England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON CIVIL JUSTICE CENTRE
(HER HONOUR JUDGE ROBERTS)

		Royal Courts of Justice Strand London, WC2A 2LL
		11 February 2015

1. LORD JUSTICE PITCHFORD: On 25 April 2008, District Judge Penelope Cushing made an order in matrimonial proceedings that the former husband, Ian W (whom I shall call the petitioner), should make to his former wife Tracey (the respondent) periodical payments of £33,200 per annum during the parties' joint lives or until the respondent remarried or until further order.
2. Secondly, he was to make periodical payments of £10,400 in respect of each of his two daughters, now aged 16 and 10 years respectively, until they attained the age of 17 years. In addition, the petitioner was ordered to meet the costs of the girl's school fees.
3. The petitioner, who is now aged 59, was an equine surgeon in Newmarket shortly to become a partner in an equine hospital to which his partnership was about to move. The respondent, now aged 51 years, was not working. She had worked for a considerable period before the marriage, but at the time of the application she was caring for the parties' two daughters, who were being educated privately.
4. On 14 November 2012, the petitioner made an application in the Principal Registry for a variation of the original order on two grounds. First, that his financial circumstances had changed for the worse, and second, that District Judge Cushing had made it plain in her judgment that the respondent would be expected within the following 2 years to begin to make a working contribution towards her own household expenditure.
5. The final hearing took place before Her Honour Judge Roberts on 2 and 3 June 2004 and on 26 June she gave her reserved judgment.
6. The judge calculated that under the findings made at the time of the original order, the petitioner would be paying some 22 per cent of his net income in spousal and child maintenance. There had since been a downturn in his net income and he was now paying roughly 34 per cent.
7. The judge did not include in the calculation a substantial increase in his liability to pay school fees that had taken place since the original order because the petitioner had in the meantime received significant income from his share of a business called Newmarket Premixes Limited which would offset it. No income from this source had been factored in by District Judge Cushing because it was doubtful in 2008 that it was producing any reliable income.
8. At the hearing, the respondent's position was that there should be no adjustment of Judge Cushing's order. She challenged the honesty of the petitioner and the accuracy of the figures produced in support of his application. Judge Roberts found that the petitioner was, on the contrary, a man of integrity who had done nothing to mislead the court.
9. The petitioner, the judge found, had not since the order was made been in a financial position to make any investment towards his retirement pension. He had planned to retire at the age of 60, but had been required to postpone his retirement age until age 65 in approximately six years time.
10. The judge found, on the other hand, that the respondent was an unsatisfactory witness. In particular, on the issue of her own earning capacity the judge found that the respondent was evasive. She did not wish to answer many of the questions the judge found were properly put to her in cross-examination.
11. The judge accepted the petitioner's case that the respondent had been on strict notice that she would be expected to make a contribution towards her own maintenance.
12. The reason why Judge Cushing had made a joint lives order was that it was not possible to predict how things would develop, in particular because the younger daughter was then aged only 3 years. The judge said at paragraph 24 of her judgment:

"However, District Judge Cushing made it very clear that within a couple of years [the respondent] would be expected to start to contribute financially and that it was important that this happened whilst fitting in with her childcare responsibilities."

13. The respondent had, the judge found, previously worked before her marriage as a legal secretary and as an administrator. In fact, the respondent had done nothing since 2008 to look for work or to retrain or to prepare herself for work. The judge rejected all the reasons put forward by the respondent to explain her inactivity.
14. The judge applied the test in section 31(7) of the 1973 Act and concluded that it was appropriate to vary the order. Her objective was to scale down the spousal maintenance during the following 6 year period to enable the respondent to use and improve her earning capacity as she gathered experience and training and her childcare responsibilities reduced.
15. In the judge's view, the respondent's current income needs, including caring for the children, were £36,000, not £64,000 per annum as she had claimed.
16. Mr Johnstone on her behalf complains that the judge gave no reasons for reaching that conclusion. On the contrary, the judge said that she accepted the analysis presented to her on behalf of the petitioner by Mr Ewins. The basis for that calculation is set out in detail in the skeleton argument before the judge.
17. The judge ordered that the petitioner's periodical payments to the respondent should be varied as follows. From 1 November 2013 to 31 October 2014, the petitioner should pay to the respondent £32,000 at the rate of £2,667 per month. From 1 November 2014 to 31 October 2015, the petitioner should pay £24,000 at the rate of £2,000 per month. From 1 November 2015 to 31 May 2016, the petitioner should make payments of £1,500 per month. From 1 June 2016 to 31 December 2019, the petitioner should pay £12,000 per annum at the rate of £1,000 per month, at the conclusion of which the payments would cease.
18. The principal ground of the respondent's application for permission to appeal is that the judge failed to pay adequate regard to the fact that the original order by District Judge Cushing was a joint lives order.
19. It is submitted that the original order contemplated that the respondent would remain a dependent but that she would make some unquantified financial contribution to her own support at some stage. The judge had failed to provide reasons for her decision that it was now fair to treat the respondent as a person who could become self sufficient within 5 and a half years of the variation. In particular, Mr Johnstone complains that there was no examination of specific job opportunities or prospective income. In effect, the order was punitive.
20. Secondly, it is argued that the judge failed to carry out the exercise of assessing the respondent's current and future income requirements.
21. Thirdly, the judge had reached the conclusion that the petitioner needed financial space in which to make adequate provision for his own retirement. However, the judge had failed to take into consideration the respondent's needs in her retirement.
22. As regards the petitioner's position, the judge had failed explicitly to take into account the fact that on his retirement the petitioner would receive a lump sum as his share of the partnership accounts of Newmarket Equine Hospital and that he still had a 50 per cent interest in Newmarket Premixes.
23. Fourthly, the judge failed to give adequate attention to the respondent's needs in retirement.
24. Fifthly, it is argued that the judge failed to have regard to the reduction in the petitioner's commitment to school fees over time and maintenance, together approximately £42,200, once the parties' older daughter left school in July 2016.
25. I turn to the order and reasoning of District Judge Cushing. At paragraph 38 of her judgment, she said:

