Rogers & Norton News

Judges call time on maintenance for life

Monday, May 11, 2015

The New Ex-Spousal Maintenance

Recently, Judges have changed their attitudes towards periodical payments, now dubbed ‘ex-spousal maintenance.

Kerry Rowell of our Family Department  comments :-

“Recently there has been a steady flow of cases on periodical payment orders and variations of periodical payment orders, often known as ‘spousal maintenance’.  Pursuant to s.25 of the Matrimonial Causes Act 1973 (MCA 1973), the court is obliged to achieve a clean break, wherever possible or indeed fair. Therefore, the courts aim to achieve the termination of the financial obligations of parties towards each other as soon as it is just and reasonable to do so. However, there appears a shift in the position of ‘fairness’.

In the case of Wright v Wright [2015] EWCA Civ 201 the court refused permission to a wife to appeal a decision which varied her maintenance payments downwards.  In 2008 financial orders were made providing for the wife to receive periodical payments of £33,200 per annum for their joint lives in addition to £10,400 per annum in respect of each of their two children until they reached 17.

In 2012, the husband applied to vary this order because his financial circumstances had changed for the worse and also because it was envisaged at the time of the judgement that the wife would begin to work within 2 years of the original order being made to contribute to her own household.  This work could fit in with her child care arrangements for the children.

At the hearing, the husband offered he would have to work a further 6 years until 65 in order to make pension contributions but that he was now paying 34% of his income as opposed to the original 22% ordered.  The wife, who was several years younger, was found to be evasive about her capacity to work and earn an income.  The wife made no attempt to work following the order.  The court also felt that her stated income needs of £64,000 per annum were inflated and were no more than £36,000.

In 2012, the Judge found it was appropriate to scale the periodical payments order down over the following 6 years when the husband would be 65.  The wife appealed.  The Judge told the wife “the world of work has innumerable possibilities these days: vast numbers of women with children just get on with it and Mrs Wright should have done the same.”

On appeal, the Court of Appeal Judge was again critical of the wife’s failure to obtain employment and concluded that there was no prospect of the wife establishing there should have been no variation of the order.  It was therefore dismissed.”

Averil Ballam of our Family Department adds :-

“Justice Mostyn is keen to re-establish the principles upon which periodical payments are awarded so that there is clearer guidance on the principles of fairness.  In the case of SS v NS [2014] EWHC 4183 (Fam) Mostyn J, has put forward 9 principles which he considers should be in play when considering periodical payments (spousal maintenance). These are summarised as follows:-

  • Have the financial arrangements during the marriage created hardship for the person receiving maintenance, for example dependent children;
  • What are the financial needs of that person which justify the making of an order;
  • Where need alone is insufficient to establish maintenance, avoiding undue hardship should be considered;
  • An end date must be considered and maintenance should provide for transition to financial  independence, where appropriate;
  • There should be a focus on extending maintenance rather than making joint lives orders
  • The standard of living during the marriage is secondary to eventual financial independence
  • To not only consider the needs of the recipient but the ability of the payee to pay
  • Payments will be primarily based on a base salary with discretionary bonuses being considered on a capped percentage basis;
  • That applications to extend maintenance should not be criticised and to consider whether financial independence has been possible to achieve;
  • On an application to discharge a joint lives order an examination should be made of the original assumption that it was too difficult to predict eventual independence;
  • If the choice between an extendable and non-extendable term is finely balanced the decision should normally be in favour of the economically weaker party.

 

These principles and indeed both cases demonstrate a very real shift in judges approaches where consider awards for lifetime maintenance.  The focus now being on the period of time required to achieve financial independence for both parties.”

If you have any queries relating to this article then please feel free to contact Averil Ballam who is in our Attleborough office on 01953 453774 or Kerry Rowell of our Norwich Office on 01603 666001 or email avb@rogers-norton.co.uk  or kr@rogers-norton.co.uk.