MN v an
| Jurisdiction | England & Wales |
| Judge | Mr Justice Moor |
| Judgment Date | 10 March 2023 |
| Neutral Citation | [2023] EWHC 613 (Fam) |
| Docket Number | Case No: BV19D25385 |
| Court | Family Division |
[2023] EWHC 613 (Fam)
Mr Justice Moor
Case No: BV19D25385
IN THE FAMILY COURT
The Royal Courts of Justice
Strand
London
WC2A 2LL
Miss Deborah Bangay KC and Miss Lily Mottahedan (instructed by Penningtons Manches Cooper LLP) for the Applicant
Mr Michael Horton KC and Miss Sophie Hill (instructed by Dawson Cornwell LLP) for the Respondent
Hearing dates: 13 th to 16 th February 2023
I have been hearing cross-applications in relation to the financial arrangements to be made following the breakdown of the marriage of the parties. The Applicant, MN applies by Form A dated 25 May 2021 for the full range of financial remedies. The Respondent, AN, issued a Notice to Show Cause why the application for financial remedies should not be dealt with in the terms of a Pre-Nuptial Agreement (“PNA”) dated 3 June 2005. I propose to refer to the parties as the Wife and the Husband respectively. I do so for the sake of convenience and mean no disrespect to either by so doing.
The relevant history
The Husband was born in 1961. He is therefore aged 61. He is treated as domiciled in this country. He lives in a property in the English countryside that he jointly owns with the Wife, (“The Country Property”).
The Wife was born in 1972, so she is aged 51. She lives at a property held in the sole name of the Husband, (“The London Property”). She is a home-maker and child-carer.
The parties married in early September 2005. There are two children of the family. CN was born in 2008, so is aged 15. ON, who was born in 2009, is aged 14. Both attend fee-paying schools in London.
This was a first marriage for the Wife. The Husband had been married before. There were two children of that marriage, DN and VN, both now in their late twenties. That marriage broke down in around 2001.
The Husband is a very successful finance professional. His business success can be seen by the fact that, by the time the PNA was signed in June 2005, he had net assets of £32.5 million.
The relationship between the parties commenced in March 2003. They briefly separated in October 2003, before getting back together again in January 2004. The Husband completed the purchase of The London Property in November 2003, whilst the parties were not together, in his sole name, for £3 million with a £2.85 million mortgage. He had exchanged contracts in June 2003 and shown the property to the Wife in September 2003. The property is a substantial mid- terraced home over six floors in a prime Central London location. It has seven bedrooms, a roof terrace and a paved patio garden. It measures approximately 4,600 square feet. It is now valued at £9.5 million but remains subject to a mortgage of £2,850,000.
The parties began to cohabit in The London Property in the summer of 2004. By then, the Husband had indicated that he would support the Wife financially after she had been made redundant in March 2004 from her job, where she had been earning approximately £2,300 per month. They became engaged in December 2004. The Husband had already raised the issue of “signing something” before a marriage with the Wife in the autumn of 2004. Both parties instructed well-known “divorce” solicitors. In the Husband's case, that was Baroness Shackleton (then Mrs Shackleton) at Payne Hicks Beach (“PHB”). He suggested the Wife consult Gill Doran of Withers but she decided to instruct Maggie Rae at Clintons instead and first saw her and her assistant, Paul Newton on 27 January 2005. In the taxi they shared, when she was on her way to the first meeting, the Husband showed her a piece of paper containing his suggested terms for the PNA. In essence, the proposal was that he would pay her £300,000 for each year of the marriage.
On 28 January 2005, Clintons sent the Wife a letter which said, amongst other things that:-
“ …the current position in English law is that pre-nuptial agreements are not binding upon the Court when making an Order for division of finances on divorce. Therefore, although the document may have some influence in the Court deciding on the allocation of assets on any future divorce, I could not say it would definitely be binding. However, you need to proceed on the basis that it would be upheld. It is very important that you are aware of this from the outset.”
