For Richer & Forever: Is Spousal Maintenance a Meal Ticket For Life?

Faced with the question, how many knights does a retired sovereign need, King Lear responded: “O, reason not the need! Our basest beggars are in the poorest things superfluous,” (Act II Scene IV) thus setting out on the long, hard path by which he learned what real poverty is. How poor we are depends on how poor we feel; and while we could have been comfortable in Victorian England despite lacking a car, a properly equipped kitchen, a telephone and a source of information, such as a computer, it is unlikely that we could dispense with those resources today.

Spousal maintenance is one of the most contentious issues between divorcing couples. How much; for how long; and what is maintenance supposed to cover? On the whole it is generally accepted, or at the very least in principle, that on divorce the economically stronger will be obliged to support the economically weaker party.

Section 23 (1)(a) of the Matrimonial Causes Act 1973 (MCA 1973) gives the court the power to order periodical payments. Of more interest to practitioners perhaps, is the decision of Mr Justice Mostyn in SS v NS (Spousal Maintenance) [2014] EWHC 4183 (Fam). While Mostyn J found that it would be impossible to adopt a formulaic approach to calculating spousal maintenance, he suggested that it should be calculated on the basis of needs and the preference should invariably be for an extendable term rather than joint lives orders.

It has never been the law that a wife should or would automatically receive an equal share of her husband’s income on divorce, but this view puts the amount of maintenance squarely back onto the wife’ s needs or better yet her budget. It is also impractically to say that one can be wholly creative with the budget sought, to take reasonable needs up to more of an ‘equal share’.  A good example of this is the case of BD v FD [2016] EWHC 594 (Fam), where the wife put in a budget that was more than double what the family had spent each year as a whole during the marriage.  Rightly so in this case the Judge paid attention to the husband’s evidence of the level of family expenditure when setting a realistic budget for the wife’s reasonable needs. Indeed MCA 1973, ss 25A(1)-(2) stipulate that spousal maintenance should be terminated as soon as is ‘just and reasonable’. A maintenance term should be considered unless the payee would be ‘unable to adjust without undue hardship’ to the ending of the payments. This suggests that unless undue hardship would likely be experienced the court ought to provide an end date to a maintenance order.

In SS v NS (Spousal Maintenance) Mostyn J carefully considered the historical origins of spousal maintenance. The judge also set out guidance to assist judges in deciding whether spousal maintenance should be paid and, if so, the quantum and term. To summarise briefly, the parties were poles apart in what they felt would be reasonable on-going spousal maintenance. The wife sought £60,000 per annum for a term of 27 years, which would be extendable, and 30% of the husband’s net bonus capped at £70,000. The husband had offered periodical payments of £24,000 per annum for 12 months falling to £18,000 per annum for a further four years and then falling to £12,000 per annum for six more years, whereupon there would be a bar to extension. It was ordered that the wife should receive spousal maintenance of £30,000 per annum for an extendable term which would expire when the youngest child was 18 (in 11 years) and 20% of the net bonus capped at £26,500 per annum. This was sufficient to meet her needs and was a fair division of the husband’s income after school fees and spousal maintenance had been met from it.

The rational for imposing the obligation of spousal maintenance is as Baroness Hale stated in Miller v MillerMcFarlane v McFarlane [2006] UKHL 24, to meet needs which the relationship has generated. Furthermore, Lord Hope also stated in Miller: ‘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’ effectively resulting in an economic effect on the relevant party’s independent financial stability and employment prospects. These are needs directly generated as a result of choices made within the marriage

However from the decision in SS v NSit was emphasised that judges are obliged to look at the facts of each individual case carefully when deciding whether to order spousal maintenance. Gone are the days when clients could expect to receive financial support indefinitely. In fact Mostyn J approved of view in the Law Commission report Matrimonial Property, Needs and Agreements(Law Com No 343, 26 February 2014) that: ‘…the transition to independence, if possible, may mean that one party is not entitled to live for the rest of the parties’ joint lifetimes at the marital standard of living, unless he or she can afford to do so from his or her own resources’, remarking that it is a mistake to regard the marital standard of living as the guide, because:

  1. as time passes how the parties lived in the marriage becomes increasingly irrelevant, and
  2. too much emphasis on it imperils the prospects of eventual independence

In the case of Wright v Wright [2015] EWCA Civ 20, although District Judge Cushing had ordered maintenance to be paid on a “joint lives” basis as Mrs W had not worked for nine years and the children were then aged 3 and 9., the judge found that it would be appropriate to order maintenance to be stepped down over a period of five years until 2019 when it would be terminated. At this point Mr W would be 65 and due to retire and the children would be aged 15 and 21. The judge left open the possibility of Mrs W extending the term or varying the level of maintenance until 2019. The Court of Appeal refused Mrs W permission to appeal the decision. Lord Justice Pitchfork endorsed the comment of DJ Cushing in the 2008 judgment that “there is a general expectation…that once a child is in year 2, most mothers can consider part time work consistent with their obligation to their children” and found that HHJ Roberts had given sufficient reasoning to support her decision.

If there is a practical lesson to be drawn from Wright, it is surely to ensure that the reasons underpinning a joint lives order are clearly documented and DJ Cushing had recorded her expectations of Mrs W in her judgment. In a consent order, appropriate recitals can set out the assumptions underlying the maintenance provisions which will assist both parties when the time comes to vary, whether in mediation, negotiation or by way of court application.

So for husbands who are subject to payments under a joint lives maintenance order, is this the right time to seek a variation?  Some might be worried that their own income has risen in the meantime and could this result in a risk of an increase rather than a decrease?  The view coming from the courts appears to be that an increase in the payer’s income alone will not be sufficient to justify an upward variation, unless the original order was set much lower than what the wife truly needed, because the husband could not afford what was actually needed. The clearest opportunities for upward variation are a deterioration in the wife’s circumstances, such as loss of earning capacity through illness (her own or the children) or, possibly, loss of a cohabitee whose contribution to living costs had been taken into account previously.

It has been suggested that these recent cases show that judges are becoming more robust about the notion that the financially weaker party should be supported for life and has heralded the end for joint lives maintenance orders. While the court is guided by legislative provisions, currently s.25 of the Matrimonial Causes Act 1973, the final decision in respect of appropriate maintenance provision and needs ‘’cannot be pressed into a formula which provides an answer, and it is right that that should be so, [for the assessment is] … elastic, fact-specific and highly discretionary” (SS v NS [2014) at para 40). This is in stark contrast to, for example, Scotland and Sweden where legislation provides that, save in highly exceptional circumstances, the obligation to maintain is limited to a short period. In Scotland the maximum maintenance term is a mere three years regardless of the financially weaker party’s circumstances.  In Sweden it is referred to as a “transitional period” and the starting point in law is that divorce terminates all economic ties and that each spouse should be responsible for his or her own support.

In England and Wales such restrictions have met strong criticism and judicial discretion continues to be favoured. The expectation is that Judges will want to see hard evidence of the efforts of the receiving party to maximise their earning capacity, however, absent statutory reform, the subjective nature of financial awards will continue to remain the same.

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