What is spousal maintenance?

Spousal maintenance recognises the continuing duty of support following separation.   The duty is to maintain the other party of the relationship to such extent necessary to meet their “reasonable needs”. Spousal maintenance is usually in the form of periodic payments with the purpose of assisting the other party until that party is capable of maintaining themselves. A party receiving maintenance must assume responsibility for their own needs within a reasonable time.   To qualify for spousal maintenance a party must be unable to meet their own “reasonable needs” because of one or more circumstances specified in the Family Proceedings Act 1980. Those circumstances include:

  • the ability of each party to become self-supporting having regard to –
  • the effects of the division of functions within the relationship while the parties lived together; and
  • the likely earning capacity of each party.
  • the responsibility of each party for the ongoing daily care of any children of the relationship.
  • the standard of living of the parties while they lived together.
  • any disability.
  • any inability of a party to obtain work.
  • the undertaking by a party of a reasonable period of education or training designed to increase that party’s earning capacity or to reduce or eliminate that party’s need for maintenance.
  • any other relevant circumstances

Spousal maintenance and professional fees

Traditionally, spousal maintenance awards have not taken into account a party’s legal or other professional fees.   However, a recent High Court decision, Clayton v Clayton [2015] NZHC 550, has held there is nothing preventing a maintenance award from including a party’s need to pay accounting or legal expenses where there is ongoing litigation which will assist that party to become self-sufficient.   In that case there was complex ongoing litigation over the division of Mr and Mrs C’s relationship property. Mrs C became unable to meet her mounting legal and accounting expenses and applied to the Family Court for spousal maintenance. The Family Court made an award of spousal maintenance of $15,000 per month including an allowance of $10,000 per month specifically to cover the legal and accounting fees.   The High Court upheld the Family Court decision recognising that nothing in the law or policy relating to spousal maintenance prevents such an award.   The main points to take from the High Court decision are:

  • A final spousal maintenance award under the Family Proceedings Act 1980 may include an allowance for legal or other professional fees in relation to litigation.
  • The fees must be an ongoing expense.
  • The litigation must be for a purpose that will assist the recipient to become self-supporting such as resolving relationship property disputes.
  • A spousal maintenance order including an allowance for professional fees can be taken into consideration in a costs award. If the party receiving the spousal maintenance is unsuccessful in the litigation then there is nothing preventing that party from being liable to pay costs.

Consequences of Clayton v Clayton

Clayton v Clayton opens the gate for financially dependent spouses or partners to fund litigation where the purpose of the litigation will assist them to become more financially dependent.   Given the high costs in relation to funding ongoing litigation, this decision may result in significantly larger spousal maintenance awards being made which the liable spouse or partner will have to pay alongside meeting their own expenses associated with the litigation. This may prove to be prohibitive for some and could provide an incentive to enter into voluntary spousal maintenance arrangements or to settle relationship property disputes.   As the case is a High Court decision it may be that it will be overruled by a higher authority.

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