CCFMI 96/0416/F
Neutral Citation Number: [2000] EWCA Civ 649
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ALDERSHOT AND FARNHAM COUNTY COURT
(HIS HONOUR JUDGE SHAWCROSS)

Royal Courts of Justice
Strand
London WC2

Thursday 3 October 1996

B e f o r e:

LORD JUSTICE BELDAM
LORD JUSTICE WARD
- - - - - -
MAURICE RAYMOND FLAVELL
Appellant

- v -

ANN FLAVELL
Respondent
- - - - - -
(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 180 Fleet Street,
London EC4A 2HD
Tel: 0171 831 3183
Official Shorthand Writers to the Court)
- - - - - -
MR. M BERKIN (Instructed by Sutherland & Co., Southampton) appeared on behalf of the Appellant

MR. M HOSFORD-TANNER (Instructed by Hart Brown & Co., Surrey) appeared on behalf of the Respondent
- - - - - -
J U D G M E N T
Thursday 3 October 1996

LORD JUSTICE BELDAM:  I will ask Lord Justice Ward to give the first judgment.

LORD JUSTICE WARD:  This appeal concerns the approach the Court is to take to those orders for periodical payments following divorce which impose a term on the basis that, by the end of that term, the receiving party will have been able to adjust without undue hardship to the termination of financial dependence upon the paying party.  

The material facts are these.  The parties married in December 1970.  They have two boys, born in 1973 and 1975, both of them now being independent.  They separated in 1988 after some 18 years of marriage or thereabouts.  Their marriage was dissolved by decree absolute granted in 1992.  Following the dissolution of their marriage, the wife's claims were disposed of by the District Judge on 27 August 1993.   After a contested hearing he made an order to this effect.  First, he ordered that their matrimonial home in Hindhead, which was in their joint names, should be sold on a date after 1 July 1994 and that the net proceeds of sale be divided as to 60 per cent thereof to the wife and 40 per cent to the husband.  The relevant order, for present purposes, is his order that the husband should make periodical payments to the wife, at the rate of £450 per month, from the last day of August 1993 until 8 August 1995.  Effectively, he was imposing a term of two years.  There was an order for periodical payments for the younger boy, but that has now ceased to operate because of his having completed his education.  The order also provided that: 

"Save as aforesaid [the respective claims of the parties] for maintenance pending suit periodical payments secured periodical payments lump sum and property adjustment Orders do stand dismissed and neither party shall be entitled to make any further application in relation to the marriage under the Matrimonial Causes Act 1973 Sections 23(1)(a) or (b)."  

The wife was unhappy with that order -- one imagines that part of it which imposed the term of two years -- and she was minded to appeal against it.  That appeal did not proceed, perhaps because the husband sought clarification of the order and invited the District Judge to add to the provision for periodical payments a direction that the wife would not be entitled to apply for an extension of the term.  The District Judge rejected that request, indicating quite clearly that this was not a slip but was his deliberate intention.  

Following that order, which had been made upon a basis that this lady who was by profession an architectural technician would make serious efforts to achieve independence, she did what was required of her and obtained part‑time term employment as a sales assistant to kitchen designers, her architectural skills complementing her abilities as a sales person.  That income, together with a modest investment income on capital of about £36,000 not being sufficient to meet her need, she applied to vary the order and to extend the term.  That application came before the deputy District Judge who on 22 September 1995 made a modest adjustment, extending the term of periodical payments for a further six months, primarily on the basis that, within that time the matrimonial home (which it had been difficult to sell) would in fact be sold and that further capital would be released to the parties, and especially to her, from which she could derive further support. The wife appealed that order.  Her appeal was heard by his Honour Judge Shawcross who handed down a written judgment on 18 December.  He ordered that the appeal be allowed and he ordered that the part of the order of August 1993 providing for termination of the periodical payments on 8 February 1996 be deleted.  There would be no provision for termination.  He did, however, reduce the amount of the periodical payments from £450 per month to £250 per month.  The husband now appeals against that order to this Court.  
Mr. Berkin, who appears on behalf of the Appellant, submits that on an application to vary the Court does not have the jurisdiction to entertain the application unless the Applicant can show exceptional circumstances, or at least a material change in position.  Only if that is shown does the Court go on to exercise its discretion and, having considered all the circumstances, make whatever order is appropriate.  

In judging that submission it is necessary to consider the statutory framework.  By the amendment to the Matrimonial Causes Act 1973, which was affected by the Matrimonial and Family Proceedings Act 1984, section 25A was introduced.  That required in subsection (1) that the court was obliged to consider whether it would be appropriate so to exercise its powers to grant ancillary relief 

".....that the financial obligations of each party towards the other will be terminated as soon after the grant of the decree as the court considered just and reasonable."  

