Hand it over
1 April 2009 | By Katy Dowell
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Star family barrister Nicholas Mostyn QC was at the Court of Appeal this morning trying to prevent a precedent setting case, which would give hard-done-by spouses the opportunity to renegotiate divorce settlements.
The case of Myerson v Myerson was thrown out after Mostyn successfully argued that the fund manager husband of his client should not be entitled to renegotiate the settlement, which was agreed last February.
Brian Myerson had originally agreed to hand over 43 per cent of his £25.8m fortune to his ex wife Ingrid as part of a settlement agreed by both parties. In return, it was agreed that Mr Myerson could keep the couple’s total stock in Principal Capital Holdings (PCH), the investment company that he was chief executive of.
Most of his wealth was tied up in the stock, the value of which has nosedived, leaving Mr Myerson out of pocket in the divorce deal. His counsel, Hare Court’s Martin Pointer QC, who was instructed by Mills & Reeve partner Philip Way, argued that Mr Myerson now has 14 per cent of the settlement compared with his wife’s 86 per cent.
This meant that in order for Mr Myerson to pay his wife the agreed amount he would need to take out a £500,000 loan.
Mr Myerson wanted the Court of Appeal to revisit the original settlement and force his wife to repay some of the first £7m settlement he handed over last April.
Arguing on behalf of Mrs Myerson, Mostyn, also of Hare Court and instructed by Sears Tooth partner Ramond Tooth, said that the husband, an able businessman, was well aware of the looming recession when the settlement was negotiated.
Mostyn said Mr Myerson had since been elevated to executive chairman of PCH and that he owns just over 30 per cent of the company’s shares.
As recently as September 2008, Mostyn suggested, Mr Myerson made a bullish public statement of PCH’s achievements and prospects and recruited a new chief executive to run the company on a remuneration package that included 1.62 million shares.
In addition, Mostyn argued, if the ruling were to go in favour of Mr Myerson it would open the floodgates to a number of big money cases where the husband is attempting to reduce payments because of the economic situation.
Lord Justice Thorpe, who presided over the proceedings, rejected the latter two arguments. While he anticipated a rise in the number of people wanting to renegotiate settlements, he warned: “They would be well advised to heed the warning that very few successful applications have been reported.”
Thorpe LJ also recognised that Mr Myerson acted promptly. Nevertheless, the court rejected the appeal on the grounds that, the order was not imposed but was the product of the will of the parties.
Thorpe LJ also ruled that Mr Myerson’s suggestion that he could literally swap some of the stock with his ex wife in return for repayment of some of the lump sum “casts a clear light on the merits of this appeal”.
“When a businessman takes a speculative position in compromising his wife’s claims, why should the court subsequently relieve him of the consequences of his speculation by re-writing the bargain at his behest?” Thorpe LJ questioned.
Much has been made of the buoyant divorce market and family lawyers are among the busiest in London. For the husbands left out of pocket by previous settlements this will come as a blow. But for women it is yet another weapon to use in the mucky business that is divorce.