This was an appeal of a final order in financial remedy proceedings heard by Mr Justice Cusworth. The appeal argued that HHJ Furness KC at first instance had pitched W’s needs at too high a level, applied needs to capital but sharing to pensions, and included interest on a lump sum while H was also paying maintenance. Appeal allowed on issue of pensions and interest only.

The first instance hearing was on 16 January 2023 but went part-heard after HHJ Furness KC’s illness. The trial concluded on 6 September 2023 and a written judgment was handed down on 20 September 2023. In his judgment, he concluded that W’s needs would not be met by her sharing award. Both sides were criticised for their budgets but the judge found that W’s could not be reduced below £8,434 pcm. He capitalised this figure on a lifetime basis but deducted £100,000 from the sum to take account of her income contribution but did not include her pension. This came to £2.36m.

H’s leave to appeal was initially refused but was subsequently granted by Sir Jonathan Cohen on 1 December 2023.

In his judgment, Mr Justice Cusworth cited the recent case of Ditchfield v Ditchfield [2023] EWHC 2303 (Fam) where Peel J set out the legal principles on appeals from [10] to [12].

The proper quantum of W’s annual maintenance need, and the capitalisation thereof

The following arguments by H were rejected:

1. The judge had calculated H’s income on basis he shut down loss making company. Held: that this was open to him.
2. Judge calculated income needs using H’s gross income. Held: that this was actually an undercounting.
3. Judge failed to take into account W’s actual earning capacity. Held: judge’s deduction of £100,000 for her earning capacity over 15 years was lower than other judges may have gone and he was wrong to suggest her income would be taxed as a top-slice, but this was not enough to replace the trial judge’s decision. HHJ Furness had not only considered available income but also used the parties’ open offers and budgets to discern what the maintenance award should be. His conclusion was affordable on H’s case. Further, all of these were viewed in light of the first instance judge’s finding that H had embarked on

   ‘a deliberate course of action to tell as little as possible, to avoid disclosing matters that were contrary to his case and to paint the picture as bleak as possible in respect of his business interests. That is the prism through which, in my judgment, I must consider his evidence and his proposals.’

4. The judge had not paid heed to case law that the longer the period for which the capitalisation has to provide, the less likely that the payee would have to maintain the matrimonial standard of living (see Roberts J in Juffali v Juffali [2016] EWHC 1684 (Fam)). Held: a reduction of needs could be in ‘appropriate cases’ and in the case of a long marriage with ample resources and ongoing contributions by the applicant needs should be provided for similarly to the standard of living during the marriage. Further, only W’s young age would have pointed in the direction of granting a lesser needs award. In the case at hand they had a seven-year-old daughter who lived with W, the marriage was 19 years long, and H’s anticipated outgoings in his Form E were higher than that which he proposed for W. Mr Justice Cusworth also noted that no party has based a Duxbury on a downward taper and the taper would not have produced a significantly different outcome.

Ultimately the award was for £3.6m out of £12.3m in assets, but only £3.575m of those were matrimonial. This award, although taking up all of the matrimonial assets, would have no effect on H’s standard of living based on the rate he said he would spend at. The decision at first instance was within the bounds of what could be expected under the 1973 Act and H’s appeal was dismissed.

Applying the sharing basis of assessment to the pension assets

H’s appeal in relation to pensions was successful. This was because the judge applied the needs principle to the non-pension assets but the sharing basis to the pension assets. This was incorrect as they were two distinct and separate basis of assessment and had to apply in totality to an award. If not, it would be unfair to the respondent who would be paying above and beyond needs or sharing. He also deducted W’s pension from the income fund that H was to provide.

Applying interest to the lump sum

H’s appeal was also allowed in relation to interest. It was beyond ‘the generous bounds permitted to the trial judge’ to allow interest to run on the late payment of the lump sum whilst H paid maintenance. The capitalised sum did not reduce in line with the maintenance paid, and there was no provision for maintenance reduction in the event of part payment. This ground of the appeal was only allowed in relation to the income element of the lump sum and not the housing element.