KA v MA (Prenuptial Agreement: Needs)

This is an application made by KA (to whom, for ease of reference, I shall refer as ‘the wife’) for financial remedy orders following the breakdown of her marriage to MA (‘the husband’). That application was made in June 2016 shortly after the commencement of divorce proceedings. It provoked, by way of response, a separate application by the husband in August that year in the form of a notice to show cause why an order should not be made within the financial remedy proceedings reflecting the terms of an agreement concluded by the parties some three weeks before the celebration of their marriage in December 2008. That prenuptial agreement is relied upon by the husband as an effective and binding legal arrangement which the court should now approve as a final resolution of any and all financial claims which remain extant in the context of the dissolution parties’ marriage.

In terms of the outcome which each seeks, the parties are a long way apart. On behalf of the wife, Mr Pointer QC advances a needs-based claim of almost £6 million. If, as Mr Marshall QC contends on behalf of the husband, she is confined to the effective implementation of the terms of the agreement, she will receive a final award of just under £1.6 million. Both positions assume that there will be a financial clean break on payment of either one of those sums.

The parties are now in their mid-fifties. The wife is 54 and the husband 55 years old. This was a second marriage for each of them. The wife had previously been married for some years although that marriage was childless. As a result of her first divorce, she retained a mortgaged property in Amersham which now has an agreed equity of some £245,615. The husband separated from his first wife in the summer of 2000 shortly before these parties met in July 2000. By all accounts those divorce proceedings were protracted and, from his perspective, bruising. That marriage had produced three sons who are now in their twenties. He told me that his experience of his first divorce had caused him to set his face against any thoughts of remarriage and that was to remain his position for the first few years of his relationship with the wife. He had retained his former matrimonial home, Property G, at the conclusion of his first marriage. His former wife received a sum of about £410,000 which he raised by increasing the mortgage on Property G. I was not made aware of any residual spousal maintenance obligations at the conclusion of those divorce proceedings although he continued to provide financially for his three elder sons.

At the time when these parties met, the husband was living in Property G, a substantial property near Reading which has an agreed value in these proceedings of £3.35 million. On any view he was a man of substantial wealth having developed a successful business in the field of international travel and tourism. The wife was working full-time locally in Buckinghamshire. She told me that, with bonus payments, she was earning about £40,000 gross per annum as a senior office manager by the time she left that job in 2004. She was then living in a property which she bought with her share of the sale proceeds from the former matrimonial home which she had shared with her first husband. She had little, if any, other capital resources at the time.

By the summer of 2004 the relationship had developed to the extent that, in July of that year, the wife moved to live permanently with the husband in Property G. His three elder sons (all aged under 10 years old at the time) were spending significant periods of time with their father in their old family home and it is accepted that the wife played a not insignificant role in looking after them during that period. It is clear to me from everything which I have heard and read in this case that she formed a close attachment to those children and was committed to sustaining her relationship with them throughout the years of her marriage to the husband. By the time she moved into Property G, she was heavily pregnant with M who was born in September 2004. As the child of both of these parties, I have been asked to consider the financial provision which should be made for him in future. Happily, there is broad consensus between these parents as to those arrangements to which I shall come in due course. For present purposes it is sufficient to note at this stage that the wife, with the husband’s full agreement, gave up work after M’s birth and has since devoted her time and energies to her role as wife, mother and homemaker. M is now 13 years old and will shortly leave his prep school to take up a place as a weekly boarder at a well know local public school. It is accepted that, thereafter, weekends and holidays will be shared on a broadly equal basis and he will spend significant periods of time in the homes of each of his parents. There is no doubt whatsoever that each is fully committed to M and I have no concerns about the financial arrangements which will be put in place for him as he moves through secondary into tertiary education.

It is accepted that the husband’s pre-existing platform of wealth together with the fruits of his hard work throughout their cohabitation and subsequent marriage enabled this family to live a luxurious lifestyle. Whilst the husband told me that his financial situation improved from about 2009 onwards, there is no doubt that there were few, if any, effective brakes on their discretionary expenditure from that point onwards. The wife had moved into a very comfortable home set in 20 acres of land. The husband refers to Property G at various points in his evidence as “the G Estate”. Whatever the appropriateness of that description, it was, and is, a substantial country home. He has throughout this marriage employed various staff members to assist with its running, including a live-in housekeeper. He and the wife travelled extensively and took many short- and long-haul holidays together with M. Whilst there may have been some element of subsidy as a result of his business connections, I am satisfied that the husband’s evidence that he spent about £250,000 per annum on holidays is broadly accurate. He was able to indulge his love of classic cars and retains three valuable Aston Martin vehicles, one of which was bought during the currency of the marriage. Both parties drove Range Rovers and still do. Indeed, there is no serious challenge by the husband to the wife’s case that in the latter years of the marriage it cost approximately £1 million net per annum to sustain their family lifestyle. It is a lifestyle which the husband accepts he has continued to enjoy in the aftermath of their separation whilst financially supporting the wife at a significantly lower level.

Following M’s birth in September 2004, the wife began to press the husband in relation to marriage. She says this in one of her witness statements:

“I made it clear to [him] from the outset of our relationship that I wanted to marry in the long term. He knew that I believed in marriage and that it was important to me particularly as I had given up my home, my job and my lifestyle to commit to him and to his three children, for whom I took on a lot of responsibility.”

In particular, she told him that, having taken the decision to have a child together, she was uncomfortable about the fact that their son would soon be starting nursery school and she and he did not share the same name. The husband, as I accept, had made it plain to her throughout their relationship that he did not wish to remarry having been through a difficult divorce. He reassured her that he was committed to his relationship with her but had resolutely set his face against any suggestion that they should marry. In order to address her concerns about names, he suggested that she could change her name by deed poll. Perhaps understandably, this course did not appeal to the wife. There is no issue but that, whenever the subject of marriage was discussed by this couple, the husband made it plain that he would not marry without a prenuptial agreement. The wife describes his position on the subject as consistent throughout. Indeed, she goes further and refers in her written evidence to the existence of “an understanding between us that [he] would insist on a pre-nuptial agreement”.

