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25 FEB 2014

FINANCIAL REMEDIES: Grocholewska-Mullins v Mullins [2014] EWCA Civ 148

(Court of Appeal, Laws, Ryder, Underhill LJJ, 4 February 2014)

Financial remedies - Periodical payments - Staging of instalments - Balance of financial hardship

The full judgment is available below.

In highly contentious financial remedy proceedings following divorce the wife was awarded periodical payments of £24,000 pa. In 2011 as a result of the wife's cohabitation with a new partner the order was varied downwards to £12,000 pa. However, in 2012, when the cohabitation was no longer relevant the award was varied back to £24,000 and an inflation top up of £1,000 was added.

During that hearing the judge analysed the resources of the parties and the common aim of a clean break. He ordered a capitalised sum of £300,000 in lieu of periodical payments to be paid in three instalments relating to the husband's receipt of monies upon the sale of a business.(Court of Appeal, Laws, Ryder, Underhill LJJ, 4 February 2014)

An initial payment of £50,000 had been made and a second payment of £25,000 had also been made. A final payment of £225,000 was due to be paid by the end of 2014. The wife was given permission to appeal on the basis of whether in balancing the financial hardship the judge gave sufficient weight to the hardship of the wife in having to meet her outgoings in between instalments.

The wife claimed that she was at risk of losing her home and that she would be unable to complete her education at Oxford and in Venice unless she has greater liquidity. The husband asserted that he had tax liabilities of £290,000 and that he had no disposable income but he offered to pay the wife periodical payments of £1,000pm until the final instalment was due, which would be deducted from the final amount.

The Court of Appeal found that the husband's offer was fair and that the judge below had conducted a careful analysis of the parties' needs and resources. His conclusions on the variations were unimpeachable. The wife had had more than sufficient time to acclimatise to financial independence and the husband could not afford to pay more.

The appeal was allowed to the extent of implementing the husband's offer to make periodical payments of £1,000 pm, deductible from the final sum, until the final instalment was made.

A judicially approved version of the judgment with a comprehensive headnote will appear in a forthcoming issue of Family Law Reports.


Case No: B6/2013/1296

Neutral Citation Number: [2014] EWCA Civ 148





Royal Courts of Justice


London, WC2A 2LL


Tuesday, 4 February 2014


B E F O R E:






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(DAR Transcript of

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The Applicant appeared in person

The Respondent appeared in person

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[1] This is an appeal by Miss Grocholewska‑Mullins, who I shall call the wife, against the order of His Honour Judge Horowitz QC made in the Principal Registry of the Family Division on 20 November 2012.  The appeal is opposed by Mr Mullins, who I shall call the husband, save, as I shall describe, for an offer which it is said meets the point identified in the permission hearing in this case, which took place on 20 July 2013.

[2] That hearing was conducted by Patten LJ, to whom I am indebted for a careful resume of the issues in this case, which is reported at [2013] EWCA Civ 1121.  I do not propose to recite the contents of that judgment here.

[3] The order complained of was a variation of a previously existing periodical payments order made in highly contentious family remedy proceedings consequent upon divorce.  These parties have been at loggerheads for over 20 years.  The original ancillary relief order was made in 2006, the relevant part of which was a periodical payment order in favour of the wife in the sum of £24,000 per annum. 

[4] That order was varied down in June 2011 on the basis of the wife's then co‑habitation with an Italian doctor to the sum of £12,000 per annum.

[5] Within the variation proceedings complained of Judge Horowitz varied that sum back to £24,000 per annum on the basis that co‑habitation was no longer relevant and added an inflation top up of £1,000, making £25,000 in all.

[6] In a careful and detailed judgment, Judge Horowitz analysed the resources and needs of both parties with the common aim of providing a clean break and an end to this litigation.  He ordered a capitalised sum of £300,000 in lieu of periodical payments to be paid in three instalments by the husband between December 2012 and December 2014.  The dates are important, because they relate to the receipt by the husband of monies upon the sale of a business.

