A v A

When varying or enforcing a financial arrangement embodied in a consent order, the court must assess fairness in the context of the parties’ agreement. The agreement is an important factor and may justify a more rigorous assessment of needs, but it does not create an inflexible “real need” threshold. Needs remain fact-sensitive.

Available capital may properly be treated as income-producing and amortised, even where it is the recipient’s only resource. However, fairness may require part of the capital to remain available for security, flexibility and exceptional expenditure. The court should avoid leaving a party exposed to an uncertain future liability where the amount and timing of repayment depend on a later property sale.

The judgment followed an earlier decision allowing the husband’s appeal against an order made by Her Honour Judge Hughes QC on 8 September 2017. The court retained the matter because it lacked sufficient information to make a replacement order.

Following further evidence about the wife’s assets, liabilities, income and expenditure, the central issue was how far she should remain liable under undertakings to repay sums advanced by the husband, and whether any part of that liability should be discharged against the background of the parties’ prior agreement.

1. Fairness and the agreement. The court had to achieve fairness against the background of the parties’ agreement. Applying Granatino v Radmacher [2011] 1 AC 534, the existence of the agreement was an important factor capable of altering what fairness required. The test was not whether the wife was in a state of “real need”. Needs were sufficiently elastic to be assessed in the circumstances of the particular case, although they required more rigorous assessment because of the agreement.
2. Assessment of resources. The court was required to consider the reasonable use of the wife’s available resources. Amortisation could be appropriate even though the resources were all that she had to rely on. However, it would not necessarily be fair to amortise the whole award. The wife required free capital for security, flexibility, contingencies and occasional expenditure outside her budget.
3. Fact-sensitive approach. In applying the approach discussed in Waggott [2018] EWCA (Civ) 727, the extent of amortisation depended on all the relevant circumstances. The court treated the wife’s pension assets as fully amortised but treated only 50 per cent of her non-pension capital as amortised.
4. Outcome. The court accepted a long-term income need of £120,000 per year. It discharged the wife from repaying £389,000 representing an assessed income shortfall and £170,000 representing the uncertain liability arising on the future sale of the Spanish property. Her remaining repayment obligation was approximately £1.066 million. The undertakings and order were to be rewritten to give effect to that result.

1. High Court (Family Division): The present judgment followed an earlier judgment dated 28 February 2018 allowing the husband’s appeal against an order of Her Honour Judge Hughes QC dated 8 September 2017. No citation for the earlier decision is stated.
2. High Court (Family Division): The court retained the matter and made the consequential financial determination after receiving updated information about the wife’s means.