Family Law Hub

De Cruz v Rubino [2015] EWHC 1691 (Fam)

Application for permission to appeal an order for maintenance where the maintenance payable to the mother was less than the legal fees to pursue the appeal by the father. Permission to appeal was granted, although the father was warned about the risks of losing the appeal and possible costs implications.

  • [2015] EWHC 1691 (Fam)

    Case No. FD11P01320

    IN THE HIGH COURT OF JUSTICE

    FAMILY DIVISION

    Royal Courts of Justice,

    STRAND,

    London, WC2A 2LL.

    3rd February, 2015

    B e f o r e :

    MR JUSTICE HOLMAN

    (Sitting throughout in public)

    ------------------

    PETER THOMAS DE CRUZ (Applicant)

    - and -

    CHARMAINE RUBINO (Respondent)

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    MR MARTIN WARD appeared as counsel on behalf of the applicant.

    The respondent did not attend and was not represented.

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    Transcribed by :

    JOHN LARKING VERBATIM REPORTERS

    Suite 305, Temple Chambers,

    3 - 7 Temple Avenue,

    London EC4Y OHP

    Telephone : 020 7404 7464

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    J U D G M E N T

    (As approved by the judge)

    ---------------------------------------------------------

    3rd February, 2015

    MR JUSTICE HOLMAN:

    1. This is an application for permission to appeal from the decision and order of District Judge Robinson made on 24th February 2014. At an earlier hearing on 2nd April 2014, Coleridge J adjourned the application for permission to appeal to a date to be fixed (namely, now, today) and directed that, "The appeal to follow if the application for permission is granted." For all of that, a time estimate of half a day was given. The respondent to this appeal, and mother of the children concerned, lives and has lived for many years in New York. Yesterday, at 16:15 p.m. local English time, she sent an email to my clerk saying:

    "I'm writing for permission to attend via telephone the permission to appeal hearing for the above case due to be heard tomorrow at 10.30 a.m. UK time. I am the respondent and reside in New York."

    I personally saw that email some time after 16:30 yesterday. At that stage I had had no opportunity to read the papers in this case, although I did very quickly glance at the bundle and see that order of Coleridge J to which I have referred. By that time of day, staff are closing down here and preparing to leave for home and it was, frankly, far too late to start setting up a formal telephone link for the respondent to participate by telephone. Accordingly, at 16:39 yesterday my clerk replied by email to the respondent saying:

    "It is too late to set up a telephone or video link hearing. The judge will limit the application tomorrow to consideration of permission only. If he does grant permission, you will need to attend the substantive hearing of the appeal."

    I have to say that it is a matter of regret to me now that the respondent is not participating by telephone, for it is possible - I put it no higher than that - that this case might have been able to be resolved with some tripartite negotiation between her, the proposed appellant and myself. The sums involved are objectively very small indeed and the costs that are being incurred bear no proportion whatsoever to the sums in dispute. This is yet another stage of litigation that appears to have continued remorselessly between this couple now for over 10 years since they first separated in January 2002. However, having said what I said in that email from my clerk yesterday, the fact is that the respondent is not participating and I must, of course, limit my decision today to the issue of permission alone.

    2. This proposed appeal relates to child maintenance. The parties have three children. The eldest, C is now aged 22. The next, R is now aged 20. The third, A is now aged 19. Those three children were all living with their mother in America under a shared residence order whereby they also spent substantial amounts of time with their father. For many years there has been an order or orders in existence for the payment of periodical payments by the father to the mother for the maintenance of the three children. I have been told that the actual levels of maintenance were historically broadly fixed by reference to the amounts that would have been assessed by the Child Support Agency if all members of this family had been living in England.

    3. There came a time when the eldest child, C, moved to England to attend university here. Since then he has made his primary home with his father here in England. He has now in fact left university and, as I understand it, is working. Clearly, therefore, no question arises now of any further payments of court ordered maintenance by either parent to or for C. Obviously, the fact that C had moved to live in England and was now a direct financial burden upon his father made it necessary and appropriate to reconsider levels of maintenance. This all, finally, came on for hearing before District Judge Robinson on 24th February 2014.

