Prenuptial agreement upheld after 12-week marriage
10 November 2016
Prenuptial agreement upheld after marriage of only 12 weeks, in "paradigm case" for upholding the prenup, which had "a magnetic place".
In this recently reported case, heard before His Honour Judge Booth in the Family Court sitting at Manchester, in March 2016, the wife was held to the terms of a prenuptial agreement after a very short marriage which had lasted only 12 weeks (24 weeks including the premarital cohabitation): H v H EWFC B81 (Fam).
The facts of this case, which concerned a mature couple (husband aged 72 and wife aged 64), were unusual and particular. Both Mr and Mrs H had been married four times previously, this being the fifth marriage for both of them. Both of them had children and grandchildren by their previous marriages. Sadly their own marriage was of very short duration (12 weeks from the wedding in December 2013 to separation in March 2014; 24 weeks maximum, including their pre-marital cohabitation).
The marriage had ended abruptly after Mrs H moved out of the former family home, after having accused Mr H of having committed anal rape, which he denied. He was charged with rape and prosecuted but acquitted in the Crown Court, in January 2015.
Prior to their marriage, the couple had entered into a prenuptial agreement whereby each agreed to retain their pre-acquired assets and neither was to have any financial claim against the other. Both of them had provided financial disclosure and both had been independently advised by lawyers. Indeed, the wife's lawyers had advised her not to sign the agreement.
The husband was described by the judge as "relatively wealthy". He lived in a mortgage-free property (which had been the couple's family home and where he had lived prior to their marriage with two of his previous wives and then on his own) worth about £600,000 (transferred into his daughter's name after the breakdown of the marriage) plus savings of 60 K and other capital assets: four motor vehicles and an aeroplane. He had disclosed a substantial shareholding in a family business worth 3 million as part of his disclosure for the prenup, but had subsequently given away most of that shareholding to his children. Nevertheless, he continued to work long hours in that business, from which he derived an income of just over 10k net per month. It was accepted by the judge that, as he put it, "he could without too much difficulty satisfy any order that I am likely to make in Mrs H's favour."
In contrast, the wife had no substantial assets and suffered from various health conditions including type I diabetes. She contended she had no realistic earning capacity, although she had made the same assertion in her previous divorce but had continued to work as bookkeeper before and during her marriage to Mr H, earning about £1500 per month. During the marriage she had been supported by Mr H by providing her with a home plus housekeeping money and paying the rent on her rented property. After the breakdown of the marriage, she had returned to live in the rented home where she had lived prior to the marriage.
As the marriage had broken down within 12 months, Mrs H could not issue divorce proceedings straightaway, so she made an application for financial support pursuant to section 27 of the Matrimonial Causes Act 1973. This was dealt with by the same judge, in November 2014, when he made an order that Mr H should pay Mrs H spousal maintenance of £1500 per month, "concluding that the terms of the prenuptial agreement did not cover the circumstances presenting to me".
In January 2015, Mrs H brought divorce proceedings relying on Mr H's unreasonable behaviour in relation to the alleged rape. He denied that allegation and cross- petitioned for divorce on the basis of her unreasonable behaviour.
The wife then brought financial remedy proceedings and applied for a legal services funding order. Mr H was ordered to provide her with £1 for every £1 he spent on his own legal costs, so as "to achieve equality of arms between the parties" and to discourage both of them from running up substantial legal fees. She sought £361,000 (to buy a house for £220,000, a Duxbury lifetime spousal maintenance fund of £77,000, plus £64,000 to pay off her debts, including outstanding legal costs.) Her fall-back position was that the house should revert on her husband, or his estate, on her death.
The husband then issued a notice to show cause why an order should not be made in the terms of the prenuptial agreement. He argued that the terms of the prenuptial agreement should be upheld but, in order to avoid further litigation, made a pragmatic "commercial offer of a payment of £88,000… reducing pound for pound by costs incurred... from the date of that offer. The effect of his offer is that Mrs H would now get nothing."
The judge decided to hear the divorce proceedings together with both parties' financial applications. He dismissed the wife's rape allegation and granted a divorce based on the husband's cross-petition. He pointed out that the husband had paid almost 2 years of spousal maintenance at £1500 per month, both parties' litigation costs (in respect of which the wife had overspent), plus most of his own legal fees for the criminal proceedings and was consequently out-of-pocket by about 300 K, with no realistic prospect of recovering his wife's overpayment in respect of her costs.
He held that the contingencies of an unknown future, as identified in the case of Radmacher , did not arise due to the very short duration of the marriage and other relevant circumstances and that the prenuptial agreement had "a magnetic place" in his consideration of the financial aspects of the divorce. Having decided that, he had to stand back and ask himself whether the outcome would be fair, if the couple were held to the terms of the agreement. He found that it would be, commenting that: "this is a paradigm case for upholding such an agreement". He concluded that a fair outcome of the proceedings had already be achieved, that "the prenuptial agreement should bite", and that "there should be no further financial provision for Mrs H", who should have accepted her husband's open offer to settle and had been "singularly ill-advised" to pursue her financial claim.
Although a first instance decision, the case demonstrates that parties are likely to be held to a prenuptial agreement after a short marriage and is also noteworthy for the judge's creative approach to an application for a legal services funding order, so as to achieve equality of arms between the parties within the litigation.
Maeve O'Higgins Family Law Partner, Burlingtons Legal |
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