Are spousal periodical payments for life of just for Christmas?

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'.