In the court of first instance, Mrs Waggott received an award totalling £9.76 million and £175,000 in annual maintenance payments for life.
Mrs Waggott appealed the decision on two grounds:
- Mr Waggott’s ‘earning capacity’ was capable of being a matrimonial asset to which the sharing principle applies, and:
- Whether it was fair that she be required to use her sharing award to meet her income needs when her ex-husband would be able to meet his needs from earned income.
Mrs Waggott asked the Court of Appeal to increase the amount of her annual payments.
Mr Waggott cross appealed on the basis that the judge at first instance did not give sufficient weight to the clean break principle and should not, therefore, have awarded maintenance payments for life. Mrs Waggott would, according to Mr Waggott, be able to adjust following the expiration of a term order without undue hardship.
In a landmark judgment, LJ Moylan held that an earning capacity is not capable of being a matrimonial asset to which the sharing principle applies as it fundamentally undermines the court’s ability to affect a clean break. The Court also allowed Mr Waggott’s cross appeal and rejected Mrs Waggott’s argument that she should not be required to use her free or available capital from her award to meet her income needs. LJ Moylan ruled that payments should stop in March 2021 and that Mrs Waggott could make up the shortfall from losing her annual payments by investing 21% of her free or available capital or 10% of her total award and using the interest.
The judgment in Waggott could be seen a hardening of the court’s stance when it comes to the amount and duration of maintenance, particularly where one of the parties has received a large capital award as part of settlement.
Please contact our Family Department if you have any questions concerning financial settlement on divorce.
14th May 2018