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Moylan J calls for caution when courts make financial orders based on future income

Permission to appeal granted to Husband in financial remedies case

In CR v SR [2013] EWHC 1155 (Fam) the Husband has been granted permission to appeal an order which provided that the parties only substantial capital asset, the former matrimonial home (valued at £975,000) should be transferred to the wife outright (subject to mortgage of £600,000) with an ongoing joint lives maintenance order for the wife.

The Husband contended that it would be unfair for the wife to receive the principal capital asset in this way and that such an order would lead to capital inequality between the parties.  He argued that an outright sale or a Mesher type order would have been more appropriate.

The parties had married in 1995 and separated in 2011. The husband is 45, and the wife is aged 46 and they have three children, aged 14, 12 and 6.

There were a number of significant debts including credit card debts of £19,000, and a liability for unpaid school fees of £20,000 and mortgage arrears of £13,000

In respect of maintenance the Husband argued that the wife's claim for maintenance for herself should be dismissed or that in the alternative, a term order was the appropriate order. He proposed that he should pay maintenance for the children of a total of £15,000 p.a.

The wife proposed that an outright transfer to her of the former matrimonial home and that the husband should pay maintenance of £3,000 per month (split as to £2,000 for her and £1,000 in respect of the children.)

Moylan J considered that in his view he Husband's appeal did have a real prospect of success stating, " he has a real prospect of establishing that the current orders, in particular in combination, are outside the bracket of reasonable orders in that they do not reach a balanced outcome."

The judge went on to say that, "when the court is making orders based on estimates of future income, there needs to be, in my judgment, a reasonable degree of caution exercised to make sure that the order which is made is (a) affordable, and (b) does not result in an imbalance or an undue imbalance between the parties' respective future financial positions. There is on that point, in addition in my judgment, a reasonable prospect of the husband satisfying a judge on appeal that the District Judge's order in respect, in particular, of maintenance is based too heavily on estimates of future income, which may, in fact, turn out not to be achieved."

For the full judgment and fuller case summary, written by Alison Easton of Coram Chambers from which this news item is derived, please click here