Maintenance: The road to independence

Deborah Jeff reflects on the approach to maintenance following the seminal decision of Mostyn J in B v S and how the principles in that case have subsequently been applied

Mostyn J started to shape modern, needs-based criteria for assessing spousal maintenance in B v S [2012]. It was long overdue and for many years both practitioners and clients had faced hugely inconsistent outcomes in quantum and duration depending on location, judge and generally in the discretion built into the application of the s25, Matrimonial Causes Act 1973 (MCA 1973) factors. The ‘statutory steer’ of a clean break ‘soon after the court considers just and reasonable’, as inserted by the Matrimonial and Family Proceedings Act 1984 by the addition of s25A, MCA 1973, told us that such maintenance was to end unless the payee couldn’t adjust without ‘undue hardship’, but was not of great assistance and didn’t result in significant change.  

It is easily forgotten, however, that it was Baroness Hale in Miller v Miller; McFarlane v McFarlane [2006] who started the conversation on needs-based maintenance, commenting that the most common rationale for adjusting the resources of the parties after marriage was to meet needs which the relationship has generated (para 138).  

This article will explore the case law that followed B v S and how the courts’ approach to maintenance has developed.

SS v NS (Spousal Maintenance) [2014]

In SS v NS (in which I acted for the 39-year-old wife), Mostyn J picked up the reins again on the approach to needs-based maintenance he had started to explore in B v S, recounting the history of the legislative framework of spousal maintenance and the criteria to be applied in assessing such applications. It must be remembered that this case in December 2014 followed the publication in February that year of the Law Commission report on Matrimonial Property, Needs and Agreements (Law Com No 343), which emphasised that ‘the objective of financial orders made to meet needs should be to enable a transition to independence’ (para 3.67). The mood was certainly changing. While SS v NS is familiar to most, it serves well to summarise the essential facts again here before assessing the general trajectory since.

The husband was aged 40, the parties had cohabited since 2002 and had three children aged three, five and seven. They had married in 2007, but separated in 2013. All three children were privately educated. The husband had worked for a bank but after recovering from cancer moved to a less stressful role at a competitor bank. The wife was the homemaker but had started working part-time since the separation and was training as a Pilate’s instructor. The matrimonial assets were valued at over £3m and included unvested shares from the husband’s employers.

The wife’s case was that she should receive spousal maintenance of £60,000 pa for an extendable term of 27 years and an additional 30 percent of the full value of the husband’s net bonus, after school fees were deducted, for as long as the husband received a bonus.

The wife received core spousal maintenance of £30,000 pa, to continue for an extendable term to expire when the youngest child turned 18. The term was extendable if the wife, as the financially weaker party, fell on hard times which justified further support from the husband. The wife also received 20 percent of the husband’s net after-tax annual bonus until 2021. If any part of the bonus was deferred, the payment to the wife was to be equivalently deferred to the time when that part vested. The term of the bonus element for the wife was non-extendable.  

In cases since the courts have applied the principles set out in SS v NS on an application for spousal maintenance, which are:

• that a spousal maintenance award is properly made where the evidence shows that choices made during the marriage have generated hard future needs on the part of the claimant, with the duration of the marriage and the presence of children being pivotal factors;

• an award should only be made by reference to needs, save in the most exceptional cases where it could be said that the sharing or compensation principles apply;

• where the needs are not causally connected to the marriage, the maintenance should generally be aimed at alleviating significant hardship;

• the court must consider a termination of spousal maintenance with a transition to independence as soon as is just and reasonable;

• a term should be considered unless the payee would be unable to adjust without undue hardship to the cessation of payments and a degree of not undue hardship in transitioning to independence is acceptable;

• if the choice between an extendable term and a joint lives order is finely balanced, the statutory steer should militate in favour of the former;

• the marital standard of living is relevant to the quantum of spousal maintenance, but is not decisive and that standard should be carefully weighed against the desired objective of eventual independence;

• the essential task is not merely to examine the individual items in the applicant's income budget, but also to look at the global total and ask if it represents a fair proportion of the respondent's available income that should go to support the applicant;

• where the respondent's income comprises a base salary and a discretionary bonus, the applicant's award might be equivalently partitioned with the needs of strict necessity being met from the base salary and additional discretionary items being met from the bonus on a capped percentage basis;

• there is no criterion of exceptionality on an application to extend a term order and on such an application, the original order's implicit premise that it was impossible for the payee to achieve independence should be examined;

• on an application to discharge a joint lives order, the original assumption that it was too difficult to predict eventual independence should be examined; and

• if the choice between an extendable and a non-extendable term is finely balanced, the decision should normally be in favour of the economically weaker party.

