WW v HW
| Jurisdiction | England & Wales |
| Judge | Mr Cusworth |
| Judgment Date | 10 June 2015 |
| Neutral Citation | [2015] EWHC 1844 (Fam) |
| Docket Number | Case No: FD12D05810 |
| Court | Family Division |
| Date | 10 June 2015 |
[2015] EWHC 1844 (Fam)
Mr Nicholas Cusworth QC
(SITTING AS A DEPUTY HIGH COURT JUDGE)
Case No: FD12D05810
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Richard Harrison QC AND Harry Oliver (instructed by Lee & Thompson) for the Applicant
Lewis Marks QC AND Katherine Cowton (instructed by Stewarts) for the Respondent
Hearing dates: 20 th– 24 th April, 10 th June 2015
This judgment was handed down in private on 10 th JUNE 2015. It consists of 74 paragraphs and has been signed and dated by the judge.
The judge hereby gives leave for it to be reported.
Mr Cusworth QC:
On 13 th June 2002, the parties in this case signed an agreement by which they agreed [cl.13] that in the event that their forthcoming marriage ended in divorce, neither would make a claim against the other (at least in their own right). Yet, at the end of this hearing during which I have heard extensive evidence from each of them over more than 3 days, as well as from their former nanny, and heard submissions from their respective Leading Counsel for the best part of a further day, they have between them run up during the extent of these proceedings costs in the sum of c.£1.77m. If ever there were a paradigm example of a case which demonstrates the need for more certainty in the law of financial remedies and nuptial agreements, this is surely it.
Brief History. I have read, but will not here repeat in full, a detailed agreed chronology. The husband in this case ('H') is 57 and the wife ('W') 46. They met and began a relationship in the summer of 2000, when H was 42 and W 31. In July 2001, their elder child was born (now 13). Sometime after this, they became engaged to be married. H was born and raised in Southern Africa, before studying at Film School in England. I have not been told much about the first 20 years of his career – he evidently had his own small production company, and when the couple met he had written and was staging a play in Shoreditch.
It is now accepted (although this was not understood by W at the time), that he had never generated any substantial income from his artistic endeavours. His only significant capital was the house he owned in London, E1, which he was to sell at the outset of their relationship to generate an equity of £474,000. His current assets comprise his interest in the parties' home in London W1 (discussed below but on his own case as put to me worth £742,000, on W's £611,100), savings in his bank accounts, and his interest in his production company – FF. This has some value but is subject to a very significant tax issue.
W's father had died young, when she was only 3, in 1972. This meant that she, along with her mother and brother, came into a significant inheritance. This includes their interests in an historic stately home (W's is 25%), and a very valuable painting now attributed to a celebrated 16 th century artist. The current value of her assets, virtually all of which are inherited, held in trust for her, and in shared ownership with the rest of her family, is somewhere around £27m. This figure does include her interest in the parties' London home, which has a market value of £4.5m, so that her net interest is valued at least at £3.5m. She currently works as the director of an art gallery in London.
In the circumstances it is unsurprising that the suggestion was made on W's side that the parties should sign a pre-nuptial agreement in advance of their wedding. She had taken advice from her family's solicitors, Charles Russell, and they produced the draft which H received in the middle of May 2002. On 22 nd May he had a meeting with H's solicitor at Hughes Fowler Carruthers where the document was discussed. On 24 th May, she sent him a follow up letter in which she provided him with certain further advice. She confirmed that although the document was not legally binding under English Law, it was possible that the law might change and that it could become so. Both sides exchanged schedules of assets and income for attaching to the document prior to its signing – H's drawn by his solicitor, and evidently based upon the instructions which he had given her in the 22 nd May meeting. As indicated, the document was eventually signed on 13 th June 2002. The parties married on 4 th July 2002.