By the summer of 2008, after they had lived together for four years, it seems that the husband’s position had softened slightly. Having set his face resolutely against any remarriage from the outset, he agreed he would marry the wife but only on the condition that she signed a prenuptial agreement. He described to me his recollection of a discussion between them in their bedroom in September of 2008 when he finally agreed that she should put in place arrangements for the wedding ceremony.

There was a good deal of evidence during the hearing about whether or not, by this stage, the parties were formally engaged to one another. I heard about two rings given to the wife by the husband, the first, in 2002, during a holiday to Thailand. She saw that gift as a clear indication of his commitment to her. In 2004, he had presented her with a diamond solitaire ring whilst they were on holiday in Barbados. It is her case that this gift was preceded by a formal proposal of marriage which she accepted. The husband says that it was no more than a gift to the woman he loved. Either way, it seems to me that little turns on this. Within a matter of months it is accepted that they were indeed married and a prenuptial agreement had been put in place.

The chronology is by and large agreed. Solicitors were involved for each of the parties and privilege has been waived by both the husband and the wife in relation to the advice which each received at the time. Thus, within the material available to the court have been the solicitors’ files including the letters and attendance notes produced contemporaneously with the instructions given by each party to his/her respective firms of solicitors.

It is clear from the husband’s solicitors’ file that the issue of a prenuptial agreement was raised with them by him almost a year before this prenuptial agreement was signed by the parties. On 27 September 2008, he initiated the discussion between the lawyers by sending an email to the solicitors firm which acted in his first divorce (Horsey Lightly). That email was copied to his accountants and referred to preliminary advice which he had received in relation to the contents of a proposed prenuptial agreement in September 2007. He asked for a review of those tentative proposals and instructed his lawyers to come up with a Will and an agreement which “will be efficient for me, the family and tax purposes”. The intended date of the marriage was advertised in that email as 8 December 2008. The solicitor who had advised him in 2007 has since left the employment of the firm and there is no record of the advice which was given to the husband on that occasion. This piece of evidence reinforces what I was told by each of the parties during their oral evidence. It is clear that discussions between them had been ongoing over a protracted period of time. I accept that the husband had resolutely set his face against marriage without some form of asset protection for the future. He had clearly acted on those discussions and sought guidance from his lawyers as to how this might be achieved.

It may well be, as the wife told me, that throughout 2008 there had been fewer discussions about putting in place a pre-nuptial agreement. She may well have reached a conclusion in her own mind that his insistence on such a step was not expressed with quite the same frequency as had been the case during the earlier years of their cohabitation. She told me that she thought he might have changed his mind about requiring an agreement. However, I accept that the issue of the prenuptial agreement was once again raised when the parties finally agreed to marry during the discussion they had in their bedroom in late September 2008. As the husband put it to me, ‘I said to her, “Okay, let’s get married. Let’s sign the pre-nuptial agreement and get on with it’. The wife may not have been told at that point what provision would be made for her in any such agreement but she accepts that she was always aware that she would have to sign such an agreement if she was to marry him. My finding on this issue is that the husband was adamant that there would be no marriage without a clear agreement from the wife to enter into a prenuptial agreement; she, for her part, was fully aware that her agreement to this course would be the condition precedent to any future wedding.

By 2 October 2008, the wife had booked both the Registrar and the wedding reception at a well-known local hotel. She acknowledged in her oral evidence that she made those arrangements knowing full well that the wedding would not go ahead unless she had by then signed a prenuptial agreement.

Having been put in touch with a different solicitor at Horsey Lightly, the husband wrote to the firm again on 17 October 2008. In that email, he said he required “something simple”. Explaining his thinking behind the need for and/or terms to be incorporated within such an agreement, he said this:-

“My main asset, which is my share in the family company – [T Ltd] – is left in trust to my boys with my brother (who is my business partner) to trade the company and have outright say in what should be done with the company until such time as it is prudent to sell it and distribute the funds equally to the boys or trade it and pass it along to those sons that are interested in running the business (the ones that are not involved should also get some consideration from it’s value). On my death and assuming that I am still married …. the yearly dividend/funds that would have been paid from the company to me will be passed in part to [my wife] to maintain the estate and give her maintenance and in part to give maintenance to the 4 boys for school fees and living expenses etc etc. until such time as [my brother] decides to sell the company or pass it to OUR sons to trade. As my brother and I have 6 sons between us (and he owns 41% of the company and I 51% of the company) he will have to come to an equitable arrangement of passing the company proceeds to the 6 boys by our fair split (should it be sold or should 3 of the boys trade the business) – ie his 2 boys would get the profit split of his 41% and my 4 boys would get the profit split of my 51% … all very complicated but I am sure that [my brother] would find an equitable way to sort this and I in turn would do the same for him in the event he dies before me and we are still trading the company – fyi [my] accountants are drawing up an agreement for both [my brother] and I to this effect [sic].”

That email was copied in to his brother and his accountant. The intentions expressed by the husband are clear although there was no reference in that email to the proposals which he intended to make for the wife should his marriage end in divorce rather than as a result of his death.

By a further email dated 21 October 2008 he put some flesh on the bones of a tentative proposal. Having warned his solicitors that the wedding date had been accelerated by just under a week to 2 December 2008, he wrote:-

“My opinion for the pre-nup is that it should be very simple and that IF the relationship goes sadly wrong, and subject to me having the funds, I would give [the wife] a one off payment of £500k and a reasonable maintenance per month for her and [M] until [M] is 18 years old. With the £500k she could pay off her mortgages and live rent free and also have the other property bringing in rent and being a nice pension for her. I would of course provide her with a car. How does that sound ???”

