Ancillary relief- variation

s31 governs the rules on variation. The court can vary, discharge or suspend any provision contained in an order. This only applies to periodical payments order or a lump sum paid in installments. Also can apply to a deferred order such as pension provisions, sale of property, or pension sharing order made under s24B which is made before the decree absolute. Property adjustment orders and lump sum orders cannot be varied. They are final.

PPO can be varied upwards, downwards or stopped. They can also vary the period over which they need to be made. The only exception is if the court has made an order under s28(1A) which prevents the recipient of fixed term PPO applying for an extension of term under s31.

Timing of the application to vary- the variation powers under s31 are unfettered and apply with equal force to consent orders. The applicant isnt required to establish exceptional circumstances or material change in circumstances but the exercise of discretion will be affected by this. It is essential to make an application to vary a limited time order before the order expires or there will be no order capable of variance.

T v T- PPO made in favour of the wife that ran out until the husband retired or she remarried....

After the husband retired the wife applied to vary the order. The court said it would have had jurisdiction to vary if she came before he retired. The jurisdiction had ended on retirement.

G v G- One of the cut off points for the wife's PPO was the youngest child turning 18, amongst others. There was no direction under s28(1A) that the wife couldn't apply for variation. However she made her application 1 month after the child turned 18 and so there was no jurisdiction after the order expired.

Jones v Jones- the judge had jurisdiction to hear the wife's application, even though it would be determined after the consent order expired. The crucial point was that the application was made before the order expired. Thus the court can extend or vary under s31 as long as the application is made in the life of the order, and it does not matter if the application is not determined until after it has run out.

What factors must the court consider? The court has regard to all circumstances of the case, with first consideration being children under 18. The court also considers any change of circumstances which the court had regard to when the original order was made.

Flavell v Flavell- the CoA held the power of the court to vary orders was not dependent on exceptional circumstances or material change. While these issues can effect the courts discretion, they are not a requirement of a successful application.

Can a lump sum be given? Court must consider the possibility of a clean break. Under s31(7)(a) the court must consider whether to vary a PPO so that payments shall only be made for a period of time whch is sufficient to enable the recipient to adjust without undue hardship to the termination of payments. So where a clean break order is not possible at the time of the original order, subsequent developments eg one parties increased capital, may make it possible at a later date. To make a clean break the court can capitalise a PPO. This may be a lump sum under s31(7A-G). When discharging a PPO or varying an order to be for a limited time only the court has power to- make a lump sum, a property adjustment or pension sharing order. The court can also direct that the applicant is not entitled to make further application for PPO or extension. When capitalising a PPO, one important question is the quantum of capital order. Is the court limited to a strict mathematical calculation of the equivalent of ongoing payments or can the court conduct a broader assessment of how the couples assets should be distributed?

Pearce v Pearce- when terminating one party's entitlement to future PP, the function of the court is not to reopen capital claims but to substitute for the PP, a capital order which compensates the payee and achieves a clean break. The judge should determine 1) what variation is needed to do this 2) fix the date the new order will commence and 3) substitute a capital order, calculated in accordance with the Duxbury tables, for which the PP are terminated. Such an approach is necessary to prevent the redistribution of capital on events that could not be foreseen or that did not pertain to the original decision.

The Duxbury principle comes from the case of Duxbury v Duxbury. It should be used sparingly and the formula can be used to calculate the quantum to be paid via lump sum that will accomodate the applicants needs.

Duxbury v Duxbury- provided an arithmetical formula which will take into account factors such as life expectancy, rate of inflation and interest, to generate a lump sum which when invested will provide sufficient income for the claimant's life. However this is only a guide and is not determinative.

White v White- referred to the Duxbury paradox, which means reliance on the acturial calculations could result in unfair outcomes on the basis that 'the longer the marriage and hence the older the wife, the less capital required for a Duxbury type fund.'

Thus while the Duxbury calculation may be a useful tool it will not be determinative of the final award.

s31 confers a broad discretion on the court to determine applications. The wife may need more money due to a change in circumstance.

North v North-wife applied for upwards variation of PPO which had been in place for many years. She had a PPO of 5p a year for the joint lives, until the wife remarried or varied the order. Wife didnt attempt to find employment and husband helped her financially on a few occasions. She lost all her money in Australia and so wanted a variation. The husband had significantly more money now. The trial judge increased PP. Husbands appeal won in CoA. The wife's financial needs which were created by her lifestyle choices were of her own making and so the husband could not be responsible for them. However the losses incurred by her investments were in a different category.....

