Key Facts
- •Appeal against an order declining to convert an arbitral award into a substantive court order in financial remedy proceedings under Schedule 1 of the Children Act 1989.
- •Arbitration concerned housing provision for the mother and two children.
- •Arbitral award required a joint mortgage to be raised for a new property.
- •Father's subsequent unemployment and financial difficulties formed a central argument.
- •The case involved significant legal costs exceeding £1 million.
Legal Principles
The court can decline to make an order in terms of an arbitral award if there are 'good and substantial grounds for concluding that an injustice will be done'.
Haley v Haley [2020] EWCA Civ 1369
A challenge to an arbitral award is akin to an appeal, not a rehearing.
Haley v Haley [2020] EWCA Civ 1369
Schedule 1, paragraph 4 of the Children Act 1989 considers 'all the circumstances', including the parties' income, earning capacity, property, and financial resources.
Children Act 1989, Schedule 1, paragraph 4
The court's power to 'settle' property under Schedule 1 is broad, and includes the concept of beneficial interest.
Prest v Petrodel Resources [2013] UKSC 34; Jones v Skinner (1835) 5 LJ 87; K v K (Minors: Property Transfer) [1992] 1 WLR 530
A settlement under Schedule 1 can involve mortgage borrowing.
DE v AB [2011] EWHC 3792 (Fam); Mesher v Mesher and Hall [1980] 1 All ER 126; Birch v Birch [2017] UKSC 53
The court has ancillary powers to make orders to give effect to its decisions under Schedule 1, even if not expressly stated in the statute.
CH v WH [2017] EWHC 2379 (Fam); Children Act 1989, Schedule 1, paragraph 13
Appellate courts should be slow to interfere with an arbitrator's factual findings.
Geogas S.A v Trammo Gas Ltd. [1993] 1 Lloyds Rep 215; Volpi & Delta v Volpi [2022] EWCA Civ 464
Outcomes
Appeal allowed.
The Judge wrongly interpreted Schedule 1, sub-paragraph 1(2)(d) of the Children Act 1989, concluding there was no power to make a property settlement order requiring mortgage borrowing. The Court of Appeal found that mortgage borrowing capacity is a resource under Schedule 1, and the court has power to make such orders, even if it requires prospective mortgage borrowing.
Cross-applications remitted for rehearing.
The arbitral award, while legally sound, was considered ambitious given the father's deteriorating financial circumstances. A rehearing allows for consideration of the updated financial situation and a fairer outcome.