Supreme Court makes landmark maintenance payment rulingJul 20, 2018
Graham and Maria Mills divorced in 2002 after a 15 year marriage. In the resolution of their finances Mrs Mills received a lump sum of £230,000 on the basis that she would purchase a new home for herself and their son. It was also agreed that she would receive ongoing maintenance payments of £1,100 per month.
By April 2015 and, after several property purchases, Mrs Mills was living in rented accommodation and had accrued debt in the region of £42,000.
Mr Mills made an application to the Court to vary the maintenance payment to lower the amount of maintenance he was to pay as circumstances had changed since the conclusion of the divorce proceedings.
Mrs Mills made a cross application arguing that the maintenance should be increased as the agreed payments were no longer sufficient to meet her basic needs. This was due to her now being in debt having made a series of poor investments and she stated that there was a shortfall of over £4,000 per year between the income she needed and what she was receiving by way of maintenance from her ex-husband. She was not successful with that application and appealed to the Court of Appeal where she was awarded increased maintenance payments of £1,441 per month. Mr Mills appealed that decision to the Supreme Court.
Last Wednesday the Supreme Court ruled that Mrs Mills is not entitled to any additional money from her ex-husband but the originally ordered payment of £1,100 must continue and so Mr Mills has not been successful in his application to reduce the amount he pays each month.
The decision has again prompted conversation about how appropriate it is for maintenance to be paid for life and the case highlights that any Order for spousal maintenance leaves the door ajar for future litigation. However, the outcome has been welcomed in that it is clear that a spouse paying maintenance should not be responsible for their ex-spouse’s unwise financial decisions following settlement.
The Court does have a duty in all cases to consider whether there should be a clean break and it is felt that there is a move by the Courts to encourage people to be financially independent of their ex-spouse although this is not always appropriate.
In this particular case, the wife received a lump sum to meet her housing needs (the lump sum of £230,000) and then, in her application to increase the maintenance payable to her, included the payment of rent as an income need. The decision has made it clear that a spouse paying maintenance into the future would not be expected to address a housing need when the original settlement made specific provision for housing.
It is possible in settlements for spousal maintenance to be “capitalised” which means that a lump sum is paid to bring about a clean break. This is not always financially possible at the time of separation or settlement but maintenance can be capitalised at a later date either by agreement or by Order of the Court.
It is worth noting that child maintenance payments do sit entirely outside of spousal maintenance provision and a “clean break” does not include bringing to an end payment of child maintenance.
The resolution of family finances following a relationship breakdown can be complex and difficult and anyone going through the breakdown of their relationship would be sensible to seek specialist advice in relation to this. Our specialist Family Team are happy to discuss matters with you and talk through the options available.