A v A
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Baron |
| Judgment Date | 24 November 2006 |
| Neutral Citation | [2006] EWHC 2900 (Fam) |
| Court | Family Division |
| Docket Number | Case No: FD05D02526 |
| Date | 24 November 2006 |
[2006] EWHC 2900 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
the Honourable Mrs Justice Baron DBE
Case No: FD05D02526
JEREMY POSNANSKY QC and GAVIN SMITH (instructed by Messrs U) for the Applicant
NICHOLAS MOSTYN QC and JUDE ALLEN (instructed by Messrs Z) for the Respondent
Hearing dates: 30 th and 31 st October, 1 st– 3 rd and 6 th– 10 th November 2006
Judgment Approved by the court
for handing down
Insert Judge title and name here:
Mrs Justice Baron
1) This is an application made by NA (to whom, for ease of reference, I shall refer as the Wife) for full ancillary relief after the breakdown of her marriage to MA (the Husband). These parties were married on the 20 th June 1998 having cohabited for some 6 years prior to that date. The Wife filed (but did not serve) her petition for divorce on the 12 th May 2005. The Husband filed his petition on the 27 th May 2005. The divorce proceeded on his petition based on the Wife's adultery. Their relationship lasted some 12 1/2 years. They have two children. E who was born on the 27 th May 2000 (6 years old) and N who was born on the 21 st May 2002 (4 years old). The children have their main base with their mother and have regular contact with their father.
2) This litigation has been hard fought and it is obvious to me that much bitterness has been engendered by the disintegration of this relationship, perhaps because these parties were once so close and enmeshed with each other. The cause of much vituperation has been the Wife's adultery with the Husband's best friend which occurred in the latter stages of the marriage. The Husband, perhaps unsurprisingly, has been unable to forgive the Wife for this betrayal. Nevertheless, I believe that this factor has coloured his view of her entitlement for financial relief under the Law.
3) The costs of this case total some £1.2 million and, whilst I have no doubt that these parties can afford this level of expenditure, it is a great pity that so much of the family assets has had to be expended in this way. It was sad to see these parties effectively flayed through cross examination. I hope that the experience will have a cathartic effect, for the parties need to put this chapter behind them and concentrate upon their future role as parents. Whilst the children remain young, these parties must be able to co-operate for the benefit of E and N. I would hate to think that the children will effectively be made to suffer for the past, perceived sins of their parents.
4) The bitterness that I have described above has spilled into the litigation and the trial. Mr Mostyn QC for the Husband described it “as the most demanding case in which he had ever been involved”. Mr Posnansky QC for the Wife described it as “brutal litigation”. No quarter was given and, at times, there seemed to be a lack of basic co-operation to enable the smooth running of the trial. These cases are difficult enough for the parties without additional niggles being caused in this way. For example, I expect Counsel in all cases to co-operate by producing new documents in good time so that opponents can consider them. In other words not produce them with a flourish in Court. I also expect them to meet outside Court each morning (for example at least 15 minutes before the start of the day) to discuss and co-operate about “housekeeping” matters or arrange some other fail safe method. Arriving at Court with a minute to spare and no time to discuss matters can be tactical and I do not approve of the practice as it delays matters.
5) The original time estimate of this case was 5 – 7 days. In fact, it lasted some 9 days in Court without, as things turned out, allowing any time for Judgment writing. In the main the additional time was required because, during the trial, very serious allegations were made against the Wife's solicitors. Mr Posnansky has described them as a “diversionary tactic” and, whilst this may be an overstatement, the allegations took a great deal of time to unfold and analyse. As my findings will make clear they assumed much more significance than was appropriate. They first surfaced in any clear way during the Wife's cross examination. Indeed, as it was originally put that “the Wife and her lawyers had entered into a strategy”, I thought that the allegation was tantamount to some form of conspiracy. I felt it necessary to intervene in order to clarify the level at which the allegations were being put. The Bar Code of Conduct is clear and I did not want Mr Mostyn QC to find himself in any form of personal difficulty. Therefore, I called for the allegations to be put into writing. This led to a clarification of the precise level of accusation.
