H v H

When considering termination of a periodical payments order, the court may make termination conditional on a future event, such as actual retirement, rather than waiting until that event occurs. The court must assess fairness by reference to the past, present and reasonably predictable future circumstances. The exercise is necessarily uncertain and should not be reduced to a spurious formula.

A clean break is desirable where it can be achieved without undue hardship. In exceptional cases, the compensation element of a financial remedy may properly affect how the payee’s capital is treated, even where reasonable needs are otherwise assessed. Compensation remains a limited consideration and does not displace the overall assessment of fairness.

The former husband applied to terminate a joint lives periodical payments order in favour of his former wife. The order, originally made in 2005 and varied by consent in 2007, required payments of £150,000 per annum. He sought termination upon his planned retirement from full-time accountancy work in 2015.

The wife initially opposed the application as premature, but during the hearing accepted that the court should determine the parties’ long-term financial position. She sought a substantial capital payment if maintenance were terminated. The central issues were whether termination could be determined before retirement, whether it would cause undue hardship, and the appropriate capital payment under section 31 of the Matrimonial Causes Act 1973.

1. Termination before retirement. The application was properly considered before the husband’s actual retirement. A termination order may take effect upon the happening of a specified future event rather than on a fixed date.
2. Statutory approach. Under section 31(7)(a) of the Matrimonial Causes Act 1973, the court must consider whether payments should continue only for a period sufficient to enable the recipient to adjust without undue hardship. Section 31(7)(b) permits a further lump sum to cushion the effect of termination.
3. Fairness and uncertainty. The court must assess fairness by considering the past, present and reasonably predictable future circumstances. The exercise should not be converted into a precise formula, since economic forecasting and future earning capacity are inherently uncertain.
4. Clean break. The wife had been fairly treated by the earlier orders, and those arrangements could not be reopened retrospectively. Ending the parties’ financial dependency was desirable, particularly given the length of the separation and the husband’s impending retirement and family responsibilities.
5. Compensation. The wife’s loss of a substantial earning capacity remained relevant. Although compensation should not generally be given disproportionate weight, this was one of the small number of cases in which it was an obvious feature. It justified treating only part of the wife’s home equity and savings as income-producing capital, rather than assuming full capital amortisation on a Duxbury basis.
6. Order. The periodical payments order was to terminate upon the husband’s actual retirement, provided that he paid the wife a lump sum of £400,000 on retirement. The payment could not be required before 2015 or before the postponed date of actual retirement.

This was a first-instance decision of the High Court (Family Division). No appellate history is stated in the judgment.