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In MN v AN [2023] EWHC 613 (Fam), Moor J heard cross-applications in relation to the financial arrangements to be made following the breakdown of the marriage of the parties. The case is one of an increasingly large body of reported cases concerning pre-nuptial agreements since the seminal decision of Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, [2010] 2 FLR 1900.

Facts

The husband was aged 61 and the wife was aged 51. At the time of the final hearing, the husband was living in a jointly owned property in the countryside and the wife was living in a property in London held in the husband’s sole name (the London Property). There were two children aged 14 and 15, both at fee-paying schools in London. The parties had married in September 2005. The husband was a very successful finance professional. The wife was a homemaker and childcarer.

The relationship commenced in March 2003. The parties 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, while the parties were not together, in his sole name, for £3m with a £2.85m mortgage. The property was a substantial mid- terraced home over six floors in a prime Central London location. At the time of the hearing it was valued at £9.5m, subject to a mortgage of £2.85m.

The parties began to cohabit in the London Property in the summer of 2004. 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 to act for them in relation to a pre-nuptial agreement. The wife had an initial meeting with her solicitor on 27 January 2005. The husband’s initial proposal was that he would pay the wife £300,000 for each year of the marriage.

Thereafter, both parties communicated quite extensively with their respective lawyers in face-to-face meetings, on the telephone and by email. During the negotiations, the parties had, in the words of the husband, ’the mother of all arguments‘ in the London Property. The wife’s evidence at trial was that the husband was shouting at her down the street that she was a ’gold-digger‘. He denied that but accepted he said that the £2m provision that the wife was seeking would be a ’gold-digger's charter’.

The parties subsequently managed to agree the terms of the pre-nuptial agreement.  The basic terms were that the wife would receive £500,000 for each year of the marriage 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. There would also be maintenance of £60,000 pa for each child, plus school fees and medical expenses.

The pre-nuptial agreement was executed by each party in front of a witness and dated 3 June 2005. It recited that each party 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 £32.5m. Appendix B detailed 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 stated on the face of the agreement that the parties intended that it ’shall be legally binding upon them…’.

The parties’ relationship broke down in 2019. The wife applied by Form A for the full range of financial remedies on divorce and alleged that the husband had placed her under undue pressure to sign the pre-nuptial agreement. The husband issued a notice to show cause why the application for financial remedies should not be dealt with in the terms of the pre-nuptial agreement.

The final hearing took place over four days in February 2023. A central tenet of the wife’s case was that she was deeply frightened of the husband’s behaviour in the run up to the signing of the pre-nuptial agreement and felt she had no option other than to capitulate. While she did not run a formal conduct case, she relied on the husband’s alleged bullying and controlling conduct as a ‘circumstance of the case’. The wife’s open position made no reference to the pre-nuptial agreement and the quantum equated to around 40% of the total assets of £46.3m. The husband denied the allegations and his open position was that the wife should exit the marriage with provision calculated in accordance with the pre-nuptial agreement. 

Decision

The judge performed a two-stage exercise when drawing his conclusions. Firstly, were there any circumstances surrounding the making of the pre-nuptial agreement which should eliminate or reduce the weight to be attached to the agreement? Secondly, did the pre-nuptial agreement operate fairly having regard to all of the factors in section 25 of the Matrimonial Causes Act 1973 (MCA 1973)?

In relation to the first question, the judge found that while the wife was under pressure to sign a pre-nuptial agreement, it did not amount to undue pressure. The fact that the husband had stated there would be no marriage without a pre-nuptial agreement was not a vitiating factor by itself. There had been full disclosure and proper legal advice, as well as a cooling off period before the pre-nuptial agreement was signed. The judge was critical of way the wife had run her case, and did not find any of her allegations of coercion or bullying to be with foundation.     

In relation to the second question, the judge found that after a consideration of the MCA 1973, s 25 factors, the pre-nuptial agreement was fair, reasonable and adequately met the wife’s and the children’s needs. The wife would receive £4.75m for accommodation plus £300,000 pa, along with child maintenance of £146,000 pa.

Conclusion

This decision confirms the strength of pre-nuptial agreements and solidifies the line of judgments dealing with this area of family law since Radmacher. In circumstances where there is full disclosure, legal advice, and a reasonable level of financial provision made, pre-nuptial agreements will be upheld by the court ’in the absence of something pretty fundamental that vitiates the agreement‘. Moor J considered the wife’s case that the pre-nuptial agreement should simply be ignored to be ’bold and difficult to advance successfully’. He made it clear that the order was not being made on the basis of no order as to costs and that either party was free to apply for costs. In light of the judge’s conclusions, the wife was clearly at risk of a costs order being made against her.

Practitioners advising clients on this area of law need to be alive to the very significant weight which is now attributed to pre-nuptial agreements. The onus is on the party seeking to depart from the pre-nuptial agreement to show a fundamental and persuasive reason as to why the terms should not be upheld.  It is also worth bearing in mind the fact that the same rules apply to all cases regardless of the level of assets in question. While the reported cases tend to deal with high-net-worth individuals, the legal principles apply just as fully to modest asset cases.