The Supreme Court has ruled that a divorced husband should not have to increase payments to his ex-wife after she mismanaged her finances following their split.
Mr Mills divorced his wife, Mrs Mills, in 2002. The order for variation was made by the Court of Appeal on 1 February 2017. The Court of Appeal allowed the wife’s appeal against the dismissal of her application to vary the first order for periodical payments made by Judge Everall QC in the Central Family Court in London on 9 June 2015.
Subsequently, Mr Mills appealed against this order for upwards variation of an order for periodical payments against him in favour of the wife.
It was heard that following their divorce in 2002, after a 15-year marriage, she had received £230,000 in settlement of her capital claims against him, and it was agreed that the husband would make annual periodical payments of £13,200.
But by April 2015, following a series of property purchases and later, the wife beginning to rent accommodation, she had debts of around £42,000 and there was a £4,092 shortfall per year between her needs and the existing level of the periodical payments.
The Judge’s decision was not to vary the existing order for periodical payments in the annual sum of £13,200. In other words he countenanced a shortfall of £4,092 between the wife’s annual need and the husband’s obligation to meet it. Why?
The answer lies in the Judge’s analysis of the wife’s loss of the capital sum which had been awarded to her in 2002.
In particular, the Judge found that:
the award in 2002 would then have enabled the wife to buy a home free of mortgage;
it had however been reasonable for her to be ambitious and to secure a mortgage for the purchase of her current house;
thereafter she had not managed her finances wisely;
she had committed herself to borrowings which were too high;
it would be wrong to describe her approach to finances as prudent.
but her needs had been augmented by reason of the choices which she had made.
Lord Wilson stated:
“Although the Judge had described the wife’s schedule of annual needs totalling £35,792 as “very modest” and indeed as “basic”, he said that the husband’s contribution should do no more than to enable her to meet her “bare minimum needs”, which, so he therefore implied, were properly to be reflected in an even lower figure. “The wife”, he said, “will have to adjust her expenditure to live within her means.”
The decision not to increase Mr Mills’ maintenance payments is a victory for campaigners who have argued that divorce should not constitute a ‘meal ticket for life’. Instead, parties should be financially prudent and stand on their own two feet in the long-term.
The judgment demonstrates the Court’s greater expectation on the non-earning spouse to take responsibility for their finances after divorce. This may mean following the conclusion of divorce and financial proceedings, utilising an earning capacity or making more sensible financial decisions.
If you wish to pursue a divorce or are considering commencing financial proceedings against a former spouse, please do not hesitate to contact Christine McVay, Head of the Family Law department at Short Richardson & Forth Solicitors on 0191232 0283 or at email@example.com.