They were more the 'outcome of hazard and were misfortune rather than mismanagement.' Thus the wife was entitled to a modest entitlement of £3000 per year to be capitalised.

An award can be given for financial hardship that is not self created. Poor conduct which has financial impact is a factor to reduce but not necessarily defeat the claim. Depends on facts of the case. However, will it always be clear if it is mismanagement or misfortune? Why should the husband provide for decisions made after divorce? Normally a nominal order is varied upwards due to circumstances created by obligations in the marriage.

Lauder v Lauder- court had to consider whether to vary the parties pre- White settlement which was made in 1998 to take account of the fact that the wife's earning capacity had been limited by her contribution to the family in line with compensation in Miller. The wife was awarded 35% of the husbands income in PPO which at the time was £8'000. Order invisaged she would get 2/3rds of the value of the home. When the home was sold the wife had an income of £9'000 and the husband of £200'000. They hadnt implemented the previous order. The court held they had to establish in light of Miller. They interpreted the wife's needs generously and considered if compensation was required. He drew attention to the fact that marriage lasted 24 years...

produced 3 children and the wife continued to spend many years looking after the youngest on divorce. Judge awarded £725'000. The award included an element of compensation for the wife's relationship generated economic disadvantage. Even though the wife had attempted to become self sufficient she had a modest earning capacity which was 'the direct result of a marriage and the parties decision she should be a wife and a mother.' Husband argued the strength of compensation claim reduced due to so many years divorced but this was rejected. Also the fact the original order was not implemented left the wife with more economic instability.

Hvorostovsky v Hvorostovsky- since the intial order was made the husbands income had risen from £500'000 to £1.8m. The wife applied for variation from £113'000 pa and was raised to £170'000. She appealed that as well. The judge concluded that the uncertainties of a performing artists life should not affect quantification and that tax, the second family and other issues had been appropriately weighed. He ordered a further increase of the wifes PPO, partly because the single factor of greatest significance is the husbands greatly increased income. The wife was a whole life dependent. The fundamental changes of circumstances that had to be weighed in the judgement were the changes in the wife's budgeted needs and the changes in the husbands circumstances.

VB v JP- wife applied for increase of PP awarded in 2002 on the basis she was entitled to compensation for her lost earning potential. Court said Miller is of general application and extends where appropriate to consideration of the court on application to vary and fairness. The court held it was right to have regard to the wife's relationship generated disadvantage and found there was a mutual decision that the wife would sacrafice her career to be a mother, as the husband could only devote a small amount of time to the family. The husbands career and income had progressed significantly since the first order. Compensation is hard to quantify. They considered it as part of the wife's assessment of needs generously assessed against the standard of living in the marriage and husbands increased income.

Termination of PPO-

It always terminates on remarriage. Consent orders may have provisions saying it terminates on a period of cohabitation. These should be avoided as they may lead to snooping and control by the ex spouse. Whereas cohabitation may provide a good reason to apply for variation or termination, for an order to terminate automatically on the wife's cohabitation, could cause the wife a great deal of financial hardship. Could still vary under s28(1A).

May be a variation if need is reduced to cohabiting with a partner who provides support.

• Atkinson v Atkinson- wife had a new partner. District judge held she wasnt likely to marry him. 4 months after the judgement, her and her new partner began to cohabit completely and the husband sought to vary the order.  Held that although cohabitation was not to be equated with marriage, it was a factor which the court should take into account since it had a bearing on the parties financial circumstances and the reasonable needs of the cohabiting spouse. The weight to be attached depends on the case. In the present case, the evidence was that the new partner had a business that was in a very strong position. As such the initial PPO of £30'000 a year was reduced to £10'000.
• Grey v Grey- although cohabitation does not equate to automatic termination of periodical payments, cohabitation is relevant, insofar as it means a reduction of the financial needs of the recipient. May be reduced if have a home etc.

What if the husband is less about to pay due to a change in circumstances?

Wright v Wright- initial order was £33'000 pa joint lives order. Husband applied for variation as...

his financial situation had changed for the worse and the wife had been expected to begin working within 2 years. The husband had planned to retire at 60 but had been unable to make sufficient pension contributions that would be postponed until he was 65. Wife had made no attempt to work again. Spousal maintenance was to be scaled down over 6 years to allow the wife to increase her earning capacity. Judge said at time of retirement the husband should no longer be paying spousal maintenance.