Subsequent case law

Wright v Wright [2015]

The principle-based assessment of spousal maintenance applications first came into the spotlight soon after in Wright.  The husband was an equine surgeon and age 59. The wife was age 51. The parties had two children age ten and 16. After an 11-year marriage, the husband had been ordered in 2008 to pay the wife £33,200 pa on a joint lives basis. On an appeal by the husband in 2012, HHJ Roberts replaced the joint lives order with a term order of six years, tapering off before cessation. The wife then appealed on the basis that the judge had paid insufficient notice to the original joint lives order. Pitchford LJ in the Court of Appeal in February 2015 (ie six weeks post SS v NS) disagreed, emphasising (at para 25) the comments of the district judge at first instance when she said that:

There is a general expectation in these courts that once a child is in year two, most mothers can consider part time work consistent with their obligation to their children.... I do not anticipate her having a significant earning capacity nor would it be reasonable to expect her to muck out stables for the minimum wage. However, she should make some financial contribution.

The district judge had also clearly set out the expectation that the wife would ‘use her best endeavours to develop an earning capacity in two to three years’ time to the extent that it is compatible with [the children’s] care’. The wife failed to seek out any work or attempt to meet her own income needs by the time the case reached the Court of Appeal, with Pitchford LJ noting that she had been put on strict notice as long ago as the first instance judgment that she should do so. The Court of Appeal held the wife’s needs could be met via the term order per Roberts LJ, supporting the move to earliest financial independence and the preference of an extendable term order over a joint lives order.  The message was clear that payees must begin to maximise their earning potential without delay on separation, mitigating their loss and moving towards financial independence.

Aburn v Aburn [2016]

In Aburn, the Court of Appeal allowed the husband’s appeal, after a long marriage and two children, against an order providing for an automatic upward variation in spousal maintenance following the parties' youngest child ceasing private secondary education four years later. This case was needs-based and the deputy district judge at first instance had failed to justify why the wife’s spousal maintenance would increase after a four-year period, doubling the husband’s payment each month.  The Court of Appeal held the deputy district judge was wrong in his exercise of his discretion by making an advance variation that was not needs driven.  Already, it was clear that needs arguments only would prevail.

Taylor v Taylor (Financial Remedies: Clean Break) [2016]

In Taylor, both parties were in their fifties. On the application of SS v NS, the judge ordered a clean break where periodical payments to the wife were both avoidable and ‘unattractive’ (para 37).  The husband was nearing retirement as a professional darts player, after which his earnings would be uncertain. A lump sum of £830,000 would meet the wife’s needs over time, avoid future litigation and provide the parties with certainty of outcome. Her needs were therefore capitalised, avoiding ongoing spousal periodical payments and the possibility of an extension at the end of a term.  

Juffali v Juffali [2016]

In Juffali, after a 12-year marriage and the husband having financed a very lavish lifestyle, the standard of living the parties enjoyed during the marriage was a factor but not determinative.  In applying SS v NS, the wife was awarded a capitalised sum for her living expenses based on an annual figure that would reduce after ten years. The court found that the wife had no realistic entitlement to an annual income that replicated the marital standard of living, ie it was not the ‘lodestar’ (para 152).  

AB v FC [2016]

Then followed AB v FC, where the husband was a professional footballer and while the marriage was just 19 months, there was a very young child. The husband earned circa £1m net pa plus bonuses but was now aged 28 and his career was of course time limited. The wife had previously worked as a beautician but hadn’t worked since the marriage. There was no marital acquest so it was clear this was not a sharing case, rather the issues were how housing needs and income needs would be met. While the standard of living during the marriage had been high, again per SS v NS this was not the ‘lodestar’ for future standard of living. The husband was ordered to pay global periodical payments of £200,000 pa on a joint lives basis, with £80,000 being earmarked for mortgage payments or ‘stockpiling’ for an eight to ten-year period.  The award was to be revisited in seven years, or if the husband’s income were to reduce substantially, but there was to be no sharing of the bonus element of his income. This case was a reminder of how in cases involving short marriages and insufficient capital, in order to meet needs in high income cases the court may make an order allowing ‘stockpiling’, in this case to allow for the purchase of a family home for the wife and the child. Roberts J had acknowledged that ‘the principle of allowing a former spouse to stockpile for the future is a well-recognised device for achieving fairness as between the parties’ (para 79). However, it would only be applied in cases in which the facts warranted it and the facts in AB v FC qualified.  This decision also told us that the joint lives order was not dead in the water, with the age of the child and the wife’s inability to generate sufficient income to meet needs leading to such an order in place of a term order. However, the judicial steer that the case would be revisited in seven years served as a marker, perhaps a psychological quasi-term order for both parties, that the joint lives order was certainly not set in stone, instead being needs-driven.

Conclusion

The second part of this article will review the more recent case law, the lasting influence of SS v NS and summarise the principles that can be applied from this line of authorities in spousal maintenance cases.  

Cases

B v S [2012] EWHC 265 (Fam)

Miller v Miller; McFarlane v McFarlane [2006] UKHL 24

SS v NS (Spousal Maintenance) [2014] EWHC 4183 (Fam)

Wright v Wright [2015] EWCA Civ 201

Aburn v Aburn [2016] EWCA Civ 72

Taylor v Taylor (Financial Remedies: Clean Break) [2016] EWFC B66

Juffali v Juffali [2016] EWHC 1684 (Fam)

AB v FC [2016] EWHC 3285 (Fam)

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Deborah's article was published in the July/August 2022 issue of Family Law Journal, and can be found here.