McFarlane v McFarlane [2004] EWCA Civ 872 (07 July 2004)

McFarlane v McFarlane [2004] EWCA Civ 872 (07 July 2004)

Where the payer's income significantly exceeds the recipient's needs, periodical payments may exceed needs to allow the recipient to build up capital towards a clean break, but the overriding objective is to achieve financial independence and terminate financial obligations as soon as reasonably practicable. The surplus should be used for this purpose, not to provide indefinite capital accumulation. The quantification of periodical payments is an art, not a science, and must balance all Section 25 factors, with a focus on fairness and the clean break principle.

Citation
[2004] EWCA Civ 872
Parties
Appellant: Mrs McFarlane; Respondent: Mr McFarlane; Appellant: Mrs Parlour; Respondent: Mr Parlour
Jurisdiction
England and Wales
Judgment Date
07 July 2004
Procedural Posture
Appeal (family Law Ancillary Relief) / Court of Appeal Judgment Following Appeals From High Court (family Division) Decisions on Periodical Payments
Outcome
Appeals allowed in part; original orders for periodical payments restored or varied to reflect the correct legal principles.
Legal Topics
Ancillary Relief, Periodical Payments, Clean Break Principle, Division of Income Post Divorce, Section 25 Matrimonial Causes Act 1973, Section 25 a Matrimonial Causes Act 1973
Family Law Ancillary Relief Periodical Payments Clean Break Principle Division of Income Post Divorce Section 25 Matrimonial Causes Act 1973 Section 25 a Matrimonial Causes Act 1973

Case Brief

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Parties

Mrs McFarlane

Appellant

Mr McFarlane

Respondent

Mrs Parlour

Appellant

Mr Parlour

Respondent

Procedural Posture

Appeal (family Law Ancillary Relief) / Court of Appeal Judgment Following Appeals From High Court (family Division) Decisions on Periodical Payments

Legal Issues

  1. 1 What principles govern the quantification of periodical payments to a spouse where the payer's income far exceeds the recipient's needs?
  2. 2 Should surplus income above needs be shared, and if so, for what purpose?
  3. 3 Is it permissible to use periodical payments to build up capital for the recipient post-divorce?

Ratio Decidendi

Where the payer's income significantly exceeds the recipient's needs, periodical payments may exceed needs to allow the recipient to build up capital towards a clean break, but the overriding objective is to achieve financial independence and terminate financial obligations as soon as reasonably practicable. The surplus should be used for this purpose, not to provide indefinite capital accumulation. The quantification of periodical payments is an art, not a science, and must balance all Section 25 factors, with a focus on fairness and the clean break principle.

Court Disposition

Appeals allowed in part; original orders for periodical payments restored or varied to reflect the correct legal principles.

Orders

  • In McFarlane v. McFarlane, the district judge's order of £250,000 per annum periodical payments is restored, subject to the recipient's obligation to use surplus above needs towards financial independence and clean break.
  • In Parlour v. Parlour, a four-year extendable term order for periodical payments is ordered, with the expectation that the recipient will use surplus income to build up capital for a future clean break.