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Home > Judgments > 2008 archive

VB v JP [2008] EWHC 112 (Fam)

Application for an increase in periodical payments on the grounds that the wife and the childrens' needs had increased since the original order and that she was due compensation following Miller & McFarlane.

Before giving up work to look after the family, the wife had been a personnel manager with prospects of rising to director level. The husband was a city solicitor who was made a partner. Just before starting the family, the wife had an opportunity for a new position but that would have required a move to which the husband would not agree as he did not want to jeopardise his own career prospects.

The wife was now claiming an element of compensation in an increase of her periodical payments following the decision in Miller & McFarlane. The key issue in this judgment is how to apply the claim for compensation. The President reviews the evidence of the wife's possible loss of earnings and the recent post-Miller case law where compensation has been an issue and in paragraph 59 he draws several conclusions. In the light of his findings he identified two specific issues that fell to be decided; 1) can the element of compensation only be considered at the original application and; 2) should compensation in this case be considered separately from needs. He concluded that periodical payments can be subject to revision and that compensation could be considered but, given the difficulty in quantifying the wife's loss of earnings, he did not need to consider that separately.

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The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.


Neutral Citation Number: [2008] EWHC 112 (Fam)
Case No: FD01D01620
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 29/01/2008

Before :

SIR MARK POTTER,
PRESIDENT OF THE FAMILY DIVISION
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Between :

VB (Applicant)

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JP (Respondent)

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Miss Ann Hussey (instructed by Family Law Partnership) for the Applicant
Miss Deborah Bangay QC (instructed by Harcus Sinclair Solicitors) for the Respondent

Hearing dates: 9-10 October 2007
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Judgment
Sir Mark Potter, P:
1. This is a wife's application pursuant to section 31(7) of the Matrimonial Causes Act 1973 ("the 1973 Act") for an increase in the amount of the periodical payments payable under paragraph 2 of a consent order dated 28 June 2001 ("the original order") relating to the wife's claims for ancillary relief following divorce from her husband after a marriage which had lasted some eleven years. The husband is 43 and the wife is 45. The parties were married on 29 September 1990. There are two children of the marriage, both boys: B born 21 August 1994 (now 13) and M born 19 November 1996 (now 11). They lived with the mother. They go to separate schools. B is a day boy at a well-known public school. M attends a separate preparatory school as a day boy, but it is intended that he will proceed to his brother's school in September 2009.

2. Under the original consent order there was a capital clean break, including a provision as to pension sharing whereby the wife received approximately 60% of the capital assets and the husband 40%. The wife received the four-bedroom matrimonial home in Welwyn Garden City, mortgage free and valued at £330,000.00 together with its contents, the family car and other assets totalling some £28,100 and her personal pension of £26,000. She also received a lump sum in lieu of a pension share of £50,000. The husband retained assets of £195,000 plus his pension of £147,000.

3. The husband agreed to provide and pay to the wife (i) periodical payments for herself at the rate of £33,000 per annum during joint lives until her re-marriage, her co-habitation with another person of not less than six months, or further order; (ii) periodical payments for the benefit of each of the children of £24,000.00 per annum until they attain the age of seventeen or cease full-time tertiary education if later, or further order; (iii) the school fees for both boys and such reasonable extras as should be agreed between the parties; (iv) BUPA benefits for the wife and children as long as they were in receipt of periodic payments; (v) should he cease to be partner in his solicitors' firm, a life insurance policy on the whole of his life for £600,000 at a cost of £7,000. per annum.

4. At the time of the consent order, the husband's gross income was £534,000, (net £340,000). Expressed as a percentage, including the then level of the boys' school fees, the husband was committing 34% of his net income to the maintenance of the wife and children. It is not in issue that the total of the agreed periodical payments of £81,000 for the wife and the children were apportioned on an arbitrary basis between the wife and the children and not based upon any calculation of their separate needs. There was clear over-provision in respect of the children at the time, from which the wife was plainly intended to benefit.

5. The parties were both living in the matrimonial home at the time of the order. However a month afterwards the husband purchased his present home in Islington for £725,000 funded by a substantial mortgage (£540,000) and part of his cash resources (£68,000), plus a loan from his firm for the balance (£117,000). Within six months of the order, the wife sold the former matrimonial home realising £316,478, but rather than buying a new home, she moved into rented accommodation with the children for the next three years.

6. Three years later, in November 2004, the wife found and purchased her present home, a three-bedroom property in Ware conveniently situated for the boys' educational needs, at a price of £585,000. Her overall costs for the purchase were just under £610, 000. She bought the house mortgage-free, the purchase being funded by the sale proceeds of the former matrimonial home (£316,500,00), her lump sum received on divorce (£50,000.00); shares and investments retained on her divorce (£30,000.00) and an inheritance from her mother (£118,000.00). It appears that, through rigid economies, she had also accumulated substantial savings, not only from the invested proceeds of the matrimonial home but out of the maintenance payments to herself and the children, over the period of three and a half years since the original order. These sources in combination (it is not clear what the relative figures are) funded the balance.

7. The house in Welwyn which the wife sold had four bedrooms and may appropriately be described as a compact modern house, whereas the house she bought in Ware is more spacious with a large garden, as is apparent from the brochure before me in which it is aptly described as a late Victorian "Gentleman's Residence". It is built on a larger scale than the home in Welwyn. Although it only has three (large) bedrooms, one with an en-suite bathroom, it has a further bathroom, two reception rooms, a dining room, a kitchen and large garden. The original fourth bedroom had been converted to provide a spacious first floor landing space.

8. In February 2004, the wife sought to pursue the husband for certain arrears of maintenance which he subsequently paid. However she also requested an RPI increase in respect of the periodical payments for herself and the children. At that stage, according to the husband, his projected gross income for 2004/2005 was £652,000 (i.e. an increase of over £100,000.00 since the original order) but it was stated that there was no certainty as to the actual amount. In February 2006 the figure proved in fact to be £807,241 (£494,410 net).

9. However, the wife was not aware of that discrepancy as at 19 September 2005, when a further consent order was made by District Judge Berry ('the RPI Order') varying the 2001 order. That order acknowledged that there were now no maintenance arrears and provided that RPI increases would be payable on the 1 April of each year in respect of the periodical payments for both the wife and the children. However, there were provisos that (i) if the husband's income reduced from any one year to the next, no increase would be made for that year and (ii) that in the event the husband's annual income from all sources reduced below the figure of £534,000 gross (which he was receiving at the time of the original consent order) such RPI increases would no longer apply and any future increase would be calculated by reference to the original level of periodic payments due as at the date of the 2005 order. It also contained an unusual "claw back" provision to the effect that the husband was not obliged to pay, nor the wife entitled to pursue, any arrears of the RPI sums payable till they amounted to £10,000. There was also a provision that "reasonable extras" which the husband was liable to pay under the original order in respect of the children's education should include fees for boarding for each of the children of the family for no more than one night per week per term at the schools which they attended as day pupils from time to time, the wife being entitled to deduct £5 for each such night spent boarding from the periodical payments payable for the children under that order. As a result of the RPI order, the global level of maintenance currently payable to the wife for herself and the children is £85,608.00 per annum but, because of the operation of the "claw back" clause, no RPI increase has yet been paid.

10. On 27 October 2006 the wife's solicitors wrote to the husband's solicitors stating that the wife's outgoings were now £51,000 "excluding any ability to save for a replacement car, unforeseen expenditure future security, nor for appropriate expenditure on items such as eating out, holidays, weekends away, clothing, health club membership and domestic help". It was stated that the mother's inheritance and the children's maintenance had been subsidising those outgoings, but that the children's expenses had more than doubled since 2001 and were no longer available for that purpose. She was no longer able to manage on the overall maintenance paid; the husband was in any event paying a lower figure than he should be upon his level of income; and that she proposed to issue an application for increased maintenance, based on her needs and upon the principle of compensation as propounded by the House of Lords in Miller and McFarlane.

11. In her Form E dated 8/1/2007 the wife set out a budget for the children which, if accurate, virtually absorbed the sum of £48,000 payable per annum for their maintenance and advanced a separate budget for herself of £102,000 per annum as against the £33,000 currently provided. She now seeks an upward variation to £130,000.00 per annum on the basis that she is entitled to a 'premium' over budget of £28,000.00 by way of compensation over and above need for loss of the wife's earning capacity (relationship-generated disadvantage).

12. Following service of the husband's Form E, on 15 March 2007, District Judge Berry ordered that the parties set out their proposed evidence as to the wife's earning capacity, that they should update their financial position and deal with any medical issues (in this respect the wife has a tender and unstable back condition).

