Pre-Nuptial Agreements
Divorce – Pre-Nuptial Agreements
In the case of WW v HW the Court considered a claim for financial division, in light of a Pre-Nuptial Agreement.
This case provided further guidance in respect of the impact of Pre-Nuptial Agreements.
Background
The parties met in 2000 and married in 2002. They subsequently separated in 2012.
There were two children of the marriage, who were born in 2001 and 2004.
The Husband had never generated a substantial income from his chosen profession and his only significant capital asset was a house which he sold at the beginning of the relationship to generate equity of £474,000.00.
The Wife had received a significant inheritance as a child and at the time the Pre-Nuptial Agreement was signed, she had assets worth over £16 million.
The Wife also had future inheritance prospects.
Prior to the marriage the parties signed a Pre-Nuptial Agreement in which they confirmed neither of them would make a claim against the other in the event they divorced.
Following the breakdown of the marriage, the Husband sought financial provision.
The Court held that it would be fair to hold the Husband to the Agreement, unless his needs dictated a different outcome.
Therefore, the issue to be determined was how the Pre-Nuptial Agreement and other surrounding factors should affect the assessment of the Husband’s need.
The Court ruled that significant weight should be attached to the Pre-Nuptial Agreement.
The Court stated that both parties had understood the agreement, had the opportunity to receive legal advice and had entered into it freely and intended it to be binding on them at the time of execution.
The Husband acknowledged that his claim could be no more than needs based.
Issues in this case
The Husband explained that when the Pre-Nuptial Agreement was entered into, his solicitors advised him (correctly) that as the law stood then, such agreements were not legally enforceable.
The Husband stated that when he heard this “he switched off” and did not listen to further advice provided.
The Husband argued that he therefore did not have a full appreciation of the implications of the agreement when he signed it.
The Judge found that the Husband has been offered further advice from his solicitors, but denied it.
The Husband argued that even if the Court attached weight to the agreement, it did not meet his needs and therefore he should have additional provision.
However, the Judge confirmed that the Husband should have a life interest in a home bought for him, reverting to the Wife upon his death.
This would include a step down in the Husband’s housing requirement when the party’s youngest child reached the age of 23.
At this time, 45% of the housing fund would revert to the Wife, causing the Husband to downsize in his accommodation.
Significance of this case
The principles of Radmacher were applied in this case.
Two important aspects of the principles set out in the case of Radmacher were explored in the case of WW v HW.
The outcome of each issue was essentially based on the specific facts of this particular case – including unfavourable findings against the Husband in relation to his conduct.
The outcome of this case provides a useful indication of the approach that the Courts may take in other cases where the same issues arise.
For example, the Court rejected an argument that an agreement made in 2002 should be given less weight because a party did not realise it could be given full weight in the future.
The Court found that the advice received by the Husband was sufficient to give him an appreciation of the meaning and effect of a Pre-Nuptial Agreement.
The Pre-Nuptial Agreement also included a clause which confirmed that the parties intended the agreement to be legally binding on them.
The Husband was also advised that the law might make such agreement binding in the future.
In addition to the above, the Court considered the extent to which a Pre-Nuptial Agreement could depress the assessment of needs of the economically weaker party.
Although an agreement could alter what is considered to be fair, it was not likely to be fair to leave one party in near destitution.
Therefore, as in the case of Radmacher, the agreement may reduce the provision for meeting needs to a much lower level than would be the case otherwise.
Impact of this Case
The outcome of this case is very much based on a decision of facts.
The provision for the Husband was affected not only by the Pre-Nuptial Agreement, but also by adverse findings of conduct against him.
However, the case does provide a useful illustration of the relatively restrictive manner in which needs may be assessed against a Pre-Nuptial Agreement.
If you need assistance in respect of your matrimonial affairs, whether this is in respect of issues concerning a divorce and the related financial aspects, children, injunctions or cohabitation disputes, please contact our offices on 01323 727321 to arrange an appointment.
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