Mills v Mills: Supreme Court Judgment released on 18 July 2018

18 / 07 / 2018

I previously wrote that on 8 August 2017, the husband in the case of Mills v Mills was granted permission to appeal on the ground of “whether, provision having already been made for the Respondent’s housing costs in the capital settlement, the Court of Appeal erred in taking these into account when raising her periodical payments”, with permission to appeal on the other grounds advanced being refused.

Today, 18 July 2018, the Judgment of the Supreme Court was released and the Court unanimously allowed the husband’s appeal concluding that the Court of Appeal had erred when taking into account the wife’s housing costs when raising her periodical payments.

Background

As I have explained previously, by way of background, the parties separated after 15 years of marriage and they divorced in 2012. Following separation, the parties entered into a Consent Order in relation to their finances providing for (together with other provisions) a capital lump sum (of £230,000) from the sale of the family home to the wife (so that she could buy herself a new property to house her and the parties’ son), as well as periodical payments (spousal maintenance) to the wife from the husband in the sum of £1,199 per month. It was also agreed that the husband would retain his business assets.

In 2014, the husband applied to the Court asking the Court to Order that the periodical payments would cease entirely (that being his preference of course). Or, in the alternative, that the level of periodical payments be varied downwards so that he would be required to pay a lower amount each month. The wife, on the other hand, applied to vary the periodical payments upwards, stating that she was unable to meet her basic needs.

The Judge at the first hearing, whilst finding that the wife was unable to meet her income needs, refused both applications and held that the periodical payments would remain as they were. Both parties appealed that decision.

The case then went to the Court of Appeal and there it was held that the first Judge was wrong to decide that the wife could not meet her income needs (i.e. that she had a shortfall of what was assessed to be £341 per month) but did not increase the level of periodical payments to the wife. The Court of Appeal consequently varied the wife’s maintenance upwards.

The husband had contested that the payments should increase (and indeed, he argued that they should cease entirely) as he argued that the wife should utilise her own earning capacity to meet her needs and further, he argued that she had mismanaged her finances so that she had none of the capital left that was provided to her to purchase a property and that essentially he should not have to bear the brunt of that.

The appeal to the Supreme Court

As mentioned above, the husband in this case asked for permission to appeal to the Supreme Court as to “whether, provision having already been made for the Respondent’s [the wife’s] housing costs in the capital settlement, the Court of Appeal erred in taking these into account when raising her periodical payments”.

Today, the Supreme Court ruled that the previously Ordered periodical payments (the spousal maintenance) must continue at the previous (original) rate and that the Court of Appeal was wrong in increasing the amount payable by the husband by £341 per month (the latter being the shortfall of the wife’s income over her outgoings) as the £341 shortfall took into account the wife’s rental payments – when her housing had been already taken into account in the original Order. Indeed, the £230,000 lump sum that she received pursuant to the original Court Order which was provided to her from the sale of the family home in order that she could purchase a property for herself and the parties’ son.

 I believe that the Judgement released today is the right outcome. The wife was effectively looking to have a “second bite  of the cherry” – to come back for more monies to take into account something that she had already received under the terms of the original Court Order.

The wife of course would not have rent to pay for if she had a mortgage free house that she could have purchased with the capital sum provided to her at the time of the divorce settlement – that is a need that she has created for herself and her housing needs had already been accounted for in the original financial Court Order.

 The Courts like finality where possible and it would seem unjust for the husband to effectively pay twice for his wife’s housing needs due to the choices that she made and actions she took post separation. It is expected that parties should make efforts to maximise their own financial position post separation and it would have been unjust for the husband in this case to have to supplement the wife’s income/financial position further when she has done the opposite of that.