Hvorostovsky v Hvorostovsky

On an application to vary periodical payments, the court must apply the statutory criteria and assess the payer’s current ability to pay, the payee’s needs and all relevant obligations. A prior standard of living or a generously assessed budget does not impose a ceiling where the payer’s income has substantially increased. Relationship-generated disadvantage may already be reflected in the original capital and income settlement and need not be recalculated on every variation. The judge should stand back and test the award for overall proportionality, including by comparing the original and varied orders. An award falling outside the generous ambit because that exercise was not undertaken may be adjusted on appeal.

The parties divorced after a long marriage in which the husband’s international singing career developed substantially. Their 2001 financial arrangement transferred the matrimonial home to the wife and provided an income allowance, with claims for periodical payments adjourned generally with liberty to restore.

Following a substantial increase in the husband’s income, the wife sought an uplift. The High Court treated the application as one under section 31 of the Matrimonial Causes Act 1973 and awarded her £120,000 per year, with £12,500 for each child. She appealed the quantum of those awards. The central issue was the proper approach to variation, including the relevance of needs, compensation, increased income and proportionality.

The appeal was allowed unanimously. Thorpe LJ gave the principal judgment; Bodey J agreed and endorsed the warning against over-sophisticated analysis, and Etherton LJ agreed.

1. The wife had two technically available remedies: determination of generally adjourned periodical-payment claims under section 31 of the Matrimonial Causes Act 1973, or variation of a maintenance agreement under section 35. Although the section 31 route was technically inapt, a determination under it imported the section 25 criteria.
2. Variation was not confined by the parties’ standard of living immediately before the breakdown. Where the payer could pay more than the payee’s generously assessed needs, reasonable requirements were not a determinative ceiling. The court had to apply the statutory language. The reasoning in Cornick v Cornick (No.3) and the principles attributed to White v White [2000] 2 FLR 981 were approved.
3. Compensation for relationship-generated disadvantage was an element of fairness, not a separate head of claim. It could be important in the original division of capital and anticipated income. If reflected at that stage, it continued to be reflected on variation without a fresh assessment.
4. The variation exercise had to focus on changed budgeted needs and changed circumstances, especially the husband’s greatly increased income. His tax position, obligations to his second family and other relevant circumstances also required consideration. The court should stand back and test the result for proportionality, including by comparing the original order with the varied order as a percentage of income. The failure to do so, together with the unclear calculation, justified appellate intervention.
5. The wife’s periodical payments were increased to £140,000 per year and the payments for each child to £15,000 per year.

• Court of Appeal (Civil Division): On 23 July 2009, the appeal was allowed and the periodical payments were increased.
• High Court of Justice, Family Division: His Honour Judge Horowitz QC ordered £120,000 per year for the wife and £12,500 per year for each child. The order was dated 30 October 2008.