It provided in the second subsection, relevantly for this purpose, that where the Court decides to order periodical payments, then 

"The court shall in particular consider whether it would be appropriate to require those payments to be made or secured only for such term as would in the opinion of the court be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party. "  

Subsection (3) provides that: 

".....if the court considers that no continuing obligation should be imposed on either party to make..... periodical payments....., then the court may dismiss the application with a direction that the applicant shall not be entitled to make any further application.....[for such orders]."

The 1984 Act also introduced section 28(1A).  That is highly material.  It provides that, where an order for periodical payments is being made, then: 

".....the court may direct that that party shall not be entitled to apply under section 31 below for the extension of the term specified in the order." 

Applying those sections to what happened in 1993, it is plain that the view of the Court was at that time that this wife could adjust without undue hardship to the termination of her financial dependence on her former husband.  Consequently it made the two year term, but, and significantly, it did not make the direction under section 28(1A).  

The power to vary is contained in section 31.  Subsection (1) provides: 

"Where the court has made an order to which this section applies," 

and there is no dispute, of course, that this is such an order, 

"then, subject to the provisions of this section [and of section 28(1A) above] the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended."  

Subsection (7) provides for the manner in which the Court is to 

proceed.  That subsection reads: 

"In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen, and the circumstances of the case shall include any change in any of the matters to which the court was required to have regard when making the order to which the application relates, and -

	(a) in the case of a periodical payments.....order made on or after the grant of a decree of divorce......the court shall consider whether in all the circumstances and after having regard to any such change it would be appropriate to vary that order so that payments under the order are required to be made only for such further period as will in the opinion of the court be sufficient to enable the party in whose favour the order was made to adjust without undue hardship to the termination of those payments." 

I reject Mr. Berkin's primary submission.  The very words of section 31(1) make it plain that there is unrestricted power to vary.  The Court's jurisdiction is afforded by section 31(1) and there is nothing in the language of that section which requires that jurisdiction be accepted only if there is some exceptional circumstance or some material change.  

Mr.  Berkin sought to derive support for his proposition from a passage of the judgment of Cazalet J in Garner v Garner [1992] 1 FCR 529.  The case concerned an application to vary a periodical payment made to children.   In the course of the judgment Cazalet J said this: 

"Almost invariably an application to vary an earlier periodical payments order will be brought on the basis that there had been some change in the circumstances since the original order was made; otherwise, except in exceptional circumstances, the application will, in effect, be an appeal.  If an order is not appealed against, or is made by consent, then the presumption must be that the order was correct when made.  If it was correct when made, then there will usually be no justification for varying it unless there has been a material change in the circumstances."  

I entirely agree.  But the Judge says nothing to justify a submission that jurisdiction is dependent upon exceptional circumstances or some material change.  The exercise of the discretion may, of course, be affected by that consideration, but that is a matter not going to the Court's jurisdiction.  

The judgment as a whole makes the Court's approach on an application to vary quite clear.  Whatever may have been the position under the Matrimonial Causes Act 1950 which, in its terms as set out in section 28, seemed to emphasise that the primary consideration was the increase or decrease in the means of the parties, the language of the 1973 statute has been established by several judgments of this Court -- including Garner itself, and preceding Garner, Lewis v Lewis [1977] 1 WLR 409 -- to be that the Court does have a discretion on an application to vary, and that the Court is not required to proceed from the starting point of the original order but looks at the matter de novo. So the issue in this case is whether, judging this application to vary on the facts before the Court, the wife was entitled to an extension of the term.  

The judgment of his Honour Judge Shawcross was handed down after consideration had been given to it by him.  It is a judgment which runs to only 5 pages of typescript.  It is a model of its kind.  The temptation to annex it to this judgment and say no more than that I agree with it is overwhelming; but nonetheless I feel obliged to resist it.  He addressed himself as to the correct approach in judging an application to vary and in applying the requirements to section 31(7).  He said: 

" I must have regard to all the circumstances, including any change in the matters to which the court was required to have regard when the original order was made, and to consider whether it would be appropriate in those circumstances to limit the wife's right to maintenance for a further period on the basis set out in section 31(7)(a)."  

I agree.   He directed himself that this was not an appeal from the original decision.  He said that in his judgment he had to approach the application on the basis that the 1993 decision was correct.  I agree.  He said there was no burden on the wife to rebut any presumption that her rights should be terminated, otherwise than on remarriage or joint lives.  Again I agree.  He correctly observed that the specific effect of the District Judge's refusal to impose the section 28(1A) direction was that: 

".....it must follow that the court is deliberately leaving open the possibility of extending the period if matters do not work out as anticipated at the original hearing.  

In my judgment, therefore, the correct approach on such an application is to look at the present situation, examine the basis of the original order, consider the event since that order was made, and decide what is a fair order in the light of those matters, applying the requirements of section 31(7)."  

I agree.  He therefore carefully analysed the effect of the 1993 judgment.  He correctly analysed that the reason for the limitation of two years was "the hope and expectation [was] that [the wife] would adopt a more realistic view of her financial position."   Also that she would "be able to increase her earnings considerably, purchase cheaper accommodation without resorting to her other capital, and reduce her outgoings significantly."  

