2 August 2018 | Comment | Article by Adrienne Donneky

Mills v Mills: The Supreme Court Judgment and its impact

The Supreme Court has recently ruled - in what has been widely touted as - the most important family law case of the year; Mills v Mills.

Background

Mr and Mrs Mills divorced in 2002 after fifteen years of marriage and resolved their financial affairs through a consent order. Under the terms of the order, Mr Mills paid Mrs Mills a lump sum of £230,000 and maintenance payments of £1,100 per month during their joint lives. At the time of the divorce Mrs Mills was suffering from ill health, making it difficult for her to work and to obtain a mortgage. Mr Mills anticipated that she would use the £230,000 lump sum to purchase a house, mortgage free.

Mrs Mills did manage to get a mortgage which she used to purchase a property worth £345,000. Over the next decade she made a number of unwise property transactions with the amount of borrowing increasing with each new property she purchased and her capital pot steadily dwindled.

By April 2015 Mrs Mills had no capital, was living in rented accommodation, and had debts totalling £42,000 and so she applied for an increase in her maintenance to cover her rent. Mr Mills applied for his £1,100 a month payment to Mrs Mills to be either discharged or reduced.

The judge found that Mrs Mills needed an additional £341 per month to meet her needs and to be able to pay her rent. However he also noted that Mrs Mills’ current financial situation was largely of her own making, particularly in that she had to pay rent when she could have purchased a mortgage free house using her £230,000 lump sum. The judge decided that he would not vary the order upwards or downwards and instead preserved the status quo of Mr Mills paying £1,100 per month to Mrs Mills.

Mrs Mills appealed this decision to the Court of Appeal. The Court decided that the first judge had not given sufficient reasons why all of the Mrs Mills’ basic needs should not be met by Mr Mills and increased the periodic payments she received to £1,414 per month.

Supreme Court decision

Mr Mills then appealed this decision to the Supreme Court. He argued that the wife’s housing needs had been provided for with the lump sum of £230,000, which she could have used to buy a mortgage free property, therefore, he should not have to pay more money to Mrs Mills to cover her rent, which she only had to pay because of her poor financial decisions.

The Supreme Court decided that the Judge at first instance was entitled to decline to increase the periodical payments. They said that the Court of Appeal should have noted the first judge’s clear reason for declining to increase the order; those being that the wife’s poor decisions had led to her having to pay rent, and it was unfair to expect the husband to meet that rent in full. They decided that the court would need very good reasons to require a spouse to fund the other spouse’s rent in these circumstances.

Comment

So, is this a win for Mr Mills? His lawyers think not. Mr Mills had to endure protracted litigation to achieve  - what is in effect - a continuation of the status quo. It should not be forgotten that in 2015 he applied to discharge or reduce his periodical payments, and instead must continue to pay Mrs Mills £1,100 per month. The debate as to whether one spouse should be liable to pay maintenance to the other, possibly for the entirety of their life, will have to wait for another day.

However, Mr Mills has not been made to take responsibility for Mrs Mills’ poor financial decisions after their marriage had ended. This should serve as a warning to spouses who are considering applying to alter periodical payments to cover their housing costs, when housing has already been factored into a lump sum payment. It may also encourage spouses to be financially prudent making investment decisions with lump sum payments.

Joint lives orders remain controversial, but they are by no means the only option available to divorcing spouses. The law states that spouses should try to achieve a clean break and avoid any spousal maintenance payments where possible. If spousal maintenance is necessary, it should be for a limited period if possible. However, in some cases joint lives orders are the fairest option, especially where one spouse has sacrificed their career and cared for children whilst supporting the other spouse to succeed.

If you would like to speak to one of our family law specialists about financial orders or any other family matters please contact our family team.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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