North –v– North
- Mr and Mrs North married in 1964 and divorced in 1978. They had three children. The marriage ended because, in 1977, Mr North discovered that Mrs North was having an affair with a friend of his; she then left, leaving him with the three children, who remained with him until they became independent.
- A final financial order was made in 1981 which included a nominal maintenance order in favour of the wife. Ground rents were transferred into Mrs North’s name to give her an annual income. (Further rents were later voluntarily transferred by Mr North and other payments were made to increase the wife’s income.)
- The husband re-married in 1984 and had two more children.
- In approximately 1998 Mrs North realised her assets in the UK and relocated to Australia. She made no effort to find work there and was not entitled to state benefits. She subsequently made poor investments and incurred substantial losses.
- By the time the matter came to Court again Mr North had retired through ill health but had built up a fortune of between £5m – £10m.
- Mrs North applied for an upwards variation of the nominal maintenance order.
- At first instance, the district judge awarded Mrs North periodical payments of £16,500 per annum which he capitalised to £202,000 on a clean break basis.
- Mr North appealed and the judge upheld the district judge’s decision. Mr North was then given permission by a single lord justice to take the matter to the Court of Appeal.
The husband bears some responsibility for the wife’s needs if he can afford it
The Court of Appeal criticised the district judge’s approach, on the basis that having made findings that the wife had been responsible for her own losses it did not follow that the husband would inevitably be responsible financially for any established ‘needs’. Further, as a matter of fairness, the husband should not be held responsible for the wife’s poor financial and lifestyle choices. Mr North’s financial conduct towards his ex-wife was also described as ‘generous’, ‘honourable’ and ‘irreproachable’. His appeal was upheld.
The Court of Appeal however, was not prepared to allow the wife to leave Court empty handed: ‘The bald case is that she has a need and he can afford it’. The court was not inclined to dismiss the wife’s application for a variation as a matter of principle. In the end the Court of Appeal awarded the wife £3,000 per annum, anticipating that there would be a capitalisation of that sum.
It is understood that the costs of this exercise were well in excess of £100,000.
Legislation introduced in 1984, which made amendments to the Matrimonial Causes Act 1973, highlighted the importance of a ‘clean break’ or ‘life after divorce’, as Lord Denning described it – nearly 30 years on Mr North doubtless thinks that nothing has changed, notwithstanding his impeccable conduct over this very long period of time.
Key point: If there is a maintenance order in place following a divorce, readers should be aware that the recipient can apply at any time to vary the order by asking for an increase in their maintenance or, more unusually, for a decrease and for a lump sum instead. This can often come as a shock to the payer, particularly as the application is often made just before the payer’s retirement, when he or she has a lump sum due or has saved money in anticipation of retirement.
In Mr North’s case, notwithstanding his tolerance and generosity for the best part of 30 years, there was still found to be some value in the nominal payments order. The Court of Appeal felt that, in circumstances where Mr North was able to afford the payments, and the wife was in ‘need’ – albeit selfinflicted need – it was still appropriate for further payments to be made.