Disputes over spousal maintenance are often the main bar to couples resolving financial disputes on divorce. In the judgment of SS v NS [2014] EWHC 4183 (Fam), Mostyn J has given comprehensive guidance on the principal issues surrounding spousal maintenance.
Having considered the applicable case law and the views of the Law Commission, Mostyn J pulled together 11 applicable principles in respect of spousal maintenance.
The first issue to consider is why a spousal maintenance liability should arise in the first place. As Baroness Hale stated in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, the most common rationale is to meet needs which the relationship has generated. As Lord Hope also stated in Miller: ‘The career break which results from concentrating on motherhood and the family in the middle years of their lives comes at a price which in most cases is irrecoverable.’
Conversely, Mostyn J found it difficult to see why it was reasonable that an ex-husband should have to pay spousal maintenance by reference to factors which are not causally connected to the marriage, unless they were looked at in a wider economic context – that is, that the former husband should meet his former wife’s needs, rather than the taxpayer. In such cases Mostyn J was of the view that spousal maintenance payments should only be made to alleviate significant hardship.
On the second point, Mostyn J stated that a spousal maintenance award should only be made by reference to a wife’s needs, save in exceptional cases where the sharing or compensation principle applies. This reflects the firm views that he previously gave in B v S [2012] EWHC 265 (Fam) and which has been followed elsewhere.
On the third point, where the needs in question are not causally connected to the marriage, the award should generally be aimed at alleviating significant hardship. On this point, Mostyn J referred to the decision of Fisher v Fisher [1988] EWCA Civ 4 in which a former wife applied for the upwards variation of her spousal maintenance order on the ground that a child born to her by another man reduced her earning capacity and increased her needs. As Purchas LJ said in Fisher the approach ‘flies in the teeth’ of section 31 and is not supported by ‘authority, reasoning or logic’.
On the fourth point, and this is arguably one of the more significant points of his judgment, Mostyn J stated: ‘In every case the court must consider a termination of spousal maintenance with a transition to independence as soon as it is just and reasonable. A term should be considered unless the payee would be unable to adjust without undue hardship to the ending of payments. A degree of (not undue) hardship in making the transition to independence is acceptable.’
On this point, Mostyn J also commented: ‘As for “how long” the Holy Grail should be, where it is just and reasonable, an eventual termination and clean break.’ He noted that the Law Commission in its report, Matrimonial Property, Needs and Agreements (26 February 2014), stated that financial orders should be to enable a transition to independence, in light of the choices made within the marriage, the length of the marriage, the marital standard of living, the parties’ expectation of a home and the continued shared responsibilities in the future.
On the fifth point, which links with the previous point and is arguably the other most significant view expressed by Mostyn J, he stated, ‘if the choice between an extendable term and a joint lives order is finely balanced the statutory steer should militate in favour of the former’.
On the sixth point, marital standard of living is relevant to the quantum of spousal maintenance, but it is not decisive. The standard of living should be weighed against the desired outcome of independence. The Law Commission had stated that the transition to independence may mean that one party is not entitled to live for the rest of their joint lives at the marital standard of living unless they can afford to do so from their own resources.
Mostyn J added that as time passes, how the parties lived in the marriage becomes increasingly irrelevant. Too much emphasis on the marital standard of living imperils the prospects of eventual independence.
On the seventh point, Mostyn J noted that in quantifying maintenance, the judge was not to examine the individual items in the wife’s budget, but also to stand back and look at the global total and consider whether it represents a fair proportion of the payer’s available income.
As Thorpe LJ had stated in Purba v Purba [1999] EWCA Civ 1730, ‘the essential task of the judge is not to go through these budgets item by item, but stand back and ask, what is the appropriate proportion of the husband’s available income that should go to the support of the wife?’. As Mostyn J summarised, the court should clearly survey the wood as well as the trees.
The eighth point deals with bonuses. Where the payer’s income comprises both base salary and bonus, the periodical payments award may be partitioned with needs being met from the base salary and additional, discretionary items being met from the bonus on a capped percentage basis. This reflects what now appears to be the accepted approach and which was adopted by King J (as she then was) in H v W [2013] EWHC 4105 (Fam) and earlier by Coleridge J in R v R [2007] EWCA Civ 503.
The ninth point deals with applications to extend term maintenance orders. Mostyn J held that there is no criterion of exceptionality to justify an extension of a term order. He agreed with a view expressed by Charles J in McFarlane v McFarlane [2009] EWHC 891 (Fam) that the test of exceptional justification established in Fleming v Fleming [2003] EWCA Civ 1841 does not survive.
On an application to extend, an examination should be carried out to ascertain whether the premise of the original order of the ability of the payee to achieve independence had been impossible to achieve and, if so, why.
In a similar vein, under point 10, on an application to discharge a joint lives order, an examination should be made of the original assumption that it was too difficult to predict eventual independence.
Finally, at point 11, Mostyn J stated that if the choice between an extendable and a non-extendable term is finely balanced, the decision should normally be in favour of the economically weaker party. That would therefore usually give rise to a term order being made without a section 28(1A) bar.
In conclusion, following on from his earlier decision in which Mostyn J gave firm views in B v S that spousal periodical payments orders should generally be assessed by reference to needs, his decision in SS v NS may also herald a move towards the increased use of term orders for spousal maintenance, albeit with the possibility that such orders may be more capable of extension should circumstances allow.
Andrew Newbury, Slater & Gordon
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