13. The husband's capital position has built up substantially since the making of the original order, but I have not been asked to examine the capital position of the parties in any detail. The original order provided for a clean break in relation to the capital assets then available to the parties. Further, the parties have not suggested, nor do I consider, that there is yet a case for a clean break in relation to periodical payments pursuant to s.25A (1) of the 1973 Act or for an order that payments be made for a limited term pursuant to s.25A (2). It is thus my broad task to consider what is the appropriate sum to be ordered by way of variation of the original periodical payments order in respect of the wife on a continuing 'joint lives' basis or until further order.

14. However, as an incident of that task, the following issues are now before me :

(1) Is the wife's budget inflated, even when generously assessed?
(2) Do certain items of claim represent an illegitimate attempt to re-open the wife's capital claims finally settled at the time of the order?
(3) Does the wife have an unexploited earning capacity and, if so, at what level and when does it fall to be considered.
(4) Does the principle of compensation apply in an application to vary periodical payments order?
(5) If so, is it appropriate to apply it on the facts of this case?
(6) What is the correct quantum of periodical payments?
(7) Should a conventional RPI clause be included in the order as varied and, if so, when should it start?
(8) At what level should the husband maintain life cover during the subsistence of the spousal periodical payments?
(9) Should the co-habitation clause be deleted as a trigger to cessation of payments?
(10) Should the husband be responsible for the payments of extras on the school fees bill and to what extent should that cover flexi/weekly boarding?
(11) Should the court order a reduction to be made in the children's payments once they start tertiary education?

I shall deal with those issues in order following brief observations about the original order.

15. In this case it is plain that the parties recognised at the time of the original order that the capital available from the husband at that time was insufficient to be able to make a capital payment on a clean break basis sufficient to provide for the wife's future maintenance as primary carer of the children and it was necessary to make provision in that regard by way of a periodical payments order as well as orders in respect of the maintenance of the children, while agreeing that the wife and children should be treated as one for the purpose of providing the global sum sufficient for their joint needs. The wife stated in evidence, that there was no science to the order. She stated that on her calculations she was spending £84,000.00 a year on her and the children's maintenance at the time. She had asked for that sum, index-linked, but in the event an order was agreed which provided for a total of £81,000.00 without any provision for an RPI increase. The husband made clear that the parties were legally represented by lawyers who negotiated the order on the basis of the figures. The figure of £81,000.00 (together with the husband's payment of £20,000 per annum school fees, insurance of £7000, and BUPA subscriptions of £847) amounted to an award of 34% of the husband's then net annual income for the maintenance of the wife and children, leaving him ample out of which to provide a home for himself and any future wife or partner.

The wife's budget
16. I take issues (1) and (2) together.

17. The wife's budget as presented for assessment of her needs is a comprehensive itemised list under the headings of Property, House Living Expenses, Personal Living Expenses, Car, Leisure, Mortgage, Pensions and Savings, Unforeseen Expenditure. The wife states that the figures are based on what she has in fact spent over the last year, but acknowledged in evidence that various items were claimed at the level she considered reasonable as opposed as to what she had in fact spent, emphasising the degree to which she had economised by buying few clothes, having no domestic help, avoiding dry cleaning etc. The husband asserts that the figures are exaggerated, but through his counsel Miss Bangay QC has concentrated his attack on a few specific items and, in the absence of detailed challenge, I broadly accept the figures set out, save as indicated below.

18. I turn first to the last three items. Under the heading "Mortgage", the wife gives a monthly sum of £833 in respect of a flexible mortgage of up to £250,000.00 taken out with Northern Rock in March 2007. This is said to have been taken out for the purpose of subsidising the wife's maintenance by £2,000 per month up to the hearing, her legal fees, her intention to replace her car with a new car costing £45,000.00, and £150,000 for an extension to her house to add a fourth bedroom and en-suite bathroom. The amount of the mortgage taken up was £42,000.00 at the date of the hearing but was said to be likely to rise to £52,000.00 by the end of October 2007.

19. Miss Bangay submits that this item is in fact an ill disguised effort to increase the capital provision for the wife at the expense of the husband contrary to the terms and intention of the original order of 20 June 2001 and the dictum of Thorpe LJ in Pearce v Pearce [2003] 2 FLR 1115 at paragraphs [36] and [39]. I consider Miss Bangay is right. In her form E, the wife claimed that her current income needs exceeded her actual income such that she had to eat into her capital to the extent that it had reduced over the previous 12 months by £41,000.00, the approximate amount of the mortgage so far taken up. In fact, it is apparent that between those dates, the wife spent almost exactly that sum, not on subsidising her living expenses, but on renovating her new home. Furthermore, the mortgage facility was in large measure obtained (though it has not yet been used) to finance the installation of a proposed new bedroom and en-suite bathroom. It appears, however, that such an improvement is a luxury rather than a necessity. The wife has made no case for it so far as the needs of the family are concerned. The position seems to me that her purchase of the Ware property in 2004 was her own choice in respect of the investment of her capital settlement and the savings she had been able to make out of the global maintenance available up to that date and she is not now entitled to require the husband effectively to supply further capital by the back door by treating it as an item in her day to day budget requirements.

20. The same is true of the very substantial claim of £20,000 per annum for Pensions and Savings. The first paragraph of the original consent order provided for the husband to pay to the wife a lump sump of £50,000 which she duly received. According to the husband it was the last item agreed, the wife saying that she intended to use it in the purchase of a new house (as she did). She agreed in evidence that she did not dispute that she accepted that £50,000.00 as her share of the husband's then pension fund and paragraph 5 of the order makes quite clear that she should not be entitled to make further pension claims.

21. As to the wife's requirement to fund the purchase of a new car, a significant element of the wife's annual budget in respect of car expenses includes a high yearly sum claimed in respect of depreciation. The suggestion that in addition the husband should finance the purchase of a new car outright via the mortgage would plainly involve double counting. At the same time, a continuing and realistic figure does need to be provided under the heading "Car" if the wife is to finance the essential of a family car by hire purchase or other means.

22. Finally, the claim for Unforeseen Expenditure of £500 per month (£6000 per annum), while not in principle objectionable, appears to be of a makeweight nature given that the wife's budget has been carefully and comprehensively prepared on the basis of present figures over a heavy spending year and an assumption that her future needs will continue at that level.

23. If, at this stage of the exercise, the last three items in the wife's budget are deducted, the total of the items remaining under the preceding headings is £66,000 - odd.

24. In attacking the rest of the budget, Miss Bangay has rightly not sought to look at the minutiae, but has concentrated on certain particular heads which she submits are substantially over-claimed. There is a claim of £919 per month for repairs, maintenance and decoration and £395 per month for depreciation of white goods, electrical and computer equipment. That yields a total of £15768 per annum. I do not doubt that the repairs and maintenance items have been expended in the last year, but they are not likely to be annually repeated at that level. On the other hand, every so often, some major and expensive item may be required. It seems to me that the depreciation of white goods is plainly overstated. For purposes of broad calculation in respect of future needs I would reduce the annual figure of £15,768 per annum to £12,000.

25. Under Household Living Expenses I would reduce the annual claim for personal computer doctor for the wife and children from £624 to £250. The sum of £98.00 per month for 'Domestic Help' (i.e. £1,170.00 per annum) also requires deduction as it appears that the wife does not employ domestic help. At the same time, so far as the future is concerned, if the wife is to re-train to exploit her earning capacity such help may well become necessary and I do not consider such provision unreasonable.

26. Despite the challenge by the husband on car expenses I do not consider that any reduction is called for bearing in mind the size and age of the car concerned and the need to finance a replacement.

27. The remaining substantial item of challenge has been under the head "Leisure", in relation to the claim in respect of holidays for the wife taken with the children. They are claimed as what appears to be a high annual figure of £25,476. The wife has made clear that in the years April 2005/6 and April 2006/7 she has taken three one week holidays abroad with the children, staying in hotels and spending on a generous basis, the cost rising from £9,200 in 2005/6 to £16,990 on 2006/7, largely because of the greater costs involved for a week's skiing holiday in 2006/7. In addition, she has taken a 3 day break in Paris and a week's holiday in Italy on her own for a total cost of £3,150. Her budget of £25,000.00-odd is based on an estimate of the cost of 3 holidays of one week (including one week's skiing in Austria) and two weekend breaks with the children. The husband does not suggest that holidays and breaks should not be taken (the mother makes the point that, since the husband has remarried, he has seen less of the children and, in the last 2 years, has missed the 3 one-week holiday periods with them anticipated at the time of the break-up); however, he challenges the level of expense claimed.

