Q v Q

In a high-income ancillary-relief case, periodical payments may exceed the recipient’s generously assessed needs where surplus income can help achieve a planned progression towards a clean break. The court must apply sections 25(2) and 25A of the Matrimonial Causes Act 1973, rather than treating equality as decisive for future income. The appropriate percentage is fact-sensitive and must reflect the children’s claims, the parties’ resources and responsibilities, the likely duration of the payer’s high income, and the recipient’s prospects of financial independence. A term order may be used as a bridge towards a later clean break. Lifetime maintenance is inappropriate where the recipient is comparatively young, has substantial capital and can rebuild earning capacity.

The parties agreed that their net capital assets should be divided equally, but disputed implementation of that agreement and income provision for the wife and four children. The husband was a highly paid professional footballer whose income substantially exceeded the family’s generously construed needs, although his earnings were likely to fall after his playing career ended.

The wife sought a four-year order providing her with 50 per cent of the husband’s net income, partly for maintenance and partly to build capital towards a clean break. The husband proposed a lower percentage. The central issue was the proper share of surplus income under sections 25(2) and 25A of the Matrimonial Causes Act 1973.

1. Capital. The equal division of capital was maintained. A modest allowance was made for notional conveyancing costs, and the anticipated £900,000 tax repayment was included as an asset because both parties and their advisers were confident that the scheme would succeed. The balancing payment was conditional on receipt of that repayment. The wife was allowed three months to produce concrete refinancing proposals for two properties, failing which they were to be sold.
2. Maintenance. The husband was ordered to pay £20,000 per annum for each child and £120,000 per annum for the wife. A lower figure would have been unfair in light of the husband’s income and expenditure, although some items in the wife’s budget were excessive.
3. Surplus income. Section 25(2) required consideration of all relevant circumstances, while section 25A required consideration of an early clean break and whether a term would enable adjustment without undue hardship. The court applied the guidance in McFarlane v McFarlane; Parlour v Parlour [2004] EWCA Civ 872. Periodical payments could exceed needs where surplus income was used to promote financial independence.
4. The 37.5 per cent award in McFarlane v McFarlane; Parlour v Parlour was pragmatic and case-specific. It did not establish a general tariff. Equality was relevant to accumulated capital, but was not a controlling cross-check for future income. The children’s priority claims, the husband’s new household, the wife’s capital and earning prospects, and the likely fall in the husband’s income all required consideration.
5. A payment of 40 per cent of the husband’s net income for four years was fair and affordable. The wife’s percentage was not reduced merely because she might receive the anticipated tax repayment. The four-year extendable term was appropriate. The wife’s proposed 50 per cent share and the husband’s proposed lower share were rejected.