Besharova v Berezovsky

A consent order is construed objectively, using the language of the order in its relevant context. A provision requiring a sum received under one paragraph to be credited against a percentage entitlement under another applies irrespective of whether the former sum is received before or after the latter entitlement arises, unless the order indicates a temporal limitation.

A requirement for prompt interim payment does not displace that set-off. Where later events reveal an overpayment, the recipient must account for it and the adjustment may be made against a later payment.

The former wife appealed against a declaration made by Roberts J concerning a financial-remedy consent order which compromised her claims against the late husband.

The order gave her the balance of the net proceeds from a specified property after the first £16 million, and 20% of monies received in specified litigation. It also required sums received from the property to be credited against the 20% figure. The husband’s estate had received litigation monies, but the property had not been sold.

The issue was whether the credit applied only to property proceeds already received when litigation monies were received, or also to property proceeds received later.

1. Appeal dismissed. The declaration made by Roberts J was correct. Under paragraph 3(b)(i), any sum the wife received under paragraph 2 after the property’s sale had to be set off against the amount payable under paragraph 3.
2. Applying the ordinary objective approach to construction of a consent order, the natural meaning of “the sum received” in paragraph 3(b)(i) was not confined to sums received before the husband received litigation monies. The wording did not impose that temporal limit. The construction advanced by the wife would produce arbitrary and uncommercial results depending on the timing of litigation receipts and sale proceeds.
3. Paragraph 3(c), requiring payment within ten working days of the husband’s receipt of litigation monies, enabled the wife to receive funds as they arose. It did not limit the set-off required by paragraph 3(b)(i).
4. The wife remained entitled to prompt payment of 20% of litigation monies under paragraph 3(c) while she had received nothing under paragraph 2. If she later received property proceeds, those proceeds had to be credited against the paragraph 3 entitlement. Any resulting overpayment was subject to an obligation to account arising by operation of law, and could practically be adjusted by reducing the payment under paragraph 2.
5. Paragraph 4 did not support a contrary construction. The £200 million cap was a certain and understandable trigger for disapplying the property-sale provisions, although a lower figure might also have been possible.

• Court of Appeal (Civil Division): appeal dismissed in [2016] EWCA Civ 161. The court upheld Roberts J’s declaration on the operation of the set-off, while clarifying that paragraph 3(c) could require payment before the property was sold.
• High Court of Justice, Family Division: Roberts J declared that later receipts under paragraph 2 were to be set off against the amount payable under paragraph 3. Her order was sealed on 24 February 2015.