The reference to the wife’s mortgages related to the fact that, by the time she moved in to Property G to live with the husband, she owned two properties which were by then investment vehicles, both of which were let and subject to mortgages. The husband had made a financial contribution to the acquisition of one of these properties.

Once again, the husband made clear in his email to his solicitors that the value of his other assets, including his interest in the business and his classic car collection, were to be ring-fenced from any future claims by the wife in the event of a divorce.

When he sent that email, the husband was out of the country on business in India. He made an appointment to see his solicitors on his return. That meeting took place on 31 October. In the meantime, the wife had made contact with a firm of solicitors whom her brother had recommended. That firm (Lightfoots) was instructed on 14 October 2008. On 23 October 2008 she followed up an earlier telephone call to them with an email alerting them to the husband’s impending visit to his own solicitors.

There is on file no attendance note or other written record of the husband’s meeting with his solicitors on 31 October 2008. What I do have is a follow up letter which was written to him at Property G on 5 November 2008. That letter attached the draft agreement in its initial guise and sought his instructions in relation to any amendments or changes. It referred to the need for speed and the 21 day “deadline” given the impending celebration of the marriage. In terms of the legal advice he received in relation to the agreement, this is recorded in the following terms:-

“I think it is very important that I set out for you the advantages and also the limitations of a prenuptial agreement. I did discuss these briefly with you at our meeting.

You should both be aware that currently pre-nuptial agreements are unenforceable in English law. This is because a private agreement made between two parties cannot limit or oust the jurisdiction of the Courts and therefore pre-nuptial agreements can be set aside or varied by the Court in accordance with the provisions of the Matrimonial Causes Act 1973, the legislation which governs financial arrangements on divorce.

However, recent cases have shown that pre-nuptial agreements can be influential or can even determine the outcome in the event of a financial dispute. A pre-nuptial agreement can also have significant advantages in setting out the arrangements which you have agreed between you and such agreement will be taken into account by any Court adjudicating on the marriage.

The Government has suggested that if one or more of the following circumstances are found to apply the written agreement would not be legally binding. These include the following:-

1.

Where one or both of the couple did not receive independent legal advice before entering into the agreement.

2.

Where the Court considers that the enforcement of the agreement would cause significant injustice to one or both of the couple or a child of the marriage.

3.

Where one or both of the couple had failed to give full disclosure of assets and property before the agreement was made.

4.

Where the agreement is made fewer than 21 days prior to the marriage.”

The letter concluded as follows:-

“In the light of the above it is particularly important that you appreciate that a pre-nuptial agreement cannot absolutely safeguard your interests either in your own property or in any properties which you may inherit or even in your business. However, by setting out in a pre-nuptial agreement what you and [your future wife] have jointly agreed this will provide the Court in the event of divorce with evidence of both of your intentions and as I said to you at our meeting the Courts are now increasingly taking note of what the parties have agreed between them prior to the marriage.”

On 6 November 2008, Lightfoots contacted the wife to say they were in possession of a draft prenuptial agreement which had been prepared by the husband’s advisers. The email sent to the wife emphasised the need for speed in dealing with the matter, in particular, “in order to ensure the agreement is as binding as possible, it ideally needs to be finalised by Tuesday, 11 November !” (i.e. three weeks ahead of the wedding, that then being the minimum 21 day period considered acceptable for the advance formulation of a prenuptial agreement).

In its original manifestation, the draft agreement which was sent to the wife’s solicitors was framed in relatively conventional terms from the perspective of a professional matrimonial lawyer. There were a number of factual recitals set out by way of preamble. Of significance, the draft agreement recorded the following:-

The wife does not seek to challenge any of these factual representations. During the course of her oral evidence, she told me candidly that she had indeed intended to be bound by its terms when she signed the agreement. She also accepted that she had been advised in relation to the rights she was potentially surrendering (subject to a caveat which Mr Pointer makes in relation to disclosure in relation to the husband’s income). She also accepted that she was fully aware that the husband would not have agreed to marry her save on the express basis that, prior to the marriage, both parties would have signed a prenuptial agreement.

The original draft of the agreement provided for a payment of £500,000 to the wife in the event of a divorce. It was clearly a figure based upon his own subjective assessment of what her reasonable needs might be. Of greater significance was the fact that the lump sum (expressed as a full and final capital settlement) was to reduce pro rata by an equivalent percentage in the event that the husband’s personal wealth decreased over time. The extent of his wealth in 2008 was reflected in a schedule attached to the draft agreement which recorded the following:-

The wife’s assets at the time consisted of the two rented properties which had a combined equity of approximately £216,000.

Aside from the capital provision of £500,000, the wife was to be entitled under the terms of the draft agreement to maintenance payments of £2,000 per month. That entitlement to ongoing financial support was to subsist during her lifetime unless she remarried or lived with a third party for a period of six months or more. Her ability to capitalise those payments was restricted by an undertaking she was required to give to relinquish that right. As with the capital settlement, there was a corresponding pro rata percentage reduction in the event that the husband’s disclosed capital wealth were to fall. M, their son, was to be provided for separately. Aside from the provision of a car, the wife was to have no further claims against the husband’s pre-acquired wealth and, in particular, no claim or interest in any of his commercial or business interests. She was asked by Mr Marshall whether, at the time, she accepted that this was a reasonable aspiration on his part. She responded, “Yes, that was what he wanted”. She accepted, candidly, that she was well aware of the importance which the husband attached to safeguarding his business assets for the benefit of his four sons and wider family.

These arrangements were to be underpinned by the execution of mutual Wills which would remain in place throughout the marriage.

There was no disclosure in the schedule in relation to the provenance or extent of the husband’s income. Mr Pointer makes much of that omission. He submits on behalf of his client that she was in no position to judge whether the income provision which was made under the terms of the draft prenuptial agreement was appropriate or fair.

