Prenups given decisive weight

Post-Radmacher prenup

The court hearing detailed below confirms an earlier decision made in Radmacher V Granation, where the judge gave pre-nuptial agreements ‘decisive weight’. Pre-nuptial agreements have become increasingly common in the UK over recent years, and these two recent judgements are only likely to accelerate this process given that it appears the judiciary are being more and more persuaded as to their validity.

At the High Court on 3 November 2011, Mr Justice Moor considered the merits of a French prenuptial agreement and delivered judgment in Z v Z (No 2) [2011] EWHC 2878 (Fam). This is thought to be the first reported post-Radmacher prenuptial agreement case.

The prenup was signed by the parties in France in 1994 in the presence of two notaries, days before the couple’s marriage in France. The agreement excluded the sharing of the couple’s wealth on separation. They moved together to live in England in August 2007. The wife was aged 50 and the husband was 53. The marriage duration was 14 years with four years of cohabitation before the marriage. The couple had three children aged 14, 12 and nine.

In February 2008 there was a trial separation for a period of three months. The husband signed a letter to the wife before leaving in which he agreed that he would not seek to rely on the prenuptial agreement if he commenced divorce proceedings and that if he did commence legal proceedings he would agree to share the couple’s assets. The assets in this case were valued at 15m pounds. The wife had over 1m pounds worth of assets in her name while the husband was a big earner.

The wife started divorce proceedings in London in 2008. The husband contested the divorce proceedings in Paris where he challenged the jurisdiction of the High Court. Ryder J considered this issue in 2009 and ruled in favour of the wife.

At the four-day trial in October 2011, the husband put forward a case that the prenup should exclude the sharing principle and that the award to the wife should be made on a ‘needs’ basis. The husband initially made an offer of 35 per cent of the assets to the wife, which was not accepted.

The wife argued that the prenup was not entered into freely and said that she had been induced to enter into it. She also added that she had given up her job, had children and came to the UK with her husband when the marriage was not going well. The wife was seeking 50 per cent of the assets and argued that if her claim was to be dealt with on a ‘needs’ basis she should still receive 50 per cent, which amounted to 7.5m pounds.

The judge did not accept the wife’s arguments and upheld the prenuptial agreement. The terms of the prenup could not be varied by the husband’s letter as legal proceedings had by then been initiated by the wife. The wife was awarded 40 per cent of the assets, amounting to 6.03 million pounds, including her own assets.

The award was made for the wife on a ‘needs’ basis rather than on a ‘sharing’ basis, as the sharing of the assets was not provided for in the prenup. Income needs were assessed at 100,000 pounds per year for the wife and 75,000 pounds per year for the children, which were determined according to English law. The wife was awarded a lump sum of 2.28 million pounds.

In 2012, the Law Commission is due to report on whether there should be a change to the law on the recognition of prenuptial agreements.

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