MacLeod v MacLeod
| Jurisdiction | UK Non-devolved |
| Judge | Baroness Hale of Richmond |
| Judgment Date | 17 December 2008 |
| Neutral Citation | [2008] UKPC 64 |
| Court | Privy Council |
| Docket Number | Appeal No 89 of 2007 |
| Date | 17 December 2008 |
[2008] UKPC 64
Privy Council
Present at the hearing:-
Lord Scott of Foscote
Lord Walker of Gestingthorpe
Baroness Hale of Richmond
Sir Henry Brooke
Sir Jonathan Parker
This case is about the validity and effect of a post-nuptial agreement made between a husband and wife while they were still living together. It dealt with their financial arrangements both while they stayed together and in the event of a divorce. It so happens that that agreement was an affirmation with important variations of an ante-nuptial agreement which the parties had made on their wedding day. But the case is not about the validity and effect of ante-nuptial agreements as such.
The husband and wife were both born and brought up in the United States. They married in Florida on 14 February 1994. It was a second marriage for both of them. There is a 22 year age difference between them. When they married the husband was aged 49 and the wife 27. There is also a considerable wealth difference between them. When they married the husband had amassed substantial wealth as a result of business and property development. The wife had been studying for a degree in business administration funded by the husband.
In June the following year they moved to the Isle of Man and have lived there ever since. The husband effectively retired from business when they moved but his investments have increased in value since then. They made their matrimonial home at Ravensdale Castle, Ballaugh Glen, bought in the name of a company solely owned by the husband. In 2001, the couple also bought in their joint names a house called Dove's Hill, close to Ravensdale Castle. This was said in the agreement to be "the house [the wife] said she would want in the event of divorce or [the husband's] death in her old age".
The couple have five sons, now ranging in age from 13 down to seven, having been born on 19 September 1995, 8 October 1996, 23 July 1998, 20 September 1999, and 1 September 2001. The youngest will therefore reach the age of 23 in 2024 when the wife will be 58 years old and the husband nearly 80. The significance of this will become apparent later.
The couple made three agreements in the course of their relationship, each of them intended to create legal relations between them. The first was made before their marriage but on their wedding day. Each was separately advised by lawyers and each disclosed their resources. Deputy Deemster Williamson found that there had been adequate legal advice and disclosure and that the wife was acting voluntarily and under no pressure. He "simply [did] not accept that this lady was a tyro" (para 29).
The husband's net worth at marriage, according to the schedule of his assets and liabilities annexed to this ante-nuptial agreement, was $10,349,000. The Deputy Deemster took this to be the equivalent of £7,000,000 at the time. The Board does not have any schedule of the wife's assets then. The agreement provided for each spouse to retain the separate property which they brought into the marriage and for the ownership of after-acquired property to depend upon legal title. In the event of divorce each party waived their right to claim any sort of maintenance. Properties owned jointly were to be divided equally between them. In addition the husband would pay the wife a lump sum calculated as $25,000 for each full year that the couple had been married. He could pay that as they went along. The same would apply in the event of the husband pre-deceasing the wife, when she would also receive $300,000 if they had been married for less than five years or $1,000,000 if they had been married for longer. The couple agreed that, regardless of where they might later live, the agreement should be construed in accordance with the laws of the State of Florida.
There was unchallenged evidence that the Florida Supreme Court had declared ante- and post-nuptial agreements valid and generally binding in the case of Posner v Posner, 233 So 2d 381 (Fla 1970) and that the courts had repeatedly recognised that the mere fact that an agreement might be a bad bargain was not enough to have it set aside. The first agreement did not deal with support for any children the couple might later have as this is dealt with separately under Florida law and the parents are not allowed to contract out of that.
The second agreement was made in 1997. It made a temporary variation in the terms of the 1994 agreement. This lapsed at the end of 1998. We know nothing more about it.