This point, amongst many others, was addressed by the wife’s solicitor when they had their first face to face meeting on Friday, 7 November 2008. SW, the solicitor dealing with the matter, commented on the absence of disclosure in relation to income and/or pensions. According to the attendance note of that meeting, she told the wife that the absence of “full financial disclosure … would not necessarily undermine the agreement” given the level of capital assets disclosed. When she was pressed on this point in cross-examination, the wife told me that she knew full well at the time that the husband was in a position to spend money without any apparent limit or impediment because “that was how he lived”. In this context, it has to be borne in mind that she shared that lifestyle with him as a member of his family and household. Mr Marshall reminded me in this context that the exponential increase in the family’s lifestyle did not manifest itself until after 2009 when the husband emerged from a lengthy ongoing investigation by HMRC. Be that as it may, it seems to me, and I so find, that at the time of the 2008 prenuptial agreement, the wife must be presumed to have known that the husband was in a financial position to spend more or less whatever he wished on the lifestyle which the family was able to enjoy. Furthermore, she would have been aware that the ongoing financial support which he proposed in the event of a divorce (£24,000 net per annum) was then the equivalent of the personal allowance which he was paying to her in respect of what he called “spending money”. (Footnote: ¹)

The advice which the wife received in relation to these terms can be collected from a detailed attendance note which her solicitor prepared following the meeting on 7 November 2008. It can be distilled into the following headline points:-

What emerged during the course of that meeting, as the wife subsequently confirmed to me in her oral evidence, was that she and the husband had discussed the proposed terms of the agreement the previous evening on Thursday, 6 November 2008. During the course of that discussion, the husband agreed to index-link the maintenance and the £500,000 lump sum. That discussion no doubt followed the receipt by the wife of the draft document which had been sent by email earlier that afternoon. The husband accepts that it is unlikely that she would have been aware of its terms until she was sent a copy although he contends that the broad figures had hitherto been the subject of several discussions between them, a contention which the wife does not accept. In cross examination the wife denied that there was any mention during the conversation on the evening of 6 November, of the substantive figures in the draft pre-nuptial agreement, though she accepted that index-linking was discussed and agreed on that occasion. On behalf of the husband, Mr Marshall reminds me that there is no reference at all in the wife’s written evidence to this conversation. Further he submits that it is absurd to suggest that there was an abstract conversation about indexation without some anchor to the figures. I am prepared to accept that submission given that there is now no issue but that the wife had a copy of the draft agreement which had been emailed to her by her solicitor that afternoon in preparation for their meeting the following morning. I am not persuaded that these specific figures had cropped up in discussion on the many occasions when marriage and prenuptial agreements were discussed over the years. I accept that the wife knew how much the husband’s first wife had received by way of a divorce settlement. I am also prepared to accept on the basis of the evidence I heard that she probably knew from these discussions that any prenuptial agreement would contain provision for her future needs in respect of both capital and ongoing ‘maintenance’. The husband accepted that she would not have seen in hard print the figures contained in the agreement before it was sent to her solicitors. He also accepts that there was no reference to any figures in the discussion they had in their bedroom in late September 2008 when they agreed to go ahead and marry.

Whilst the wife may not have been unduly surprised by the concerns which her solicitor was expressing during the meeting on 7 October 2008, she was clearly concerned about the advice she had received. That much is acknowledged and recorded in her solicitor’s attendance note. She told SW that she felt under pressure and that she did not feel that she was in any position to negotiate with the husband because he held all the bargaining power in their relationship. Nevertheless, as the attendance note records, whilst she recognised the steps which he had taken to safeguard his assets as far as possible, she “did desperately want to get married”. The attendance note concludes with this passage:-

“[She] was clearly uncomfortable with the terms of the agreement and was clearly feeling under considerable pressure to sign and agree it. After lengthy discussions with regard to the proposed agreement and the view a court would take, the client decided that we should write to [the husband’s] solicitors requesting the amendments as listed …”.

At the conclusion of the meeting, it was agreed that the wife would take the weekend to consider her position. The letter which was sent to the husband’s solicitors late on the Friday afternoon is within the bundle of material put before the court. Subject to some typographical amendments and the inclusion of indexation in relation to both the lump sum and maintenance, the wife’s solicitor confirmed her instructions from the wife to approve the terms of the draft agreement. It advertised the wife’s intention to attend at their offices on Tuesday of the following week to sign an engrossment of the amended document. The wife accepted in her oral evidence that this letter was sent on her specific instruction.

Over the course of that weekend, there was a further discussion between the parties. The husband describes a walk through the grounds of Property G. He recalls a discussion next to the pond when they settled upon an increased lump sum of £600,000. The wife recalls a conversation during which she relayed her solicitor’s view that the lump sum he had originally proposed was too low. She said she had not proposed an alternative figure because she did not know what to ask for. When he came up with the figure of £600,000, she simply accepted that offer. She told me that he had said this was a fair sum. She did not ask for more “because I am not like that”.

She was pressed by Mr Marshall as to why a clear exposition of this exchange over the weekend of 8 to 9 November 2008 had not appeared in her written witness statement. She told me that the entire weekend was “awful: it just carried on”. There was never any discussion about cancelling the wedding and I accept that, from her perspective, this was not an option in any event. She was honest and open in her evidence to me that she was not prepared to do anything which might jeopardise her wedding plans. I appreciate that we are revisiting these matters nearly ten years after they happened. It is hardly surprising that the parties’ recollections have dimmed somewhat with the passage of time. I do not believe that either was being deliberately dishonest in their respective recollections but there is nevertheless a stark contrast between how each remembers that weekend. According to the wife’s account, it was a weekend fraught with tension and tears. On the husband’s account, there was not the slightest indication, or at least none which was apparent to him, that the wife was under any pressure at all.

As to where the truth lies, I look to the contemporaneous documentation which is now available as a matter of historic record.