    4. The father, through Mr Martin Ward, who appears on his behalf on a direct access basis, complains very bitterly about the course that that hearing took. It seems that, despite previous orders to do so, the mother had not filed any kind of form E or other documents in that latest round of proceedings. This had led to District Judge Gordon-Saker making an order on 17th December 2013 that the mother must file "a fully completed form E" by 21st January and also that, by 3rd February, each party should file "a short statement setting out ..." certain matters, including "their positions on whether the variation application should be dismissed at this stage without a full final hearing." As I understand it, the failure by the mother to file a form E persisted right up to the hearing itself and, indeed, she has never filed one in relation to that round of litigation. Further, she did not file by 3rd February a short statement dealing with any of the matters listed in the order of District Judge Gordon-Saker.

    5. Paragraph 3 of the order of District Judge Gordon-Saker provides as follows:

    "The applications are listed for hearing on 24th February 2014 at 2 p.m., reserved to District Judge Robinson ... with a time estimate of half a day. The respondent may attend by phone."

    It should be noted that the language of that paragraph of the order, standing alone, appears to contemplate that the hearing on 24th February 2014 would be the final substantive hearing of the applications for a variation. Paragraph 3 does not say some such words as listed "for further directions". Further, provision of a time estimate of half a day would normally be indicative more of a substantive than a directions hearing in a relatively small-scale case such as this. Mr Martin Ward makes the point, however, that one of the matters to be dealt with by paragraph 2(e) of the "short statements" was "their positions on whether the variation application should be dismissed at this stage without a full final hearing." His point is that that seems of itself to leave open the question whether there was ever going to be "a full final hearing" and that, therefore, there is ambiguity as to whether paragraph 3 of the order was itself contemplating "a full final hearing" or some further directions hearing where consideration would be given in the light of the "short statements" to whether or not, indeed, there even should be "a full final hearing". Partly because of that ambiguity and partly because of the failure by the mother to file a form E, it is clear that the father, and indeed Mr Martin Ward, reached the position where they were not contemplating that the hearing on 24th February 2014 itself would be a final hearing. Indeed, paragraph 1 of a note headed "Applicant's note for hearing on 24th February 2014" by Mr Martin Ward begins "Today's matter is listed for further directions in respect of the applicant's application for discharge or variation of the child maintenance order ..." As I understand it, also earlier in February the father himself had written to the court a letter dated 13th February 2014 saying:

    "Having consulted with my barrister, I wish to clarify the scope of the hearing currently listed for 24th February. The impression I received from DJ Gordon-Saker is that that hearing will be a further directions hearing to consider the matter listed in the order ..."

    So, it does seem that, rightly or wrongly, there was some lack of clarity and some lack of understanding as to the scope of that hearing.

    6. By his application for permission to appeal, the father, supported by Mr Martin Ward, bitterly complain at the course that the hearing on 24th February 2014 took. The district judge clearly took the view that, despite the lack of a form E, he should deal with the matter finally then. He said at the top of internal page 9 of the transcript of the hearing, now bundle page 33:

    "I am very familiar with the case. I have considered all the previous judgments in the case. I have to consider, above all, the overriding objective and proportionality. I think it is unfortunate that in fact there was ever an order made for the filing of form E in this case and I do not think that in the circumstances I am going to insist on them ... I consider that the parties' best interests and those of the children will not be served by indefinite continuing litigation on the scale which has already taken place in this case, and I wish to be able to exercise my judgment as to whether and how this case should go any further after I have heard the facts rather than before ..."

    In his judgment itself, at paragraph 1, now bundle page 51, he said:

    "This has been a most unhappy experience for everybody concerned. It is my job to exercise fairness in accordance with the law and also in accordance with the overriding objective to deal with matters fairly, expeditiously and within the terms of the rules, with an appropriate allocation of court time."

    So, it seems to me that there was there a conscious exercise of a discretion by the district judge that proportionality, expedition and fair allocation of court time not only justified, but required, that he deal with the case finally that day, notwithstanding any previous uncertainty as to the scope of the hearing and the failure of the mother to file a form E.

