The expression “meal ticket for life” is the latest media speak for its 1980’s equivalent “taken to the cleaners”. It is designed to strike fear in the hearts of all hardworking spouses that their future income will never be their own. It is also derogatory to homemaker wives and homemaker husbands who work hard caring for children, but it makes the headlines.
Back in the real world, and the law courts, maintenance after marriage is less a “meal ticket” for life and more a “season ticket” to financial independence for both spouses, reflecting fairness and taking into account the clean break principle.
Two recent cases have dealt with the issue of determining future maintenance: Mills v Mills [2018] UKSC 38 in June 2018 and Waggott v Waggott [2018] EWCA Civ 717 in April 2018. Now the headlines have died down, let’s look at the facts and the principles which apply: -
This case received a lot of negative press centred on Mrs Mills’ alleged financial mismanagement. However, the Court of Appeal did not find this to be the case and varied Mrs Mills’ maintenance upwards on the basis of need, but only by £341 per calendar month.
Briefly, the parties had agreed a settlement in 2002, which, amongst other things, provided for Mrs Mills to receive capital of £230,000 and Mr Mills £23,000. Mr Mills was also ordered to pay spousal maintenance of £13,200 per annum for the parties’ joint lives (i.e. until Mr Mills died or retired). Mrs Mills bought a house for £345,000 using her capital payment and a mortgage of £125,000.
By 2009 Mrs Mills had bought and sold three properties but had depleted the capital in the properties significantly. By 2015 she was renting a house and no longer owned any properties. Mr Mills applied to the court for the spousal maintenance to be discharged by way of modest lump sum or for a fixed period to be set and/or for the payments to be reduced. Mrs Mills made her own application for the payments to be increased to assist her with her rent as she had no capital left and debts of approximately £42,000. The judge denied both applications and declined to vary the payments. He found that Mrs Mills had not managed her finances wisely and her needs had increased due to her own choices.
Mrs Mills appealed the decision and was successful at the Court of Appeal as it was held that the judge at the first hearing had not given sufficient reasons why her housing needs should not be met by way of periodical payments. The payments were increased to £17,292 per annum.
Mr Mills appealed that decision to the Supreme Court, which was heard on 6 June 2018. The Supreme Court unanimously allowed the appeal, concluding that the judge at the first hearing was entitled to decline the application to vary the order for periodical payments. This is because Mrs Mills could not have a ‘second bite of the cherry’ in relation to her housing needs.
In Waggott, both parties were accountants when they married in 2000. In 2001 Mr Waggott accepted alternative employment and the couple had to move. Mrs Waggott left her job and did not work again, save for a brief period in 2002/2003. The couple have one child together, born in 2004. The marriage broke down in 2012 and the couple separated. At first, they both agreed that the capital should be shared equally but disagreed about the level of maintenance Mrs Waggott should receive.
The matter went to a final hearing and, eventually, Mrs Waggott was awarded £9.76million. Mr Waggott was awarded approximately £7.8million. Mrs Waggott was also awarded maintenance for the parties’ joint lives. The Judge expected Mrs Waggott to have obtained paid employment after 4 or 5 years but did not think it fair to set a term on the maintenance now to take account of assumed future earnings.
Mrs Waggott appealed the decision and sought 35% of Mr Waggott's net bonuses payable for the years up to and including 2019 (to be paid until 2022), and maintenance of £190,000 per year for the parties' joint lives. She argued Mr Waggott’s earning capacity was a matrimonial asset and should be shared jointly and she should not be expected to use her capital for income.
Mr Waggott cross appealed and argued that the judge should not have made a joint lives maintenance order. He argued that Mrs Waggott could adjust without undue hardship.
The Court of Appeal allowed Mr Waggott’s appeal and ordered a three-year non-extendable term for spousal maintenance. The court found that an earning capacity is not a matrimonial asset and Mrs Waggott’s capital should not be protected.
The law requires courts to look to achieve financial independence between spouses going through divorce as soon as possible. There is no doubt that our courts are getting meaner than they once were, but the broad discretion afforded to judges means that each case has to be looked at individually. There remain multiple possible outcomes even between judges in the same building, which is unhelpful for those locked in an expensive dispute. The courts and parliament have sacrificed clarity on the altar of flexibility.
If you need advice on maintenance, our team of specialist family lawyers can assist. Do not hesitate to contact us at mail@burgessmee.com or on 0203 824 9950.
