What are Nominal Maintenance Orders?
Spousal Nominal Maintenance Orders are made when the paying party is ordered by the Court to pay the other party nominal maintenance – say £1 per year. Such orders are generally made in favour of a party who has the necessary resources to meet their needs and who therefore does not need any substantive spousal maintenance at that time, but who may require such support in the future. The Nominal Maintenance Order allows the receiving party to keep the door open so they can ask the Court to increase the nominal maintenance if they need to. This is mostly applicable in cases where, for example, a receiving party has the primary care of minor children (under the age of 18). A Nominal Maintenance Order therefore acts as a ‘safety net’ to allow for any future variation application in the event that circumstances change. The change in circumstance would need to be significant and more than just temporary. This may be appropriate where, for example:
- The receiving party suffers from a long-term illness leaving them unable to meet their income needs; or
- The receiving party is forced to give up work to care for a disabled child.
Losing a job, when the receiving party should be able to regain employment fairly shortly, is unlikely to be a sufficient reason to make a Nominal Maintenance Order substantive.
Applications for upwards variation of Nominal Maintenance Orders are therefore very rare.
What does the Court consider on a variation application?
There will be a wide level of judicial discretion in terms of the weight applied to the principles below:
- The welfare of any minor child is paramount;
- Change in circumstances – the Court must consider any changes to the parties’ circumstances in line with the ‘Section 25 factors’ under the Matrimonial Causes Act 1973. These factors include the income and earning capacity of the parties, the financial needs and responsibilities of the parties, amongst other factors;
- Clean break – the Court needs to consider whether it is appropriate for the parties to separate with no further financial responsibilities towards one another (this may include capitalising any substantive maintenance that is awarded);
- Fairness – there should be a balance of fairness between the parties;
- Balance of responsibilities between first and second families – priority cannot be given to the second spouse, for instance;
- Not condoning financial mismanagement – a spouse is not to be responsible for the other spouse’s needs arising from that other spouse’s financial mismanagement;
- Consideration of actions and discussions between the parties – any agreement made but not incorporated in the order would be considered;
- Whether an identical variation application has already been made – has a similar application already been made? If so, a Court is likely to dismiss it;
- Proportionality – a Court can adopt an approach suitable to the individual case. This can include looking at the whole case once more or only a small aspect of the case.
It is very difficult to predict decisions in this area of law given the Court’s wide powers of discretion. In addition, there is little judicial guidance on the subject and therefore it is not clear what approach would be taken in any individual case.
Can there be an upward variation where the receiving party is at fault?
In North v North1, a financial order was made in February 1981 settling the wife’s claims and providing for a Nominal Maintenance Order. The parties had 3 children who lived with the husband until they became independent (the children were adults at the time of her variation application). The wife moved to Australia and made losses on investments (these investments were made upon receiving advice). She applied to the Court to vary the Nominal Maintenance Order. Although at first, the wife was awarded maintenance of £16,500 per year, this was reduced on appeal by the husband. The judge was clear that the husband “is not an insurer against all hazards nor, when fairness is the measure, is he necessarily liable for needs created by the applicant’s financial mismanagement, extravagance or irresponsibility”2. It was ordered that a fair award was £3,000 per year for the parties’ joint lives.
What is clear, therefore, is that in a case where a party’s needs have been provided for by the original order, such that there is no substantive award for maintenance, the other party cannot take responsibility for that spouse’s financial misconduct. In the case mentioned above, the Court was able to pinpoint that the wife’s need arose as a result of her own mistakes, given the time that had passed since the parties’ separation. This, however, may not be clear in other cases.
In conclusion, although it is possible for Nominal Maintenance Orders to be varied upwards, the specific circumstances of the case will need to be such that there is enough of a change to warrant a variation. A needs-based variation may be required, where, for example, the receiving party falls seriously ill, but this will need to be considered along with all the principles mentioned above.
Here, at Teelan & Silwal, we are able to advise and assist you in navigating this complex area of law.
1North v North  EWCA Civ 760
2North v North  EWCA Civ 760,