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O’Dwyer: the one where everything went wrong

Date:1 AUG 2019
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This was a case that had six days of first instance final hearing, three days in July 2017, two days in November 2017 and a day in March 2018; with an appeal hearing in December 2018 and the appeal judgment in July 2019, it meant that after seven days of Court time, over a period of two years, the parties finally obtained a final outcome. 
In addition to this delay and numerous hearings, having circulated the draft judgment, the first instance judge ‘never circulated a perfected judgment’. Three chasing emails were sent by Counsel, even a handwritten letter was delivered to the Court from Counsel, and yet by the time of the appeal hearing on 19th December 2018, precisely one year after the first instance judgment had been circulated to the parties in draft form, Mr Justice Francis had ‘neither a final version of the Judgment nor an agreed order, still less a sealed order’ (para 5). 
The Husband brought the appeal and, whilst ‘considerable difficulties’ were caused due to the lack of final order and judgment, Mr Justice Francis proceeded on the basis that the draft judgment and order would be deemed as final for the purpose of the appeal. The Husband was spared, understandably, a strict application of the rule 30.4(2)(b) FPR 2010 regarding the 21 days to lodge an appellant’s notice as a result. Francis J’s guidance (para 6), should this ‘unlikely event… ever happen’ and ‘if repeated attempts to persuade the judge to finalise his order fail’ then ‘the matter is taken up with the office of the President of the Family Division’. 
The main subject of the appeal was the quantum of maintenance, ordered at first instance as £150,000 per annum commencing on 1 February 2018 until, in addition to the usual clauses, the Husband’s 66th birthday. As part of the appeal, the Husband sought a stay of the maintenance order. Interestingly, as the Wife was found by Francis J ‘to have sufficient funds for her own needs between the date of any stay and the date of judgment’ the Husband was ordered ‘make the periodical payments into an account in the name of his solicitors, or a joint account between the firms, as he elected, on the basis that the sums are to be held until the outcome of the appeal is known’. This was a neat solution found by Francis J to a common problem on maintenance appeals (or variation cases): the recovery of either overpayments or arrears. Arrears are difficult to justify after a lengthy appeal as the need for them, without some form of consequential liability, has passed; overpayments are difficult to recover when the money has, in all likelihood, already been spent. In cases where needs can be met from other sources on a temporary basis, this is an interesting solution for practitioners to consider going forward. 
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The Wife received £2,932,739 of capital in the final order. From this, £1,200,000 was deducted to ‘cover the costs of a car, currency fluctuations and other expenses’ and, whilst not expressly stated in the first instance judgment, Francis J ‘inferred’ that ‘the Judge meant to include in the list of items totalling £1.2 million the £1.128 million allocated to her for the purposes of purchasing a property’. The Wife was therefore left, after her capital needs were met, with the sum of £1,732,739. 
The issue of the appeal was therefore is the maintenance quantum correct, in so far as: 1) should the Wife be able to share in the Husband’s income as a matrimonial asset going forward; 2) Were her reasonable needs accurately assessed at first instance; and, 3) what accounting should be made for the income potential of her capital award? 
The first of these is easily answered. Despite the Wife’s attempts to argue that Waggott v Waggott [2018] 2 FLR 406 ‘was a very different case’ (para 33), Moylan LJ ‘was purposefully setting out general guidance rather than dealing with facts very specific to that case.’ The nature of that general guidance is ‘that it is now settled law that income cannot be shared’ (para 22) and ‘an award of periodical payments (absent rare compensation cases) must be based on properly analysed arithmetic reflecting need’. The first instance judge therefore mistakenly identified the Husband’s income as matrimonial property that needed to be shared. 
The Wife’s budget was not subject to any detailed analysis in the judgment. This despite her being cross-examined ‘extensively’ (para 44) and ‘the [first instance] Judge intervened even to the extent of asking about the price of a litre of milk, the sprinkler systems in the wife’s garden and the cost of toll roads, which make the lack of analysis in the Judgment all the more surprising’. Without said detailed analysis, the first instance Judge found £150,000 per annum to be ‘appropriate’ and whilst a judge ‘is entitled to be generous in their assessment’ (para 36) ‘a judge is not entitled simply to take a round number without reference to any arithmetic… otherwise, discretion gives way to a risk of disorder or even chaos with people not knowing how or whether to settle’. Francis J reduced this figure to £120,000 per annum (para 45) as her Form E needs were stated as ‘not less than £10,000 per month’ and Francis J was ‘entitled to assume, and do so, that the wife’s asserted figure in her Form E was carefully thought through’.
The Wife was attributed with an income of £52,000 per annum derived from her capital (para 42) following a partial amortisation: (para 41) ‘it is fair not to amortise the wife’s capital for the remaining years of the husband’s employment’ with, interestingly, Francis J stating that Waggot should not be interpreted as always requiring a spouse to amortise all of their capital for all of the time and that there should be some ‘fact specific… flexibility’ about the amount and time required. 
Having attributed the Wife with £52,000 per annum from her capital (it would have been around £100,000 net per annum if he had ‘amortised all of the wife’s capital from day one) (para 40)) and assessed her reasonable needs at £120,000, the correct maintenance quantum was determined at £68,000 per annum, some £82,000 less than at first instance and an overpayment by the Husband of over £115,166 in the seventeen months between the commencement date of maintenance and the appeal judgment.