Date of Case: 7 December 2020
Case Reference: [2020] EWHC 3696 (Fam) 

Stewart Leech QC and Daniel Bentham appeared on behalf of the respondent in a husband’s application for a variation of a final order due to circumstances arising from the Covid-19 pandemic, and a wife’s cross-application for an increase in periodical payments, increase in interest on late payments, and a legal services provision order (LSPO).

Cohen J had previously handed down judgment in March 2020 after long-standing financial remedy proceedings (commenced in June 2017), involving ultra high-net-worth individuals (FRB v DCA (No. 2) [2020] EWHC 754 (Fam)). He ordered the husband to pay the mortgage (c.£12m) on the FMH, transfer the FMH (worth £15m) to the wife, and to pay the wife to pay the wife a lump sum of £49m in two instalments (£30m in 6 months and £19m in 18 months, time periods which were suggested by the husband). Interest of 4% was to be payable on any late payments. Additionally, he was to pay periodical payments of £720k per annum, reduced pro-rata by the proportion of the £49m that had been paid. 

The husband subsequently failed to transfer the FMH or pay the lump sum. He applied to vary the quantum and timing of the lump sum, stating that the Covid-19 pandemic was a Barder event and he was unable to make payment due to “the enormous reduction in [his] financial worth”. The wife applied for an increase in her periodic payments to £2.5m, interest on all outstanding sums at an increased rate of 8% and an LSPO of £1.4m.

Cohen J refused the husband’s application on the basis that there was no evidence that his financial worth had substantially decreased. He also stressed that the application should be viewed in the longer term, with the stock market expected to recover in the coming years. Additionally, the husband had chosen not to pursue the option of transferring assets such as shares in the previous hearing when the judge had raised the issue of liquidity.

Regarding the wife’s application, the Judge concluded that 8% interest was excessive given current interest rates. Interest of 4% on the £30m overdue was £1.2m. Interest on a lump sum was only payable upon decree absolute, which had not yet been pronounced, so the Judge increased the periodical payments by £1.2m instead of ordering interest.

In respect of the wife’s LSPO application, the husband was ordered to pay the wife’s outstanding legal fees (set against the final lump sum instalment), to provide the wife with litigation funding for satellite litigation.

Bailii report: https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Fam/2020/3696.html&query=(%272020)+AND+(ewhc)+AND+(3696%27)