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Bryan Myerson, the former city fund manager hit by the credit crunch, has lost his appeal to renegotiate his £9.5 million divorce settlement.
Three Court of Appeal judges dismissed his challenge, saying the "natural process of price fluctuation, however dramatic", did not satisfy the Barder legal test under which a court may grant leave to appeal out of time. Mr Myerson spokesman said he will now take his appeal to the House of Lords.
Mr Myerson's former wife was awarded 43 per cent of the couple's £25.8 million fortune when the divorce settlement was agreed in February last year, of which £7million has already been paid.
The main ground set out by Lord Brandon in Barder that Mr Myerson was relying on was "that new events have occurred since the making of the order which invalidates the basis, or fundamental assumption, upon which the order was made, so that, if leave to appeal out of time were to be given, the appeal would be certain, or very likely, to succeed".
The crisis in the financial markets has driven down the value of Mr Myerson's shares in Principle Capital Holdings, where Mr Myerson worked as a fund manager. Since February the share price of Principle Capital Holding has plummeted from around £2.95 a share to just 27.5p on the date of the hearing.
Mr Myerson's barrister, James Ewins, argued that the drop in share prices and house values constituted the new events to satisfy the Barder test.
However, Lord Justice Thorpe, giving the ruling of the Court of Appeal, did not agree and said the appeal failed on the application of Barder and cited the judgement of Justice Hale in Cornick in which she analyses what circumstances will and will not satisfy the Barder test.
In addition, Lord Justice Thorpe added "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.
"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?
"He continues to enjoy control of the opportunities that go with it. 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", Lord Justice Thorpe added.
Mr Myerson has four further equal instalments of £625,000 to pay over the next four years which, according to his spokesman, he will seek to cancel at the High Court in July.
Mr Myerson's spokesman said: "Mr Myerson is disappointed that the Court failed to recognise that the economic downturn had rendered his divorce settlement unfair.
"The aim of Mr Myerson's appeal has always been to ensure that the division of assets with his ex wife was equitable and he will now take his appeal to the House of Lords.
"A separate consequence of this appeal is that in July the High Court will hear a freestanding application to cancel the further payments that are presently due to his ex-wife under the terms of the existing settlement. That hearing will be in private."
Angela Davis of Nottingham law firm Berryman said she was not surprised by the ruling. "Had the appeal been successful, it could have triggered numerous similar applications, not just in 'big money cases' like for Bryan Myerson and his wife, but in all types of family cases where for example, the value of the former family home had fallen as a consequence of the current downturn."
However Lord Justice Thorpe warned anyone who may be thinking of making a similar application to vary their divorce settlements.
"There may be many who are contemplating an attempt to reopen an existing ancillary relief order on the grounds of subsequently encountered financial eclipse. All in that situation should ponder Hale J's analytical characterisation.
"They would be well advised to heed the warning that very few successful applications have been reported."
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