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Supreme Court ruling stirs lifetime maintenance payment debate

The debate over the fairness of granting lifetime maintenance payments following divorce is not new. The Supreme Court’s recent decision to grant an appeal against the increasing of such provision, in the case of Mills v Mills 2018, sends the message that recipients should not rely on maintenance payments to fully meet their needs, particularly if their own financial behaviour worsens their situation. Equally, however, the ruling does not end maintenance obligations which will reassure those who continue to receive them.

In Mills v Mills, the Supreme Court granted Mr Mills’ appeal against a Court of Appeal order to increase his periodical payments to his ex-wife to cover her financial needs. In a Consent Order made under the terms of their divorce in 2002, Mrs Mills received £230,000 to settle her capital claims. In addition, Mr Mills agreed to make periodical payments amounting to £13,200 per year for an unlimited period.

At the time, Mrs Mills was suffering from ill health and unable to work. When the original Consent Order was made, it was assumed that the capital sum would be used by Mrs Mills to purchase a mortgage-free home for her and her son. As it transpired, she purchased a property for £345,000 with a mortgage.

Over the next seven years, Mrs Mills sold and purchased a string of properties. On each occasion, her mortgage increased and she did not always re-invest the sale proceeds into the next purchase, apparently choosing to spend the balance instead. As a result, her capital steadily decreased and, in 2009, she moved into rented accommodation. By 2015, she had no capital remaining and debts of more than £40,000.

At this point, Mr Mills applied to the Courts for the maintenance to be cancelled or reduced, whilst Mrs Mills applied for the maintenance to be increased. The judge found that there was a shortfall of just over £4,000 a year between the wife’s basic financial needs and the combined total of her earnings and the maintenance. However, the judge also recognised that the deterioration her financial and housing situation was due to the choices she had made.

On this basis, the judge held that it would be unreasonable to expect Mr Mills to cover his ex-wife’s rental costs in full but that he should continue to contribute towards them at the previously agreed rate. To cover her shortfall, Mrs Mills was expected to reduce her general expenditure.

Mrs Mills successfully appealed that decision and the maintenance was increased to £17,292 a year to cover the shortfall and meet her basic needs. Subsequently, Mr Mills’ appeal to the Supreme Court was granted. In its judgement, the Supreme Court questioned the right of the Court of Appeal to increase the periodical payments to cover his ex-wife’s rental costs in full. Contrary to the Court of Appeal ruling, the Supreme Court also maintained that the judge at the first hearing in the lower Court had given a clear reason why the maintenance should remain the same and not be increased, namely that Mrs Mills’ decisions had led to an increase in her basic needs. Furthermore, it held that the Court of Appeal should have considered the value of the original capital payment of £230,000, in line with its judgements in previous cases.