Supreme Court decision on payment of extra rental costs

The Supreme Court recently heard an appeal against an order made in the Court of Appeal, which had increased the amount of money paid as periodical payments to his ex-partner. 

The case, Mills v Mills [2018] UKSC 38  involved a couple who had divorced in 2002 following a 15 -year marriage. Originally the finances had been agreed by consent order, and the wife had been awarded £230,000 plus an extra £13,200 per year. The £230,000 was expected to fund a house purchase so that Mrs Mills could buy a property for herself and the couple’s son. She wasn’t able to work full time because of ill health. 

Instead, she bought a more expensive house with the help of a mortgage, and then went on to buy more properties between 2002 and 2009. A series of bad financial decisions meant that the capital decreased and instead of making a profit, she ended up having to sell her last property in 2009 and rent a home.  By April 2015, she had run up debts of around £42,000.

There was now a shortfall of £4,092 per year between what Mrs Mills needed, and what she was getting from her ex-husband, even taking into account her own earnings. When the case was originally heard, the judge decided that although her actions had not been profligate, she had not managed her finances properly and that it would be unfair to expect her ex-husband to cover the cost of her bad decisions. He left the periodical payments amount as it was. Her husband still paid around 60% of her rental costs, but she would have to find the rest herself.

The wife appealed against this decision to the Court of Appeal, and was successful, increasing the amount paid to £17,292 per year. Mr Mills then appealed to the Supreme Court on one ground only, and that was that in light of the fact that his ex-wife’s housing needs had already been provided for in the lump sum settlement, was the Court of Appeal entitled to interfere with the judge’s decision not to increase the periodical payments to cover unexpected rental costs?

The Supreme Court unanimously allowed the appeal, and said that yes, the original judge was right not to change the periodical payments order to make Mr Mills pay all of his ex-wife’s rental costs. It was agreed that the judge had given a clear reason for not varying the order in the first place, and that reason was that it was his ex-wife’s decisions that had increased her basic needs and led her to need to rent a property, so it was unfair to expect Mr Mills to cover the cost.

Beverley Morris, partner at Lodders Solicitors, acting for Mr Mills, said:

 
“At the heart of this case, is the issue of financial prudence and financial responsibility. Mrs Mills proved an unreliable witness with her evidence being described as ‘not fully satisfactory’ but, despite that, Mr Mills has an ongoing obligation to maintain her. 

“So, what now? It is time for us to contemplate this outcome and take time out to consider what would be the right outcome for this family going forward.”

Hazel Wright, partner in the family department at Lincoln’s Inn firm Hunters Solicitors, commented:

“All maintenance cases ultimately have to answer one basic question: ‘how long and how much?’ Today’s Supreme Court ruling regarding the divorce maintenance settlement of Mr and Mrs Mills cuts to the heart of this question.

“Today, the Supreme Court agreed that it is time for Mrs Mills to be independent and to meet her increased housing costs herself. The court has ruled that it would be unfair to Mr Mills to be saddled with an obligation to keep up the maintenance payments to Mrs Mills at the level she wanted.”