28. In my view it is clear that the holidays could be taken with greater economy and that the overall amount claimed is excessive. The wife makes the point that it is more enjoyable for the children and the mother to go on holiday with another family and that as the children's friends are from families enjoying high incomes it is inevitable that the holiday choices involve good hotels and good restaurants which increases the cost. She says that the pattern of her holidays reflects the pattern during the marriage and she also points to the substantial number of holidays and leisure trips taken by the husband and his new wife in places such as Moscow, Florence, Zagreb, Milan, Athens and China. These points all have force. However, in my view some efforts at economy are to be expected of the wife. At the same time in the light of the husband's reduced holidaying with the children and the level of the parties' means the reduction should not be great. In my view an appropriate reduction is one of 25%. This has the effect of reducing the family budget from £25,000 odd to £18,750 and the mother's individual budget from £8,500 odd to £6,250 i.e. a reduction of £2,250 per annum.

29. The above reductions, totalling £7,562 reduce the wife's budget considered separately from that for the children to £58,500-odd as against a figure of £43,632.00 contended for by Miss Bangay on the assumption that the points she made by way of attack on the budget were all successful.

30. However if, as I conclude, it is not right to treat the wife separately from the children, it is necessary to have regard to the extent to which (as has undoubtedly occurred in the past) the wife is still able to subsidise her personal needs out of the high awards of maintenance made in respect of each child.

31. In this respect I have had little help from either party, as the wife was not engaged or interrogated on that aspect when she gave evidence. She has produced up-to-date schedules of the "Monthly income needs per child", the individual items of which it is not possible to fault without close examination. The total of the items set out amounts to a figure only £69 short of £2,000 per month (i.e. £24,000 per annum), which figure of £69 is then put in as "Unforeseen Expenditure". I find myself compelled to look with reserve upon the figures for the children which I instinctively consider to be well over-egged, not least to the extent that their budgets fail to make clear, or give any allowance for, a reasonable proportion of the general running costs of the household (save food). I thus proceed on the basis that the wife still enjoys a reduced and reducing subsidy of her needs from her boys' maintenance.

The wife's earning capacity
32. I now turn to issue (3).

33. The wife is a graduate of Oxford University where she obtained an Upper Second Class degree in History and Modern Languages. Thereafter she worked in the human resources field, becoming a graduate of the Institute of Personnel Management. At the time of the marriage in 1990 she was aged thirty-two and employed as a Personnel Manager earning a salary of £32,000. She was established and working her way up the career ladder in the human resources field and accumulating credits at the Open University towards an MBA. She was on a fast-track management training scheme with her employers, the Civil Aviation Authority. She continued in this employment and in 1993 was offered a significant promotion to middle management level at a salary of £45,000 per annum plus a company car and a relocation package to Hampshire where the vacancy existed. She was keen to make the move which would have involved moving house from Welwyn Garden City to somewhere like Guildford so that the husband and she would each have a reasonable commute to their respective jobs. She saw the job as a stepping stone up the ladder, first to a senior personnel management appointment and then that of Personnel Director with her employers or elsewhere in industry. She discussed this with the husband who was not willing to move house or for her to take up the position. He did not wish to live south of the River Thames and was generally unsupportive of her career development. He was himself pursuing a successful career in corporate work in his firm of city solicitors of which he was shortly thereafter made a partner. He was working hard, making good money and wished to stay where they were. The wife states that since it did not appear that a similar opportunity would present itself in the near future, and although they had not been thinking of having children at that stage, she suggested that it was time to start a family and for that purpose arranged to take a five year career break from her employment.

34. From the birth of B in 1994 until one year after the birth of M in 1996, she worked full-time as a wife and mother, at which point she herself wished to return to work, to which end she suggested that they buy a larger property so that they could have a live-in nanny in order to permit her to do so. She says that the husband would not entertain the idea of her working outside the home as this would have limited her ability to run the home without any input from him and would limit the support she could offer him in pursuit of his career. He also rejected the wife's suggestion that they should move to London so that neither would have to commute and it would be easier for her to combine working with motherhood. His view was that it was absurd for her to work, that as compared with his own earnings it would only be "pin-money", and it would not be worth the inconvenience caused. The wife says that she accepted that even with a nanny, the arrangement would be fraught with difficulty and she also accepted that the husband's career should come first. She summarises the matter in this way. She says that she had always intended to continue with her career once she had a family, being ambitious, hard-working and well-qualified. However, the life-style choices in the course of the marriage which were made primarily by the husband, albeit accepted by her, prevented this so that now, at forty-five, with two relatively young children who require most of her time and energy as a single mother, the opportunities of her pursuing a career in any significant way have gone.

35. Since the end of the marriage, the division of responsibilities agreed between the parties at the time they had children have continued by agreement, with the wife bringing up the children and the husband continuing to pursue his busy and successful career. By the time M leaves secondary education, she will have given twenty years of her life to the children, including the years of opportunity for career development and earning potential. It is her case that, in the light of her progress and qualifications, had she pursued her earning career, the parties employing a nanny to perform much of the caring function and the father being prepared to give or share more of his time to that end, she would have had a successful career, proceeding beyond the level of middle management to the level of Personnel Director in a large organisation, which she believes she would by now have achieved. In this respect she has exhibited a list taken from the internet of advertisements for Heads or Directors of Human Relations Operations in substantial companies showing a range of salaries around and well above the £100,000 mark plus benefits, for all of which the wife states she believes she would have been in the running had she stayed employed in the HR sector. With such a level of earnings, even as a single mother, she says she would have been able to afford reliable child care and domestic help and to have enjoyed an income which would enable her to have accumulated a significant pension fund.

36. As for her present position, she states, and I accept, that, at the level of activity demanded of her since, as the mother and full-time carer of two energetic boys at different schools involving substantial car journeys, and running her household without domestic help as she has done, it has not been practicable or reasonable for her to seek employment and that while she now has the opportunity, part-time, to seek to train for part-time employment in 2010, (when B and M will be aged sixteen and fourteen respectively and at the same school,) the opportunities for such employment are of limited range and very limited remuneration. She has considered a range of options such as working as a librarian, teaching English as a foreign language and teaching personal and social education, having made enquires with the Chartered Institute of Librarians and information professionals, TEFL International and the Training and Development Agency for Schools ascertaining that the appropriate courses over a two year period would cost around £6,000.00 plus travelling expenses.

37. She states that the level of remuneration likely in respect of a part-time occupation in these fields would be no more than around £7,000 per annum as a starting salary, rising to £14,000 per annum in a more senior position, assuming such was available on a part-time basis. As a library assistant she would earn £15,000 a year full-time following completion of a Diploma in Librarianship at the London Metropolitan University over two years, which process would cost some £3,000.00 a year plus travelling expenses. Once qualified, a starting salary as a Librarian would be around £20,000.00 full time, or £30,000.00 on becoming a Senior Librarian. Again, after a part-time qualifying course at Middlesex University over two years at similar cost, the post as a teacher of English as a foreign language would commence at about £13,000 full-time rising to £25,000 with seniority. To teach personal and social education, in which she would be interested, she would need an MA in Education over three years to earn a salary of £20,000 per annum, rising up a scale to £30,000 per annum if employed full-time.

38. In evidence, the husband did not challenge those figures or areas of endeavour. He challenged the wife's assertion that it was primarily his decision that she should give up work at the stage she did. However, having heard the evidence I am satisfied that was so. At the same time I am satisfied that the wife recognised the need to support the husband's career, and always intended to have children, and therefore the initial decision for her career break to start a family was essentially consensual. I accept also the wife's version of the circumstances and the husband's attitude and reluctance for her to return to work as she had hoped after the second child was born. For the purposes of any element of compensation, it seems to me unnecessary to decide the degree of pressure or reluctance on either side. What happened was undoubtedly a mutual decision that the wife should sacrifice her ambitions and earning capacity for the role of mother and carer for a husband who was busy, worked long hours, and, despite his wish, could devote only a very minor part of his time to his 'family life', given the demands of his job and his ability to pursue it successfully to the full as a result.

39. I find much more difficult and, on any view highly speculative, (a) the degree to which the wife's assessment of her likely progress in her career is accurate and (b) the degree to which in fact she would have been prepared to make compromises in her family life in pursuit of the corporate moves or promotions which might have proved necessary for her to rise to the highest level, rather than, say, remaining in a middle of the range job near to her family base. Having heard her give evidence, I do assess the wife as an extremely energetic and committed person, but also as one who would not be prepared to sacrifice a closely influential and caring relationship over the children. Certainly, having chosen the path of full-time carer, she has discharged it with an energy and close attention which accords with the husband's wishes and requirements both during the marriage and since its break-up. Whereas these complexities in relation to 'compensation' may well merit closer examination and attempts at more precise quantification for the purposes of a clean break at some date in the future, I have neither the material nor the need to grapple further with them now for the purposes of a generous assessment of the wife's needs in her present role which are likely to continue certainly to the end of the children's secondary education and, probably, their tertiary education (see further below).

