Family Law Hub

Grocholewska-Mullins v Mullins [2014] EWCA Civ 148

The wife was appealing an order in which a capitalised sum of £300,000 was to be paid in three instalments by the husband between December 2012 and December 2014 in lieu of periodical payments.

  • In brief: A successful appeal brought by a wife ("W") against an order capitalising an award of spousal maintenance. W and her former husband ("H") had been "at loggerheads" for over twenty years. In 2006, she had been awarded £24,000 a year in spousal maintenance; that award had been varied downwards (and halved) in 2011 due to her cohabitation with a new partner but had subsequently been varied back up again to £25,000 and, in those variation proceedings, had been capitalised at £300,000. The capitalised payment was ordered to be payable in three instalments between December 2012 and December 2014 so as to be in line with the sale of H's business; the largest sum of £225,000 was ordered to be paid in December 2014. W's periodical payments came to an immediate end on the making of the capitalisation order (i.e. there were no interim periodical payments payable – just the three instalments). By the time of this hearing, only one instalment had been paid by H and therefore W was owed £250,000.  

    W was granted permission to appeal the payment plan; significantly, the appeal court was asked to consider, if it was correct that the instalments could not be structured so as to provide a more even stream of income for W, had the trial judge been wrong not to continue periodical payments to W whilst she awaited the largest instalment?  

    In the lead up to the appeal hearing, both parties made offers to settle:

    • W's offer comprised a total sum of £262,000 (instead of the £250,000 outstanding) to be paid in regular instalments - £35,000 upfront and then six equal monthly payments thereafter 
    • H's offer (which was effectively based on his indebtedness) was £1,000 a month as interim periodical payments until the final instalment of the capitalised sum was paid (with credit being given for those monthly payments). 

    The appeal court noted that W had had "more time than almost any former wife I have encountered in the family courts" to acclimatise herself to financial independence. H, it was said, could not afford to pay any more and the "balance of hardship" had been appropriately decided by the trial judge. So, how then was W's appeal successful? Well, the appeal judges accepted H's offer to make the continuing periodical payments until the final payment of the capitalised award was made and amended the original award accordingly.  

    Comment

    A good reminder to think carefully about the structure of payments especially where a party may be kept out of the bulk of their entitlement for some time. Perhaps consider explaining the reasoning for a particular structure in a preamble in any order so as to help avoid a future dispute or else consider nominal interim payments to keep the "cashflow" going.

Case note, published: 11/03/2014

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  • The wife was appealing an order in which a capitalised sum of £300,000 was to be paid in three instalments by the husband between December 2012 and December 2014 in lieu of periodical payments. The wife complained of cash flow problems. The judge agreed with the husband's offer of continuing periodical payments of £1,000 until the final payment of the capitalised sum was made, the interim payments to be deducted from the final instalment so that the total sum to the wife remained as £300,000. Judgment, 18/02/2014, free

Published: 11/03/2014

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