DDJ Holmes-Milner. FR decision at DDJ level. Consideration of treatment of critical illness payout for H’s cancer.

H is a chartered accountant aged 46 and W a teacher aged 47. Two children, one an adult and one living with W in FMH. Married 2002 and separated 2021.

H had bowel cancer which involved surgery, chemotherapy and radiotherapy. He ran a number of companies and had delegated this work to proxies during his illness. Nevertheless he had a reduced income of about £1,000 pcm. He lived in rented accommodation. He received critical illness insurance payouts of £1,409,110. The parties had several jointly owned properties and H had one premarital property.

Held:

H’s premarital property remained non matrimonial although significance of this contribution had diminished over time. Fact that rental income and remortgage had been used for joint purposes did not change this.

H’s critical illness monies were matrimonial. Premiums were generated from household income. The payments comprised damages for (a) pain, suffering, and loss of amenity (PSLA); (b) past loss of earnings and out of pocket expenses; and (c) damages for future loss of earnings. Latter were not matrimonial as no principle of sharing of future incomes per Waggott. However, per Wagstaff [1992] 1 WLR 320, each case should be approached individually and, while damages including PSLA were matrimonial, the reason for the availability of the capital must temper or may exclude sharing.

Parties had same housing needs of £725,000 and similar mortgage capacity of £175,000. Parties should receive balancing payment of £725,000 less £175,000 together with enough to discharge their respective debts. Of remaining monies, £802,000, H should have as much as possible to replace his income over rest of his life. Per Duxbury this would give him £40,000 pa for life. H would also be able to sell premarital house to put towards rehousing. He will have earning capacity at least that of W and be able to afford a mortgage-free property.

W has liability to pay some of H’s costs but this was not ordered because her needs would not otherwise be met. Although costs awards can bite into needs, the costs would make a real difference to W’s ability to rehouse herself and minor child. W to use best endeavours to release H from mortgage and in default FMH to be sold with W retaining all proceeds. Pension share, applying impairment enhancement of 30% per PODE report.

H should pay child maintenance per CMS.