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O'Dwyer v O'Dwyer [2019] EWHC 1838 (Fam)

Appeal in financial remedy proceedings allowed by Francis J in respect of a periodical payments order made erroneously on the basis of sharing an income stream, contrary to Waggott v Waggott [2018] 2 FLR 406.

The husband appealed a final order of HHJ O'Dwyer to pay periodical payments of £150,000 p.a. to the wife. He maintained that the award offended the recent decision of Waggott v Waggott [2018] 2 FLR 406 (although the judgment in Waggott would not have been available to the first instance judge), insofar as it amounted to the sharing of a future income stream and went beyond what was required to meet the wife's needs [16]. Indicative of this approach, the judge had asked 'Why after divorce should only Mr O'Dwyer continue to live well upon [the income] when clearly it is the product of matrimonial endeavour?' [17]. The wife sought to distinguish Waggott from the present case in at least eight ways [23-33].

Francis J agreed that the question of sharing an income stream was now settled, and that periodical payments 'must be based on properly analysed arithmetic reflecting need, albeit that the judge is still left with a significant margin of discretion as to how generously the concept of need should be interpreted' [22]. While the judge had gone on to refer to the wife's needs, and was entitled to assess them generously, he was not permitted simply to take a round number without reference to any arithmetic and, in particular, (a) the wife's needs, (b) the income that the wife's capital will generate, and (c) if and when said capital was to be amortised [36]. Applying this more systematic needs-based approach [37-44], Francis J substituted a figure for periodical payments of £68,000 p.a. [46].

While Francis J accepted that the wife may consider it unfair that she would now have to start living on capital rather than have it preserved for the term of the periodical payments order, as the judge had intended, he found this to be the inevitable consequence of the principle in Waggott [35].

Summary by Iain Large, barrister, St John's Chambers

You can read the full judgment of O'Dwyer v O'Dwyer [2019] EWHC 1838 (Fam)on BAILII