We have finally received the long awaited Supreme Court judgment in the case of Mills v Mills which followed cross applications by the husband and wife to vary a Spousal Maintenance Order, which was made back in 2002.
Following a marriage of some 15 years, Mr and Mrs Mills separated and reached an agreement in respect of the financial matters arising from their separation. This was subsequently recorded in a Consent Order. Under the terms of the Consent Order Mrs Mills received a lump sum of £230,000 and Spousal Maintenance payments of £13,200 per annum.
Mr Mills understood that the lump sum would be used to purchase a home for Mrs Mills and the parties’ son, without the need for her to obtain a mortgage (as she had been suffering with ill health). Despite her health issues, Mrs Mills made the decision to purchase a larger property, securing the balance with a mortgage.
During 2002 and 2009 Mrs Mills bought and sold a number of properties, and with each purchase she increased her mortgage lending. In addition to this, she did not always reinvest the sale proceeds in her next property and subsequently Mrs Mills’ capital decreased and by April 2015 she had no capital and a significant amount of debt.
In 2014 Mr Mills applied to discharge or decrease the Spousal Maintenance he was paying. This was on the basis that, firstly, Mrs Mills had lost the capital she retained as per the agreement in 2002 (and his position was that this was due to Mrs Mills’ financial mismanagement of her money’) and, secondly, that she was in a position to work more, thus increasing her income. At the same time, Mrs Mills made an application to increase the Spousal Maintenance, on the basis that she was unable to meet her basic needs.
The trial Judge found that Mrs Mills had a shortfall of £4,092 per annum between her current needs and, when coupled with her own earnings, the Spousal Maintenance payments. The Judge found that, although Mrs Mills had not been profligate in her actions, she had not wisely managed her finances and her current needs (in particular her need to rent) had been increased by her actions. As such, the Judge declined to make the Order and Spousal Maintenance continued at the same level.
Mrs Mills applied to the Court of Appeal who granted her appeal, considering that the trial Judge had not given sufficient reasons why all of her basic need should not be met. The Court of Appeal increased the Spousal Maintenance to £17,292 per annum.
Mr Mills applied to the Supreme Court to overturn the Court of Appeal’s decision, and the Court gave judgement on 19 July granting Mr Mills’ appeal. Mr Mills was given permission to appeal to the Supreme Court on a single ground – that being whether, in light of the fact that the Court had already made a provision for the wife’s housing needs (by way of the capital sum), whether the Court of Appeal was entitled to interfere with the trial Judge’s decision not to Order an increase in payments.
The Court of Appeal’s decision did create some uncertainty between family lawyers as the views of the Court had seemed to be that separating parties should become financially independent from one another much sooner than had been expected historically. The real question family lawyers then had was ‘does a person’s increased needs (which they have increased themselves) justify a second bite at the cherry?’
It’s important to note that only a total clean break between the parties will avoid future applications for varying spousal maintenance (i.e. seeking an increase, decrease or capitalisation). But this isn’t going to be possible to achieve in all cases.
Should you be considering a separation, it is extremely important that you seek legal advice as to the financial matters surrounding your separation. At Emin Read Solicitors we offer clear and concise legal advice. Should you wish to have a free 30 minute, no obligation consultation, please contact Claire Tennant or Laura Sherlock (email@example.com) or 01424 775967.
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