S v S

When implementing a substantial lump sum order, the court may allow further time for payment where the payer’s assets are complex and realisation is genuinely time-consuming. The court must balance that need against the recipient’s need for housing and the prejudice caused by delay. The payer must arrange his affairs to comply with the order and must not materially divest assets after the order in a way that impedes payment. A staged payment timetable may be imposed, with existing maintenance arrangements adjusted and default consequences specified.

The application concerned directions for the timing and implementation of a lump sum order made in matrimonial financial remedy proceedings. The original order required payment of £5.6 million, later reduced to £5.175 million after a payment on account. The respondent sought further time because his principal business asset and associated property interests were complex to realise. The applicant sought earlier payment, particularly to fund accommodation. The central issue was the fairest timetable for payment in light of the respondent’s progress, asset dispositions and the applicant’s housing needs.

1. The application for directions was determined by imposing a staged payment timetable. The respondent was ordered to pay £2.2 million by 9 December 2015 and the balance by 31 March 2016.
2. The court accepted that a sale of the respondent’s principal business assets could be complex, time-consuming and partly outside his direct control. Nevertheless, the respondent had made little progress after the original order and had dragged his feet during the earlier part of 2015.
3. A party subject to a financial order must arrange his affairs so as to comply with it. The respondent’s transfer of company shares into his grandchildren’s trust, effectively giving away land worth £893,000 which he could have recovered, materially weakened the case for further indulgence.
4. The timetable balanced the respondent’s need for time to realise assets against the applicant’s need to purchase accommodation. Upon payment of the first instalment, the £3,000 monthly rental element of the existing maintenance arrangement was to cease.
5. The court declined to impose punitive judgment-rate interest of 8% as maintenance from the date of the hearing. If either scheduled payment defaulted, however, interim maintenance paid from the date of default would be credited against accruing judgment debt interest when payment was eventually made.