant something to the father as he had fought for its inclusion. If it helped him to accommodate his responsibilities and diminish the potential for further conflict then it served a purpose which was everything to do with human emotions and nothing to do with the law. It should be included thus: ‘the mother agrees that she has no present intention of seeking a further lump sum’.