40. As to the wife's present earning capacity, it is plain that, at forty-five and after fourteen years of child rearing and caring, it is now greatly reduced and lies outside the field of human resources, with which she has long since lost touch. Indeed, the husband does not suggest otherwise. He accepted in evidence that she was, currently in no position to earn more than 'pin money'. Equally, given the wife's character and interests, if she is to seek work as soon as it is practicably open to her, which I take to be in two years time once the boys are at the same school, she will need to re-train if she is to undertake the fulfilling and worthwhile employment which it is fair to require of her, in which circumstance it is neither practicable nor to be expected that she obtains such employment immediately. For the purposes of considering the appropriate order to be made on this application, I consider that it would be reasonable to expect the wife to undertake appropriate training over the next two years at a cost of around £3,000.00 per annum with a view to obtaining part-time employment from 2010 at a salary of £7,500.00 per annum, and moving to full-time employment by 2015 at a salary of £20,000.00 per annum when M will have finished his secondary education. That said, the wife has a troublesome and suspect back (see further below). On the medical evidence available, I consider it unlikely (but I am unable to find with any confidence) that it would prevent her from holding down a permanent job. Even on that assumption, the wife's income level would represent a very substantial reduction in the earnings which would have been available to her had she in fact resumed a successful career in human resources after the birth of M, subject to the employment of a nanny, in respect of whose salary the husband has been spared and continues to be spared.

Compensation
41. As to issues (4) and (5), the principle of compensation, as propounded by the House of Lords in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 [2006] 1 FLR 1886, was identified in the speech of Lord Nicholls at paragraphs [13]-[16]. Having identified at paragraph [11] the principle element of fairness for the court's consideration as that of needs as set out S.25 (2)(b) of the 1973 Act, he went on to state:

"[12] In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes. The court seeks to stretch modest finite resources so far as possible to meets the parties' needs. Especially where children are involved it may be necessary to augment the available assets by having recourse to the future earnings of the money-earner, by way of periodical payments.

"[13] Another strand, recognised more explicitly now than formerly, is compensation. This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage. For instance, the parties may have arranged their affairs in a way which has greatly advantaged the husband in the terms of his earning capacity but left the wife severely handicapped so far as her own earning capacity is concerned. Then the wife suffers a double loss: a diminution in her earning capacity and a loss of a share in her husband's enhanced income. This is often the case. Although less marked in the past, women may still suffer a disproportionate financial loss on the breakdown of a marriage because of their traditional role as home-maker and childcarer.

[14] When this is so, fairness requires that this feature should be taken into account by the court when exercising its statutory powers. The Court of Appeal decision in SRJ v DWJ (Financial Provision) [1999] 2 FLR 176, at 182, is an example where this was recognised expressly.

[15] Compensation and financial needs often overlap in practice, so double-counting as to be avoided. But they are distinct concepts and they are far from co-terminous. A claimant wife may be able to earn her own living but she may still be entitled to a measure of compensation"

I pause here to observe that at paragraph [14] Lord Nicholls observed that the principle of compensation as he had expounded it was itself a requirement of fairness.

42. At paragraph [31] he made clear that there is nothing in the statutory and ancillary relief provisions contained in ss 23 and 25 of the 1973 Act which restricts the making of periodical payments to the particular purpose of "maintenance" properly so called. He continued:

"[32] In particular, I consider a periodical payments order may be made for the purpose of affording compensation to the other party as well as meeting financial needs. It would be extraordinary if this were not so. If one party's earning capacity has been advantaged at the expense of the other party during the marriage it will be extraordinary if, where necessary, the court could not order the advantaged party to pay compensation to the other out of his enhanced earnings when he receives them. It would be most unfair if absence of capital assets were regarded as cancelling his obligation to pay compensation in the respect of a continuing economic advantage he has obtained from the marriage.

[34] The wife's financial needs, or her "reasonable requirements", are now no more a determinative or limiting factor on an application for a periodical payments order than they are on an application for payment of a lump sum. I agree with Charles J's observations to this effect in Cornick v Cornick (No3) [2001] 2 FLR 1240, at para [106]."

43. The observations of Charles J thus referred to were to the following effect:

"In my judgment, just as it is on the first application for orders for financial provision, White v White [2000] 2 FLR 981 is clear authority on an application for variation (and for an order for a lump sum on a discharge or variation of a periodical payment) for the following points, namely that (a) the court should not rely on the judicial concept of "reasonable requirements" as a determinative or limiting factor in cases when a payer has, or acquires, an ability to pay more than the payee's financial needs even when they are interpreted generously and called "reasonable requirements" and (b) the court should exercise discretion by applying the words of the statute". (emphasis added)

44. Baroness Hale of Richmond dealt with the principle of compensation and its interrelationship with the question of needs/ reasonable requirements as follows:

"[138]… In the great majority of cases, the court is trying to ensure that each party and their children have enough to supply their needs, set at a level as close as possible to the standard of living which they enjoyed during the marriage (note that the House did not adopt a restrictive view of needs in White: see 608G- 609A and 993 respectively…) Many parents have seriously compromised their ability to attain self-sufficiency as a result of past family responsibilities. Even if they do their best to re-enter the employment market, it would often be at lesser level than before, and they would hardly ever be able to make up what they have lost in pension entitlements… Compromises often have to be made by one so that the other can get ahead. All couples throughout their lives together have to make choices about who will do what, sometimes forced upon them by circumstances such as redundancy or low pay, sometimes freely made in the interests of them both. The needs generated by such choices are a perfectly sound rationale for adjusting the party's respective resources in compensation.

[139] But while need is often the sound rationale, it should not be seen as a limiting principle if other rationales apply. This was the error into which the law had fallen before White. Need had become "reasonable requirements" and thus more generous to the recipient, but it was still a limiting factor even where there was a substantial surplus of resources over needs: see Page v Page (1981) 2 FLR 198. Counsel would talk of the "discipline of the budget" and suggestions that a wife's budget might properly contain a margin for savings and contingencies, or to pass on to her grandchildren, were greeted with disbelief.

[140] A second rationale, which is closely related to need, is compensation for relationship-generated disadvantage. Indeed, some consider that provision for need is compensation for relationship-generated disadvantage. But the economic disadvantage generated by the relationship go beyond need, however generously interpreted. The best example is a wife, like Mrs McFarlane, who has given up what would very probably have been a lucrative and successful career. If the other party, who has been the beneficiary of the choices made during the marriage, is a high earner with a substantial surplus over what is required to meet both parties' needs, then a premium above needs can reflect that relationship-generated disadvantage."

45. These are clear statements of an underlying principle falling for consideration in cases where it is clear that (i) the parties have arranged their affairs in a way which has greatly advantaged the husband in terms of his earning capacity but left the wife very considerably handicapped in the terms of her own earning capacity and (ii) the husband is a high earner with a substantial surplus of resources over what is required to meet both parties needs. However, as made clear by their Lordships, while the term compensation is a convenient or appropriate label by which to identify and emphasise the need for an approach which would not preclude a wife from relying on a clear relationship-generated disadvantage in support of a claim for maintenance, it is no more than an aspect of fairness, important to be identified as a strand or step in the thinking of the court when exercising its powers under ss 23 and 25 of the 1973 Act.

46. In Charman v Charman (No 3) [2006] EWCA Civ 1791, [2007] 1 FLR 1237, a case in which the issues under appeal did not raise for consideration the principle of compensation as such, the court picked up and emphasised the principle of compensation as relating to "prospective financial disadvantage which upon divorce some parties face as a result of decisions which they took for the benefit of the family during the marriage, in particular in sacrificing or not pursuing a career" and adverted to several pre-McFarlane decisions where the court had recognised other instances of disadvantage in respect of which fairness required "compensation" to be made. (para [71]).

47. My attention has been drawn by the parties to four decisions which have, since the case of McFarlane, involved first instance consideration of the principle of compensation as therein expounded. The first is that of Coleridge J in RP v RP [2006] EWHC 3409 (Fam); the second that of Baron J in Lauder v Lauder [2007] EWHC 1227 (Fam); the third that of Charles J in H v H [2007] EWHC 459 (Fam), [2007] 2FLR 548; and the fourth that of Bodey J in CR v CR [2007] EWHC 3206 (Fam).

48. In RP the court was concerned with a case where, despite the limited assets available, the parties were agreed that they wished to achieve a clean break. There was agreement as to the level of maintenance by way of periodical payments in respect of the children and a secure fund to be set aside by the husband out of his retained resources to ensure that the periodical payments were met in a timely way. The principal issue was characterised by the judge as "should the main driver for the division of the capital be the wife and children's needs, as the husband contends, or should I also have special and extra regard to compensating the wife for the loss occasioned by her career break while living with the husband and now whilst bringing up the children?" A significant feature of the case was that in relation to the income and earning capacity of the parties, the wife was at the time herself setting up in business with a partner in a situation where her turnover already substantially exceeded her original business plan, being herself described as the judge as a "talented and energetic business woman in her own right".

