Olivia Murphy, Tanfield Chambers
The Court of Appeal recently decided a discreet argument regarding periodical payments orders in the case of Aburn v Aburn
 EWCA Civ 72,  FLR (forthcoming). So, what are the implications for automatic variations in periodical payments?
Practitioners and judges alike will be familiar with the concept of stepped periodical payments. However, the commonplace order will be for periodical payments to be stepped downwards based upon either particular trigger events (such as children reaching their majority, a payment of a lump sum order) or after a specific period of time during which it is judged that the recipient of the periodical payments can, or ought to, have taken steps to increase their earning capacity. Given the commonplace nature of these orders, it is perhaps understandable that a deputy district judge (DDJ) presiding over the final hearing of the financial remedies application of Mrs Aburn (and then a circuit judge hearing the appeal thereafter) thought perhaps an order 'stepping up' periodical payments upon a particular trigger event was a clever solution, thereby falling into what we now know was an error of law and an impermissible exercise of his judicial discretion.
I shall briefly sketch out the facts of the appeal. At the time of the first instance final hearing, the Mr Aburn (H) was working as GP. Mrs Aburn (W) was not employed but had been performing homemaker duties since the birth of the first child of the family. There were two children of the family, one of whom was a minor, aged 14. This child was still being privately educated and it was anticipated that she would remain in private education until she completed secondary education.
The effect of private education on the order
As with so many middle class families, private education was a significant drain on the husband’s healthy GP income. It was a limiting factor to the quantum of periodical payments that could be awarded to W. The DDJ assessed W’s income needs and, having assessed her earning capacity, found that she had a shortfall of £1,242 pcm. The DDJ then looked at H’s ability to pay. As a consequence of this exercise the court ordered H to pay to W £1,000 pcm, linked to inflation, until the child had left school. So far, this was an entirely unremarkable order. However the DDJ decided that upon this child ceasing secondary education, the payments would be automatically increased by a sum equivalent to 50% of the school fees, which at that point would no longer be payable.
Grounds for the appeal
H appealed the automatic upward variation of the periodical payments order, arguing that the increase (which would roughly double W’s periodical payments) was unreasoned and lacked reference to W’s needs. Furthermore, argued H, there were no findings or indeed evidence as to either party’s needs at that point in the future, and no consideration had been taken of the costs of tertiary education, the funding of which, believed H, would fall upon him.
Reasoning of the Court of Appeal
The Court of Appeal allowed the appeal. The periodical payments order was made on a needs basis and having assessed W’s needs as being met by an order for £1,000 per month, the Court of Appeal could see no reasoned basis for the uplift. The Court of Appeal acknowledged that a review of W’s maintenance could be appropriate at the point where the cessation of private school fees freed up income for H, but that it was impossible to predict (at the stage of the final hearing) what the outcome of that review might be, 4 years hence.
The Court of Appeal agreed with H that the totality of the school fees could not be regarded as being available for distribution after the child left secondary school, as the child may still have some financial needs. There were too many other factors which would need to be considered, and the DDJ had been plainly wrong to order an upward variation on the basis of just one known element to the balancing exercise (being the cessation of school fees).
An application would have to be made at the relevant future time, if one of the parties wished to make it, and any variation should be considered at that point.