7 April 2015

The end of generous pay-outs to ex spouses? Judge tells ex wife of equine surgeon to get a job

In a decision in February 2015 that was widely reported by the media as being a 'game-changer' in terms of the English court's attitude to financial provision on divorce (particularly amongst the wealthy), an Appeal Court judge upheld a judgment that there should be a staged cut-off of ex-spousal maintenance that a millionaire equine surgeon had previously been paying his former wife. 'Divorcees with children over 7 years old should be working for a living' concluded the media. Yet how much did the case really change the way the family court approaches ongoing spousal maintenance after divorce?

A question of affordability

Mr Ian Wright, aged 59, nearing the end of an illustrious career as a horse surgeon, had applied to vary/terminate the overall level of his maintenance obligations of £75,000 per year (of which £33,000 was for Mrs Wright's personal expenditure) on the grounds that he was due to retire and it could no longer be afforded. He argued that the proportion of his income passing to his ex wife (together with boarding school fees for his older daughter) was far higher than the original judge who determined his divorce in 2008 had envisaged and was unsustainable.

The court last year agreed. Mrs Wright, aged 51, appealed that decision. Mrs Wright had previously been in receipt of ongoing maintenance for life, despite being told in crystal clear terms by the judge who dealt with her divorce in 2008 that she would be expected to make a financial contribution within a couple of years and to fit this in with her child care responsibilities. Lord Justice Pitchford in the Court of Appeal last month rejected her appeal, upholding the original decision of the lower court which criticised Mrs Wright and her attitude towards paid employment.

A duty to maximise earning capacity

Mrs Wright had resisted any paid employment in the years since her divorce, and failed to maximise her earning capacity, citing as justification her responsibilities for childcare, housekeeping, animals and trees! The court found that Mrs Wright had made no effort to find work or update her skills (previously working as a legal secretary and administrator) and criticised her attitude that she should be supported for life. Her older child was now at boarding school and with a younger child aged 10 it was possible to fit a job around child rearing.

She was robustly criticised for her attitude. 'Vast numbers of other women just get on with it and Mrs Wright should have as well'' said Lord Justice Pitchford, who added that working part-time may provide children of a certain age with a good role model. He noted that there was now a general expectation that women with children in year two of school education (so 7 upwards) could work part-time and earn an income themselves.

A break from the past?

On closer inspection, however, has the case changed the law? Has it been as radical and groundbreaking as headlines would suggest? The principles regarding maintenance were set out by the House of Lords in Miller v Miller and McFarlane v McFarlane [2006 UKHL 24, [2006] 2 AC 618 and those principles remain binding on all the lower courts. The Court of Appeal can't overturn them. On retirement it has long been common for payers of ex-spousal maintenance to vary downward/extinguish their obligations. Indeed, in many cases, both parties' needs can be met by pension income at that stage instead. Here, however, Mr Wright was able to apply in advance of retirement in order to make proper financial planning for his future, which may encourage the payers of ex-spousal maintenance to apply to vary their obligations sooner than was previously the case. The fact that Mrs Wright was in her early 50s and able to work, unlike Mr Wright who was nearly ten years older and nearing retirement, also influenced the court's thinking.

The court has always been required, when considering a variation to a maintenance order, to consider not only the effect on the payer, but the effect on the party receiving payments to adjust without undue hardship to the termination of those payments. For this reason, Mrs Wright's payments will be phased out incrementally, to enable her to adjust accordingly.

The court, too, has always had a duty to encourage divorcing couples towards the goal of independence from one another; a 'clean break' is the aim wherever possible. The latest decision reinforces the notion that it is not only in terms of capital that the court must strive to help divorcing couples separate their lives, but also ongoing financial support.

Wind of Change

Certainly, the wind of change is blowing through the family court, which has long adopted a protective view of mothers, historically ordering spousal maintenance to be paid for the parties' joint lives, or until the children had reached 18 years of age. The generosity of the London courts in this respect has led to London's reputation as the divorce capital of the world. An obligation to maintain an ex spouse into the future was to meet needs which the relationship had generated, e.g. to compensate a party for loss of earnings due to child rearing, but it has always been open to either party to review the arrangements as circumstances change.

What the Wright case highlights is that the courts are promoting independence more than ever. Practitioners are aware that certain High Court judges have been championing a move away from ongoing ex-spousal maintenance. For example, Mostyn J most recently in the case of SS v NS [2014] EWHC 4183 (Fam) in December 2014, noted that it was a strange fact that there had not been much ethical questioning of why there should be an obligation to support an ex spouse after marriage. He ordered, in that case, a an extendable fixed term maintenance order and railed against the marital standard of living as justification for ongoing spousal support at the same level. He cited a recent Law Commison's report on need which stated:

"…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'.

He stressed:

'I would emphasise this…sentence. It is a mistake to regard the marital standard of living as the lodestar. As time passes how the parties lived in the marriage becomes increasingly irrelevant. And too much emphasis on it imperils the prospects of eventual independence'.

I was in court on another case before Mostyn J in December, the month he handed down his judgment in the case of SS v NS. Interestingly, despite the emerging re-emphasis on independent living post divorce, he indicated to the parties in our case that it would be 'ridiculous' for the very wealthy husband to expect his wife to work even in a low paid capacity. Doubtless this was because she had a young family, had not worked throughout the marriage and such were the significant resources available to the family and the standard of living throughout the marriage, that there was no issue about the affordability of spousal maintenance. Cases will continue to be decided on their individual circumstances.

An end to a meal ticket for life?

It is too simplistic, therefore, to conclude that judges will henceforth expect every divorcing spouse to work and support themselves by a finite date. Change is in the air, but it is early days and there are no absolutes. The family court offers a bespoke service – there is no tariff, no set rules by which cases are determined – what is ordered varies depending on the individual needs of the family.

In many cases, it is unrealistic for both parties not to work, given the limited resources available to couples suddenly needing to support two households. The recent cases do not immediately herald the end of ongoing spousal support. It will continue to be ordered by the courts in appropriate cases, where children are young and the family resources are such that ex-spousal maintenance is both needed and can be afforded without undue hardship to the payer.

Only time will tell whether this heralds a new dawn in respect of ex-spousal maintenance and an end to the 'meal ticket for life'.

 

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