Can increase the length of periodic payment orders if necessary- G v G.

The Barder test governs this. An appeal must be lodged within days of the order being made. There must have been a fundamental assumption that has now be falsified by a change of circumstance since the making of an order.

Barder v Caluori- 1) new events have occurred since the order has been made. 2) these events invalidate the basis on which the order was made so that an appeal would be certain, or very likely to succeed. 3) the new events have occurred within a relatively short time period after the order was made. 4) the application for leave to appeal out of time has been made reasonably promptly. 5) the granting of leave does not prejudice third parties who have acquired interests in good faith and for value in the property which is subject to the order.

Point 2 is the most problematic aspect as it can be hard to determine the assumption upon which an order as made and assess whether this has been invalidated or falsified by subsequent events.

Williams v Lindley- the task of the judge considering the application is to identify the supervening event. Must then consider if that event has invalidated the basis of the order...

The judge should consider whether the supervening event is such that, if foreseen at the time of the order, the order would be significantly different. If so, an appeal from the order would be almost certain to succeed.

The supervening event must not be part of lifes normal difficulties-

• Myserson v Myserson- the husband recieved high risk assets on order of the court but they reduced in value by 86%. This was not a Barder event as the husband had agreed to the order and known that the assets were subject to the natural process of price flucuation.
• Thompson v Thompson- the cause of the change should not have been foreseen and taken into account when the order was made. The change should not have been brought about by the conscious fault of the person who sought to take advantage of it. It must be conscious so that those who may be ruined by a bad business deal could still apply. Exceptional case where leave would be given out of time.
• Shaw v Shaw- the public interest of finality to litigation must be emphasised.

• Barder v Caluori- the death of one of the parties allowed the appeal out of time. Consent order was made which the home was transferred to the wife. The wife killed the children and herself. The wife had left the estate to her mother. Clearly the assumption the order was made on (the wife and children would need somewhere to live) was invalidated. Husbands appeal was allowed.
• Reid v Reid- wife, was was 74, died 2 years before the consent order was made. The husbands application to appeal out of time was allowed as the death was a new event which could not reasonably have been foreseen. The court held the severe contraction of the wife's future needs would have led to a substantially different result so a new order was substituted.
• Benson v Benson- wife died 6 months after consent order was made. Husband had business difficulties which deriorated his financial position. The judge said the first 3 points were fulfilled by the death. However the contention that the husbands financial position was a new event was rejected as the seeds for potential disaster were already sown and plain to the husband before entering the consent order. Delay in mounting appeal was lengthy. The husband had also entered the agreement with financial and legal advice.

The change in circumstances must have been unforeseeable at the time the order was made.

• B v B- wife appealled out of time on the basis that the matrimonial home valued at £1.25m was subsequently sold by the husband for £1.6m. Application was dismissed. The increase in value was due to the property market and husbands expensive renovations. This kind of thing was foreseeable. There was no reason to believe the husband would have hidden the information if asked for it.
• Maskell v Maskell- the CoA held that the husbands redundancy 2 months after the order was made was not a supervening event. Rather loss of employment was a foreseeable challenge that happened to many.
• Wells v Wells- 6 months after he was ordered to transfer his entire interest in the house to his wife, the wife remarried and moved out. The husband was granted leave to appeal as the wife's situation had fundamentally changed and the whole basis of the order had been vitiated.
• Williams v Lindley- the parties separated and the wife and children went to live in the home of the employer. She claimed she wouldnt marry him and a 70:30 equity split in the home was given in her favour. Shortly after she married the employer. The main foundation for the order was the wife's urgent need for housing. This was destroyed within a month so appeal allowed.

• Dixon v Marchant- distinguished by the CoA from the above case. Husband ordered to pay lump sum and PPO for joint lives or until the remarriage of the wife. Husband sought capitalisation of the PPO and paid £125'000. During this time the husband believed the wife to be cohabiting with her long term partner. As part of the negotiations the wife said she had no intention of remarrying. 7 months after the order she married her new partner. Court said wife's indication of her present situation during negotiation had carried no future implication of intention and the risk of remarriage is something the husband had to bear. To succeed in his application the husband had to show that there was a mutual assumption between the parties that she wouldnt remarry for an indefinite period. Wells v Wells and Williams were distinguished because there was a need for a home which was then removed. The facts of the case fell well below what was needed for a Barder claim.