49. In his judgment, having referred to the speech of Baroness Hale in McFarlane, the judge described it as:

"… highlight[ing] some of the rationales which may, in a given case, necessarily be implicit in achieving fairness and which should be borne in mind in the divisionary process which is at the heart of any ancillary relief application. They are very helpful in ensuring the court achieves a fair result and does not become stuck or formulaic in its approach as it has done from time to time in the past (e.g. when the Duxbury formula tended to overwhelm proper consideration of all the s. 25 factors). However, care needs to be taken to ensure these passages are not treated as some kind of quasi-statutory amendment. They are the commentary of the House of Lords on a very well-trodden statute now in its fourth decade."

50. He went on at paragraphs 60 et seq to warn that

"60… it is neither possible nor desirable to break-up, artificially, these ancillary relief claims into separate heads of claims as if they were actions for damages for personal injury. In this jurisdiction there is only one finite pot of resources which has to be divided between the two parties fairly by balancing their competing claims by reference to s.25 …"

61.I begin to detect creeping in from some quarters a new methodology or approach akin to a damages claim, in order to bring some science to these applications and in the ceaseless cravings for certainty that constantly inhabits the fertile mind of the specialist advocates. Mr Dyer tells me that he has already been engaged in a case where it is suggested that expert evidence should be called to establish the value of the wife's loss of earnings/ earning capacity caused by her marriage!

62. In my judgment, any such approach is totally misconceived and likely to lead to double counting (as Baroness Hale warned). It is a blind alley at the mouth of which are " no entry" sign should now be planted.

63. In this case the parties made a life-choice early on in their marriage; that they would have children and so the wife would cease to work. That was a life-choice made by them both with all its pros and cons. From then on her contribution has been just as full as the husband's but different. At the end both are entitled to the full share of the combined and equal contribution; she to ensure that she has a secure future both with and later without the children and the husband so that he can re-establish himself. She has earned it, as Lord Nicholls stressed in Miller. And so has he. This is not largesse by the husband, it is her entitlement deriving from her valuable contribution.

64. But it is simply not possible (and highly undesirable and costly) to conduct, additionally, a speculative "what if…?" exercise to reconstruct the party's marriage on a different basis. Talk of "compensation" in this case has added nothing except confusion and the real risk of double counting. (emphasis added)

51. In the final passage of his judgment the judge warned against microscopic scrutiny of the judgment in Miller: McFarlane for innovative arguments and a novel approach whereby applications for costly evaluations of assets at different points/ stages of a marriage are emerging in the preliminary stage of cases. He also warned against the undesirable consequence that clean breaks seem to be becoming more difficult to achieve despite the statutory imperative to achieve such a break where reasonably possible.

52. On the basis (as the judge recognised elsewhere) that there are indeed implicit in the provisions of s. 25 the strands or rationales adumbrated by the House of Lords, there is little to disagree with in the passages quoted in the context of that case. I share and endorse the concerns expressed. The judge was dealing with a case where it was accepted there were before the court just sufficient capital assets to achieve a clean break in a situation where the wife, because her own earning capacity remained essentially intact, would not be left in a position of continuing reliance for her needs upon the husband's future earning capacity. Thus, on the facts, the case for compensation, whether viewed simply as a matter of fairness, or as itself adding some "premium" element, was weak if not non-existent. Further, I would endorse the warning sounded by the judge against the introduction of an approach which seeks to separate out and quantify the element of compensation, rather than treating it as one of the strands in the overall requirement of fairness in the assessment of the parties' joint contribution to the marriage, where the wife, as a result of joint marital decision has sacrificed her own earning capacity in the interests of the bringing up the family. Attempts under the rubric of Compensation to isolate and quantify the level of income or earning capacity sacrificed by a wife years after the event for the purpose of calculating a premium element on the award, constitutes a search for precision which is to be discouraged both on the grounds of policy and practicality, and which goes beyond what is required or generally appropriate in the exercise required of the court under s.25.

53. The next decision is that of Lauder v Lauder [2007] EWHC 1227 (Fam) in which Baron J considered and allowed a wife's appeal from the order of a District Judge on a wife's application to vary a consent order for periodical payments made in her favour in 1988, Baron J made an upward variation of the order and made a clean break order in respect of the wife's future entitlement at the increased rate. In doing so, she conducted a survey of the relevant case law applicable to an application for variation of maintenance in the course of which she made clear her view that

"the proper approach to this type of application is to apply the precise terms of the statute in the light of the factual matrix and give proper consideration to recent guidance given by the House of Lords in the case of Miller [and] McFarlane"

In this respect she referred to the passages from the speeches from Lord Nicholls and Baroness Hale which I have quoted above. The case was substantially different on its facts. However, at paragraph 65 the judge referred to the fact that the wife's modest earning capacity on separation was "a direct result of the marriage and the parties' decision that she should be a wife and mother. This disadvantage requires proper compensation." See also her observations at paragraph [67] that '[her] caring role within the family inevitably affected her ability to generate income or assets as she grew older. When this marriage came to an end she was past the age of being able to start a career anew'.

54. At paragraph 69 Baron J stated:

"… On analysis, therefore, this case merits an award which includes an element of compensation for relationship related disadvantage. This wife can not claim to be a Mrs McFarlane, but there can be little doubt that the length of the marriage and her age at separation put her at severe disadvantage in the labour market. She did not have an ability, given the manner in which these parties conducted their lives and their suspension of the 1988 order, to make herself fully independent given that she is seventy years old."

55. In her conclusions Baron J made clear that she came to her decision on the basis of the wife's needs as "generously interpreted", taking into account her right to have an element of compensation. The judge stated that she did not consider it right to seek to separate those two factors in delineating her figure. She also took into account as a factor, though not determinative, the fact that the increased figure for the wife's maintenance represented the same percentage of the husband's income that she had received under the original order stating that:

"It is in line with what was originally agreed and is a fair division, given his additional works since 1985 and the wife's needs and rights to compensation."

56. In the case of H v H (supra), Charles J was concerned with the case of a 20-year marriage where the agreed assets were valued at £27million and there was agreement that they should be shared on a clean break. The principal issue in dispute was the extent to which the wife should be compensated by a capital sum for loss in the future for a share in the husband's bonus payable after the end of the marriage and thus the issues were far from this case. However, in his review of the matter at paras 74-79 of his judgment Charles J plainly treated the observations of Lord Nicholls and Baroness Hale as recognising the right of a wife, even if never on the road to becoming a high earner, to share in the product of the husband's enhanced income and earning capacity by reason of her role in the marriage, whether under the headings "needs", "sharing" or "compensation".

57. Finally, in the case of CR v CR, Bodey J was concerned with a situation where the joint matrimonial assets were in excess of £15 million and the claim for "compensation" was essentially that, in addition to a 50:50 split of the assets there should be additional compensation for the wife's "forfeited earning capacity". Having referred to "strands" of fairness in Miller and McFarlane, he observed:

"However, it is important in my judgment that these strands underlying fairness do not become elevated into separate heads of claim or of loss independent of the words of the statute. If such an approach were to gain momentum, there would be a real danger of double-counting, against which the House of Lords expressly warned in Miller. It remains the statutory criteria which ultimately guide the court's overall discretion by the exercise of which fairness is sought to be achieved."

58. At paragraph 92 of CR v CR, Bodey J found that, in the event, the wife had failed to succeed in demonstrating any significant loss of career prospects for which "compensation" should be factored into the outcome on the basis that the prospects were far too speculative. He went on to observe:
"In any event, a wife with (if I may so describe them) "ordinary" career prospects which are forfeited following her marriage to her husband who is or becomes a financial high-flyer, is highly likely to be adequately "compensated" for that forfeiture by the very fact of an equal division of the family's resources."

59. In my view there emerge from the post-Miller and McFarlane authorities to which I have been referred the following propositions in elaboration of, but consistent with, the House of Lords decision. First, it is at the exit of the marriage and in relation to the division/ redistribution of the family assets that the consideration of the element of compensation immediately arises, but as a feature of the concept of fairness rather than as a head of claim in its own right. Second, on the exit from the marriage, the partnership ends and in ordinary circumstances a wife has no right or expectation of continuing economic parity ("sharing") unless and to the extent that consideration of her needs, or compensation for relationship-generated disadvantage so require. A clean break is to be encouraged wherever possible. Third, in big money cases, where the matrimonial assets are sufficient for a clean break to be achieved, a wife with ordinary career prospects is likely to be have been compensated by an equal division of the assets and consideration of how the wife's career might have progressed is unnecessary and should be avoided. Where, however, that is not the case and the parties accept or the court decides that fairness can only be achieved by an award of continuing periodical payments in respect of a wife's maintenance, then the matter of compensation in respect of relationship-generated disadvantage requires consideration, again as a strand or element of fairness. Fourth, in cases other than big money cases, where a continuing award of periodic payments is necessary and the wife has plainly sacrificed her own earning capacity, compensation will rarely be amenable to consideration as a separate element in the sense of a premium susceptible of calculation with any precision. Where it is necessary to provide ongoing periodical payments for the wife after the division of capital assets insufficient to cover her future maintenance needs, any element of compensation is best dealt with by a generous assessment of her continuing needs unrestricted by purely budgetary considerations, in the light of the contribution of the wife to the marriage and the broad effect of the sacrifice of her own earning capacity upon her ability to provide for her own needs following the end of the matrimonial partnership. These considerations are of course inherent in s.25(a)(b)(d) and (f) of the 1973 Act.

