News & Publications - Publications

Myerson v Myerson [2009] EWCA Civ 282 — Varying the Maintenance You Pay - The Dangers of Speculation

The importance of seeking legal advice before attempting to vary your maintenance agreement or Order (see article posted 17 March 2009) has been well highlighted by the recent Court of Appeal decision in Myerson v Myerson. The husband in the case wished to vary the lump sum payment he had agreed to pay his wife on the basis that the economic downturn had severely reduced the value of the shares he had retained as part of the divorce settlement.

Mr. Myerson originally agreed to hand over 43% of his £25.8m to his ex-wife so long as he was allowed to keep his stock in Principal Capital Holdings (he was a chief executive of the company). In these troubled times, the value of Mr. Myerson’s stock plummeted, reducing his share of the divorce settlement to just 14% of its original value.

Mr. Myerson requested that the Court revisit the original settlement and order his ex-wife to repay £7m. The Court refused to vary the agreement, giving great weight to the fact that Mr. Myerson had agreed the compromise and that he should not be allowed to relieve himself of the consequences of his own speculation.

This decision is consistent with other cases in this area. A final Order can only be re-opened where the fundamental basis on which the Order was made has been invalidated. The fluctuating value of Mr. Myerson’s shares was insufficient to meet this test. However, if the shares upon which the Order was based were valued incorrectly, the case could potentially have been re-opened.

It should be noted that Myerson does not change the possibility of a divorcee varying their maintenance agreements or Orders. This can still be achieved if financial circumstances change. Interestingly the lump sum payment in Myerson was to be paid in instalments. What remains to be tested is whether the future lump sum payments can be varied due to the fall in the value his stock.

In any event, divorcing couples should be alive to the risks the current environment presents when it comes to dividing their assets or agreeing maintenance payments. Seeking legal advice now could give these couples a valuable insight into the levels of risk attached to various parts of their assets or income. Lawyers can negotiate discounts and compensation to account for this risk. This could help divorcees avoid the adverse consequences experienced by Mr. Myerson of not properly considering risk.

If you require help with the division of your assets, or the varying of your maintenance agreement, please contact Teresa Cullen, Philippa Dolan or Anna Coakes at Rochman Landau Solicitors 0207 544 424. They will also be pleased to discuss any other matrimonial issue you might have.