"A light touch". Variation of maintenance: reconsideration of how much and for how long it is paid

There is no such thing as a job for life. Even if you work for yourself, things change. Companies go out of business, house values fall, some earn more and some earn less. What happens when those changes impact on a payer's ability to comply with an earlier court order for maintenance?

In Morris v Morris [EWCA] Civ 812, the English Court of Appeal considered all of these changes, and the application of the law to such changes on an application made to vary a recent financial order. The judgement was given on 10th August 2016, dealing with an original order made on 14th August 2014 (almost exactly 2 years earlier). At that time the court said that the net assets, after liabilities, totalled ￡560,000. The wife was relying on state benefits to enable her to meet her needs. Although they had divorced by the time of the second round of litigation, it is convenient here to call the parties "husband" and "wife".

The husband applied to the court in February 2015 to vary the 2014 order for him to pay maintenance to his ex-wife for herself and the children. She meanwhile had applied to have him committed to prison for breach of the requirement to pay such money. Her application failed for procedural reasons, and once the court had dealt with that, the ex-husband's application was considered.

Given how recently all the circumstances of the case had been considered by District Judge Brasse, as required by the Matrimonial Causes Act 1973 section 25, the husband had to meet a high standard if he wanted to persuade the court in 2015 to vary his obligations, using its powers under section 30(7)(a). There had to be regard to all the circumstances of the case, which must demonstrate a significant change since the original order was made, and the court has also to consider whether it would be fair to put an end to the liability to pay maintenance, and if so, how. Above all, the court is required, under Rule 1.4(1) of the Family Rules, deal with cases proportionately.

The Court of Appeal in August 2016 considered the 2015 order made by HHJ Hughes on the husband's application. In 2015 the judge had reduced his payments to the wife from ￡2000 pm to ￡1750 pm (not ￡800 as the husband had wanted), having heard evidence on the following changes of circumstances, amongst others:

a) The wife had obtained full-time employment almost immediately after the 2014 hearing. So she earned a bit more.
b) The husband's company went into administration, and so he could no longer use a flat provided by the company. He began working again, under a contract of employment.
c) The house had its priced reduced by ￡250,000 to secure a sale eventually in August 2015. The 2014 order had provided that the husband should pay the arrears of mortgage and maintenance from his fixed share (so he got almost nothing when it sold) and the wife was to have the balance, which was less than had been hoped.

Court of Appeal

Most financial settlements on divorce never go anywhere near the Court of Appeal. By far the majority are made by agreement (which must be recorded in a court order, made on divorce), sometimes after mediation, often with the help of solicitors; and others are the subject of arbitration awards. Those that do go to court are seldom the subject of appeal, not least because of the huge costs of litigation and because the right to an appeal is not automatically given.

As can be seen from the figures above, there was not much money to start with. The husband had not had lawyers for the earlier hearings, and in the Court of Appeal his barrister worked for free. The wife's costs were modest, considering how bitterly fought the litigation had been, and how the husband had expressly said he would make things difficult for her.

The Court of Appeal listened to careful arguments by the husband's barrister and by the wife's barrister, about how fair it was for the 2015 judge dealing with the husband's application for variation, not to have gone into great detail in examining all the background to the case. The problem was that not only would that have effectively meant an appeal against the 2014 order (which was not asked for) but the court had to be shown that there had been significant changes which were not expected. The husband also wanted to shorten the time over which he had to pay (the 2014 court order said until he was 65, so on retirement, and he got the bigger pension fund to compensate for having less money from the house sale).

The Court of Appeal decided that the restrictive approach taken by the 2015 judge was not wrong. There had been no exhaustive consideration of every possible factor. The husband still had enough income to meet his needs, his housing needs were met by moving in with his partner, and he had not provided evidence about his debts, which the 2015 judge doubted were all repayable at once.

So what does it all mean for people wanting to vary an earlier maintenance order?

Some points are clarified in this Court of Appeal judgement:

1 The judge who deals with such an application can use "a light touch" and does not have to go into or spell out every aspect of the current or earlier changes of circumstances. Indeed, as court resources are limited, it would be disproportionate to start the whole detailed examination of all the circumstances again.
2 Where the recipient of maintenance remains dependent on the income, as the wife did here, the law will do its best to make sure her needs are met even if the payer's situation has changed.
3 If you are going to apply to reduce payments because you now have much larger debts than you used to (but do not provide detailed evidence) or because your source of income has changed due to an insolvency or otherwise, get your facts straight, provide full documentation, and try to make sure the court believes what you say. In 2014 the judge had said that the husband "preferred to control the flow of disclosure himself" and that his command of the detail did not "necessarily equate with candour". As a result, the judge decided that he should take "a cautious and sceptical view of the accuracy of [the husband's] assertions regarding his receipts from the company." (Paragraph 18 of the Court of Appeal judgement). How far this was a problem made worse by the husband not using a lawyer at that time is not clear, but as the Court of Appeal judges do not listen to the parties give oral evidence, they must take into account what the earlier judges had said about credibility of a witness.

In times of falling employment in many job sectors, some falling house prices, and general uncertainty over the economy, this court decision is important.

Hazel Wright
Partner, Hunters

www.hunters-solicitors.co.uk

@hkw1981