On Monday, 10 November 2008 the husband sent an email to his solicitors confirming that the lump sum to be inserted in the draft agreement should be increased to £600,000 and that this sum and the maintenance payments should be index-linked. That email simply referred to an ‘agreement’ which was reached between them over the weekend. An amended prenuptial agreement was duly dispatched to the wife’s solicitors that same day.

On the same morning the wife telephoned her solicitor. The attendance note of that conversation refers in anodyne terms to “a discussion” over the weekend and an agreement to increase and index link the lump sum.

The following day, on Tuesday 11 November 2008, the wife duly attended her solicitors’ offices to sign the amended agreement. She was given advice in relation to the amendments which had been made. A query was raised by her solicitor in relation to the apparent inconsistency of index-linking the lump sum and maintenance on the one hand whilst providing for a downward variation should the value of the husband’s wealth decrease over time. The attendance note records that “it was felt that any ambiguity may assist [the wife] if she needed to challenge the pre nuptial agreement although I stressed that it was not a clear cut clause in that sense”. The attendance note continues in this vein:-

“[The wife] was clearly unhappy with the agreement and ummed and aghed about whether to sign it. Unfortunately she does not appear to have an awful lot of choice as she explained that it was important to her that she was married for the sake of the parties’ son, [M], however it would appear that [the husband] was not prepared to get married without a pre nuptial agreement protecting his assets.”

Once again, the wife was advised by her solicitor that she would be “substantially better off” under either the 1973 and/or the 1989 Acts. She was advised in clear terms that she would be compromising her future rights by signing the agreement and that she must assume that she should be bound by its terms if she signed. The wife told me during the course of her oral evidence that she understood that advice. Not uncommonly in these situations, she was asked by her solicitor to sign a formal waiver acknowledging the advice she had received in relation to the agreement. A second attendance note prepared on that date records the fact that she was “still extremely uneasy about signing the agreement and confirmed that she felt under immense pressure to do so. She again confirmed that the bargaining powers were all on [her future husband’s] side and she felt a little unable to do or say anything in respect of the proposed agreement”.

During that second face to face meeting, she asked her solicitor what might happen if, in a few years’ time, she was to challenge terms of the agreement in the context of future divorce proceedings. The attendance note records the following:-

“… I explained to her that we would [be] writing to his solicitors saying that the agreement was signed, however, we have some concerns in respect of the pressure she was under and the time scale in which it had to be signed. I again confirmed to her that there were no guarantees she would be able to get out of the agreement and that if she signed it she needed to work on the assumption that she was going to be bound by it.”

“… I advised that I would be sending her a copy of that letter together with the attendance notes which she needed to keep safe should she need to challenge the agreement in future.”

It was put to the wife by Mr Marshall that, in this way, she had either set up or colluded in a deliberate “exit strategy” which was designed to provide her with a ‘defence’ to the implementation of the prenuptial agreement should the marriage break down. Whilst this may have been precautionary advice from an experienced matrimonial solicitor, I reject the suggestion that, at this point in time, this wife was deliberately setting up for herself an “exit strategy”. The advice she received was given in circumstances where, as she told me herself, she had every intention of being bound by the agreement when she signed up to its terms.

Having signed the agreement at the offices of her solicitors on Tuesday, 11 November 2008, the wife was nevertheless given a final opportunity to reflect on her position. The date was significant because there were then only 21 days remaining until the celebration of the marriage. That the wife had misgivings about what she was being asked to do is clear to me. She told me during the course of her oral evidence that the husband was well aware of the fact that she was upset. He denies any such knowledge.

However, having signed the agreement, the wife later telephoned her solicitor on the same day. She was distressed and in tears when she made that call and told her solicitor that there had been “an enormous argument” with the husband during the course of that day. The attendance note of that call records that he had told her that “the longer they are married the less binding the agreement will be”. That was not the end of her contact with her solicitor that day because she was to make a second call later in the afternoon about thirty minutes later. I have a note of that second call.

“She apologised and said that she has calmed down a little now and has stopped crying. She said that actually she would prefer that I did sit on the agreement overnight to give her [the] opportunity to consider it before it is sent off to his solicitors.”

It was not until the morning of Wednesday, 12 November 2008 that she called her solicitors and spoke to SW’s assistant or secretary to authorise the release of the signed agreement to the husband’s solicitors. That final attendance note records that, when asked if she was sure, “she said in a very resigned voice just to send it”.

A letter was sent to Horsey Lightly later that Wednesday afternoon. This was, in effect, the wife’s final word relayed through her instructions to her solicitors:-

“We do have some concerns that our client is perhaps not entirely happy with the agreement and may be feeling under some pressure to sign. However, she has nonetheless decided to sign the agreement and we now enclose it for your client’s counter signature.”

Having considered carefully the oral evidence which I heard from the parties, together with the contemporaneous evidence contained within the solicitors’ attendance notes, I have reached the following conclusions about the circumstances in which this prenuptial agreement was signed.

The husband signed the final engrossment of the prenuptial agreement on 14 November 2008 and the marriage was celebrated some 18 days later.

Having set out my findings in relation to the circumstances surrounding the existence of the 2008 prenuptial agreement, I need to say something about the law as I must apply it to the circumstances of this case. Mr Pointer and Miss Gray make the obvious but fundamental submission on behalf of their client that, leaving aside any vitiating factors, this was an agreement which was concluded before the decision of the Supreme Court in Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, [2011] 1 All ER 373. That decision brought about a fundamental change in the approach of English courts to the enforceability of such marital agreements and the court must be careful to distinguish between the law as it then stood and the law as it is now applied.

I take as my starting point the exposition of principle set out in the judgment of Lord Phillips of Worth Matravers from para 68 at page 398. His Lordship said this:

“[68] If an ante-nuptial agreement, or indeed a post-nuptial agreement, is to carry full weight, both the husband and wife must enter into it of their own free will, without undue influence or pressure, and informed of its implications. The third and fifth of the six safeguards proposed in the consultation document (Footnote: ²) (see para [5], above) were designed to ensure this. Baron J applied these safeguards, found that they were not satisfied, and accorded the agreement reduced weight for this reason. The Court of Appeal did not consider that the circumstances in which the agreement was reached diminished the weight to be attached to it. In so far as the safeguards were not strictly satisfied, this was not material on the particular facts of this case.

