Future Music Income Exempt From Financial Remedy Agreement

A Judge has rejected that future earnings from a husband’s band tour should be classed as a matrimonial asset susceptible to being shared in their financial remedy claim.

Considering the case of a base player in a ‘well known band’, Mostyn J had to rely on expert advice to assess the total income from five separate royalty income streams.

The royalties being considered were the husband’s own composition royalties, those from broadcasts of the band’s songs, a share of royalties from songs composed from other band members, a share of a recording royalties and a share of ticketing and merchandising income.

The wife was also arguing that income from future touring revenue should be shared as matrimonial assets.

Mostyn J was tasked with capitalising the value of the income streams so as to produce a clean-break agreement, consisting from a time-limited maintenance agreement, child support and a Duxbury capital sum.

A Duxbury calculation is when a court can determine an appropriate lump sum to replace regular maintenance payment. The aim of the lump sum is for it to be invested, enabling the receiving spouse to receive an income from the investment, equivalent to regular maintenance payments. There is also an allowance for the recipient to use some of the capital.

Through expert advice, it was assessed that the total income for the royalties, ticketing and merchandise were £4.45 million, capitalised at £10.2 million.

When it came to the future earnings from tour revenues being susceptible to being shared, Mostyn dismissed the income as pure future earnings that could not be predicted.

Mostyn is the originator of the standard judicial guidance on financial remedy cases, as shown in B v S (Financial Remedy: Martial Property Regime), but there is also the settled law that income is not a matrimonial asset capable of being shared, from the case of O’Dwyer v O’Dwyer.

The case was concluded with the wife granted half of the capitalised £10.2 million, maintenance for a limited period of £42,786 per year. The musician was also ordered to pay the children’s school fees and £12,600 a year child maintenance, which had been calculated through CMS calculation principles.

Mostyn J concluded by finding that the wife’s needs would be amply met by the amount awarded, in addition to the child maintenance, without the need for a claim on future earnings.

“The application of the equal sharing principles gives to her net assets, after discharge of all liabilities of £5,110, 079. I have observed before that is almost a truism that someone living in the Home Counties with assets of £3 million has sufficient to meet her needs

“It is pre-eminently reasonable that the wife should be required to amortise that is to say, to spend her Duxbury fund. Indeed, I struggle to conceive of any case where in the assessment of a claimant’s needs it could be tenably argued that it was reasonable for her not to have to spend her own money in meeting them”.

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