60. This is not a big money case; that is to say a case where the matrimonial assets are amply sufficient to provide for the needs of the parties and the area of debate relates solely to the fair and proper proportion of their distribution as between the breadwinner and the homemaker and carer. Nor is it a case like McFarlane where, although the assets were insufficient to make a clean break possible, not only was the husband's annual income far in excess of the financial needs of both the parties even after separation, but the economic disadvantage generated by the wife's abandonment of an established career as highly paid as that of her husband went well beyond the compensation afforded by a generous interpretation of her needs: see McFarlane paras 90 and 92. It was of course those features which led the court to describe Mrs McFarlane as a "paradigm case" for an award of compensation for future economic disparity. (Per Lord Nicholls at para [93] and Lord Hope at para [117])

61. It is a further distinction that this application is not itself concerned with the redistribution of the assets at the time of the exit from the marriage but is for variation of a maintenance order made at that time. Such orders are of their very nature ongoing, concentrate upon continuing need, and are themselves subject to later variation. Finally, this application to vary is not one in which the court is concerned (as it was in Lauder v Lauder) to capitalise the continuing periodical payments as varied so as to achieve a clean break, in which circumstances there is a particular necessity to concentrate on the adequacy of the sum ordered because it will finally settle the position between the parties.

62. Against this background, two particular issues have been argued before me in relation to compensation. First, whether the observations of the House of Lords are restricted to the court's approach upon an original application for ancillary relief at which the appropriate order for redistribution of the parties assets is considered and made, or is it a matter which also falls for consideration on an application for variation of a maintenance order made at that time. Second, and in any event, is the instant case one where it is necessary or appropriate to consider the element of compensation as a matter separate from that of the parties' needs (generously assessed).

63. On the first question, Miss Bangay has submitted that the only time for consideration of the principle of compensation was and is the exit point of the marriage when the parties agree, or the court decides, the fair outcome at that point. She points out that nowhere in the speeches in Miller and McFarlane is it suggested that the exercise should be repeated in the context of a variation application in relation to a maintenance order made at the time. She submits that to seek to do so is contrary to the requirement in the court to search for finality following divorce and further submits that, for the court to be willing to re-open consideration of a fair and/ or agreed solution years after that exit point would be to open the flood gates to maintenance applications in which it would be argued that the compensation principle was not specifically considered and applied at the time.

64. I do not accept those submissions. Whether or not they were made to Baron J in Lauder, it was plain to her, as it is plain to me, that the language of the House of Lords is of general application and extends where appropriate to consideration by the court of the overall fairness of an order made upon an application to vary a joint lives periodical payments order. At paragraph 21 of her judgment, Baron J accepted that, in relation to that part of the court's original order which dealt with the wife's capital claim by way of a lump sum order, the wife was precluded from a second bite of the capital cherry. She nonetheless made clear, and proceeded to deal with the wife's application on the basis, that the provision for long-term periodical payments originally made as a concomitant to the amount of award of capital was susceptible to, and required, consideration on her variation application in the light of the recent guidance in Miller and McFarlane in the passages I have quoted above. As a result she made an award which included an element of compensation for relationship-generated disadvantage in the situation where the wife, who apparently did not work during the marriage, had nonetheless by her efforts following separation clearly demonstrated that had she done so, her earning capacity which she had sacrificed during the marriage would have been substantially greater on separation than it was.

65. That award took into account the wife's right to have an element of compensation but did not quantify it separately from the element of the wife's needs as generously interpreted. Again, in my view that approach was appropriate. The judge was right to refuse to interfere with the clean break settlement of the wife's capital claims (albeit in modern eyes they might have been regarded as discriminatory). However, under s. 31(7) of the 1973 Act, her task in assessing the application for variation of the wife's joint lives maintenance order was to have regard to all the circumstances of the case, including any change in the matters to which it had to have regard when making the original periodical payments order: c.f. per Booth J in Boylan [1988] 1 FLR 282 at 286D; see also the observations of the Court of Appeal in Cornick v Cornick (No2) [1995] 2 FLR 480 when decisively rejecting the "budgetary" approach urged upon it by counsel for the appellant.

66. I have the same task. Having made the findings which I have in relation to this wife's earning capacity, it is right for me to have regard to her undoubted relationship-generated disadvantage, albeit difficult to quantify, and to take it into account in my award. However, because of (1) the general uncertainty of the extent of the disadvantage, (2) the realistic agreement of the parties that there is an indefinite continuing need for periodic maintenance, and (3) the fact that a clean break at this stage is not suggested to be possible or appropriate, this case is not one where it is necessary to attempt to quantify the element of compensation separately from that of the wife's needs generously assessed against the background of the standard of living during the marriage, the husband's considerably increased income and the reduced availability to the wife of a substantial proportion of the child maintenance originally provided.

The quantum of periodical payments
67. I now turn briefly to the various matters set out in s.25(2) of the 1973 Act.

68. (a) the application has been conducted before me upon the basis that I am concerned with the parties' relative income positions, the capital division having taken place under the original order on a clean break basis. The order for periodical payments was made in April 2001 on the basis of a net income figure of the husband of £340,000 (£534,000 gross).

69. Taking the figures set out in Miss Bangay's opening, the husband's income position is as follows. By 2003, the husband's net income had risen to £486,000 (£786,000 gross). Thereafter his income entitlement was calculated in U.S. dollars and rose gradually but, thanks to movements in the exchange rate and the fact that he is paid in sterling, the net figures for the next three tax years (y.e. for April) were as follows: 2004-£454,000 (£740,000 gross); 2005-£494,000 (£807,000 gross); 2006- £473,000 (£789,000.00 gross).

70. The figures for 2007 are not yet available. In March of each year each partner in the husband's firm is supplied with a letter of projected income for that year which is followed in January of the following year with a letter stating the actual income as allotted between partners. To date, the predictions have regularly proved conservative so that, for instance, in 2006 the predicted profit share of $1.275 million gave way to an actual profit share of $1.489 million (£789,000.00 gross) yielding a net income of £473,000.00.

71. The husband's March 2007 letter projects income for 2007 of $1.375 million (£732,500 gross) (i.e. $100,000 above the 2006 projection). If this were to prove accurate, the husband's net income share would be reduced to £448,000. However, if the same percentage increase are the projected figure's achieved as in 2006 the figure for the husband's net income will be close to £500,000. On the history of the matter and figures before me I proceed upon the basis that the husband's future partnership remuneration is likely to continue at a minimum level of £470,000 per annum with the likelihood of an overall upward trend over the years. So far as the wife's income is concerned, I have already dealt at length with her position and the question of her earning capacity.

72. (b) So far as the needs, obligations and responsibilities of the husband are concerned, he now has a new wife, a former corporate lawyer aged 33 who because of her interest in the arts is making a career change and is being maintained by the husband while she studies a culture policy management programme at City University, from which she will graduate in 2008. The husband states his desire to start a new family, but at some uncertain point in the future. Meanwhile he is living a very comfortable lifestyle, continuing as he did with his former wife to take frequent pleasure trips abroad, whilst at the same time making generous pension provisions for the future and increasing his savings. He has long since paid off his mortgage of £540,000. His schedule of Annual Expenditure attached to his Form E totals £332,632 including his current global maintenance obligations and 'insurance and savings' of £130,000.00. If his net income is taken as £470,000, it leaves him, after generous provision for himself with almost £140,000 per annum free to meet any order for an increase in the wife's periodical payments. He has comfortably enough to cover his needs and those of his new family.

73. As to the wife, she has a home suitable to her needs and those of the children but virtually no income of her own. Her capital is all in her house. Her needs are those of a middle-class mother continuing to devote herself without the necessity for rigid economy to the welfare needs of the children at a comfortable level with a great deal of driving about in support of the educational and social lives with which both parents wish to see them provided. The wife does not have a support network on which she can rely as backup in relation to her responsibilities or with whom she can make reciprocal arrangements for child care. She thus continues to bear all the obligations and responsibilities for the day to day care of the children, their entertainment and their holidays which, combined with looking after the house without daily help, is a demanding and full-time operation.