[69] The safeguards in the consultation document are designed to apply regardless of the circumstances of the particular case, in order to ensure, inter alia, that in all cases ante-nuptial contracts will not be binding unless they are freely concluded and properly informed. It is necessary to have black and white rules of this kind if agreements are otherwise to be binding. There is no need for them, however, in the current state of the law. The safeguards in the consultation document are likely to be highly relevant, but we consider that the Court of Appeal was correct in principle to ask whether there was any material lack of disclosure, information or advice. Sound legal advice is obviously desirable, for this will ensure that a party understands the implications of the agreement, and full disclosure of any assets owned by the other party may be necessary to ensure this. But if it is clear that a party is fully aware of the implications of an ante-nuptial agreement and indifferent to detailed particulars of the other party’s assets, there is no need to accord the agreement reduced weight because he or she is unaware of those particulars. What is important is that each party should have all the information that is material to his or her decision, and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end.

[70] It is, of course, important that each party should intend that the agreement should be effective. In the past it may not have been right to infer from the fact of the conclusion of the agreement that the parties intended it to take effect, for they may have been advised that such agreements were void under English law and likely to carry little or no weight. That will no longer be the case. As we have shown the courts have recently been according weight, sometimes even decisive weight, to ante-nuptial agreements and this judgment will confirm that they are right to do so. Thus in future it will be natural to infer that parties who enter into an ante-nuptial agreement to which English law is likely to be applied intend that effect should be given to it.

[71] In relation to the circumstances attending the making of the nuptial agreement, this comment of Ormrod LJ in Edgar’s case [1980] 3 All ER 887 at 893, [1980] 1 WLR 1410 at 1417, although made about a separation agreement, is pertinent:

‘It is not necessary in this connection to think in formal legal terms, such as misrepresentation or estoppel; all the circumstances as they affect each of two human beings must be considered in the complex relationship of marriage.’

The first question will be whether any of the standard vitiating factors: duress, fraud or misrepresentation, is present. Even if the agreement does not have contractual force, those factors will negate any effect the agreement might otherwise have. But unconscionable conduct such as undue pressure (falling short of duress) will also be likely to eliminate the weight to be attached to the agreement, and other unworthy conduct, such as an exploitation of a dominant position to secure an unfair advantage, would reduce or eliminate it.

[72] The court may take into account a party’s emotional state, and what pressures he or she was under to agree. But that again cannot be considered in isolation from what would have happened had he or she not been under those pressures. The circumstances of the parties at the time of the agreement will be relevant. Those will include such matters as their age and maturity, whether either or both had been married or been in long-term relationships before. For such couples their experience of previous relationships may explain the terms of the agreement, and may also show what they foresaw when they entered into the agreement. What may not be easily foreseeable for less mature couples may well be in contemplation of more mature couples. Another important factor may be whether the marriage would have gone ahead without an agreement, or without the terms which had been agreed. This may cut either way.

[73] If the terms of the agreement are unfair from the start, tis will reduce its weight, although this question will be subsumed in practice in the question of whether the agreement operates unfairly having regard to the circumstances prevailing at the time of the breakdown of the marriage.”

These passages inform the modern law in relation to the potentially binding nature of nuptial agreements and led the Supreme Court to formulate a new test which Lord Phillips set out in para 75 of his judgment:

In the context of fairness and in the new landscape of post-Radmacher agreements, the Supreme Court remarked, albeit obiter, that, in relation to non-matrimonial property, there is nothing inherently unfair in parties wishing to organise their finances in such a way as to meet obligations towards existing family members or children of one of the spouses from a former marriage. In so doing, their Lordships approved the dictum of Rix LJ in the Court of Appeal where he said ([2009] 2 FCR 645 at [73]):

I mention that clear ‘nod’ to the principle of personal autonomy and fairness at this stage for two reasons. First, because Mr Pointer and Miss Gray accept that the computation of the wife’s award in this case should be driven by her generously assessed needs rather than by any application of the sharing principle. That was the wife’s position from the outset of this hearing. She does not seek in this context to persuade me to embark upon any determination of the extent to which the husband’s wealth has increased during the subsistence of the marriage or the computation of any notional share of such increase which might reflect the marital acquest in this case. That, in my judgment was a sound and entirely appropriate decision on the part of her legal team.

Secondly, I have to take into account as part of all the circumstances of this case the wife’s clear acknowledgement and acceptance of the husband’s position in relation to his pre-marital assets as reasonable. She has been aware almost from day one of this relationship that he had no wish to remarry and the intended beneficiaries of his wealth have always been his children. It is clear from the email he sent his solicitors at the outset of these negotiations that M was included within that class of future beneficiaries and I have no doubt that any other children born to this couple would have benefitted in a similar way to the three children from his first marriage.

In BN v MA [2013] EWHC 4250 (Fam), Mostyn J stressed the importance accorded to the principle of personal autonomy when, post-Radmacher, the court is asked to consider agreements of this nature. At para 28, he said,

“The principle of autonomy is, in my view, extremely relevant. In many cases … the parties entering into the agreement are sophisticated, highly intelligent and have the benefit of the best legal advice that money can buy. When in those circumstances they have thrashed out an agreement, which they have both then freely signed, in my view, heavy respect should be accorded to that decision. The question of autonomy is particularly relevant where the agreement seeks to protect premarital property. This is clear from paragraph 79 of Granatino v Radmacher, and in this case that is exactly what the agreement was intended to achieve.”

