The application was dismissed; while world events gave superficial respectability to the attempt to vary the court order, the applicant failed to demonstrate how specific assets had been affected by the global economic downturn.
The final hearing in these long-running financial remedy proceedings took place in January-February 2020 before Mr Justice Cohen. Shortly afterwards, the pandemic took hold and in March 2020, the husband applied for judgment to be deferred on the basis that the economic effects of the pandemic were likely to undermine the basis of the order. He asked the court to adjourn the case until September 2020.
The husband’s application was refused, and judgment was handed down at the end of March. Under the terms of the order, the husband was ordered to pay the wife £64m, comprised of the matrimonial home (£15m) and a lump sum by instalments totalling a further £49m.
Shortly before payment of the first instalment, due in September 2020, the husband applied for permission to vary both the quantum and timing of payment of the lump sum. In his statement in support of the application, the husband argued that he was not able to make any payments due to the impact of the pandemic. He asked for a revaluation of all the assets in the case, an exercise which would take at least six months and cost in the region of £300,000 - £400,000.
Mr Justice Cohen was critical of the husband’s statement, calling it ‘general in the extreme’. Its focus was the macro-economic situation caused by the pandemic, rather than the specific impact of Covid-19 on the husband’s assets. Importantly, the husband failed to provide the material the court needed in order to assess whether and to what extent his asset base had been affected:
There are no trading figures, no profit and loss accounts, no underlying documentation, and no valuations: in short there is an almost complete absence of matter which could establish or even raise a prima facie case for the court to be satisfied that there are grounds for belief that H’s wealth has been significantly reduced. It is not sufficient for H just to invite the court to look at the general global financial situation. [27]
Nor did the judge have a very high opinion of the husband’s conduct in the proceedings; in his view the application was ‘even more unattractive’ because, given the husband’s track record with regards to disclosure, any valuer was unlikely to be provided with adequate information. For those reasons, the husband’s application was dismissed.
The court will always be reluctant to revisit final orders. Overturning an order on the general basis of the pandemic would inevitably result in a tidal wave of cases being reopened, and in any case the economic situation remains unsettled. In this instance, the husband failed to provide the documentary evidence – accounts, valuations, trading figures – which he needed to sway the judge. It remains to be seen whether an applicant better prepared to demonstrate specific impact beyond macro-economic grounds will be able to overcome this necessarily high hurdle.
Hannah Wise
Solicitor, Katz Partners