High Court rules on disadvantageous post-nuptial terms in guideline ruling

Aishat Balogun

Article written by Aishat Balogun, Solicitor, Family department

Pre-nuptial and post-nuptial agreements that do not fairly meet the “reasonable needs” of one divorcing party or the other are unlikely to be worth the paper they are written on. The High Court made that point in refusing to hold a wife to the disadvantageous terms of one such agreement.

The couple’s tempestuous marriage lasted approximately eight years and was characterised by periods of separation followed by attempts at reconciliation. During one such attempt, they signed a post-nuptial agreement whereby the husband agreed, amongst other things, to pay the wife a £10,000 lump sum and to discharge the £83,000 mortgage on a property she owned. The agreement stated in terms that both sides had entered it of their own free will and that neither would be entitled to make any further financial claims against the other.

After their divorce, however, the wife sought financial orders against the husband on the basis that she was entitled to seek an equal share of the marital assets, which totalled more than £4 million. She asserted that the post-nuptial agreement was of no effect in that she had not in fact entered into it freely and it did not in any event meet her reasonable needs. He contended that the agreement was fair and that it should be treated as binding.

Ruling on the case, the Court rejected arguments that the husband’s conduct during the marriage could objectively be described as coercive or controlling. The wife had made the running when it came to drawing up the post-nuptial agreement and she had signed it despite reservations expressed by her legal advisers. She had exited the marriage in a much better financial position than she had entered it.

In ruling that she was not bound by the terms of the post-nuptial agreement, however, the Court noted that she suffered from mental health difficulties and was clearly vulnerable. Although the pressure she was under was self-created, she had invested a huge amount emotionally in the relationship and was desperate for it to work. Her previous history of relationship break-ups had deprived her of the ability to make a rational and considered decision as to where her best interests lay. Overall, her judgment was impaired when she signed the post-nuptial agreement.

The Court concluded that the post-nuptial agreement did not in any event adequately meet her longer-term financial needs. She was approaching the end of her working life and the provision made for her by the post-nuptial agreement would not enable to her to live much above subsistence level. That provision was not reasonable following an eight-year marriage to a man who was a relatively prosperous professional.

In seeking an equal share of the marital assets, however, the Court found that the wife had set her sights far too high. The husband had reached retirement age and most of his assets pre-dated the marriage. He had also borne the majority of the very substantial legal costs of the divorce. To achieve a clean break, the Court ordered him to pay the wife a lump sum of £293,261. It also directed that she should have a 12.1 percent share of his pension.

To discuss pre-nuptial or post-nuptial agreements or for advice on a specific family matter, please feel free to email me or contact the Grant Saw Family department on 020 8858 6971.