Grocholewska-Mullins v Mullins

When a financial remedy is capitalised but payable in stages, the court must evaluate the balance of hardship created by the payment schedule. It should consider the recipient’s interim needs and liquidity alongside the payer’s resources, liabilities and ability to pay. The court may order continuing periodical payments until the final capital instalment, provided those payments are credited against the capitalised sum. Once the final instalment is paid, the periodical payments may be dismissed.

The parties had been divorced following highly contentious financial remedy proceedings. A periodical payments order in favour of the wife had previously been varied in light of cohabitation, then restored when cohabitation ceased. The High Court subsequently replaced the continuing arrangement with a capitalised sum of £300,000, payable by the husband in three instalments between December 2012 and December 2014.

The wife appealed on several grounds. At a permission hearing, permission was refused on all grounds except the staging of the capitalised payments. The central issue was whether the wife’s hardship between instalments required continuing periodical payments, particularly if the instalments could not provide an even income stream.

1. Disposition. The appeal was allowed only on the issue of staging. The order was varied to require the husband to pay the wife £1,000 per calendar month from the date of the Court of Appeal’s order until the final capital instalment was paid. Those interim payments were to be deducted from the final instalment, leaving the capitalised total at £300,000. The periodical payments order would then stand dismissed.
2. Assessment of hardship. The court’s task was to assess the balance of financial hardship caused by the staged payments. That required consideration of the wife’s outgoings, need for liquidity and delay before the final payment, together with the husband’s resources, indebtedness and ability to pay. The judge below had conducted a careful balance of the parties’ needs and resources, and his conclusions on the variation issues were not challenged successfully.
3. Appellate scope and remedy. The permission order confined the appeal to the staging question. The Court of Appeal therefore did not reopen the findings concerning disclosure, fact, quantum, indexation or costs. The wife’s hardship arising from the long wait for the final instalment justified limited interim support, but the evidence did not establish that the husband could afford a larger payment. The husband’s offer was accordingly accepted as fair.

1. Court of Appeal (Civil Division). On 4 February 2014, the court allowed the appeal to the limited extent of varying the staging arrangements and ordered interim periodical payments of £1,000 per month, deductible from the final capital instalment.
2. Permission hearing. On 20 July 2013, Patten LJ refused permission on all grounds except the staging of the instalments. The permission judgment is reported at [2013] EWCA Civ 1121.
3. High Court, Principal Registry of the Family Division. HHJ Horowitz QC made the order dated 20 November 2012, capitalising the periodical payments at £300,000 payable in three instalments.