S v S

In ancillary relief proceedings, a joint-lives maintenance order may be appropriate where the parties’ future financial circumstances are materially uncertain and a term order risks unfairness. The statutory encouragement towards independence and a clean break must be applied consistently with the overarching requirement of fairness. A spouse’s established lifestyle may properly inform housing and income needs, including expenditure associated with an important and accepted activity, where the paying spouse has ample resources. That approach remains conditional: a substantial fall in the paying spouse’s income may require a fresh assessment and may make the expenditure unreasonable. An appellate court should not interfere with a first-instance discretionary assessment unless there has been procedural error, failure to consider relevant matters, reliance on irrelevant matters, or a conclusion that is plainly wrong.

The respondent husband appealed against a District Judge’s order requiring him to pay the applicant wife periodical payments of £50,000 per annum for joint lives. The parties had been married for 11 years, had no children, and had agreed to divide their capital equally. A clean break was accepted to be inappropriate because the wife’s resources and earning capacity would not meet her needs.

The husband argued that the order should instead be for a reducing five-year term. He challenged the assessment of the wife’s earning capacity, the cost of housing that would allow her to keep her horses, the effect of the order on the parties’ respective standards of living, and the District Judge’s failure to reduce the award after discovering an error concerning the husband’s bonus. The central issue was whether the order was plainly wrong or otherwise required appellate interference.

1. Appeal dismissed. The District Judge was entitled to make a joint-lives order. Although Matrimonial Causes Act 1973, s.25A required careful consideration of a term order and encouraged financial independence, it did not displace the overall requirement of fairness. Given the uncertainty over whether the husband would remain in highly remunerated employment, a term order could itself produce unfairness. The decision to permit the parties to return to court if circumstances changed was tenable and not plainly wrong.
2. The finding that the wife’s foreseeable net earning capacity was approximately £12,000 per annum was supported by her work history, limited recent experience and the District Judge’s evaluation of the evidence. It was not unreasonable, while the husband remained in the City with sufficient income, to allow her to work part-time and retain time for horses and eventing, which had been an important feature of the marriage.
3. The assessment of housing needs at approximately £1 million was also permissible. The wife’s horses had been maintained with the husband’s consent and encouragement and formed part of the parties’ established way of life. Since the husband had sufficient means, accommodating that activity did not unfairly promote the wife’s standard of living at his expense.
4. That conclusion was conditional. If the husband became redundant or left the City and his income substantially declined, continued maintenance of the horses at his expense could become an unjustifiable extravagance. The wife should plan for that possibility and make provision from her own resources.
5. The bonus calculation error did not invalidate the order. The addendum judgment showed that the District Judge had adopted a broad-brush assessment and intended the wife’s total net income not to exceed the husband’s. The resulting award was not plainly wrong.

• High Court (Family Division): dismissed the husband’s appeal from the District Judge’s order perfected on 3 May 2007.