THE recent Court of Appeal judgment in the case of Mr and Mrs Mills draws attention to the long-term obligations that can arise on divorce.
Mr and Mrs Mills divorced in 2002. Mrs Mills received the majority of the capital in their financial settlement in order to meet her housing needs. Mr Mills was ordered to pay her £1,100 per month in spousal maintenance in order to meet her future income needs.
Nearly 15 years later, Mrs Mills applied to the court to increase her spousal maintenance, as she had lost all of the capital on “unwise” property investments and was now in serious debt.
Mr Mills argued that he should not be the insurer against her poor financial decisions and that it was unfair that he should ‘pick up the tab’ so many years after they had divorced.
He sought to end the maintenance payments, but the Court of Appeal rejected his arguments and ordered him to increase the payments to £1,441 per month for the rest of their joint lives.
The Court of Appeal decision surprised many family lawyers, as recent case-law has aimed to limit spousal maintenance.
Mr Mills is now crowdfunding an appeal to the Supreme Court so that the law on this issue can be clarified.
What is spousal maintenance?
Spousal maintenance is the income paid by a husband or wife to support their former spouse following a divorce. It is different to child maintenance, which is paid to support any children.
When is it ordered?
There is no automatic entitlement to spousal maintenance, but the court is obliged to consider whether each spouse can meet their own needs or whether they need ongoing support from the other after the marriage has been dissolved.
How is it calculated?
Unlike child maintenance, no strict formula applies to calculating spousal maintenance. In broad terms, spousal maintenance is calculated by balancing the income and earning capacity of each party against their needs, taking into account all the circumstances of the case.
The court follows the legal principles from legislation and case law when making a decision, but each judge has the discretion to do what they perceive to be appropriate on the evidence in each particular case. This means the precise outcome of financial court proceedings can be difficult to predict.
In the majority of cases, meeting essential needs will be all that is achievable. Where financial resources are limited it may only be possible to meet the basic needs of one party, often the parent with the day-to-day care of the children of the relationship. Needs are considered within the context of the available resources of the marriage.
Income needs are calculated by compiling lists of expenditure setting out income requirements on a monthly or annual basis.
The expenditure claimed should be realistic and proportionate, taking into account the standard of living enjoyed during the marriage and the available income of both parties.
How long is it payable for?
The court can order one party to pay maintenance to the other either for the rest of their joint lives (known as a ‘joint lives order’) or for a fixed period of time.
A term order may be appropriate after a short marriage, particularly if the children are older or if there are no children.
Term maintenance may be paid until a specific future event, such as the recipient being able to draw down on a pension.
In certain circumstances there may be no basis for a maintenance order (eg if the couple are of a similar age and earn broadly similar incomes).
If there is no financial need for a maintenance order, or if the sharing principle means that no adjustment of income is required, an immediate clean break order may be appropriate.
A maintenance order will automatically terminate if the recipient remarries during the term of the order, but will not automatically terminate if they cohabit.
Can it be varied?
A maintenance order can be varied up or down. In some cases it can be extended or terminated. An application can be made by either party. A significant change in circumstances since the making of the original order may warrant a variation or termination of the maintenance order. Such circumstances may include:
* A significant increase or reduction in either party’s income
* Cohabitation (although the recipient’s, rather than the payer’s, cohabitation is more likely to be a factor to lead to a review of the maintenance)
The case of Mills & Mills is an example of where maintenance was increased so that Mrs Mills could continue to meet her income needs.
This is a complex area of family law where the outcomes are dependent on the specific circumstances of each case.
For further information about spousal maintenance and family law, please contact Stuart Duncan on (01635) 521212 or email@example.com