For richer, for poorer…even after divorce?
Can a payer of maintenance be forced to subsidise the recipient's financial mistakes? The Supreme Court has just delivered its judgment on precisely this issue in Mills v. Mills.
The husband and wife, a surveyor and beauty therapist respectively, divorced in 2002 after a 15 year marriage and a court order was made in relation to their matrimonial finances. The wife received £230,000 and the husband £46,000 out of their joint capital; the husband having contended that £230,000 was enough to house the wife and their six year old child mortgage free.
The court also ordered the husband to pay maintenance to the wife of £1100 per month until either party's death or the wife's remarriage.
The basis of maintenance
If your husband or wife can meet their reasonable financial income needs from their own achievable resources when you divorce, you will not have to pay maintenance. If they cannot, you probably will.
What happens in the meantime?
After the divorce, the wife in this case embarked on a handful of property transactions with pretty poor consequences. By the end of them, her mortgage borrowing had rocketed to £442,000 and a further £106,000 of the sale proceeds seemed to disappear without trace. Eventually she sold her last flat and started to rent, having retained only £120,000 from her property dealings.
The variation applications
Fast forward to 2015 and both parties applied to court to vary the maintenance order; maintenance orders being variable in amount and duration throughout their life. The wife applied to vary the maintenance upwards putting her annual needs at £35,000 including £10,200 for rent. The Judge found she could earn £18,500 and so had a shortfall of about £17,000 a year.
The husband applied to bring the maintenance to an end or, at best, to fix a short period for which it should continue or which could be reflected in a small capital payment to the wife.
At the time of the hearing the wife had no capital left and almost £45,000 of debt. The Judge felt the husband could earn £55,000, and had pretty much the same capital as he left the marriage with.
In the end, the Judge left the maintenance exactly as it was.
Both parties endeavoured to appeal. The Court of Appeal granted the wife's appeal, agreeing with her that the Judge's order left her unable to meet about £4000 of her reasonable needs and that he had not explained why this was justified.
The husband then appealed to the Supreme Court and asked it to overturn the Court of Appeal's increase in the wife's maintenance to cover her rent. This was because the need to pay it was caused by "unwise transactions."
The Supreme Court granted the husband's appeal but only by reinstating the Judge's order. It felt the Judge had explained why the wife should be left in a position of shortfall and compelled the husband to meet only 60% of her rent. In doing so, it approved three Court of Appeal decisions from the last 15 years which have decided in relation to maintenance, as one Judge put it:
"(The maintenance payer) is not an insurer against all hazards nor…is he necessarily liable for…the (recipient's) financial mismanagement, extravagance or irresponsibility"
With a lengthy maintenance order remaining in Mills v. Mills, this case does perhaps offer only crumbs of comfort for those fearful of the impact of a profligate former spouse. That said, the outcome left the wife unable to meet her reasonable needs which is normally prohibited in matrimonial law. In this, there is a word or two of warning for those maintenance recipients who might look to their former spouse's bank account a little too feverishly.
If you have any queries about maintenance orders of any type, please contact a member of our family team.