Generally in a divorce where no children are involved so there are no parental responsibility, child contact or child maintenance issues, a Family Court will try and create a clean break financial settlement so that both spouses can start a new life without the necessity of spousal maintenance payments. However, if a clean break settlement is not an option, spousal maintenance will be agreed.
Generally spousal maintenance continues until either the re-marriage or death of the spouse receiving payment unless an end date was agreed at the time the spousal maintenance agreement was drawn up. The spouse paying maintenance can apply to Court to terminate or change the level of spousal maintenance. This application cannot be made on the basis of the remarriage of the spouse paying maintenance. If the application to terminate or vary the level of spousal maintenance would cause undue hardship to the spouse receiving maintenance, then the Court may order a capital or lump sum to be paid under Section 31 of the Matrimonial Causes Act 1973 which will discharge the duty for ongoing maintenance payments.
In the recent case of Vaughan v Vaughan, the husband’s first marriage ended in divorce after 13 years. There were no children and the first wife was working part-time and earning around £5,000 per annum. The husband re-married. The first wife applied for spousal maintenance and was granted spousal maintenance, set at £27,000 per annum, with no cut-off point. At the time the husband’s earnings were in the region of £243,000 per annum.
The first wife’s spousal maintenance payments were not generous, given the level of income the husband received which the second wife benefited from. The husband continued to have a successful career and retired with a sizeable pension. He gave his second wife a share portfolio worth £330,000 plus £900,000 when they sold their jointly owned home for a smaller property. Mr Vaughan decided to apply to Court to stop the spousal maintenance payments he was still making to his first wife.
His first wife cross-applied for capitalisation of her maintenance claims under Section 31 of the Matrimonial Causes Act 1973. Mr Vaughan argued that because of his lower retirement income and that his first wife had inherited capital after the deaths of her parents, he should not have to make any capital payments to his first wife at all. Initially the lower Court agreed, but the first wife appealed.
The Court of Appeal found the first wife had increased needs of £48,000 per annum (previously £27,000 per annum) and she could not adjust to the ending of spousal maintenance without undue hardship. Using the Duxbury tables, the Court calculated the lump sum due to the first wife as around £500,000. Taking into account the value of an antique she was left from her marriage to Mr Vaughan which was expected to raise £300,000 if sold, a shortfall of £215,000 was left and the Court ordered Mr Vaughan to pay this.
It’s worth remembering that the first Mrs Vaughan did not apply for an increase in spousal maintenance, just that her existing spousal maintenance was capitalised to allow Mr Vaughan to make a one-off capital payment. Courts do not give priority to a first wife over a second, but aim to balance the needs of both wives and have discretion to do so. The second wife had married the husband knowing that he had an obligation to provide spousal maintenance so the second wife does not get priority either.
If you have any queries relating to ancillary relief or spousal maintenance after divorce, please contact either James Haworth on 0116 212 1080 or Janet Hopkins or Alistair Dobson on 01858 445480 or complete one of the on-line forms. James is a member of the Leicestershire Regional Committee for Resolution, an association of legal professionals working to reduce conflict in separation and divorce.