He then looked at the events since 1993, which were that the house had not been sold but that she had obtained her part‑time work bringing in gross earnings at the rate of £5,500 per annum.  He felt there was justification in her view that that limited her ability to earn from other resources.  He itemised the husband's present position, which is that he has set up a relationship with another lady, that they have a child, that they live in her home; she has some income from her business and he, the husband, remains a university lecturer who in his spare time (perhaps not so readily available now) was able to conduct a modest business making specialised glassware which in the past had produced income.  From those two sources his income in the past was £25,000 per year net, though there was a question mark over his ability to earn the £5,000 from that part‑time occupation.  

The Judge then dealt with the 1995 judgment which he was considering.  He observed -- and this is an important observation to note -- that no evidence was called by either side and that the appeal before him proceeded "on the basis of oral submissions based on the facts and figures (as amended by agreement) which were before the Deputy District Judge in September."   I say that is important because those are the findings of fact upon which that appeal proceeded, and Mr. Berkin has an uphill task to persuade us, as he has sought to do, that we should go behind them.  

The Judge found that, in his view, this was a wife who set a reasonable requirement for her accommodation need, that it was perfectly reasonable for her to expect to continue to live in the Hindhead area, and "it follows therefore that the sale of the matrimonial home will not reduce the wife's outgoings to a very great extent, nor is it likely to release very much additional capital with which to augment her income."  If I am to be pedantic about the Judge's approach, it would be to add the comment that he failed to have regard to the likely change and improvement in the husband's position when 40 per cent of his property (which was recently hoped to achieve £163,500) became available to assist his financial position and improve it considerably.  

The Judge said of the wife that she was 54 years old. She would have secure mortgage-free accommodation.  She has capital, but "in my judgment a very limited earning capacity.  She has no pension.  She has no real dependants, though I accept that it is reasonable for her to have accommodation sufficient to provide for occasional visits over the years from the 2 adult sons of the marriage." 

His approach to the appeal was that: 

"....it is not usually appropriate to provide for the termination of periodical payments in the case of a woman in her mid-fifties." 

I wish to endorse my approval of that observation.  The words of the section do not impose more than an aspiration that the parties should achieve self-sufficiency.  The power of the Court to terminate dependency can, however, be exercised only in the event that adjustment can be made without undue hardship.  There is, in my judgment, often a tendency for these orders to be made more in hope than in serious expectation.  Especially in judging the case of ladies in their middle years, the judicial looking into a crystal ball very rarely finds enough of substance to justify a finding that adjustment can be made without undue hardship.  All too often these orders are made without evidence to support them.  Here the Judge correctly held that: 

"Such an order will usually only be justified where she has substantial capital of her own and/or a consistent and significant earning capacity." 

He found that her capital could hardly be described as substantial. At a return of 5 per cent it would produce only £1,800 per annum.  He found that she has very limited earning capacity.  He repeated the finding that the home was unlikely to produce very much spare capital.  He found it was unlikely she would be able to increase her earnings to any great extent and that a shortfall between income and expenditure was likely.  The risk of ill-health and loss of employment for a person in their mid-fifties are real factors to take into account.  She had no pension whereas the husband, by contrast, was secure and well provided for with professional pensions to follow his ceasing work in due time. 

His conclusion was that the optimism of the District Judge in 1993 had not been borne out by events, nor was it likely to be.  That seems to me a wholly unappealable finding.  Accordingly, the wife did not have sufficient resources of her own to be confident of supporting herself, even at a considerably reduced standard of living.  In the light of those findings the Judge concluded that it was impossible to satisfy the duty imposed upon him by section 31(7)(a) of establishing that this wife could adjust without undue hardship to the determination of her dependence upon her husband.  In the light of that conclusion it was inappropriate to impose any term.  It was within his power, on the hearing of an application to vary, to come to that conclusion even though a term had previously been imposed.  Each case depends upon its own facts, but on the facts of this case that was a decision plainly right and in no way wrong.  He reduced the dependence to £250 and there is no complaint about that from the wife.  

Mr. Berkin, having failed in his submission that the Judge had no jurisdiction, is therefore driven, it seems, to attack his findings.  He submits that this lady should be expected to do more than she is doing to become self-sufficient.  The findings of the Judge preclude that submission.  He is not shown, in my judgment, to be plainly wrong about that.  He submits that it is wrong to leave the order open to endure for a term until her remarriage or for their joint lives, but, in the light of the finding that she cannot adjust without hardship, that was perfectly proper.  

Far from finding that the Judge was plainly wrong, everything in his judgment entirely commends itself to me and, for those reasons I would dismiss the appeal.  

LORD JUSTICE BELDAM:  I agree.  

Appeal dismissed with costs.  (No order for costs in the court below)