[7] The largest payment of £225,000 is due at the end of this year.  A payment of £25,000 has just been made and the first payment of £50,000 was made by the husband, together with some fixed arrears, immediately upon publication of the judgment.

[8] At the permission hearing Patten LJ carefully considered six heads of appeal lodged by the wife relating to the attitude of the court below to disclosure and other interlocutory orders; challenges to findings of fact and quantum of the capitalised sum of £300,000; the judge's refusal to apply RPI indexation to the value of the periodical payments and the costs order.

[9] On each ground permission was refused, save as follows: the one ground upon which permission was given related to the staging of the instalments of the capitalised sum. 

[10] The question before this court is whether, in the balance of financial hardship evaluated by the judge, he gave sufficient weight to the hardship of the wife in having to meet her outgoings between the instalments ordered.

[11] In essence, was Judge Horowitz wrong not to have continued the periodical payments during the period within which the capitalised payments were to be made, if it is right that the staged payments cannot be structured so as to provide a more even income stream for the wife?

[12] This court has had the benefit of hearing from the wife and the husband in person, the former assisted by two McKenzie friends, one of whom was her advocate in the court below.  We are grateful to them for their assistance.  The wife tells us that she is at risk of losing her home in the United Kingdom which has been tenanted in recent times, and that she will be unable to complete her education at Oxford and in Venice unless she has greater liquidity. 

[13] She made a proposal in July 2013 to settle this appeal on the basis of a larger capitalised sum than had been ordered; £262,000 instead of the £250,000 due and remaining to be paid by the end of 2014, but for that sum to be paid in regular instalments; £35,000 up front and then equal monthly payments thereafter.  She renewed that proposal today and adds that she was deprived of monies from the hearing to the date of judgment to which she believes she is entitled as further arrears.

[14] The husband has taken this court to his indebtedness, which is effectively that relied upon by Judge Horowitz.  He has received a statutory demand within the last few days from Her Majesty's Revenue and Customs in the sum of nearly £290,000 and he must now negotiate a resolution to that demand.  He has no disposable income that is not used to service debt, although he concedes that in some months he earns more than the forecast of £15,000 per month net, allowing him to live.  He has offered the wife £1,000 per calendar month as continuing periodical payments until the final instalment of the capitalised sum is paid, which monies should be deducted from the final sum.

[15] I am of the view that his offer is a fair offer.  Judge Horowitz conducted a very careful balance of the needs and resources of the parties, and in particular the hardships that were visited on both of these adults.  His conclusions on the variation questions were unimpeachable and the only question which is before this court is how to stage the instalments of the £300,000 that was ordered.

[16] The wife has now had more time than almost any former wife I have encountered in the family courts to acclimatise herself to financial independence.  The husband cannot, on the papers this court has seen, afford to pay any more.  The wife has had over time some significant monies in periodical payments and the instalments ordered by Judge Horowitz.  The balance of hardship was in my judgment appropriately decided by him.  I have sympathy with the wife on one matter, and that is the long delay until the final payment is due at the end of the year, assuming that that payment is made to the husband on time so that he can make the payment on time to the wife. 

[17] For that reason and that reason alone, reflecting the internal logic that Judge Horowitz himself descended in judgment, I would accept the husband's offer and make a continuing periodical payments order from today until the final payment of the capitalised sum is made.  That continuing periodical payments sum will be in the sum of £1,000 per calendar month to be paid immediately and thereafter in each month until the final instalment of the capitalised sum is paid.  The interim periodical payments paid from now until the final instalment are to be deducted from that final instalment so that the capitalised figure remains £300,000 in total.  Once the final instalment is paid, the periodical payments will stand dismissed.  Using the powers vested in this court, I would therefore vary the order made by Judge Horowitz from a nominal periodical payments order to a periodical payments order of £1,000 per calendar month on the terms I have described.

[18] To that extent and to that extent alone I would allow this appeal.


[19] I agree.


[20] So do I. 

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