You may well have read in the press about Mr Myerson, a City fund manager, who has taken his case to the Court of Appeal in an attempt to "claw back" some of the £9.5million settlement he agreed to pay his wife back in March 2008.
Since that time, his fortune - largely made up of shares in his company - has collapsed and as such he claims that he can no longer afford to pay the settlement to his wife. She received 43% of their total over fortune of £25.8milliion. This was made up by a property in South Africa and a lump sum of £9.5million, payable in instalments.
Mr Myerson has lodged an appeal out of time on the basis that the dramatic loss of fortune was an "unforeseeable and unforeseen combination of forces at play within the global economy has undermined the assumptions upon which the order was made". He claims that the result of the order now means that instead of leaving him with an estimate £14.6million he is left in debt by £500,000. He claims that he cannot afford to pay the final instalment of the lump sum of £2.5million. One of the Judges, Lord Justice Thorpe has described this as a "rum do".
Mr Myerson therefore seeks to claw back the South African property and to be discharged from paying the final instalment of the lump sum.
If he is successful, and judgment has been reserved, this could have a significant impact on cases, in particular the "big money" cases, that have been settled since the credit crunch and recession began. In some instances, orders have been made on the basis that income is going to continue and bonuses will be paid in the future and this may not now be the case. There is a possibility that the floodgates will open. Would it be the same if a property value had reduced significantly? Most properties whose value was obtained at the time of settlement will have reduced in value which affects potentially the funds available. Certainly there is likely to have been a reduction in asset values and pension funds. If the reduced outcome is so dramatic that the balance of fairness is tipped and the original basis for the order is undermined, there may be the opportunity to revisit the order.
It is hoped that clear guidance will be given in this case, whatever the outcome. Already it is a hot topic for family lawyers and we are often asked by our clients who perceive their situations, post final order, to now be unfair due to the economic downturn. Will there be any set of circumstances that will allow a former spouse to revisit what should have been their final order on divorce as a result of the recession?
However, consider the situation if there had been an considerable up turn in fortune? It is highly unlikely that Mrs Myerson's application would have been entertained in the event that Mr Myerson's wealth had increased.
We await the judgement with considerable interest.
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