The third agreement is the one with which the Board is concerned. It was made by deed on 25 July 2002. This confirmed the 1994 agreement but made substantial variations to it. The Deputy Deemster, at para 33, was "satisfied that the wife made the agreement because she wanted to". She was an able and intelligent woman. She had later given a police officer "the impression [that] she was used to getting her own way". Each party was separately represented during the negotiations which began some 14 months before the agreement was executed. The Deputy Deemster, at para 38, was "satisfied too that the wife agreed to the 2002 variation freely, voluntarily and with a full understanding thereof and having had proper legal advice, which she chose not to follow".
The schedule to the agreement listed the husband's assets at a total of £13,810,000 and the wife's at £184,000 (mostly consisting of her half share in Dove's Hill). The parties confirmed that they still intended to be bound by the 1994 agreement, as varied, and that in any proceedings they would request the court to adhere to its provisions. The variation made certain provisions for the wife "in order to help secure [her] financial future, whilst continuing with the marriage". These included a lump sum of £250,000 for her to invest; a monthly allowance of £2083.33 (£25,000 a year) adjusted annually for inflation; a monthly allowance of $3000 similarly adjusted for the wife's grandmother living in the United States; all the expenses of the wife obtaining another degree, up to £100,000; conveying to her the husband's half share in Dove's Hill (on certain terms as to what she would do with it); and paying for the planned improvements to that house. The agreement also expressly provided that the wife would not be called upon to pay any household expenses out of these sums during the term of the marriage.
The agreement also provided that, in the event of divorce or the husband's death, the wife should receive £1,000,000 sterling, adjusted for inflation since February 2002. As far as the children were concerned, payment for their expenses was to be the responsibility of the parent with whom they lived from time to time. But the husband agreed to pay for their educational expenses. If the wife was to be the primary residential parent, Dove's Hill was planned to be their home and the parties would ask the court for any payments from the father for the support of the children to be made as periodical payments rather than as an increase in the mother's lump sum. Apart from this the parties "are not attempting to make provision for child support for any child adopted or born of the marriage".
Each party acknowledged that the agreement was "the full and fair settlement of the rights of both parties" to the marriage. In the event of separation or divorce or the husband's death, the wife agreed to ask for no more than the agreement allowed her and the husband agreed that he would "stipulate to the Court this Variation as the full and fair financial settlement between the parties".
The husband complied with his immediate obligations under the agreement: he transferred his interest in Dove's Hill; he paid the lump sum uprated to £266,000; and he paid the monthly allowances. However, the marriage was, as the Deputy Deemster put it, at para 38, already "on the rocks". The wife had had one very close extra-marital relationship in 1997 and began another in November 2001 which became adulterous in April 2002. Nevertheless the marriage continued for another 13 months after the agreement was executed. But by August 2003 it had broken down and the husband issued divorce proceedings in September 2003. Both parties applied for residence orders in relation to the boys, but they all remained living under the same roof until April 2005. Then the wife moved out of Ravensdale Castle into a rented property in Glen Vine. The couple eventually agreed that the children should divide their time equally between them. That was reflected in a consent order made in July 2005.
These proceedings for ancillary relief were begun in February 2005, a provisional decree of divorce having been made on 26 October 2004. They were tried before Deputy Deemster Williamson over four days in June 2006 with judgment in October. The wife claimed full financial provision, which she put at 30% of the husband's wealth at marriage and 50% of its increase in value during the marriage. She asserted that the agreements should be disregarded altogether. The husband claimed that the third agreement should be upheld. He accepted that there should also be periodical payments for the children while they were living with their mother. He proposed £300 per month for each child while the wife proposed £600. He also accepted that, despite what was said in the agreement, Dove's Hill was not a suitable home for them. This was because of a comment made by the court welfare officer in the course of the residence proceedings. Hence the husband proposed that a further £750,000 be used to buy another house which would be held on trust until the...
