Walkden decision - no variation upwards of wife's settlement
26th June 2009 by: Deborah Jeff and David Lillywhite
In another landmark case that has been described as the reverse of Myerson, the Court of Appeal has ruled that a wife is not able to renegotiate the terms of her divorce settlement upwards to reflect the husband’s shares quadrupling value.
Martin and Kim Walkden divorced in 2006 after a 20 year marriage. The terms of the original settlement provided for a lump sum payment to the wife of £482,000 together with maintenance of £1,100 per month. Two months after the proceedings concluded, the husband received £1,758,199 when his timber company was taken over. The wife argued that the husband had failed to keep the court informed of the rise in value of his company and her lump sum should be varied upwards as a result.
In Myerson, the Court held that Mr Myerson could not vary downwards the lump sum payable to his wife following the impact of the global recession on his shares and property interests which had both fallen substantially in value. In his judgement, Lord Justice Thorpe held that the economic downturn did not constitute a Barder event (a new event post-settlement that materially affects the original agreement) that would justify altering the Order. This was because “the natural processes of share price fluctuation, whether in houses, shares, or any other property, and however dramatic” did not satisfy the evidential requirements of the test to re-open the settlement.
The ruling in Walkden was also given by Lord Justice Thorpe. He again referred to the test established in Barder saying that the wife had not met enough of the requirements to justify altering the settlement despite the fact that with the increased value of the husband's business upon sale, she was now walking away with just 18% of the matrimonial assets compared with the husband’s 82% - a stark contrast to the original division which left her with 42% of the total assets.
Many practitioners were bemused by the judgement in Myerson, arguing that the global downturn represented a force majeure that no-one could have foreseen as it effectively left the husband with a net position of -£539,000. Although Lord Justice Thorpe was right to say that the husband’s risk in retaining the shares meant that he might also have enjoyed the benefit of a rise in value rather than the burden of a fall, some take the view that the reduction in value of his shares was of such cataclysmic impact that it warranted the judgement being reopened. Mr Myerson has recently indicated his intention to appeal to the House of Lords.
In Walkden, the Court of Appeal’s judgement was useful in providing further guidance regarding the variation of financial settlements, whether upwards or downwards, to reflect a change in the value of assets post-settlement. It should be noted however that the husband has voluntarily given his former wife an additional lump sum of £225,000 and a further £4,000 a year in maintenance for the benefit of their 15 year old daughter until she turns 18.
Martin and Kim Walkden divorced in 2006 after a 20 year marriage. The terms of the original settlement provided for a lump sum payment to the wife of £482,000 together with maintenance of £1,100 per month. Two months after the proceedings concluded, the husband received £1,758,199 when his timber company was taken over. The wife argued that the husband had failed to keep the court informed of the rise in value of his company and her lump sum should be varied upwards as a result.
In Myerson, the Court held that Mr Myerson could not vary downwards the lump sum payable to his wife following the impact of the global recession on his shares and property interests which had both fallen substantially in value. In his judgement, Lord Justice Thorpe held that the economic downturn did not constitute a Barder event (a new event post-settlement that materially affects the original agreement) that would justify altering the Order. This was because “the natural processes of share price fluctuation, whether in houses, shares, or any other property, and however dramatic” did not satisfy the evidential requirements of the test to re-open the settlement.
The ruling in Walkden was also given by Lord Justice Thorpe. He again referred to the test established in Barder saying that the wife had not met enough of the requirements to justify altering the settlement despite the fact that with the increased value of the husband's business upon sale, she was now walking away with just 18% of the matrimonial assets compared with the husband’s 82% - a stark contrast to the original division which left her with 42% of the total assets.
Many practitioners were bemused by the judgement in Myerson, arguing that the global downturn represented a force majeure that no-one could have foreseen as it effectively left the husband with a net position of -£539,000. Although Lord Justice Thorpe was right to say that the husband’s risk in retaining the shares meant that he might also have enjoyed the benefit of a rise in value rather than the burden of a fall, some take the view that the reduction in value of his shares was of such cataclysmic impact that it warranted the judgement being reopened. Mr Myerson has recently indicated his intention to appeal to the House of Lords.
In Walkden, the Court of Appeal’s judgement was useful in providing further guidance regarding the variation of financial settlements, whether upwards or downwards, to reflect a change in the value of assets post-settlement. It should be noted however that the husband has voluntarily given his former wife an additional lump sum of £225,000 and a further £4,000 a year in maintenance for the benefit of their 15 year old daughter until she turns 18.
Add new comment