Husband Discharged: Wife’s Divorce Payments Reduced
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Claire Andrews
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Husband discharged from undertakings and periodical payments to wife reduced
It’s understandable for the parties to assume that once a financial remedy order is made, the terms are set in stone for good. However, it is possible for the order to be reopened in certain circumstances, though disagreements should be settled amicably where possible.
A recent decision is an important reminder that a party could secure a variation of the order if a change in circumstances warrants a change.
What is a financial remedy order?
A financial remedy order is a legally binding court order setting out how the parties’ assets and finances are to be divided on divorce. If a ‘significant’ change in circumstances arises after the order is made, a party can ask the court to vary the terms under s31(7) Matrimonial Causes Act 1973.
When considering an application, the court will take into account the usual s25 factors to decide what will be fair. In these cases, the court will make a needs-based assessment and it is for the payee to justify the need for ongoing dependency and continuing financial provision.
What happened in this case?
In ABC v XYZ (2025] EWFC 370, the parties (whose names were anonymised) divorced after a 24-year marriage. The terms of the 2020 financial remedy order included the wife retaining some of her shareholding in the family business.
The husband gave an undertaking to use his best endeavours to pay her annual discretionary dividends of £50,000 (index linked to the RPI), continuing a tax-saving arrangement implemented during the marriage. If the company did not pay the full amount, he undertook to pay the shortfall by way of nominal periodical payments order.
In the year ending June 2025, the business suffered significant losses leading to redundancies and (for the first time) no dividends or bonuses were paid. The husband asked the court to discharge him from his undertakings and reduce the monthly periodical payments to £1,000 on a joint lives basis.
The judge did not accept the business was failing, with the previous year’s accounts showing reasonable financial performance and resilience.
Nonetheless, he found that there had been a significant change in circumstances since the consent order was made. The wife was by now receiving £1,560 a month more than she needed – either because of the RPI-linking or her needs decreasing. A downward variation was therefore fair and justified.
The husband was discharged from his undertakings and the nominal periodical payments order reduced to a monthly sum of £2,900 (index linked to the CPI rather than the RPI). This was still affordable for the husband, though it gave little buffer to the wife.
What does this mean?
It’s interesting that the judge found there had been a “significant change in circumstances” warranting a reduction in monthly payments to the wife, but not for the reason the husband relied on. It shows that the court will consider all the circumstances of the case before justifying a variation of a financial remedy order.
Secondly, disputes arising after a financial remedy order should be settled where possible to avoid costly litigation. The judge characterised the dispute as “relatively simple” and capable of settlement. Yet the parties had adopted “rigid and unrealistic open positions”, which proved a clear barrier to them reaching agreement. The litigation ultimately cost them £175,000 in legal fees.
How we can help
The financial remedies experts at Osbornes Law advise clients in complex financial disputes on divorce and regularly advise clients on reopening financial remedy orders. Please contact us by:
- completing our online enquiry form;
- or calling us on 020 7485 8811
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