A client recently contacted me to say that her mother needed a power of attorney. After asking some questions it became clear that it would not be possible for a power of attorney to be prepared on this occasion because mother had advanced dementia so was...
COVID-19 has without doubt drastically affected the fortunes of some very wealthy people. As a High Court ruling in a big money divorce case showed, however, the pandemic does not by itself amount to a good reason for failing to meet legal and financial obligations.
The case concerned an extraordinarily wealthy businessman who was ordered to pay his ex-wife a total of £64 million, comprising the mortgage-free matrimonial home, which was worth £15 million, and a lump sum of £49 million. The order, amongst other things, set deadlines by which payments were to be made and provided for the wife to receive interim maintenance of £720,000 a year.
Following the onset of the pandemic, however, the husband applied to the Court to vary the order downwards on the basis that COVID-19 had resulted in an enormous reduction in his financial worth. He said that his business interests, particularly in airlines and hotels, were amongst the hardest hit by the virus globally and argued that there should be a complete reassessment of the value of his assets.
Ruling on the matter, the Court noted that he had made the maintenance payments, as required. As deadlines came and went, however, he had failed to pay any part of the lump sums due to the wife, on which very substantial interest was continuing to accrue. He had also failed in his obligations to redeem the mortgage on the matrimonial home and to transfer the property to the wife.
Rejecting his application, the Court noted that his claims in respect of the pandemic's alleged dire impact on his personal fortune were made on a macroeconomic level and were general in the extreme. His business interests were so diverse that such an impact was far from obvious and he had chosen not to provide trading figures, profit and loss accounts or up-to-date valuations in support of his case.
The Court noted that, although topsy-turvy stock indices had plummeted at the start of the pandemic, they had since largely recovered and most commentators believed that, at some stage in the next couple of years, the world economy would return to where it was. Although the husband had established no proper basis for reopening the award to his wife, the Court indicated that it might be prepared to consider recalibrating the timing of the lump-sum payments.