TK v AC

Maintenance may, in an appropriate case, be ordered even though the payer must borrow to make the payments. Relevant circumstances may include a debt that is unlikely to be called in, funding by a third party, or a reasonably foreseeable future receipt from property, inheritance, gift or business activity.

Such an order is inappropriate where payment would simply increase substantial and unavoidable indebtedness, no source of funds is identified, and there is no realistic prospect of repayment. The court must assess the practical source and sustainability of the proposed payments rather than proceed on the hope that funds may later become available.

The husband appealed against an order requiring him to pay his former wife periodical payments of £1,010 per month, later increased to £3,510 per month, and a legal services order of £4,000 per month for four months. The parties had separated shortly after marrying and had been divorced for many years. The husband had substantial indebtedness, no current income and no assets, while the wife was in serious financial difficulty.

Permission to appeal was granted on the issue whether interim maintenance could properly be ordered where it could only be funded by further borrowing. The wife’s resources and the merits of her application were left for the final hearing.

1. Appeal allowed. Paragraphs 5 and 6 of the Recorder’s order dated 14 April 2023 were set aside. The legal services order was discharged because, with neither party having solicitors, it was no longer appropriate.
2. There is no absolute principle preventing a maintenance order from being funded by borrowing. Such an order may be justified where the debt is unlikely to be called in, a third party is likely to meet it, or money is foreseeably available from a sale, inheritance, gift or successful business venture.
3. The present case fell outside those categories. The husband had indebtedness of about £1.7 million, no assets and no income since January 2023. No commercial lender, third-party funder or other identifiable source of funds had been established. The director’s loan account could not be extended.
4. Leaving the order in place would therefore have increased the husband’s existing debt without a realistic repayment source. The wife’s obvious needs and difficult circumstances could not justify an order resting only on the prospect that funds might somehow become available.
5. Other significant issues, including whether the wife could seek further provision so long after the marital relationship ended, were expressly left undecided for the final hearing.

• High Court (Family Division): Appeal from the order of Recorder Tidbury dated 14 April 2023. The appeal was allowed and paragraphs 5 and 6 of that order were set aside.