Businessman must live with the consequences of market speculation
A husband’s attempt to vary a divorce settlement after his investments fell in value has failed in the Court of Appeal.
In Myerson v Myerson [2009] EWCA Civ 282, fund manager Brian Myerson sought to have his share of a £9.5m divorce settlement reduced after his company’s shares fell in value.
In a 2008 divorce settlement, Myerson agreed to pay his former wife £11m, which represented 43% of the couple’s assets. This was to be provided through the sale of property plus £9.5m paid in instalments.
However, the husband’s shares in his company fell sharply, from £2.99 to £0.275, leading him to return to court to seek a reduction in the remaining instalments.
He asked the court to exercise its discretion to review the terms of the settlement on the grounds “dramatic events” had taken place, asserting the state of the global economy and the fall in share price had made the agreement “unfair and unworkable”.
Lord Justice Thorpe noted the arguments of Mr Myerson’s counsel that the wife’s share of the divorce settlement had risen from 43% at the time of agreement to the equivalent of 86%, while Mrs Myerson’s counsel argued that the shares, on the Aim index, were typically volatile, therefore “what has soared may plunge and what has plunged may soar again”.
Dismissing the appeal, Thorpe LJ said: “The husband, with all knowledge both public and private, agreed to an asset division which left him captain of the ship certain to keep for himself whatever profits or gains his enterprise and experience would achieve in the years ahead.”
He added: “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 rewriting the bargain at his behest?... The market place may take a pessimistic view of his future prospects. He may not share the market place view. Unusual opportunities are created for the most astute in a bear market.”
