MPS Applications - the importance of an accurate interim budget

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BD v FD [2014] EWHC 4443 FAM

The parties in this case were married in 2002 and later separated in 2013. There are 4 dependent children of the family.

The case involved husband’s assets in the region of £149m - £179m together with net income of £1.7m per annum. The wife had assets in the region of £4.3m.

The wife made an MPS application. At this time, the husband was paying the wife voluntary maintenance of £202,000 globally per annum for the benefit of the wife and the 4 children. He was also paying the wife’s legal fees. The wife was seeking that the sum increase to £392,000 or at the very least £280,000. The wife claimed that without the increase in maintenance she was unable to meet her reasonable income needs.

The wife’s argument for not utilising the £1.4 million she had in savings (excluding £2.9m which was the value of her new house) was twofold:-

  1. £1m of the savings had been paid by the husband upon separation on the condition that she would not use it for her outgoings and legal expenses; and
  2. She needed to utilise the savings towards the purchase of a new property worth £5.5m;

In addition the wife claimed that:-

  1. As the husband had withdrawn his offer to continue to pay her legal fees she may need to use some funds to cover the costs; and
  2. Her budget was reflective of the standard of living during the marriage.

In response to the wife’s claim the husband stated that the family lived on £230,000-£265,000 per annum and that the wife’s own maintenance needs were £156,000 per annum. The husband submitted evidence from his accountants and argued that the wife had manifestly exaggerated her income needs which were unrealistic and far in excess of the parties’ standard of living during the marriage. The husband disputed that the wife was not able to meet her income needs utilising the voluntary maintenance and sought to argue that the wife’s claim had been brought simply to set a benchmark for future maintenance.

Following evidence submitted by both parties’ legal representatives, Moylan J rejected the wife’s application. Moylan J agreed with the husband that the current level of voluntary maintenance in the sum of £202,000 per annum was appropriate to meet the wife’s income needs.

In his judgment Moylan J concluded that:-

  • The wife’s claim for interim maintenance far exceeded the standard of living during the marriage and although standard is not an absolute ceiling there would need to be exceptional reasoning as to why an interim budget should exceed that;

  • Moylan J emphasised that the purpose of an MPS application was to ensure that the party’s “immediate” needs are met and not to prejudice their longer term position;

  • There was no need for the Court’s intervention in this case; and

  • The application was disproportionate in light of the combined legal costs of upto £90,000 which exceeded the difference between the current level of maintenance and the minimum amount that the wife sought.

This case illustrates the importance of ensuring that when bringing an application for maintenance pending suit, the amount sought by the party concerned is an accurate reflection of their immediate income needs and does not seek to put the person in a positon which would exceed the standard of living enjoyed during the marriage.

The case is also a clear example of where pragmatic legal advice is essential to ensure that a party does not bring an MPS application which would be disproportionate as far as legal costs are concerned.

In light of recent case law, including the case of J v J [2014] in which Mostyn J was clear that legal costs should not be allowed to spiral uncontrollably, one would issue an application for MPS with some level of caution otherwise unrealistic parties and their legal representatives are likely to receive heavy criticism.

 

 

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