    7. In support of his bitter complaint that this matter was dealt with without fairness and justice, Mr Martin Ward now draws my attention to the very recent authority indeed of the Court of Appeal in Re S-W (children) [2015] EWCA Civ 27, in which judgment was handed down on 30th January 2015 - only last Friday. It should be observed at once that that case concerned children matters and a decision by a circuit judge to make a final care order at a case management hearing less than three weeks after the application was made. It is scarcely surprising in those circumstances that the appeal was allowed. The facts and circumstances of that case could hardly be further removed from the facts and circumstances in this case, in which the subject matter was not whether or not to make a care order in relation to three children but arrears quantifiable in the small number of thousands of pounds. Nevertheless, at paragraph 43 of his judgment in that case Lewison LJ said:

    "Moreover, where parties arrive at court expecting to participate in a hearing that is to deal only with procedural aspects of progressing a case towards a final hearing, it is quite wrong for the court, on its own initiative and without prior notice to the parties ... to treat the procedural hearing as if it were the final hearing ..."

    Mr Martin Ward submits that that observation is on all fours with the circumstances and situation in the present case, although I add that the final limb of the quotation from Lewison LJ continues:

    " ... and to make such a drastic order as the judge made in the present case ..."

    By no stretch of the imagination could an order quantifying arrears at £2,060.90 be characterised as "a drastic order" on the scale of making a care order in relation to three young children.

    8. At all events, the first proposed ground of appeal is that there was some procedural unfairness here such that the decision and order of District Judge Robinson has to be revisited.

    9. On the substance and merits of the matter, a lot of time has already been spent this morning in looking at the figures. By his order District Judge Robinson quantified arrears as due from the father to the mother in the sum of £2,060.90. That does include £100 as notional interest. So, leaving the interest figure aside, he quantified the arrears, in round figures, as £2,000. It is most strenuously argued on behalf of the father that there was and is an arithmetical error in the calculations. They started with a figure of £2,996.20, which was taken from a position statement submitted by the mother only very shortly before the hearing and which, as I understand it, was only actually seen by the father or Mr Martin Ward during the hearing itself. On internal page 2 of that document, now bundle page 100, the mother set out her calculation of child support arrears and the figures under points 3 and 4 under paragraph 4 of her document total £2,996.20. The district judge, at paragraph 2 of his judgment, took that as a starting point but said that there had to be a deduction to reflect the fact that C had already been here at university in England since 2011. He said:

    "So, for the period when he is at university in England from September 2011 until the termination of his course, it is right that there should be an overall reduction of a third in the amount due. As it effects the arrears, it brings them down by calculation to £1,960.90."

    If one subtracts £1,960.90 from £2,996.20, there is, of course, a difference of £1,035.30. The calculation whereby the district judge arrived at that figure may be seen on internal page 19 of the transcript of the hearing of 24th February 2014, now bundle page 43. It is important to say that during the exchanges on that page, the district judge arrived at his figure of £1,035.30 and asked, "Would that be right?". Mr Martin Ward, on behalf of the father, said, "I am sure that is right mathematically, sir, yes." Now, however, Mr Martin Ward and the father very strongly argue that it is not right mathematically and that it had failed to give to the father all the credit that he should be given, approaching the case on the basis that, on any view, there should have been a one third reduction in the maintenance after C moved to England. Mr Martin Ward says that the fact that he said, "I am sure that is right mathematically, sir, yes" and did not spot the arithmetical error that is now alleged, only serves to underline how he and his client were taken by surprise that the district judge was immersing in the detail of the case that day. On behalf of the father, it is very strongly contended, as set out in an email that Mr Martin Ward sent to the judge the day after the hearing, on 25th February 2014, now at bundle page 102, that the arrears had been overstated by about £1,000. Therefore, pausing there, that limb of the proposed appeal is directed at saying that arrears, which were quantified at about £2,000, should in fact have been quantified at about £1,000.