Whilst I accept that this agreement was concluded before their Lordships had recast the legal test in relation to enforceability, the principle is nevertheless relevant in this case because of the importance to the husband of securing some concession from the wife prior to his agreement to marry that his pre-marital wealth should be protected subject only to his obligations to meet her financial needs in the event of a future divorce. She knew that a formal agreement which reflected those wishes was a pre-condition to their marriage. She had been advised by specialist lawyers that if she signed such an agreement, she might be bound by its terms to the detriment of any potential award under either or both of the 1973 Act or the 1989 Act (in respect of claims for M). I have already found that her desire to marry the man who was the father of her only child and to whom she had committed her life was sufficiently strong to override those risks which she hoped and expected might never materialise. However, given the degree of reliance which the husband placed on securing that agreement as the condition precedent to the marriage, the principle of autonomy and the parties’ intentions has to be factored into the overall assessment of fairness in this case.

I accept, as Mr Pointer submits, that the ‘seismic shift’ in the law since the decision in Radmacher should not enure to the wife’s disadvantage. I am satisfied that it does not do so in this case. She was advised that her willingness to enter into an agreement to regulate or restrict her rights on divorce was one of the factors which a court would be likely to take into account, absent vitiating factors. She was told that the direction of travel in the jurisprudence on this topic was such that she should assume that she might be bound if she signed. Of greater significance in my judgment is the fact that she herself acknowledges that she intended to be bound by its terms when she signed.

Fairness nevertheless requires a consideration of whether, on the wife’s part, this was an agreement into which she entered freely. On her behalf, emphasis is laid upon the extent to which her agreement to the terms of the prenuptial agreement was procured as a result of undue pressure from the husband. In this context, I was taken to a decision of Baron J where a similar question arose in the context of a post-nuptial agreement: see NA v MA [2006] EWHC 2900 (Fam), [2007] 1 FLR 1760. In relation to what she described as “other unacceptable forms of persuasion” which fell short of duress, the judge observed with her customary wisdom and insight into human nature that the circumstances in which one person acquires influence over another, and the manner in which influence may be exercised, vary too widely to permit specific categorisation (see para [17] and her quotation from Lord Eldon LC in Hugeunin v Baseley (1807) 14 Ves 273 at 300). At para 18, her Ladyship said this:

“… in a case involving a husband and a wife where it is clear that interdependence and mutual influence are the basis of the relationship, I consider that the court has to take special care when assessing the manner in which each party’s conduct affected the other. For example, if a wife has been accustomed to placing reliance on her husband’s decisions she might be much more easily influenced than an individual in a commercial transaction.’

The case of NA v MA was not, on its facts on this particular issue, wholly dissimilar to this case. In that case the husband was reluctant to continue with the marriage absent a formal post-nuptial agreement limiting his exposure to future financial claims by his wife. Mr Nicholas Mostyn QC (as he then was) appeared as the husband’s leading counsel. As Baron J acknowledged in para 22 of her judgment, “he simply gave his wife a very tough choice. Its terms were: sign the agreement or the marriage may come to an end”. In the present case, Mr Marshall might well be making exactly the same submission save that, here, its terms were: sign the agreement or the marriage will not take place.

Can such a stance amount of itself to improper pressure sufficient to propel a prenuptial agreement into the realms of unfairness? It is fundamental that every case has to be looked at through the prism of the facts which underpin it and, as Baron J reminds us, the nature of the intimate personal relationship between married or, as here, cohabiting couples engages in the court an obligation to take special care when assessing the impact of one party’s conduct upon the other. In the earlier case of RBS v Etridge (No 2) [2001] 2 FLR 1364, a decision of the Court of Appeal which Baron J had well in mind when she made these observations, Lord Nicholls had stated at p 1368:

“8.

Equity identified broadly two forms of unacceptable conduct. The first comprises overt acts of improper pressure or coercion such as unlawful threats. Today there is much overlap with the principle of duress as this principle has subsequently developed. The second form arises out of a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes advantage …

9.

In cases of this latter nature the influence one person has over another provides scope for misuse without any specific overt acts of persuasion. The relationship between two individuals may be such that, without more, one of them is disposed to agree a course of action proposed by the other. Typically this occurs when one person places trust in another to look after his affairs and interests, and the latter betrays this trust by preferring his own interests. He abuses the influence he has acquired …

10.

The law has long recognised the need to prevent abuse of influence in these ‘relationship ‘cases despite the absence of evidence of overt acts of persuasive conduct….. Relationships are infinitely various …

11.

Even this test is not comprehensive. The principle is not confined to cases of abuse of trust and confidence. It also includes, for instance, cases where a vulnerable person has been exploited. Indeed, there is no single touchstone for determining whether the principle is applicable. Several expressions have been used in an endeavour to encapsulate the essence: trust and confidence, reliance, dependence or vulnerability on the one hand and ascendancy, domination or control on the other. None of these descriptions is perfect. None is all embracing. Each has its proper place.

12.

It is not essential that the transaction should be disadvantageous to the pressurised or influenced person, either in financial terms or in any other way. However, in the nature of things, questions of undue influence will not usually arise, and the exercise of undue influence is unlikely to occur, where the transaction is innocuous. The issue is likely to arise only when, in some respect, the transaction was disadvantageous either from the outset or as matters turned out.”

This is not a case where this husband made overt threats to the wife. I do not regard his stated position of principle that there would be no marriage absent a signed prenuptial agreement to be capable of constituting duress or exploitation of a dominant position for these purposes in the context of this particular case. These were mature, consenting adults, each of whom had been married for a number of years prior to meeting one another. The wife had an established career when they met. She worked full-time in a professional environment and owned her own property. She was financially independent to all intents and purposes. Each had travelled through the vicissitudes of an ultimately unhappy marriage which had resulted in divorce. Whilst the wife appears to have steered a path through a relatively trouble-free (although, no doubt, painful) disengagement from her first husband, this husband’s experience of divorce had been very different. That experience had left a lasting scar, as I accept, and informed his attitude in relation to future personal relationships. Having become a couple, they had made the decision to have a child together. They had chosen to live together as a family unit, sharing the same home, and had been cohabiting as a family unit for four years prior to their decision to marry. That does not in any sense dilute the impact of the wife’s clear wish to elevate their cohabitation to the status of marriage but it informs to a significant extent the court’s enquiry into the dynamics of their personal relationship at that particular point in time.