"There is a general expectation in these courts that once a child is in year 2, most mothers can consider part time work consistent with their obligation to their children. By September 2009/2010, the wife should be able to work. She will be 46 or 47 years old. I do not anticipate her having a significant earning capacity nor would it be reasonable to expect her to muck out stables for the minimum wage. However, she should make some financial contribution."

26. Judge Cushing did not amplify what she meant by the expression "significant earning capacity". Clearly the respondent did not have an earning capacity anything like that of the petitioner who earned over £150,000 per annum. In its context, this seems to be a finding that the respondent was unlikely, at least in the immediate future, to be financially self sufficient.
27. At paragraph 58, Judge Cushing expressly anticipated that the respondent might be dependent on the petitioner during her own retirement. There was, she found, a need for a joint lives order.
28. At paragraph 59, Judge Cushing declined to make a reducing order for periodical payments. Before doing so, she said she would need to know what was the respondent's precise earning capacity. However, there was a firm expectation that:

"She will use her best endeavours to develop an earning capacity in 2 to 3 years time to the extent that it is compatible with [the children's] care. It is no good to refer to other mothers who do not work. They are not relevant to this family. She needs to build up pension provision. The only way that can be done is to relieve pressure on the current income."

29. The last sentence in that passage is somewhat obscure. It seems to me that Judge Cushing meant that the respondent could only expect to make adequate pension provision for herself by working so as to supplement the periodical payments she was already receiving from the petitioner.
30. There was not a specific finding by the judge that at any particular stage in the future before her own retirement the respondent would be or could be expected to be self sufficient. That was because such a finding would, on the information available to Judge Cushing, have been premature.
31. Finally, at paragraph 68 her judgment, Judge Cushing referred to the "potentially continuing obligation" of the petitioner who may need to share income with the respondent into his retirement.
32. I turn now to the judgment of Her Honour Judge Roberts. At paragraph 24 she observed, correctly as I see it, Judge Cushing's expectation that within a couple of years the respondent would "start to contribute financially". She was well aware that Judge Cushing left open the possibility that the petitioner would still be supporting the respondent during his retirement.
33. At paragraphs 25 to 29 of her judgment, Judge Roberts had harsh words for the respondent's complete failure to confront the need to contribute financially. Her excuses were not accepted. The judge accepted that the petitioner would support his daughters financially after they left school. The judge found that upon the evidence before her, the respondent had exaggerated her income needs.
34. It was necessary for both parties to concentrate upon their retirement provision. The respondent's retirement was still some 16 years away and she needed to make plans immediately. When the petitioner retired, he would still be paying G's school fees and maintenance and would continue to support her at university. Much of that cost would come from his capital, on which, of course, he relied to support his own retirement. The judge concluded that the time had come to recognise that by the time of his retirement, the petitioner should no longer be paying spousal maintenance.
35. The judge then turned to section 31(7) and found that it would not be an undue hardship for the respondent to adjust to a variation in the order to achieve that result.
36. It seems to me that the principal question that arises in this application is whether there is a real prospect of establishing before the full court that Judge Roberts gave inadequate justification for her conclusion that the petitioner should no longer be expected to make any provision for the respondent during his postponed retirement. There are consequential questions, but for the most part they hinge on this central argument.
37. I do not consider it reasonably arguable that there should have been no variation of District Judge Cushing's order in the petitioner's favour, which was the position taken by the respondent before Judge Roberts. The issue, therefore, is whether the respondent has a real prospect of undermining the judge's scaled reduction in spousal maintenance.
38. In my view, there is no such prospect. Judge Cushing did not embark on a consideration of the respondent's earning capacity. Judge Roberts did. Over the course of a 2 day hearing, the respondent was questioned closely about her working experience and missed opportunities since the original order of 2008. In effect, the judge accepted the propositions being advanced on behalf of the petitioner.
39. By way of illustration, if the respondent earned £20,000 gross in an administrative or clerical capacity, her net income would be £16,555 per annum. With tax credits, child benefit and the continuing payments in respect of the children, the respondent would have a household income of over £46,000 without depending on spousal maintenance.
40. While Mr Johnstone criticises the judgment for failing to make explicit the figures upon which the judge was acting, it is perfectly plain to me that she was acting upon the figures presented to her in detail in the written arguments before her.
41. The judge calculated that during the following 2 years the respondent would be able to meet her reasonable costs without working, although it was imperative that she take immediate action to contribute financially to her own future. The respondent had, she found, experience as a legal secretary and as an administrator.
42. While I accept that the judge could have been more specific in setting out the foundations of her order, in my view, she gave sufficient reasons for departing from the provisional view of Judge Cushing.
43. As the judge said, it was open to the respondent to make a further application if, despite her best efforts, she failed to produce a significant financial contribution both for the present and for the future, but the onus would henceforward be on her.
44. In my judgment, Mr Johnstone has failed to make out a case that there is a real prospect of success in this appeal. For that reason, the renewed application is dismissed.