    10. The next limb of the proposed appeal is rather more sophisticated. As I have said, the approach to maintenance had apparently always been that, as the children were living primarily in America and the mother was the "parent with care" and the father was the "absent parent", he should pay maintenance assessed by broad reference to what the child support assessment would have been. As I understand it, each of these parents broadly earn similar amounts. The mother apparently works for Morgan Stanley Wealth Management in New York and I have been told that her gross income in 2012 was round about $62,000, whereas the gross income of the father at that time was about £50,000. Therefore, the rather sophisticated argument of the father is that, after C ceased living with the mother and began living with the father, he should be notionally treated as the "parent with care" of C and that the mother should be notionally treated as the "absent parent" of C. He says that, if a non-discriminatory approach is applied, that should have meant in fairness that the mother should be treated, actually or notionally, as being under an obligation to pay maintenance to the father for C in an amount broadly the same as the CSA would have assessed. On that, to my mind rather over-sophisticated approach, it has been calculated that the mother should have been paying to the father during the time that C was at university in England, but making his primary home with his father, maintenance of the order of £8,480. Therefore, the first submission made by and on behalf of the father is that, far from the father owing arrears to the mother of about £2,000, she actually should owe arrears to him of about £8,480. Even if the father was correctly assessed as owing arrears of £2,060, that, of course, would leave a balance due from the mother to him of about £6,200. Rather to my astonishment, the firmly stated position by and on behalf of the father this morning is that he considers that the mother should actually pay him that amount and he seeks an order to recover it from her. I find that rather astonishing when one bears in mind that C is now aged 22, has finished at university and is now in a job earning on his own. One just wonders at what point parents are ever able to put the past behind them and draw a line and move on? But at all events, it is the stated primary position of the father this morning that District Judge Robinson made a significant error and, far from assessing arrears owed by the father to the mother at about £2,000, he should have assessed arrears owed by the mother to the father of nearly £8,500. That, of course, is a difference altogether of about £10,000.

    11. Even if that argument does not succeed, the secondary argument by and on behalf of the father is that, on any view, any arrears correctly calculated as due from him to her should be cancelled out or wiped out to reflect those considerations. I asked Mr Martin Ward whether this rather sophisticated argument had been deployed at all at the hearing in front of District Judge Robinson. I cannot see anywhere in the transcript of the oral argument, which occupies 23 pages of official transcript, that the suggestion was made or the argument run at all that the mother actually owed money to the father. Mr Martin Ward's answer to that is that the point had been made at paragraph 2.4 of the father's "position statement of applicant", dated 23rd February 2014, which he produced at the hearing - now at bundle page 67. That says:

    "The respondent [viz the mother] has failed to pay any child support for C, who has been attending university in the UK since September 2011, as indicated in para 34 of the judgment of DJ Robinson dated 15th April 2011."

    The point is, apparently, further elaborated in an annex to the position statement headed "Explanation of child support." Actually, when one looks at paragraph 34 of the judgment of District Judge Robinson dated 15th April 2011, it does not indicate or imply that there should be any actual maintenance payment from the mother to the father during the period when C was at university in England. What District Judge Robinson said at paragraph 34 appears to me to be entirely consistent with what he was later to do at the hearing on 24th February 2014, for he said in paragraph 34:

    "As from September 2011, there will be another uprating for inflation. If C goes to university in England, it would be reasonable for Mr de Cruz to seek to offset something towards the actual costs of what he is paying to keep C. It would be no more than a third of the total. There will need to be a recalculation as from September 2011 in any event."

    That does not seem to me to imply or contemplate at all that there should be any actual or notional payment from the mother to the father; simply that there should be an "offset" in the total amount payable by the father to the mother of not more than one third of the total. That in fact is exactly the approach that District Judge Robinson did adopt at the hearing on 24th February 2014. However, that does not detract from the fact that, at paragraph 2.4 of his position statement, the father said:

    "The respondent has failed to pay any child support for C ..."

    and the concept that she should do so was not addressed at the hearing on 24th February 2014. Mr Martin Ward again says that the reason why that was not addressed was because he, Mr Martin Ward, was so taken by surprise that the district judge embarked upon a substantive hearing at all. Further, as I understand it, that position statement of the father, which, with its various appendices, is a lengthy and complex document, was only seen by the district judge during the course of the hearing and he had no opportunity fully to take it in.

    12. Quite apart from this issue as to the true level of arrears and whether on balance money should be owed by the mother to the father rather than the other way round, there is one other relatively subordinate point. The father feels and felt very strongly that, in view of the ages of the children, the time had come when any maintenance payable by him should be paid directly to them and not to their mother. The district judge acceded to that general position, but he did so by a provision, at paragraph 4 of the order of 24th February 2014, that:

    "Proof of receipt by each child [viz the two daughters] into a United States account, made unconditionally and of which the respondent has been notified in advance, shall constitute sufficient evidence of payment of future instalments."

