Divorcees seeking a “second bite of the cherry” have been dealt a blow by the Supreme Court who ruled this week in the case of Mills and Mills that a wife could not expect the Court to increase the periodical payments (also known as spousal maintenance) she was receiving from her ex-husband to cover her increased rent.
At the time Mr and Mrs Mills divorced in 2002 Mrs Mills received a lump sum of £230,000 from the matrimonial assets which was sufficient for her to buy a mortgage free property. Mr Mills kept his business assets. Mr Mills was also to pay Mrs Mills £1,100 per month periodical payments until either a further order of the Court, Mrs Mills remarried or either party died. This is known as a Joint Lives Maintenance Order.
Mrs Mills did not purchase a property that was mortgage free and instead chose to buy a house worth £345,000 by taking out a mortgage.
In the subsequent years Mrs Mills bought and sold several properties but unfortunately, she made some unwise choices and by 2009 she had limited capital and had to move into rental accommodation.
When periodical payments are being paid it is open to either party to make an application to the Court to vary the payments either upwards or downwards. Mrs Mills made such an application claiming that she needed Mr Mills to increase the periodical payments he was paying to her by approximately £4,000 per year so that she could afford to pay her rent. The Court of Appeal increased the periodical payments but the Supreme Court this week unanimously held that the level of periodical payments should not be increased and therefore Mr Mills does not have to pay any extra maintenance to his former wife simply because she has lost all her capital on unwise property purchases and now needs more money for rent. The level of periodical payments remains at £1,100 per month.
Family Courts always aim and encourage parties to achieve financial independence from one another as soon as possible after divorce. This is not always possible especially in situations where there are young children of the marriage or one party has significantly lower earning capacity than the other, or any health or disability issues. There is however a move towards shorter terms for periodical payments. In the case of Mills and Mills the periodical payments were on a joint lives basis but increasingly terms for periodical payments made by the Court tend to be for shorter periods of time, for example 2 to 5 years. The Supreme Court in Mills and Mills has laid down a clear marker that parties should not expect to be bailed out by former spouses if they make unwise financial decisions.
Each marriage and divorce is different and it is important to seek early legal advice on separation to enable you to make informed decisions about how to divide the family assets including properties, savings and investments, pensions, debts and income to ensure a fair and reasonable outcome.
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HMG Law, Family and Divorce solicitors in Oxford and Bicester
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