The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
Important reminder of the approach taken by a Court in relation to applications for Maintenance Pending Suit
Feb 3, 2021, 10:39 AM
Meta Title :Important reminder of the approach taken by a Court in relation to applications for Maintenance Pending Suit
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Feb 3, 2021, 10:37 AM
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The recent case of Rattan v Kuwad  EWCA Civ 1 has provided family lawyers with an important reminder to consider the way in which the courts should approach applications for maintenance pending suit (MPS).
The original application came before Deputy District Judge Morris who ordered that the husband pay the wife £2,850 per month on an interim basis to provide for the shortfall in her income needs, and a school fees order was also made. Part of the purpose of the MPS order was to allow the wife to make mortgage repayments on the former matrimonial home.
In the one-day hearing, DDJ Morris ordered that the mortgage on the matrimonial home be changed to a fixed rate, thus reducing the wife’s monthly income needs by approximately £600 per calendar month. DDJ Morris refused to order for additional monies to be paid to the wife in order to conduct repairs on the former matrimonial home as there was not enough evidence to support them being necessary. DDJ Morris rejected the husband’s argument that he was unemployed and was struggling to seek employment, in her words his “case is not clear, it is confused” [pgh 24]. DDJ Morris also expressed a degree of scepticism as to the husband’s financial dealings in relation to a transfer of funds to India.
The husband appealed alleging that DDJ Morris had failed to conduct a proper financial analysis of the party’s assets. That appeal was allowed by HHJ Oliver on the basis that DDJ Morris had made 3 fatal errors:
A lack of analysis into the wife’s income needs;
The inclusion of the school fees order; and,
An assumed reduction in the mortgage repayments of £600pcm
HHJ Oliver held that these errors meant the court had failed to cover the requirements under S.22 Matrimonial Causes Act 1973 which state that applications for maintenance must be reasonable and should only take into account immediate expenditure without the focus being drawn away from the final hearing determination of long-term expenditure needs.
The wife appealed to the Court of Appeal who reinstated the order of DDJ Morris stating that relevant factors had been analysed in sufficient detail to meet immediate needs. A reminder was given by the Court of Appeal to make detailed analysis only where the case is in need of it. At paragraph 48 the Court of Appeal highlighted:
“The court is required to undertake such analysis as is sufficient to be satisfied that the ultimate award is “reasonable”. In some cases, this might require a detailed examination of a budget, in others, such as the present case, it will be immediately apparent whether the listed items represent a fair guide to the applicant’s income needs” [pgh 48].
Issue was also taken by HHJ Oliver’s analysis of immediate. A word of caution was given in the judgment in the approach to be adopted by judges when faced with MPS applications, at paragraph 49 the Court of Appeal stated in relation to the word “immediate” that “the fact that some items of expenditure are not incurred every month does not mean they should be excluded for the purposes of determining what maintenance is reasonable” [pgh 49].
Importantly, it was highlighted that if the needs set out in the MPS application were broadly on par with income and expenditure needs set out in the Form E, then it was not necessary for an applicant for MPS to provide a list of income needs distinct from that set out in the Form E.
The Court of Appeal noted that the school fees order was reasonable and necessary to meet immediate needs and that the original application “did not require any extensive analysis but was an application which could be determined justly with a succinct summary and consideration of the relevant factors”. The original clause relating to the mortgage payments was not reinstated by agreement of the parties.
This case serves as useful reminder that the court should paint with a broad brush when determining applications for MPS. The court’s focus should be on making provision that is “reasonable” and in many cases that will not involve a detailed examination of the applicant’s budget, which can include expenditure that is not incurred every month and does not necessarily need to be different to that provided with the applicant’s Form E.