6) A central issue in this case is whether the Wife should be held to the terms of what has been referred to as a post nuptial agreement. In essence, it was asserted that the solicitors acting for her at the date of signature had a strategy and had deliberately entered into a course of conduct that would give her an exit route. Some of their actions were not characterised as improper but, as detailed in the written document, some were stated to be “a lapse of professional duty”. I deal with the precise allegations below and set out my findings. It is clear, therefore, as Mr Mostyn QC accepted in his final submissions, that the most serious allegations are tantamount to fraud.
7) I feel that the concentration on this issue (which took at least 2 days of Court time) meant that the parties' advisers began to lose sight of the central issues which are (i) should the agreement be upheld and (ii) if not, what is the level of fair award. I note, for example, that no detailed figures were given in Mr Mostyn's written final submissions: in his, Mr Posnansky referred to and adopted those in his written Opening
The Parties' Open Positions.
8) The Wife seeks some £13.6 million on a clean break basis made up as follows:—
a) £6 million for the purchase of a house, plus £240,000 (stamp duty); £450,000 (for refurbishment/redecoration) and £10,000 (moving costs)
b) £6.75 million as capitalised income provision, based on a multiplicand of £450,000 and a multiplier of 15 years.
c) £176,000 to cover debts (including the purchase of two cars and alleged shortfall in maintenance payments/inadequate provision prior to the maintenance pending suit order).
d) Periodical payments for the children at the rate of £60,000 per annum each (index linked) plus school bills inclusive of reasonable extras and private health care cover.
e) A division of chattels.
f) Costs.
9) The Husband asserts that the Wife's claims should be limited to the terms of a post nuptial agreement that was signed by the Wife on the 9 th March 2005 and, as I find, by the Husband on about the 25 th April 2005. The relevant terms of that agreement are that the Wife's claim should be limited as follows:—
a) £3 million (index linked, so now £3.3 million) in respect of her total housing fund. That figure having been specified by the Husband's matrimonial advisors as representing 50% of the then (incorrectly) perceived gross value of the former matrimonial home. It is asserted that this sum should be provided as a lump sum order.
b) Income provision of £240,000 per annum (index linked, so now £252,000 odd per annum) for herself during joint lives or until remarriage. The submission is that this maintenance should not be capitalised or be capable of capitalisation. Consequently, it is submitted that the Court order should dismiss the Wife's rights to a periodical payments order so that any variation application has to be made under the terms of Section 35 of the Matrimonial Causes Act 1973 (which does not permit capitalisation). This is, perhaps, a surprising submission given that, in an early attendance note the Husband's solicitor apparently accepted that capitalisation was a possibility. I quote from an attendance note dated the 28 th January 2005 “Attending Mr Z on the telephone when he said that your Husband was going to be adamant about you signing the post nuptial agreement. He appreciated that that we wanted a clean break but the provision offered would not stop that happening”.
c) In addition, £60,000 per annum (index linked, so now a total of £126,000 odd) for each of the children plus their school bills.
10) The issues which fall to be determined by the Court are as follows:—
a) The enforceability (or otherwise) of the post nuptial agreement.
b) The value of the Husband's resources. It is his case that he is worth about £21.5 million and the Wife's case that he is worth some £46.5 million. A schedule showing the £25 million difference is annexed to this Judgment marked “1”.
c) If the post nuptial agreement is not to be enforced per se, then an assessment of the fair award for the Wife after the application of Section 25 Matrimonial Causes Act 1973 in accordance with Authority.
The Law
11) One of the central issues in this case is whether a post nuptial agreement signed by the Wife on the 9 th March 2005 (which limits her claims) should be enforced by this Court. Accordingly, before I consider the facts, I will outline the current legal position in relation to contracts between spouses.
12) It is an accepted fact that an agreement entered into between Husband and Wife does not oust the jurisdiction of this Court. For many years, agreements between spouses were considered void for public policy reasons but this is no longer the case. In fact over the years, pre nuptial “contracts” have become increasingly common place and are, I accept, much more likely to be accepted by these Courts as governing what should occur between the parties when the prospective marriage comes to an end. That is, of...
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