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08 JAN 2014

FINANCIAL REMEDIES: H v W (Cap on Wife’s Share of Bonus Payments) [2013] EWHC 4105 (Fam)

(Family Division, Eleanor King J, 20 December 2013)

[The judicially approved judgment and accompanying headnote has now published in Family Law Reports [2015] 1 FLR 75]

In financial remedy proceedings following divorce the wife was awarded a lump sum from the sale of the matrimonial home, the husband retained an American property and an investment property in the UK. The wife would further receive 81.3% of the husband's pensions, periodical payments on a joint lives basis and 25% of the husband's annual bonuses also on a joint lives basis. The husband appealed in relation to the award of the wife's share of his bonuses. The issue for determination was whether there should be a cap on the share received by the wife and whether the judge had intended to make the order in terms of maintenance requirements and not in relation to a continuing share of the bonus without any maintenance.
In cases where the matrimonial income consisted of salary and bonus payments and the bonus made up a significant proportion of the total income to the extent that the judge found it necessary to make a maintenance award less than would otherwise be appropriate, then it was possible that part of the award would be paid from the bonus. Given the uncertainty of bonus payments, the award could only be expressed in percentage terms. However, in this instance the judge had erred in failing to impose a maximum reasonable maintenance entitlement. Rather he should have calculated a total figure for a maintenance award, then made a monthly order to be paid from salary and the balance to be expressed as a percentage of the net bonus up to a stated maximum each year. Appeal allowed.
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