The Telegraph is one of a number of newspapers to report on the decision of the Court of Appeal to refuse the appeal of Mrs Waggott asking for an increase in her divorce award, and to allow the appeal of Mr Waggot, asking for the duration of her maintenance award to be limited.
Their headline runs :
‘Meal ticket for life’ bid backfires as divorcee loses £175,000 a year from ex-husband
The decision is a complicated one, and not easy to summarise (although the Telegraph do a reasonable job in the space allowed). You can read it here : Waggott v Waggott [2018] EWCA (Civ) 727.
Firstly, Mr and Mrs Waggott are very wealthy and the amounts of money in question are eye watering to most of us. This wasn’t a case where the court had to ‘box and cox’ to make ends meet. There was plenty to go around – the question was what was a fair division of the income (the couple had agreed it was fair to split their capital and pensions equally)?
The arguments at the original hearing and on the appeal arose from the interpretation of key judgments of the appeal courts in the cases of White, Miller and McFarlane. Those cases talk about a ‘yardstick of equality’, the need not to discriminate for or against men / women on the basis of their different but equally important roles in a marriage, and introduced the idea that there are three important principles to think about when dividing up the pot : needs, compensation and sharing. (The judgments in these cases are long and complicated and lawyers are still arguing about what they mean over a decade later so this very mini-summary probably doesn’t do them justice).
The original judge had awarded Mrs Waggott £115,000 per year maintenance (part of that for the costs of their child) without a fixed end date (this is called ‘joint lives maintenance’ – and is typically referred to by newspapers as a ‘meal ticket for life’ – we’ll come back to that). Although this wasn’t a needs case, the wife appealed against the original decision because the figure was calculated on the basis that she could meet some of her needs out of the interest on her capital. She said that wasn’t fair because Mr Waggott wouldn’t have to use his capital that way, as he could use his ongoing earnings so it wasn’t really equal sharing after all. Her Barrister James Turner QC argued that the ‘sharing’ principle applied to earning potential because it had been created during the marriage.
As to how long her maintenance should last the original judge had said he didn’t think she could adjust without ‘undue hardship’ to an end date in five* years time (when the child reached 16) as suggested by Mr Waggott, particularly since she had not worked for a number of years and her own earning potential was uncertain – so he left the maintenance open ended.
*the Telegraph refer to 3 years, this is because 2 years has passed since the original order, and the child is now only 3 years from his/ her 16th birthday.
The Court of Appeal disagreed with what Mrs Waggott said – earning capacity is not an asset that should be shared in the way she suggested. This decision was partly based upon what the law says about the court making a ‘clean break’ between the parties. The section of the Matrimonial Causes Act 1973 which deals with clean breaks is where the test of undue hardship comes from – in summary the section says that a court must consider whether a clean break is possible immediately or whether it can be achieved by a fixed end point, but only if that adjustment can be made without undue hardship (Obviously undue hardship is all relative, and Mrs Waggott’s ‘undue hardship’ might seem like winning the lottery to most of us). The court also said that it was really quite impossible to put a figure on how much of the earning potential should be shared in this way and it turned the exercise into no more than sticking your finger in the air (we paraphrase!). Even Mrs Waggott’s barrister, who was putting this argument forward couldn’t really explain how the court should go about calculating the sharing of an earning potential.
The argument that the wife shouldn’t have to use any of her capital to meet her income needs would also undermine the clean break principle so the Court of Appeal said that wasn’t right either. The Court of Appeal says that the fact that one spouse has to use their sharing award to meet their income needs when the other doesn’t will be relevant to the overall question of fairness. So, as is so often the case in this area – fairness will all depend on the specific facts in each case.
A lot of the argument had been about what Lady Hale did and did not mean in her judgment in the Miller case (she is now the President of the Supreme Court). The Court of Appeal does not seem to have been very impressed at the fact that the lawyers extracted certain lines from the judgment and placed a lot of weight on them, without really looking at the judgment in the round or indeed other bits of it that flatly contradicted the arguments made.
The Husband’s appeal succeeded because the judge had not really gone into enough detail when looking at how the wife’s capital award could be used to meet her income needs, and allow her to adjust to the termination of maintenance without undue hardship. If looked at properly the Court of Appeal thought she could indeed adjust.
Was the headline fair?
Well, it is fair to say that Mrs Waggott came out of this appeal worse off than she was at the end of the original hearing. She was the first to lodge an appeal, and Mr Waggott’s cross appeal to end her maintenance in 5 years had followed after – he might not have bothered to appeal save for the fact that the matter was going to be reopened anyway – but he might have planned to appeal in any event. It does appear that the exploration of the issues raised by Mrs Waggott about use of her shared award led the court to conclude that actually the hardship the original judge had been worried about wasn’t really there. So on one view one could argue Mrs Waggott’s approach ‘backfired’ – she is certainly worse off than she was before and as the Telegraph point out now also has legal costs to pay (at least her own, even if not her husband’s).
The Telegraph haven’t quite got it right about what Mrs Waggott was originally awarded either – an easy mistake to make, as we initially thought it was £175,000 too, but a close reading of the judgment makes clear it was an award of £115,000, reflecting income needs of £175,000 less assumed income (from capital) of £60,000 per year.
As to the meal tickets for life issue, the court of appeal say this at the end of their judgment :
During the course of the hearing, Mr Turner was evidently concerned that recent public debate about how the courts determine a spouse’s claim for maintenance might somehow intrude into the determination of this case. His particular focus was what he described as the unfair use of the expression “meal ticket for life” which, he suggested, was often deployed without regard to a spouse’s fair entitlement which might properly include long-term maintenance. I do not comment on his remarks, save to say that I, of course, acknowledge that long-term maintenance can be required as part of a fair outcome and also that I understand why he suggests that the expression “meal ticket for life” can be used as an unfair trope. However, I would make clear that my determination of this appeal has been based solely on my view of the proper application of the 1973 Act and the principles identified above to the facts of this case.
Here, the Court of Appeal seem to accept what we have said on a number of occasions on this blog – the term meal ticket for life can be used as a rather unfair shorthand for a legitimate way of ensuring that both parties’ needs are met fairly. Parliament allows the court to make ‘joint lives’ awards for good reason – sometimes it is necessary to do justice between the parties. Mrs Waggott’s case just wasn’t one of them, and this case demonstrates that the courts do expect the parties to make some effort to go back to work if they can and to be prepared to adjust to some degree. Where a court does make a joint lives maintenance award is is not because it is some sort of automatic entitlement for lazy wives to take a windfall, but because it is justified as fair in the circumstances of that case.
Feature Pic courtesy of Aaron Shumaker on Flickr – thanks! (Creative commons)