To continue reading
Request your trial
-
AH v JH
...For the most part, from the evidence, the defendant has been exemplary in meeting his payments in accordance with the Deed. The case of MacLeod v MacLeod [2010] 1 AC 298 PC, recognises the validity of such post-nuptial agreements, though counsel for both parties acknowledge the power of the......
-
S v S (Arbitral Award: Approval) [Family Division]
...relevant to the magnetic factor(s). 15 Back of all this there is the increasing emphasis on autonomy exemplified by cases such as MacLeod v MacLeod [2008] UKPC 64, [2010] 1 AC 298, and Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, [2011] 1 AC 534. As Lord Phillips PSC said in ......
-
Radmacher (formerly Granatino) v Granatino
...attached to an ante-nuptial agreement. The Privy Council recently considered this question in relation to a post-nuptial agreement in MacLeod v MacLeod [2008] UKPC 64, [2010] 1 AC 298 and it will be necessary to consider the implications of that 3 The approach of English law to nuptial ag......
-
Melissa Jackson (as Trustee in Bankruptcy of the Etate of Michael John Sheridan) v Jian Song
...brought into existence (with its earlier form being in the Matrimonial Proceedings and Property Act 1970). 51 As stated by Lady Hale in MacLeod v LacLeod [2008] UKPC 64 in considering the identical provisions to section 34 in the Manx Matrimonial Proceedings Act 2003, at paragraph 24, ‘It ......
-
Pre-Nuptial Agreements 'All That I Have I Share With You - Subject to Contract'
...there will be good arguments to be made for the Jersey Courts to follow the Supreme Court. Footnotes [2010] UKSC 42 [2009] EWCA Civ 649 [2008] UKPC 64 [Wallis v Taylor (1965) JJ 455 Although note Ferchal v Ferchal [1990 JLR 117] – where widow held to have abandoned her usufruit orally (alth......
-
Prenuptial Agreements, 'All That I Have I Share With You - Subject To Contract'
...will be good arguments to be made for the Jersey Courts to follow the Supreme Court. Footnotes 1 [2010] UKSC 42 2 [2009] EWCA Civ 649 3 [2008] UKPC 64 4 Wallis v Taylor (1965) JJ 455 5 Although note Ferchal v Ferchal [1990 JLR 117] – where widow held to have abandoned her usufruit orally (a......
-
Financial Remedies
...The leave of the court is required to enforce arrears: 99 MCA 1973, s 35(2)(a) and (b). 100 MCA 1973, s 35(2)(b)(ii). 101 McLeod v McLeod [2008] UKPC 64, Baroness Hale. 102 Crime and Courts Act 2013 (Family Court: Transitional and Saving Provision) Order 2014 (SI 2014/956). 103 Maintenance ......
-
PRENUPTIAL AGREEMENTS
...[2009] 2 SLR(R) 961 at [103]. 50TQ v TR[2009] 2 SLR(R) 961 at [77]. Reference was made to the Privy Council decision of MacLeod v MacLeod[2010] 1 AC 298; [2008] UKPC 64: TQ v TR[2009] 2 SLR(R) 961 at [75]. 51 Cap 353, 2009 Rev Ed. 52TQ v TR[2009] 2 SLR(R) 961 at [77]. 53MacLeod v MacLeod[20......
-
The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure
...Keyes, ‘Financial Agreements in International Family Litigation’ (2011) 25 Australian Journal of Family Law 167. 238 Macleod v Macleod [2010] 1 AC 298, 314 [31], 316 [38]–[39] (Baroness Hale); Granatino v Radmacher (formerly Granatino) [2011] 1 AC 534, 555–8 [50]–[52] (Lord Phillips P). 239......
-
Ancillary Relief: Complicating the Search for Principle
...for ancillary reliefnotwithstanding her agreement not to do so in both the pre- and post-nuptialagreements.27933 Macleod v. MacLeod [2008] UKPC 64. On appeal from the High Court of Justice ofthe Isle of Man.34 Radmacher v. Granatino [2010] UKSC 42.35 id., para. 75, per Lords Phillips, Hope,......