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Are spousal periodical payments for life of just for Christmas?

Date:25 FEB 2015
Charlotte Sanders
Assistant solicitor
Disputes over spousal maintenance can often be the main bar to parties reaching a settlement on divorce. The wealthier party usually finds the thought of continuing to have to pay some of their monthly income to an ex-spouse galling, whilst the financially weaker party may be worried about making ends meet and whether achieving financial independence will ever be possible.

Balancing these two competing sides is something every family judge must do in cases where there is not enough capital to capitalize a maintenance claim, and they are afforded a wide discretion in order to allow for a fair outcome in each individual case. This article will look at how judges have used their discretion in some recent cases with regard to the term of a periodical payments order, and whether this is an area that requires further legislation, as proposed by Baroness Deech in the Divorce (Financial Provision) Bill.

The legislation

Under s 23(1)(a) of the Matrimonial Causes Act 1973 (the 1973 Act) the court can order periodical payments, and for such term as the court thinks appropriate. Under s 28(1)(a) of the 1973 Act the payments can begin after the date of the application, and cannot extend beyond the death of either of the parties to the marriage, or the remarriage of the party in whose favour the order is made.

Under s 31(1) and (2) of the 1973 Act periodical payments orders (and interim periodical payments orders) can be for nominal or substantive amounts, and the orders can be varied, discharged, suspended or even revived (although revival by way of variation is not possible if the term has expired).

As every family practitioner will know, s 25(A) of the 1973 Act sets out that the court has a duty to consider whether a clean break is appropriate. In seeking to achieve this, the court can impose a s.28(1A) bar, which specifies that the recipient party is not entitled to apply to extend the term of the order. If there is no s 28(1A) bar then the recipient party can apply to extend the term, so long as the application is made before the expiration of the term (Jones v Jones [2000] 2 FLR 307).

Case law – how do judges use their discretion?

Although the 1973 Act provides judges with the above framework for periodical payments orders, they are still left with a large discretion in the application of the rules. Below is an overview of the judiciary’s current approach to the terms of spousal maintenance.

The leading case on term orders is Fleming v Fleming [2003] EWCA Civ 1841, [2004] 1 FLR 667. In Fleming there was a term order but no s 28(1A) bar. The wife applied to extend the term, and the Court of Appeal found that there was an 'obligation' to consider whether it would be appropriate to terminate the order. In the case the payee was earning and cohabiting so that her combined income with her cohabitee met her outgoings without her having to use savings, and therefore it was held that there was no justification for an extension of the term.

In Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, [2006] 1 FLR 1186 Lord Nicholls commented that the White case had shattered the glass ceiling of the reasonable requirements of the claimant in a claim for periodical payments as well as for capital. The House of Lords went on to find that where there was not enough capital to make a clean break fair. The wife was awarded periodical payments which were not limited to her maintenance needs nor was a term order imposed. Their Lordships preferred to place the onus of a termination of periodical payments upon the payer by way of an application to vary.

More recently, in the case of L v L (Financial Remedies: Deferred Clean Break) [2011] EWHC 2207 (Fam), [2012] 1 FLR 1283 a joint lives order was reduced in the High Court to a lower figure, for a period of just over two years and with a s 28(1A) bar imposed. King J held that the trial judge had failed to explain why she had made a joint lives order, why a clean break had not been achieved and she had not properly assessed the ability of the payer husband to pay maintenance for life.

However, in A v L (Departure from Equality: Needs) [2011] EWHC 3150 (Fam), [2012] 1 FLR 985 Moor J stated that it was important to balance unfairness between the parties. In this case he declined to make a term maintenance order, as there was not enough capital to capitalise the wife’s maintenance claim.

In Yates v Yates [2012] EWCA Civ 532, [2013] 2 FLR 1070 the wife applied to vary, extend, increase and capitalise her maintenance. At first instance, she was granted a lump sum of £450,000, which was reduced by £58,000 by the Court of Appeal. It was stated that 'it is the authority of Fleming which cautions against such extensions unless exceptional circumstances have been established'.


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The principles behind spousal maintenance were recently reviewed in the case of SS v NS (Spousal Maintenance) [2014] EWHC 4183, [2015] 1 FLR (forthcoming). In this case the quantum and duration of spousal maintenance were in dispute. The husband argued that there should be tapering maintenance over 11 years with a s 28(1A) bar. The wife argued that she should receive maintenance for 27 years (she was 39 and the husband was 40). Mostyn J held that the wife should receive spousal maintenance to expire when the youngest child reached 18 (11 years away), but with an extendable term.

Mostyn J summarised the guidelines on spousal maintenance claims in general, and in relation to the terms of maintenance orders he said the following:
  1. 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.
  2. 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.
  3. The marital standard of living is relevant to the quantum of spousal maintenance, but is not decisive. That standard should be carefully weighed against the desired objective of eventual independence.
  4. There is no criterion of exceptionality in an application to extend a term order. On such an application an examination should be made of whether the implicit premise of the original order of the ability of the payee to achieve independence had been impossible to achieve and if so, why.
  5. On an application to discharge a joint lives order an examination should be made of the original assumption that it was just too difficult to predict eventual independence.
  6. If the choice between extendable and non-extendable term is finely balanced the decision should normally be in favour of the economically weaker party.
From this it seems as though the recent trend is to strive to achieve a clean break wherever possible, even if that means causing some hardship in the short term. It is certainly a tougher approach on the financially weaker party than the older case law on the subject.

Proposed changes

In tandem with the above trend, there is a Private Members Bill working its way through the House of Lords at the moment, supported by Baroness Deech, which proposes that spousal maintenance should be restricted to a total of three years, except in exceptional circumstances. Baroness Deech argues that maintenance laws have not been properly overhauled since 1857 and a more modern approach is required, set out in the Divorce (Financial Provision) Bill.

This Bill goes much further than Mostyn J set out in SS v NS. Indeed in that case he commented on the Bill, and quoted the obiter comments of Lord Hope in Miller v Miller; McFarlane v McFarlane when he stated that 'it can be seen how unfairly the principle …discriminates against women' and that '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'.

Although the Bill would result in greater certainty, it is submitted that this comes at a significant cost, and risks the financially weaker party being left in difficult circumstances. It also is likely to lead to discrimination, with the majority of stay at home parents still being women. Although it cannot be denied that there is uncertainty in family law, due to the discretion given to human judges, that discretion allows a great deal of flexibility to strive for the fair outcome. Parliament has already intervened in this area (well after 1857) by virtue of s 25A of the 1973 Act and the search to achieve a clean break if possible. This allows the court to weigh up all the factors of the case, rather than being forced to impose a clean break rigidly after three years (save in exceptional circumstances).

Conclusion

It is submitted that the courts have a high level of discretion for a reason, and that this flexibility is essential to be able to reach a fair award. Judges are able to balance the future needs of a spouse with the goal of eventual financial independence for both parties. This may result in no order for periodical payments, an order for three years or an order for a great deal longer. Arbitrarily limiting such an award to three years risks creating real financial hardship and a greater burden on the state as a result. It also is highly likely to be discriminatory, as women are still more likely to make economic sacrifices during the marriage for the benefit of the family.

The court already has the power to limit maintenance claims by using the s 28(1A) bar, and this could be used to terminate maintenance claims after three years, if appropriate. The key phrase is, of course, ‘if appropriate’ as this allows judges the flexibility necessary to reach a fair outcome factoring in all the individual circumstances of the case.
The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.
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