By their agreement, the parties acknowledged and agreed, amongst other provisions, that:
a. The marriage was conditional upon the agreement being executed [Rec. B]
b. The parties intended that the agreement should be legally binding upon them [Rec. H]
c. They had each received independent legal advice and were fully aware of the right that they each were acquiring or surrendering [ReJ]
d. They had each fully and frankly disclosed their respective means and other relevant circumstances. [Rec. K]
e. They each acknowledged that it was not possible to exclude the jurisdiction of the Court to make orders under the Matrimonial Causes Act 1973. [Rec. L]
f. Neither would make any claim against the other on dissolution of the marriage, and would enter into a consent order to that effect, without prejudice to their right to make such a claim in respect of a child. [Cl.13]
g. Any real property jointly owned would be vested in joint names as tenants in common, and their respective proportions of ownership would be set out in a Declaration of Trust to be drawn up, and otherwise in accordance with their respective financial contributions to that property. [Cl.9]
h. All pre-marital, gifted or inherited property should remain the parties' respective ownership. [Cl.3/4]
i. Neither would make any claim against the other's separate property, or against any trust interest, in the event of dissolution of the marriage. [Cl.10/11]
At the time that the agreement was signed, W's disclosure showed assets worth over £16m, together with further inheritance prospects, and income. W's understanding of H's financial position appears to have been as set out in his financial disclosure at the time. Aside from his share of their home (put at 10%), he claimed to have £600,000 in cash, £580,000 in business assets and income which, including royalties, was said to have been £280,000 in the years to April 2000 and 2001, but only £140,000 in 2002 due to a claimed advertising industry downturn.
In August 2004, the parties' second child was born, who is now therefore aged 10. They separated in 2012, and their marital relationship may thus be put at about 11 years in duration. Aside from a significant issue about an outstanding tax liability within H's company FF, and who should bear responsibility for that, the only issue of practical legal significance is how the parties' agreement and the other surrounding factors should now affect the assessment of H's needs (for neither side suggest that this is a case which involves any element of sharing). However, there are many underlying issues of fact which will have to be resolved before that question can be determinatively answered.
The Law. Both parties acknowledge that the principal authority in this area is now the judgment of the Supreme Court in Radmacher (formerly Granatino) v Granatino [2010] UKSC 42. In delivering the judgment of the Court, Lord Phillips dealt thus with the issues of weight that are relevant in this case:
Factors detracting from the weight to be accorded to the agreement
68. If an ante-nuptial agreement, or indeed a post-nuptial agreement, is to carry full weight, both the husband and wife must enter into it of their own free will, without undue influence or pressure, and informed of its implications…
69. …Sound legal advice is obviously desirable, for this will ensure that a party understands the implications of the agreement, and full disclosure of any assets owned by the other party may be necessary to ensure this. But if it is clear that a party is fully aware of the implications of an ante-nuptial agreement and indifferent to detailed particulars of the other party's assets, there is no need to accord the agreement reduced weight because he or she is unaware of those particulars. What is important is that each party should have all the information that is material to his or her decision, and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end.
70. It is, of course, important that each party should intend that the agreement should be effective. In the past it may not have been right to infer from the fact of the conclusion of the agreement that the parties intended it to take effect, for they may have been advised that such agreements were void under English law and likely to carry little or no weight. That will no longer be the case… In future it will be natural to infer that parties who enter into an ante-nuptial agreement to which English law is likely to be applied intend that effect should be given to it.
71. In relation to the circumstances attending the making of the nuptial agreement, this comment of Ormrod LJ in Edgar v Edgar at p 1417, although made about a separation agreement, is pertinent:
"It is not necessary in this connection to think in formal legal terms, such as misrepresentation or estoppel; all the circumstances as they affect each of two human beings must be considered in the complex relationship of marriage."
The first question will be whether any of the standard vitiating factors: duress, fraud or misrepresentation, is present. Even if the agreement does not have contractual force, those factors will negate any effect the agreement might otherwise have. But unconscionable conduct such as undue pressure (falling short of duress) will also be likely to eliminate the weight to be attached to the agreement, and other unworthy conduct, such as exploitation of a dominant position...
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