74. (c) The standard of living enjoyed by the family before the breakdown of the marriage as described by the wife (unchallenged) in para 4.2 of her Form E Financial Statement was one of comfort and the ability to live without the need for money worries or particular economy in any direction, a pattern of frequent holidays abroad for the family being well established.

75. (d) The husband is forty-three and the wife forty-five and the marriage lasted some eleven years. It is not be classed as a short marriage for the purposes of any special considerations so far as the wife's rights to maintenance are concerned, given that, during that period, the parties established the pattern of their lives with a family of two children to whom the wife devoted her existence and provided support for her husband who was able thus to concentrate on the long hours and hard work necessary for him to establish a successful career as a lawyer and partner in a large and high earning firm of solicitors.

76. (e) The husband is apparently fit and healthy with no problems which affect his likely future career or earning power. The wife has a troublesome back condition sustained during the marriage as a result of pushing one of the children on a bicycle. The injury was exacerbated through wear and tear from constant child care to the point where in 1999 she had to undergo surgery to remove a prolapsed lumbar disc. Her current position, supported by a medical report from a Consultant Surgeon is that she has gradually developed degeneration which causes her lower back always to feel unstable, especially with bending or twisting which she tries to avoid. She tends to get about three severe episodes a year with sharp lower back pain and tenderness and aching afterwards which takes two weeks to settle, provided she lies down during the day. This situation is likely to continue long-term. She is however a determined person who keeps active and functioning, managing the condition well to restrict it to stiffness and low level aching. That being so, I regard her as likely to be able to cope with the demands of a job which does not involve unduly long periods of sitting, but I am not able to proceed with confidence on that assumption.

77. (f) The contributions of each of the husband and wife to the welfare of the family which have been made and are foreseeably likely to continue to at least 2014, are respectively those of a busy high earner who sees the children when he can (which appears to be reducing, at least in relation to holiday time) and who provides for the needs of the family, while that of the wife remains as it always been, that of a mother energetically and single mindedly devoting herself to the role of homemaker and carer for the family.

78. (g)There are no conduct issues in this case.

79. (h) The question of pension provision having been dealt with on a clean break basis under the original order, no additional considerations arise under this head.

80. Taking the above considerations into account, I have come to the conclusion that the wife is entitled to a substantial increase in the level of periodic payments which were agreed over six years ago on the basis that the circumstances of the parties have changed and the husband's income considerably increased, and having regard to the standard of living enjoyed by the family before the breakdown of the marriage. I accept that there is undoubtedly a component in the increased family budget which stems from the wife's purchase of a larger, and older property than the original family home. However I accept that she bought it, not for reasons of grandeur, but rather for its convenience and suitability for the family needs as well as an investment not only of the proceeds of the former family home, but of her own inheritance. She had also saved for it out of the 'global' maintenance award by dint of economies she was not bound to make, but prudently did so against a rising market. In these circumstances, while the husband cannot be obliged to make a further capital contribution towards the cost of any major improvement to the house, that does not preclude the wife from inclusion in her budget of amounts for ordinary maintenance and outgoings in respect of the family home. Further, for the purposes of assessing an appropriate overall figure for the wife's maintenance, I am not limited to the figures which have emerged from examination of the detail of the budgets provided by the wife. They represent the beginning rather than the end of the exercise required in a case of this kind where the means of the husband are well sufficient to make generous provision beyond the confines or discipline of a strict budget.

81. Lord Nicholls has made clear, not only that there is nothing in the statutory ancillary relief provisions to suggest that periodical payments ordered should be limited to payments needed for maintenance (see paragraph 38 above), but also that 'needs' or 'reasonable requirements' are no longer a determinative or limiting factor in the search for fairness. Baroness Hale has also made clear (see paragraph 40 above) that a wife's budget may properly contain a margin for savings and contingencies, quite apart from questions of compensation.

82. I am faced in this case with an amalgam of uncertainties to take into account, which in my view need to be approached on a basis generous to the wife in the circumstances of the case, including the element of relationship-generated disadvantage. I propose to deal with the wife's entitlement not by seeking to calculate or quantify a specific premium above needs, but to take a generous approach to those needs as they are likely to continue to exist until the children are off the mother's hands which in my judgment is unlikely to be before the end of their tertiary education (see further below).

3. Having regard to all the circumstances of the case, I consider that the appropriate order upon the wife's application is for an increase of the periodical payments to her from the figure of £33,000 per annum to £65,000 per annum (backdated to 8 January 2007, the date of the wife's Form E) payable during the joint lives and otherwise as provided in the original order, subject to what I say below about RPI, school fees and reasonable extras. There is a quality of the 'rough and ready' in this figure which is largely to be ascribed to the difficulty created by the fact that neither party suggests that the order for periodical payments to each of the children should be the subject of variation and because the degree to which the wife has relied, and will continue to rely, on those payments to subsidise her needs considered separately has not been susceptible of satisfactory quantification. Indeed, it is no doubt flexible according to the wife's priorities as homemaker and primary carer from time to time, in which role I have no reason to doubt she bears the interests of the children well in mind at all times. I have worked upon the basis that there has been, as there was always intended to be, substantial subsidy for the wife out of the boys' maintenance, but its scope has much reduced since the original order and will continue to reduce as the boys grow older. For that reason, it is appropriate to have regard to the husband's overall obligations in respect of mother and children, rather than mother alone.

84. So far as the wife's earning capacity is concerned, having assessed it in the way I have, I do not think it appropriate to make deductions from the sum ordered in that respect. On the findings I have made, her potential earnings do not fall to be taken into account (and indeed she will have her retraining expenses to meet) until 2010, at which point her earning capacity is likely to be no more than £7,000 per annum, with a problematic increase to £20,000 in 2014 (i.e. six years hence). Whereas it might in principle be appropriate to make a deduction in the level of maintenance appropriate to be paid by the husband from 2010 onwards, I do not propose to do so in this case, assuming as I do that the level of the husband's earnings is likely to rise over the period, while the wife's ability to obtain any subsidy from the maintenance orders in respect of the children will all but disappear. So far as the wife's part-time earnings of £7,000 per annum are concerned, they seem to me best regarded as no more than a reasonable return upon the wife's expenses of retraining and provision of 'pin money' at a level which should not affect the husband's obligations. Nor do I feel sufficient confidence about the prospects of the mother earning £20,000 or more in six years time to regard it as fair that a deduction can or should be provided for at this stage from what is an appropriate annual increase to cover the next six years. By then, the position may well have been reached where an overall clean break will be appropriate and achievable.

85. In concluding that £65,000.00 is a fair figure, I am encouraged that it is consistent with the parties approach to the quantum of the husband's global maintenance obligations under the original order which, including school fees (then £20,000.00), amounted to 34% of the husband's then net income. This seems to me to be an appropriate cross-check (if not a starting point) when considering an application based on the substantial increase in the husband's income six years on. Indeed, it is noteworthy that both the husband in the witness box and Miss Bangay in argument sought to justify as fair the husband's open offer for an increase in the wife's periodical payments to £52,000.00 per annum by means of a percentage comparison, namely that the husband's offer (his school fees obligation now increased to £30,000) produces a global maintenance obligation of £137,847.00 which is 33% of his projected net income for 2007 as compared with the 34% figure under the original order. (I note, but for this purpose disregard, the fact that in her closing submissions Miss Bangay has reduced the projected income figure of £439,528.00 used by her in opening to £412,500.00, presumably by adopting a less generous exchange rate). Given, however, that I consider it appropriate to assume a figure of £470,000.00 as the likely level of the husband's 2007 net income, the husband's offer of £52,000 for the wife produces a global percentage of only 29% of that figure. If the sum of £65,000.00 is substituted, the proportion is 32%.

86. Looked at from a different perspective, out of the husband's assumed increase in net income of some £130,000.00 since the original order, the wife will receive some 25% of that increase. However, as I have indicated, because the parties do not seek any change in the 'package' approach to the needs of the wife and children, the question of the overall fairness of the maintenance arrangements between the parties is better considered on the global basis to which I have alluded in the preceding paragraph.

87. As to issue 7, I am asked by Miss Hussey for the wife, only two years after the making of the consent order in relation to RPI provision, to replace the somewhat elaborate but carefully negotiated formula for applying RPI increases to the wife's periodical payments by what Miss Hussey terms a "conventional" RPI clause. By this, as I understand it, she means a straightforward order for a year to year increase stripped of (a) any qualification by reference to the level of the husband's income and (b) the "claw back" clause which has inhibited immediate enforcement in relation to the additional sums yielded by the RPI increase ordered until they reach a total of £10,000.00. The submission is not based upon the basis that there has been any material change in circumstance since that order was made which renders its formula unduly difficult of operation or, of itself, productive of hardship (assuming an appropriate increase in the basic rate of periodical payments). Calculation of the increase, and the effects of the claw back clause upon its time for payment, have generated an amount of solicitors' correspondence. However, the position now appears not to be in dispute. I am urged by Miss Hussey to abandon the formula agreed between the parties to avoid any future such dispute. However, the reason change is sought appears to me essentially to be that the wife is dissatisfied with the effect of the agreement reached only two years ago and, in particular, that the effect of the claw-back clause is that, so far, no additional sum has been received pursuant to the terms of the order.

