Ancillary relief – Compromise – Lump sum payments – Shares – Valuation

Brian Alan Myerson v Ingrid Diane Myerson: CA (Civ Div) (Lords Justice Thorpe, Sullivan, Lady Justice Smith): 1 April 2009

The appellant former husband (H) appealed against an order giving effect to a compromise of an ancillary relief application brought by the respondent former wife (W).

H was a fund manager operating through a quoted company (P) of which he was the executive chairman. H’s assets consisted of a substantial shareholding in P and various properties. At the financial dispute resolution appointment the assets were valued at £25.8m. It was agreed that W would receive £11m (43%) and H would retain £14.5m (57%). W’s share, supplementing some small personal assets, was to be provided as to £9.5m in cash and the balance by transfer of a house valued at approximately £1.5m. The sale of one of the properties was to be the source of the first instalment of the lump sum, £7m, and that was duly paid. At the date of the compromise, shares in P stood at £2.99, valuing H’s holding at just over £15m. A year later, the shares were worth only 27.5p a share.

The global financial crisis and the fall in the value of his shares in P led H to apply to vary the orders for the payment of the balance of the lump sum by instalments and relating to the transfer of the house to W. He also appealed against the order giving effect to the compromise. H argued that the global financial crisis and the collapse in P’s share price had rendered the order both unfair and unworkable; the value of the assets had fallen to £12.7m, so that the division if implemented would be 14% to H and 86% to W; the drop in share prices and house values constituted new events which undermined the basis or fundamental assumption on which the order was made.

Held: (1) The court could set aside an ancillary relief order on the grounds of some dramatic subsequent event but the circumstances in which that could happen were few and far between and did not include the natural processes of price fluctuation, whether in houses, shares or any other property, however dramatic, Barder v Caluori [1988] AC 20 HL followed and Cornick v Cornick (No1) [1994] 2 FLR 530 Fam Div applied. On that basis, H’s appeal was dismissed.

(2) Also H had agreed to an asset division under which he retained his shareholding in P and whatever profits or gains it would achieve in the years ahead. When a businessman took a speculative position in compromising his wife’s claims, the court should not subsequently relieve him of the consequences of his speculation by rewriting the bargain at his behest. That was another reason for dismissing the appeal.

(3) Furthermore, because the payment of the lump sum was spread over five instalments there existed, and H had invoked, the statutory power of variation. If the circumstances justified the reopening of the consent order then the judge would have jurisdiction to rewrite that part of the consent order. Given that the outstanding instalments amounted to £2.5m, more than token relief was potentially available. On that basis, an appeal directed to the majority of the lump sum already paid and/or the transfer of property order had most uncertain prospects of success.

Appeal dismissed.

Martin Pointer QC, Justin Warshaw, James Ewins (instructed by Mills & Reeve) for the appellant; Nicholas Mostyn QC, Simon Webster (instructed by Sears Tooth) for the respondent.