UD v DN  EWCA Civ 1947 – outright capital awards in favour of ‘adult’ children set aside
In December, the Court of Appeal handed down its judgment in the appeal of UD v DN  EWCA Civ 1947 - providing important guidance to family lawyers in proceedings under Schedule 1 of the Children Act 1989 (“schedule 1”) and the court’s approach to awards in favour of ‘adult’ children and what would justify the making of such orders. This was a ‘big money’ case and the father had claimed the ‘millionaire’s defence’ – meaning he did not provide full financial disclosure as usually required on the basis he considered himself wealthy enough to meet any order the court might reasonably make.
At first instance, Williams J found that there were special circumstances that justified outright capital awards being made for the benefit of two of the parties’ children (to allow them to buy a house when adult).
At paragraph 4 of the judgment, the Court summarised the grounds of appeal and, in summary, it was contended that:
- any order for financial provision made on application under schedule 1 must be made before the relevant child attains the age of 18, because the court has no power to make an order in this regard once the child has attained the age of 18;
- that the court does not have power to make a property transfer order or lump sum order to a person who is a child at the date of the order, but who will be aged over 18 when it takes effect or will be paid; and
- that, in any event, the judge was wrong to make an order under which the children would receive capital provision when they were adults because there were no special circumstances justifying such an award in this case.
The court heard submissions about what constitutes a “child” for the purpose of these applications and also about certain circumstances of this case, in particular, the extent to which there would be some sort of ‘financial ultimatum’ imposed on the children by the father and whether the children were ‘vulnerable to the continuing risk of financial control and abuse from the father’.
The court had to consider whether this could be considered an appropriate ‘special’ or ‘exceptional’ circumstance to justify an award in respect of the parties’ children when adult.
In respect of point 1 above, Lord Justice Moylan emphatically concluded that the court has the power to make orders for the benefit of a child if the application is made before the child is 18 – he said: “this is a straightforward point which is not capable of much elaboration. In my view, if the application invoking the court's statutory power was issued before the relevant child attained the age of 18, the court retains the power to make an order after the child has attained that age. The court's jurisdiction is based on the relevant child being under the age of 18 at the date of the application.”
He went on to add that “that there would need to be a clear express provision before a parent could properly be deprived of an accrued, but undetermined, right to financial provision simply because their application remained undetermined at the child's 18th birthday.”
In respect of the second point, Lord Justice Moylan said: “it would, in my view, be very surprising if the court did not have power to make an order for some form of capital provision which gave a benefit to or for a child when an adult, if there were special circumstances, such as disability, which justified making such an order. The authorities referred to above clearly demonstrate that the court has power to make an order for financial provision which will benefit a child when he/she is over the age of 18, if the child is in education or training or there are special circumstances. It would be a very odd result if the court could make orders for periodical payments in such circumstances but could not make any of the other orders.”
In respect of the third point, crucially Lord Justice Moylan said that: “it is, in my view, clear that such power as there is to order financial provision in favour of an adult child who is not in education or training is limited to "special" or "exceptional" circumstances”.
He concluded that there were no such circumstances in this case. He said that: “With all due respect to the Judge, seeking to protect children from financial pressure or "manipulation" that a parent might seek to exert does not begin to come within the scope of a "special" or "exceptional" circumstance which would justify the outright capital award which the Judge made or, indeed, any award.”
This was clearly a highly emotive case involving difficult issues - particularly the risk of ‘financial control and abuse’ from the father. Lord Justice Moylan made some interesting points, particularly in the context of the Domestic Abuse Act 2021 and he said that: “I make clear that I accept, of course, the emotional and psychological damage caused to children by parental abuse. The harmful effects of such abuse are well established. However, the general observations made by the Judge are not sufficient to establish any specific consequences for the children in this case which would support the exercise of the powers under Schedule 1 to make a financial award.”
The Court of Appeal concluded that there was no evidence in this case that there was a “special” circumstance which justified the making of an award in their favour as adults and that ‘the Judge's order was not justified and must be set aside’.
Jemimah Fleet is a Knowledge Development Lawyer in our Private Client team. Jemimah is an experienced family lawyer with specialist experience in surrogacy and fertility law.