88. I do not consider that a sufficient reason to un-pick the details of what was a carefully negotiated agreement in relation to which there is no reason to think that the potential effects of the RPI provisions were not appreciated or intended at the time. It is of course the ordinary purpose of a (conventional) RPI clause to provide protection for the receiving spouse, usually the wife, against the erosive effects of inflation and hence to inhibit the likelihood of future litigation; as such, use of RPI clauses is to be encouraged in my view. However, if the parties, having addressed the necessity for such an order and/or its effects on the financial position on both parties, agree a formula which distributes the risk in the event of a drop in income on the part of the husband or otherwise affords him leeway in payment, then the court should be slow to intervene. That appears to me to be the position here. The fact that the effects of the claw back provision have been such that the wife has not yet received the sums otherwise due under the provisions of the agreement, no doubt because inflation has been contained at a low level since the order was made, does not seem to me to amount to a material change of circumstance or other valid reason justifying interference with the package as negotiated and agreed between the parties.

89. As to item (8), the husband currently maintains life cover for the wife and children under the terms of the original order: see paragraph 3 (v) above. However, such obligations as he has in this regard are contained in undertakings by way of preamble to the operative part of the order which contains his obligations to make periodical payments for maintenance and school fees. The wife asserts in her open proposals for settlement, and Miss Hussey has urged in argument, that the husband should maintain life cover in the increased sum of £1 million while the spousal maintenance order subsists. The husband says that what is provided is what was agreed and is adequate. In the absence of agreement, it seems to me that the court lacks jurisdiction to order a party to take out an insurance policy, save by way of secured provision pursuant to s. 23(1) (b) of the 1973 Act. However, the wife's Form A application seeks no such provision. Since that is so, and because I do not regard the risk of default by the husband as a real one, I see no occasion to vary the original order in that respect.

90. As to issue 9, I am not disposed to delete the provision in the original order which conditioned the obligation of the husband to pay the wife periodical payments "until [she] shall remarry or co-habit with another person for a period of not less than six months". Again, it was a provision inserted in an agreed order in relation which both parties were legally advised. In some circumstances, cohabitation may be a source of considerable financial advantage and in others the reverse may be the case. It is still the position that cohabitation is not to be equated with marriage but it is a relevant factor when assessing the wife's financial needs: (see per Thorpe J in Atkinson v Atkinson [1995] 2 FLR 356 at 361), and it has more recently been the subject of a call by Coleridge J in K v K (Periodical Payments: Cohabitation) [2006] 2 FLR 468 for increased recognition, if proved to have existed for a lengthy and settled period, as a factor apt to reduce a husband's obligations in respect of periodical payments. At the time of the agreement between the parties, those observations were not available to their advisors but, again, the wife's acceptance of the requirement of the husband for a provision of that kind as part of the overall structure of the bargain may well have been one without which agreement on the other terms would not have been reached.

91. The only argument of any substance produced by Miss Hussey to justify what would otherwise be a substantial interference with a point of principle agreed upon in the original order is that, to the extent that the award of the court contains a compensatory element in addition to that of need, it is wrong in principle to rob the wife of that element by application of the cohabitation clause. I have two particular observations to make in respect of that argument. The first is that, if the compensation component of any order is to be regarded as an accrued right from which the recipient is entitled to benefit in any event, the same argument would apply to the provision for termination of periodical payments on remarriage. Second, whether or not that is so, the effect of Miss Hussey's submission is to elevate the element of compensation into something more than an aspect of the court's duty to be fair in making whatever variation in the level of payment is appropriate; it is to give it life of its own, outlasting the period for which it is otherwise appropriate to order that the periodic payments should continue. As I have already indicated, that does not seem to me to be the proper analysis. The court is concerned to award a proper amount taking into account any compensatory element only so long as the obligation to maintain continues. If, by agreement, the parties in the form of a consent order disposing of the division of assets and providing for periodic payments by the husband, impose a limitation upon the period for which that obligation shall run, then in my view it is inappropriate for the court to re-write that aspect of the agreement at the request of one of the parties in the absence of evidence of some unforeseen change of circumstance going to that aspect of that agreement. I see no such evidence here and therefore decline to delete the cohabitation provision.

92. As to issue (10), the original order provided for payment to the mother of the amount of the boys' school fees on the first day of each term or such earlier date as might be required by the school 'including reasonable extras at such schools shall as be agreed'. The agreement of those extras proved difficult between the parties, in particular in relation to the need on occasion for B to make use of overnight stay facilities at the junior department of his public school in connection with his activities there. These difficulties led to agreement of a specific provision at the time of the RPI increase that the term 'reasonable extras' should include fees for boarding for each of the children of the family at their separate schools (it was and is anticipated that M will follow B to his public school) 'for no more than one night per week per term' and that the husband should be entitled to deduct £5.00 from each such night spent boarding. The husband acknowledged in evidence that this was a petty requirement of his but said that he was keen to establish the fact that, if the children eventually became boarders rather than day boys, he should be entitled to deduct money from the periodical payments in respect of any resulting saving in maintenance to the wife.

93. In evidence it became apparent that those occasions which required B to stay overnight were in total unlikely to be much greater in number than the number of weeks in the school year; however, the limitation of one night per week was proving restrictive. It seems to me that, in those circumstances, there should be a variation of the provision in the RPI order in the welfare interests of the children themselves. Since the husband expressed himself in evidence as willing to pay for the boarding fees of both boys, should they in fact wish to become boarders rather than day boys, it seems to me that the attitude of the husband is unreasonably grudging in respect of overnight boarding fees while they are day boys. The mother is not anxious for a substantial increase in the overnight stays sought to be covered; she simply seeks increased flexibility within an overall allowance of forty overnight stays per year. In my view that is reasonable.

94. I consider that in principle it is reasonable for the husband to seek to reduce the periodical payments made for the boys' maintenance to the wife to the extent of any real savings to her 'on the ground'. However, I have been afforded no assistance either by way of evidence or submission as to what the appropriate figure would be, bearing in mind the wife's continuing year round and weekend obligations. It should certainly not be as much as half the extra cost, as suggested by the husband. Apart from the headings of 'Food', 'Meals out and takeaway', and 'Childcare/ babysitting', the items set out by the wife in relation to the monthly income needs per child would be little affected. The position of both the parents is that, if either of the boys wishes to opt for boarding, it is plainly in his interest to do so. But that is where agreement ends. The husband's position is that the increased cost of boarding should be shared equally, while the wife's position is that boarding is an affordable extra and should be met by the husband without affecting the level of the wife's maintenance.

95. In my view, the fair order to make for so long as the boys are day pupils is one which requires the husband, while the children are day pupils, to continue to pay overnight boarding fees as 'extras' subject to the deductions set out in paragraph (5) to the preamble of the RPI order, but amended to permit up to 40 occasions of overnight stays per year.

96. As to the position if there is a change to full-time boarding, it seems to me appropriate to provide a formulaic solution rather than one which invites argument as to the amount of the actual saving to the wife as and when the boarding decision is made. I would insert a proviso in the order to the effect that, if either child becomes a boarder, then the husband should be entitled to deduct from the periodical payments made in respect of each child a sum equal to 20% of the difference between the basic termly rates of charge for day pupils and boarding pupils.

97. Finally, as to issue (11), the husband, seeks a variation of the original order. Having originally agreed that he should pay the periodical payments for the wife and children of the family until they cease full-time tertiary education at the rates set out in the order, he now proposes a reduction to the periodical payments for the children on completion of their secondary education to £8,000 per annum on the grounds that this reflects the fact that he will be responsible for paying their living, tuition and accommodation expenses when at the University. I do not think it right to make that order. The terms of the original consent order were clear and no doubt assumed a position (in respect of which it is not suggested there has been any change), whereby the children were likely to continue during their full-time tertiary education to reside with the mother, save for any periods away at University, and that the overall maintenance needs of the mother and the children should continue to be globally assessed on the basis that she would be the householder responsible for funding their day to day living expenses, as opposed to the costs of their education i.e. tuition fees and accommodation. If, at the time of either child proceeding to tertiary education those assumptions turn out to be invalid, then that will be the time for adjustment in the light of the parties' relative means and circumstances at the time. Until then, I do not consider that the case has been made out for variation of what was an important provision in the structure of the original agreement.