Thereafter, both parties communicated quite extensively with their respective lawyers in face-to-face meetings, on the telephone and by email. Maggie Rae instructed a chartered accountant specialising in financial remedy work, David Greene of Martin Greene Ravden to do some calculations, which must have been Duxbury type calculations, although a Mr Braham actually did these calculations. On 4 March 2005, Clintons sent to PHB a proposal as to what the PNA should contain. It provided that the Wife would receive £2 million on the second anniversary of the marriage and £600,000 per annum thereafter. After ten years, she would receive half the value of The London Property or her half would be held on trust until the children ceased tertiary education. There would be child maintenance of £60,000 per annum plus school fees in the event that the parties had children. It would cease to have effect if the marriage lasted more than twenty years. A draft agreement was enclosed.
There is no doubt that this proposal upset the Husband, particularly the provision for £2 million on the second anniversary. The parties had a disagreement on 7 March 2005 but the Husband sent a constructive email to PHB on 8 March 2005 which said, amongst other things that “ I'm at 300,000, she's at 600,000 so maybe we can split the difference at 450,000 for each year of the marriage.” On 10 March 2005, a further email from him to Mr Neil Graham at PHB said he had had an “unhappy [Wife] on the phone complaining about how this agreement is ‘ruining our relationship’. I told her we just had to work through it…”
PHB replied to Clintons on 14 March 2005. It rejected the proposal for £2 million after two years as being inappropriate and suggested that a figure increasingly annually in the bracket £3–400,000 would be more appropriate. The letter agreed that a housing fund, if there were children in due course, of half the value of The London Property would be entirely reasonable. The proposals for child maintenance were also reasonable. It also suggested a payment of 50% of the increase in the value of the assets during the marriage if greater than the annual payments but the whole provision should be capped at 35% of the Husband's assets.
On the evening of the 15 March 2005, the parties had, in the words of the Husband, “ the mother of all arguments” in The London Property. There is dispute as to exactly what was said but there is no doubt that the net result was that the Wife left the property for up to a couple of hours. She says that the Husband was shouting at her down the street that she was a “ gold-digger”. He denies that but accepts he said, in the property, that the £2 million provision would be a “gold-digger's charter”. The Wife returned to the property later. Constructive talks then took place between them. In essence, they largely agreed the provision that would be included in the PNA although it appears that both sides made an amendment thereafter. I am clear that the negotiations between them did not involve one side or the other “capitulating”. Nobody has suggested that these discussions were other than cordial, albeit in the context that there had been the argument earlier that day. The basic terms were that the Wife would receive £500,000 per annum and half the value of The London Property after eight years or following the birth of children. In the alternative, she would receive 50% of the increase in the Husband's assets, if that was greater but with a cap of 42% of the Husband's overall wealth. The agreement would cease to operate after 25 years. Both parties subsequently told their lawyers that they had reached an agreement.
Thereafter, the solicitors corresponded and sent each other revised drafts. There were some changes made on behalf of both parties that were agreed. In relation to the Husband, the change was a clause that any interest in real property held by the Wife would be treated as a payment on account unless it was specifically agreed that it was a gift. On behalf of the Wife, a clause relating to the position on death was removed. It is clear that, although the parties may well have informed friends and family that they were intending to marry in September 2005, the “Save the Date” email was only sent to guests on 6 May 2005 after the agreement had been finalised.
The PNA was executed by each party in front of a witness and dated 3 June 2005. It recited that each was to retain their separate property accumulated before they met. They had given full and frank disclosure of their resources. Appendix A showed that the Husband had assets of £32.5 million. Appendix B had the Wife's assets at £62,000. It then recited that each party had received separate and independent legal advice and that they were freely entering into the agreement. It said that they intended that it “shall be legally binding upon them…”
The financial provision was that the Wife would receive £500,000 for each complete year of the marriage to a maximum of £12,500,000 on the 25 th anniversary of the marriage. She would receive one-half of The London Property on the 8 th anniversary of the marriage or the arrival of children if earlier. She would, however, receive 50% of the increase in the value of the net assets during the marriage if that sum was greater. In any case, the award would be capped at 42% of the Husband's net worth. On the arrival of children, there would be maintenance of £60,000 per annum per child plus school fees and medical expenses. After ten years, the maintenance...
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