The Supreme Court rules in favour of the husband in a maintenance variation case – No second bite at the cherry!

July 18, 2018

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Mills v Mills is a case in which the court was asked to consider whether to allow a variation of a financial consent order following the parties’ divorce in 2002. The Supreme Court has today released its judgment and has allowed the husband’s appeal not to vary the original order.

Background

Following the parties’ divorce in 2002, their financial claims were concluded in a consent order which, amongst other things, provided Mrs Mills with a capital sum (which took into account her housing needs) and periodical payments of £1,100 per month on a joint lives basis. Subsequently, Mrs Mills was said to have mis-managed the capital sum awarded to her. Having sold her final property in 2009 (with funds that had originally derived from the capital payment under the order), she then moved into rental accommodation.

In 2014, Mr Mills applied to the court to discharge the periodical payments order or, in the alternative, for a downward adjustment. His application was made on the basis that Mrs Mills

  1. had grossly mismanaged the lump sum capital payment awarded to her in 2002 and
  2. that she was now in a position to, and should, increase her own earning capacity.

Mrs Mills made a cross-application seeking to increase her periodical payments on the basis that the current provision was insufficient to meet her basic needs. At the time of the hearing in April 2015, Mrs Mills had amassed debts of approximately £42,000 and had no capital.

The court at first instance declined to vary the order, thus neither increasing nor decreasing the level of periodical payments. Mrs Mills was therefore required to adjust her expenditure accordingly to enable her to meet her monthly living costs. Mrs Mills appealed and the Court of Appeal allowed her appeal, increasing the maintenance payable by £341 per month to £1,441 per month to cover her shortfall.

On 6 June 2018, the matter came before the Supreme Court.

The issue before the court was whether, provision having already been made for Mrs Mills’ housing costs in the capital settlement in the original consent order of 2002, the Court of Appeal were wrong in taking these into account when increasing Mrs Mills’ periodical payments under the joint lives spousal maintenance provision contained in 2002 order. In other words, should Mrs Mills have been awarded an increase in her financial support (to cover her rental costs) given that her original capital settlement already took her housing needs into consideration?  Given the passage of time since the Mills divorce, was the Court of Appeal justified in increasing her maintenance on the basis of her needs when the shortfall had in fact stemmed from her own conduct?

The decision of the Supreme Court

The Supreme Court has unanimously allowed the appeal, concluding that the judge at first instance was entitled to decline to vary the order for periodical payments so as to require the husband to pay all of the wife’s rental costs. Lord Wilson gives the judgment with which Lady Hale, Lord Carnwath, Lord Hughes and Lord Hodge agree.

The decision reflects the wide discretion afforded to the court in determining whether to vary an order for periodical payments under s. 31(1) and (7) of the Matrimonial Causes Act 1973. In particular, at paragraph 40 of the judgment, it was held that ‘A spouse may well be obliged to make provision for the other spouse, but an obligation to duplicate that provision in situations such as this is improbable’ highlighting that in this case, the wife was not able to have a second bite of the cherry.

The significance of this judgment

This case centres around the proper approach to be taken in applications to vary periodical payments orders made pursuant to s 31(7) of the Matrimonial Causes Act 1973 after the grant of a decree of divorce.

A line in the sand must be drawn in all maintenance cases, even where there are ongoing maintenance obligations. The ruling demonstrates that the court will not tolerate an attempt to seek to vary an order for periodical payments where the shortfall is a direct result of the receiving party’s actions alone. But for Mrs Mills property investment decisions and mis-management of her capital, she would not have had to seek an additional sum from Mr Mills. Mr Mills had naturally (and fairly) assumed that the capital sum awarded to Mrs Mills under the original order would be spent wisely towards a home for herself and his responsibility in this respect was complete.

The circumstances of this case were effectively to duplicate the award made to Mrs Mills in respect of her housing costs and this was not something the court was prepared to entertain.

At Family Law in Partnership our specialist family lawyers have a wealth of experience in advising clients on what is fair, what is reasonable and what is realistic, whether they are involved in a negotiated settlement or whether a Judge is to make the final decision. Our involvement in many of the leading cases on financial matters means we are well placed to advise on the current law and how this impacts on each individual’s particular circumstances. No matter how the outcome is achieved, our skilled family lawyers provide support and guidance throughout the process. We draw on our years of experience to advise and enable clients to make informed and well considered choices, both in terms of process and outcome, when reaching a financial settlement.

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