M v M

On an application to vary periodical payments, the court must apply the statutory discretion to the facts found. Where the court accepts the payee’s basic needs budget, finds a shortfall, and finds that the payer can afford the payments, it cannot reduce the award without identifying the reasoning or evidence that justifies doing so. A reduction requires a finding such as financial mismanagement, greater earning capacity, or an identifiable budget item that should be excluded. A term order or capitalisation also requires evidence that the payee can achieve independence or that capitalisation is appropriate. The court should avoid satellite guidelines in this fact-sensitive area.

The parties, formerly married, obtained a consent order in 2002 under which the husband was to pay the wife periodical payments of £1,100 per month indefinitely. In 2015 the wife sought an increase or capitalisation, while the husband sought a decrease, a term order, or capitalisation.

The Central London County Court dismissed both applications. The wife appealed, arguing that the judge’s accepted findings showed a monthly shortfall between her income and basic needs. The husband sought to reopen a withdrawn application for permission to cross-appeal. The central issues were whether the judge had properly exercised the discretion under section 31(7) of the Matrimonial Causes Act 1973 and whether the husband should be permitted to pursue a cross-appeal.

1. The wife’s appeal was allowed. The order below was set aside and periodical payments were substituted at £1,441 per calendar month until further order, under section 31(7) of the Matrimonial Causes Act 1973.
2. The statutory test was settled and did not require new guidance. The exercise was fact-sensitive, and the court’s overarching objective was a fair result for both parties. The applicant’s needs were likely to be the dominant factor, but the payer was not an insurer against every hazard or necessarily liable for needs caused by financial mismanagement, extravagance, or irresponsibility.
3. The judge had accepted the wife’s monthly basic-needs budget of £2,982 and found a shortfall of £1,441. He also found that the husband could afford the payments, that the wife was not financially mismanaging her position in the relevant sense, and that she had no greater earning capacity. Without identifying an excluded budget item, a finding of mismanagement, or another evidential basis, the judge could not require her to reduce the accepted basic-needs budget.
4. There was no evidential basis for a term order because the wife could not be expected to achieve independence within an identifiable period. There was likewise no evidential basis for capitalisation.
5. The husband’s application to reopen his withdrawn permission application was refused. The court did not determine the arguments concerning CPR 52.17 or the principles explained in Taylor v Lawrence [2002] 3 WLR 640, because the proposed cross-appeal had no prospect of success even if reopening were permitted.

• Court of Appeal (Civil Division): allowed the wife’s appeal from the Central London County Court, set aside the order dismissing the variation applications, and substituted periodical payments of £1,441 per calendar month until further order. The husband’s application to reopen his withdrawn permission application was refused.
• Central London County Court: on 9 June 2015, His Honour Judge Everall QC dismissed both parties’ applications to vary the 2002 periodical payments order.