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Mills v Mills: Supreme Court rules against increased spousal maintenance

In a recent judgment the Supreme Court ruled that a husband should not be responsible for meeting the wife’s rent, in circumstances where provision was made for the wife’s housing needs to be met in owned property in the original financial settlement.

The case of Mills v Mills [2018] UKSC 38 deals with a discrete issue which may arise in circumstances where one party has been awarded the lion share of the family’s capital in order to rehouse, but as a result of their own poor decision making, they have expended the money awarded to them. The case clarifies that in these circumstances, one should not expect their former partner to meet their increased income needs, to include rent, even where there is an ongoing spousal maintenance order.

Background

Maria and Graham Mills were married in 1987. At that time, Ms Mills worked on a self-employed basis as a beauty therapist. During the marriage, Mr Mills built up a surveying business within two companies which were jointly owned by the parties. They had one son, who is now an adult. Following a late miscarriage in 1996, Ms Mills suffered painful gynaecological difficulties which resulted in her being unable to work. The parties separated in 2000, following which Mr Mills left the family home in Guildford.

By 2002, following a period of separation, Mr and Ms Mills were able to agree the division of financial assets between themselves. Their agreement was embodied in a Consent Order, which provided that the family home should be sold and Ms Mills receive 90.9% of the net proceeds of sale in addition to spousal maintenance of £1,100 per month during their joint lives, or her remarriage.

So far as capital is concerned, the award comprised a payment of £230,000 to Ms Mills to allow her to rehouse, with Mr Mills receiving the balance of £23,000. Mr Mills had agreed to such a significant departure from equality, as he conceded that Ms Mills was unable to work and therefore had no mortgage capacity of her own. Mr Mills contended that Ms Mills would be able to buy a suitable property on a mortgage free basis for £230,000.

Following the Consent Order being made, Ms Mills proceeded to purchase a property for £345,000, by utilising her share of the proceeds of sale and by raising a mortgage of £125,000. It subsequently became clear that Ms Mills had begun to work on a part-time basis, which resulted in her being able to obtain a mortgage.

What followed is not entirely clear from Ms Mills’ evidence to the Supreme Court, save to say that between 2002 and 2006, Ms Mills had increased the mortgage to £218,000, before selling the property. Ms Mills proceeded to buy (and sell) two further properties, before entering into rented accommodation in 2009. By April 2015, Ms Mills had rented six properties across London and Surrey and had accrued debt of £42,000. Over a decade following the original order, Ms Mills had no capital remaining.

As a result of a change to his own financial circumstances, Mr Mills applied to the Court to vary downwards the spousal maintenance order. Ms Mills cross-applied to the Court, seeking an increase to the spousal maintenance payments, to account for rental payments which she now needed to meet.

The path to the Supreme Court

The judge at the first instance noted that there was a shortfall of £4,092 per annum between the Ms Mills’ current needs and her combined earned income and spousal maintenance payments of £1,100 per month. The judge also held that whilst Ms Mills’ spending had not been wanton or profligate, she had not managed her finances wisely.

Ms Mills’ current financial needs (namely to pay rent) had been increased by the choices which she had made. As such, the judge considered that it would be unfair to expect Mr Mills to pay all of Ms Mills’ rental costs. The judge therefore declined to vary the order for periodical payments either upwards or downwards. This meant that the spousal maintenance order of £1,100 a month continued.

Ms Mills successfully appealed to the Court of Appeal, which held that the judge had not given sufficient reasons as to why Mr Mills should not pay all of Ms Mills’ basic needs. The Court of Appeal ordered that the payments should be increased to £1,441, to cover Ms Mills’ rent.

Mr Mills appealed to the Supreme Court.

The Supreme Court decision

In what may be seen as a landmark decision, the Supreme Court unanimously allowed the appeal, concluding that the judge at first instance was entitled to decline the application to vary the spousal maintenance order. The judge had given clear reasoning in stating that Ms Mills has made unwise financial decisions and it was unfair to expect Mr Mills to meet her increased housing needs in full. That being said, the original spousal maintenance order remains in force with Mr Mills continuing to pay £1,100 a month to Ms Mills.

Although limited to the narrow circumstances of this case, the decision of the Supreme Court fits with the general trend of ongoing spousal maintenance orders – namely that the Court is increasingly encouraging financial independence rather than interdependence on divorce.

Whilst it will no doubt be disappointing to Mr Mills that he has a continuing financial obligation, it is apparent that the Court did not consider it fair for him to be responsible for his ex-wife’s poor financial decisions. Further, it seems to shut the door on a party making housing claims by the back door in the future, when this has already been factored into the original settlement.

If you would like to speak to one of our family law specialists about financial settlements or other family matters please contact us.

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