News

Mills: A Shift In Maintenance?

Tue 16th May 2017

“Divorcee Maria Mills defends herself after being labeled ‘gold digger’ for winning maintenance money for LIFE”: Mirror: 15 February 2017

 Ex-husband will fight on to end ‘meal ticket for life’”: The Times: 11 February 2017

The recent Court of Appeal decision in Mills v. Mills [1] in which the wife received an increase in maintenance 15 years after the original consent order, has received much media attention. This was in part because she was found by the trial judge to be not a good businesswoman and to have not managed her finances wisely.

The trend in recent years has been for the courts to seek to limit the term of maintenance and encourage a move towards financial independence; does this case signal a shift? The short answer is no. The case itself was very fact specific and the Court of Appeal declined to provide further guidance.

The Facts

The consent order of 2002 provided for:

  • The family home to be sold with £230,000 of the net equity to the wife and £40,000 to the husband.
  • The two businesses and assets (unvalued) to be transferred to the husband.
  • Two family endowment polices to be transferred to the husband.
  • The husband to retain a small pension.
  • The husband to pay the wife £300 per calendar month (pcm) for the benefit of their son until 18 years/end of secondary education.
  • The husband to pay the wife £1,100pcm on a joint lives basis.

First Instance Decision [2]

Contrary to the perception given in the media, it was in fact the husband who originally applied in 2014, for a downward variation or discharge of the joint lives maintenance order. The wife cross-applied for an upward variation and/or for capitalisation.

By the time of the trial in 2015, the wife was living in rental accommodation, this cost was included in her schedule of needs. The husband argued that the wife had grossly mismanaged her finances leading to the loss of the capital (£230,000) and that he should not be responsible for this, relying on North v North [2007] EWCA Civ 760, per Thorpe LJ [para 32].

The wife denied deliberate financial mismanagement. She asserted that she was unable to rehouse mortgage free in the locality to where their child was in school in 2002, then had a number of health issues in the intervening years requiring operations which had affected her income. She had taken on borrowing which ultimately, given her circumstances, she was unable to repay.

The wife was not found to be profligate or wanton by the trial judge; he also found that she was unable to meet her basic needs on the basis of her income. Her earning capacity was assessed on the evidence. On the figures in the judgment the wife still had a shortfall of £341 pcm yet the judge refused to order an upward variation and dismissed both applications.

Both parties applied for permission to appeal.

Court of Appeal

The wife obtained permission to appeal on the grounds that the judge’s order left her unable to meet her basic needs from the income she had or would probably have available to her.

Counsel on behalf of the husband, called for changes in the law to limit maintenance and encourage independence after divorce, stating “There is a social change going on.”

The Court of Appeal however, allowing the appeal, held that:

  • The judge at first instance had not found that the wife was profligate or wanton and he did not find financial mismanagement; He had made findings about her income and that she had no greater earning capacity; He accepted her basic monthly needs budget but did not give any reason why this should be cut in explanation of why that shortfall should not be met.
  • The judge concluded that the wife would not be able to move to independence.
  • The judge had found that the husband had the ability to pay periodical payments while maintaining his new family.
  • The judge therefore erred in principle.

Therefore, the wife’s appeal was allowed and the rate of the joint lives maintenance order was upwardly varied to £1,441 pcm.

The Court of Appeal confirmed that, ‘..the statutory test in relation to variation applications under section 31(7) is not in doubt, is easily capable of being understood and has had ample authority from this court to explain it.’

Analysis

The decision was upheld by the Court of Appeal based on the wife’s needs and in circumstances where the husband could pay. This does not signal a departure from the line of authorities including SS v NS [3] where Mostyn J re-iterated, in particular that:  an award should only be made by reference to needs, save in a most exceptional case where it could be said that the sharing or compensation principle applied, and that where the needs in question were not causally connected to the marriage the award should generally be aimed at alleviating significant hardship.

The Future?

Baroness Deech’s Private Members’ Divorce (Financial Provision) Bill has had its second reading in the House of Lords and is now at the committee stage. The Bill proposes a number of fundamental reforms to the MCA 1973 including a three-year cap on maintenance to mirror the Scottish system. The Bill has not received a positive response from the Government and it remains to be seen how it will progress through Parliament.

[1]    1 February 2017 – unreported as yet [case no: B6/2015/2342]

[2]    Information from Lexis PSL 28/02/17: ‘Maintenance Payments as a Gateway to Independence (Mills v
Mills)’

[3]    (Spousal Maintenance) [2014] EWHC 4183 (Fam)

SHARN SAMRA

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