The Supreme Court has today, handed down its judgement in relation to the above case. The matter to be determined by the Supreme Court was as follows;
In circumstances in which at the time of a divorce a spouse, say a wife, is awarded capital which enables her to purchase a home but later she exhausts the capital by entry into a series of unwise transactions and so develops a need to pay rent, is the Court entitled to decline to increase the order for the husband to make periodical payments to her so as to fund payment of all (or perhaps even any) of her rent even if he could afford to do so.
Mr and Mrs Mills were divorced in 2002 after a marriage of almost 15 years. Financial matters were resolved by agreement and incorporated in to a Court Order. Mrs Mills received £230,000 (the lion’s share of the capital) to rehouse herself and the child of the family. Mr Mills agreed to pay her £13200 per annum by way of maintenance. It was anticipated Mrs Mills would rehouse herself mortgage free. However, Mrs Mills rehoused with a mortgage. Between 2002 and 2009 MRS Mills sold and purchased a series of different properties and with each property the level of the mortgage increased. In addition, Mrs Mills did not necessarily reinvest all of the sale proceeds from one property to the next. In 2009, Mrs Mills sold her final property and moved in to rented accommodation. By April 2015, when the first hearing took place, Mrs Mills had no capital and debts of £42000.
The first hearing was listed to determine the following applications;
- Mr Mills application to reduce the level of maintenance he had to pay and
- Mrs Mills application to increase the level of maintenance to be paid to her
The judge accepted Mrs Mills had a shortfall of £4,092 per annum between her needs and income. However, the Judge decided that Mrs Mills had not managed her finances wisely and her current needs, in particular her need to pay rent, had been increased by the choices she made. The Judge decided it would be unfair if Mr Mills had to make a full contribution to the rental costs. The Judge decided not to vary the Order at all. The Order continued to provide Mr Mills to pay Mrs Mills £13,200 per annum. This meant Mr Mills would continue to contribute around 60% of Mrs Mills’s rental costs. The Judge expected Mrs Mills to adjust her expenditure to meet the shortfall.
Mrs Mills appealed to the Court of Appeal. Her appeal was successful on the basis the Judge had not given sufficient reasons why her basic needs should not be met. The maintenance Order was increased to £17,292 per annum.
Mr Mills appealed to the Supreme Court. The Supreme Court allowed the appeal concluding the Judge was entitled to decline to vary the maintenance Order so as to require Mr Mills to pay all of Mrs Mills’s rental costs.
The appeal before the Supreme Court was on a single narrow ground. Given provision had already been made by Mr Mills for Mrs Mills housing needs in the original settlement, should the Court of Appeal have interfered with the Judge’s decision not to increase the maintenance to cover all Mrs Mills rental cost?
The Supreme Court decided that the original Judge had given clear reasons why he had declined to increase the maintenance Order. The Supreme Court also decided that the original Judge was entitled, although not obliged, to decline to require Mr Mills to fund full payment of the rent commenting that a Court would need to give very good reasons for requiring Mr Mills to make full payment in the circumstances of this case.
The Supreme Court went on to say that a spouse may well be obliged to make provision for the other spouse. However, an obligation to duplicate that provision in situations such as this is ‘improbable.’
The issue the Supreme Court considered, in this case, was extremely narrow. The Court has to take a number of matters into consideration when dealing with variation of maintenance applications. If you are considering making such an application or would like to seek advice in relation to such an application, please contact Melanie Wilson on 01245 673767 or email [email protected].