    The reasoning behind that was set out in paragraph 3 of the judgment of the district judge, now at bundle pages 51 and 52. The father feels very strongly that in fact any payments made to the daughters should now be made entirely voluntarily rather than under court order and I am told that he actually currently pays about £40 a month more to each child than the order requires. Therefore, his starting position is that there is no justification for him being under any continuing court order as he already voluntarily pays more than the court requires. However, that apart, he has particular objection to the provision for payment "into a United States account". Apparently, if he makes payments of sterling from England into an American bank account of each child, he has to pay a transaction charge of £30 for each monthly payment. That is an annual total for the two children of £720. If, conversely, he were to pay sterling into the children's existing English bank accounts, then they would only have to pay a very small percentage transaction charge when remitting the money from England to America, if that is what they chose to do. Therefore, he says that there is a continuing cost and loss to him of about £720 under that head.

    13. I have to consider whether or not to grant permission to appeal. Rule 30.3(7) of the Family Procedure Rules 2010 provides as follows:

    "Permission to appeal may be given only where - (a) the court considers that the appeal would have a real prospect of success; or

    (b) there is some other compelling reason why the appeal should be heard."

    I cannot see any "compelling reason" why this proposed appeal should be heard. On the question of "real prospect of success", I have concluded at the end of the argument today that the proposed appeal does have what is characterised as "a real prospect of success" in that there may be some substance in the point that the father and his advocate were taken unfairly by surprise when the district judge decided to embark on a full final hearing that day in the circumstances as I have described them. Frankly, I consider the argument that the mother should be treated as under an actual or notional obligation to pay maintenance to the father for C as unreal, particularly given that C has now already left university and is working. There may, however, be substance in the argument that the arrears found to be due from the father to the mother have been overstated, or even should be reduced to zero to reflect the fact that C was living in England. Although it is a very small point, there may be some substance in the point that the provision for payment should be into an English rather than United States account. I have to say that the sums involved are objectively very small. At best, as it seems to me, the father may have a realistic prospect of reducing the assessed arrears from about £2,000 to zero. He may have a prospect of saving himself the £720 a year transaction charges to which I have referred. Against that, Mr Martin Ward has told me that, even since the hearing in front of the district judge, the father has paid to Mr Martin Ward £3,000 in fees for advice and a brief fee at this hearing. It seems likely that at the proposed substantive appeal Mr Martin Ward would reasonably expect to be paid at least another £2,000. It seems to me that all cost proportionality has gone completely out of the window in this case and that a wise person in the position of the father would reflect on the amount that he had already spent and was proposing to spend in costs, set against the amounts at issue. It is difficult to see that it is preferable to pay a lawyer than pay even a disputed amount of arrears to or for one's children. All that said, the closing submission of Mr Martin Ward is that the father labours under a very strong sense of injustice in this case and that he falls essentially in the position described by Lewison LJ in paragraph 45 of the judgment in Re S-W to which I have referred. I am unable to say that the proposed appeal does not have a real prospect of success in the limited areas that I have indicated, and that being the stated position of the father, I propose to grant him permission to appeal. I do not limit the areas which may be explored on that appeal, but I give due warning to the father, in his presence, that I am far from saying that his proposed appeal will succeed on any of the proposed grounds. I am merely unable to say that it does not have "a real prospect of success", which is a relatively low threshold test, somewhere below a 50/50 prospect of success. Therefore, he must go away from here clearly understanding that this is merely a decision on permission. If he pursues this appeal he will inevitably be incurring further significant legal expenditure on Mr Martin Ward, unless the father decides to act in person. The mother may incur legal costs of her own. He risks losing the appeal. He risks having to pay any costs that she incurs. He risks, of course, not recovering the costs that he expends, and all this about a sum of a small number of a thousands of pounds in relation to three children whom one assumes the father loves dearly. So, you can have your permission to appeal, Mr Ward.

Judgment, published: 16/06/2015

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Published: 16/06/2015

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