Insecurity in divorce for financially stronger parties
In recent years divorcees have been seemingly encouraged to strive towards financial independence. However the recent case of Mills v Mills appears to be making a U-turn towards ‘lifelong maintenance’.
Mr and Mrs Mills divorced in 2002. Their financial claims were settled by a Consent Order which conferred a lump sum of £230,000 to Mrs Mills and periodical payments of £1,199 per calendar month.
In 2014 Mr Mills made an application to discharge or alternatively vary the periodical payments by way of reduction on the basis that:
- Mrs Mills had made poor property investments which ultimately landed her in debt; and
- Mrs Mills was not fulfilling her earning capacity.
Mrs Mills sought an increase to the periodical payments due to her financial needs. The Judge held that the periodical payments should continue being paid in the amount previously agreed by consent. Mrs Mills appealed the lower court’s decision.
The Court of Appeal allowed the appeal and agreed that the periodical payments should continue, however the amount Mr Mills was paying should be increased in line with Mrs Mills’ financial needs. The Court of Appeal highlighted that “the husband has and had the ability to make the maintenance payments asked for.” It was not found that Mrs Mills had mismanaged her finances.
Mr Mills has been granted permission to appeal by the Supreme Court on one ground; “whether, provision having already been made for the Respondent’s housing costs in the capital settlement, the Court of Appeal erred in taking these into account when raising her periodical payments.”
Section 31 Matrimonial Causes Act 1973
Under Section 31(2)(b) the Court has the power to vary or discharge any periodical payments order. However before doing so the Court must consider all the circumstances of the case, with the first consideration being given to the welfare of any minor of the family, and whether it can use its powers without causing undue hardship to the party in whose favour the original order was made.
When considering all the circumstances of the case the Court must have regard to the matters within Section 25 Matrimonial Causes Act 1973. These include income, earning capacity, financial needs, standard of living enjoyed by the family before the breakdown of marriage, age, disabilities, contributions to the family and conduct of the parties.
Given the wide discretion of the Courts it is unclear whether the financial needs of Mrs Mills will prevail or whether the Courts will continue to encourage financial independence. A hearing date has not yet been listed.