Prenup round-up: The latest developments

The past six months
have seen a steady drip-feed of judgments from the High Court concerning nuptial agreements building on
the jurisprudence since Radmacher (formerly Granatino) v Granatino
[2010] UKSC 42.

Luckwell v Limata [2014] EWHC 502 (Fam), Justice Holman

Luckwell considered a prenuptial agreement where the parties had three children and the effect of the prenuptial agreement would leave the husband in a ‘predicament of real need’.

The wife came from a wealthy background and was paid an allowance of £81,000 per year
by her parents and had £7m of assets in her own name. At
final hearing, the husband was indebted, on the minimum wage, and had no property of his own. A prenuptial agreement dated 2005 purported to exclude the wife’s separate property or income gifted to
her by her parents. The parties separated and divorced in
2012. Holman J rejected the husband’s counsel submission that ‘needs’ were a trump card
to the agreement, but stated they could ‘outweigh the fact
of an agreement in a particular
case’, awarding the husband approximately £900,000 for the purchase of a property to live
in and for the children to stay in during contact, with 45 per cent of the value to revert back to the wife upon the children attaining the age of 22.

Y v Y (Financial Remedy: Nuptial Contract) [2014]
EWHC 2910, Justice Russell

The case involved a French contrat de marriage. The parties had been married 22 years and had two children. The husband was 60 and had been a banker, the wife was 49. The marital assets were worth in excess of £13m. On marrying in 1991, they had executed the contrat
in France which disapplied
the default French regime of community of goods in favour of a regime of separate property. The issue was the effect of the contrat upon sharing. Russell J found that
the wife did not have ‘a full appreciation of the agreement’s implications’ as she had not,
in 1991, received advice as
to the effect of the contrat in jurisdictions other than France. This means that, in the event
of reliance by a spouse upon a foreign nuptial agreement, a lack of advice at the time as to how the agreement would bind or have effect in England and Wales will be highly relevant. The judge, therefore, split the assets approximately 51 per cent to the husband and 49 per cent to the wife, excluding only non-matrimonial assets.

L v M [2014] EWHC 220 (Fam), Bruce Blair QC sitting as a deputy high court judge

This case involved a separation agreement dating from 2010. Under its terms the husband had agreed to pay the wife
£2m to the wife in the event
of divorce. The husband, who failed to attend at the notice
to show cause application, had advanced written arguments that there had been insufficient disclosure, a lack of advice
as to the implications of the agreement, and change of circumstances since the agreement that meant
he could not pay.

Blair found against the husband on all grounds
on the evidence, and made a specific finding that, as the agreement itself had stated
that both parties had taken independent legal advice, on the balance of probabilities either the husband had ‘at least some legal advice as to the financial consequences of divorce’ at the time, or he had ‘ample opportunity’ to take
such advice.

Gray v Work [2015]
EWHC 834, Holman J

This case involved arguments
in relation to the effect of a prenuptial agreement from
the state of Texas. The husband had a personal fortune of £144m. He proposed that the wife should receive $71,000.
He relied on a Texas agreement dating from 2000. That agreement, which had separated their assets, had
been related to his renunciation of US citizenship for tax purposes. The court held
it was ‘irrelevant’ that a Texas court would not have
made orders against the ‘partitioned property’.
The agreement was only relevant to the extent that it excluded the community of property regime in Texas and
on its true construction did not preclude the wife from seeking full statutory relief in England
and Wales. SJ

David Marusza is a barrister at Harcourt Chambers, London and Oxford