The wife had shown herself to be a resourceful and committed partner to the husband during their years of cohabitation. She had assumed a degree of responsibility for his three (then young) children from his first marriage. To a greater or lesser extent, she shared with him the responsibilities of caring for those children alongside their own son, M. I collected from her written evidence an impression of the extent to which she assisted the husband to defuse elements of ongoing parental conflict with his first wife. She describes herself in her written evidence as his “rock” and “sounding board” in relation to both personal and commercial decisions. In discharging each of those roles, she appears to have demonstrated a personal resilience which was informed to a significant extent by the husband’s wish to recognise her as an equal and fully contributing member of his extended family unit. He recognised that contribution, in part, by providing financially for his family on a generous basis. They enjoyed a high standard of living, as each accepts, and, in material terms, she lacked for very little save in one respect and that was her wish to live her life not as the husband’s partner but as his wife. He had made clear to her that he was unwilling to take that final legal step (knowing as he did what the potential consequences might be) without the quid pro quo of a legal agreement which, so far as the law would allow, restricted his financial exposure in the event of a subsequent divorce. As I have said, that was a position which had been known to this wife throughout the entire course of their relationship. In a sense, his unwillingness to take that final step towards a binding legal commitment to her was part and parcel of the dynamic of their personal relationship.

Thus, when she presented herself in the offices of Lightfoots on the morning of 7 November 2008, she knew full well that – if the arrangements which she had put in train for the wedding were to be preserved – she would be obliged to engage in a formal process which would inevitably result in the execution of a prenuptial agreement. I am unable to accept that at the time she did not understand the general nature of such agreements. The husband told me that she moved in socially sophisticated circles and had friends who had found themselves in similar situations. Whether or not that was the case, and I did not hear any evidence about this from the wife, there can be no doubt that, if she did not understand the implications before her meeting on 7 November 2008, she must be taken to have understood them thereafter. By the time she saw her solicitor, she had already had a discussion with the husband the previous night following which it had been agreed between them that the lump sum of £500,000 and the maintenance payments of £2,000 per month would be index-linked so as to preserve their value. I accept that she may not have seen these figures captured in the draft document until that evening and she had yet to take legal advice about the appropriateness of that level of provision. The time frame was tight but it was within that recognised by the Home Office consultation document as reasonable. I recognise and accept that she told her solicitor that part of the pressure which she felt flowed from her perceived inability to negotiate effectively with the husband. I accept that her solicitor did not appear to suggest any alternative figures, or even a bracket, which she might take back to the husband as an alternative proposal. Nonetheless she received advice in the clearest terms to the effect that, whatever the ongoing evolution of the law in relation to marital agreements, she should consider that she would be bound by any agreement into which she entered.

Does the ‘furious row’ (per the wife) over the course of the following weekend constitute the sort of pressure or unconscionable conduct which might enable the court to reach a clear finding that when she authorised the release of the signed agreement the following Tuesday, her free will had by then been overborn by the husband’s conduct ? As I have found, she was clearly upset and in tears when she spoke to her solicitor that morning about the prenuptial agreement. That distress may well have been engendered by a dawning recognition of the fact that, in agreeing to its terms and authorising its release to the husband’s solicitors, she was indeed compromising her full financial entitlement in the event of a future divorce. I have no doubt that she was psychologically torn between her wish to proceed with the plans she had been making for the wedding and the husband’s request to agree to a potentially binding document which might well, at some point in the future, operate to her significant financial detriment. That said, the evidence in this case does not lead me to a conclusion that this wife was effectively disabled from negotiating with the husband supported as she was by the legal advice she had received from her solicitor. She had relayed to him the advice she had received that his proposal was “a bit mean”. He had responded by suggesting an increased figure of £600,000. Knowing as she unquestionably did by then that her potential claims might be very significantly greater, she did not suggest a higher figure which might have given her a degree of financial comfort. She did not ask him if he would be prepared to renegotiate the terms through their respective solicitors. I suspect that the whole process was one which she found entirely disagreeable (“I am not like that”). I accept that she probably felt that, had she tried to engage in some sort of ‘bidding process’, the husband might well have set his face against the whole idea of going through with the wedding plans.

None of this is lost to me in my overall assessment of this couple and their respective frames of mind at the time. It may well be that she had placed some reliance on what she may have interpreted as the husband’s reassurance that the weight which a court would attach to any signed agreement would recede over time once they were married. However, when I take all the evidence into account, I am quite clear that I cannot in this case reach a conclusion that, by the time she authorised the release of the signed agreement, the wife’s free will was completely overborne by any action or inaction on the part of the husband. It is clear to me that at that moment in time the celebration of the marriage was uppermost in her mind. That was what she wanted to achieve and she accepts quite candidly that she knew full well that the agreement was the condition precedent to achieving that end. I cannot accept that she was prevented by anything said or done by the husband from balancing the alternative options which were open to her at that point in time. Mr Pointer in his closing submissions contends that I cannot presume that his client intended to be bound by the terms of the agreement when she signed because her solicitors had told her that it was unenforceable as a matter of English law. It therefore follows, he submits, that the wife cannot be fixed with knowledge that the agreement would be implemented in full under English law.

That submission has to be considered in the light of the advice which she was given and which is recorded in the various attendance notes on her solicitors’ file to which I have already referred. She was warned in clear terms that, if she signed, she should consider that the agreement might well be enforced in the event of marriage breakdown. I found this wife to be a credible and an honest witness notwithstanding some of the inconsistencies in her written evidence to which Mr Marshall was able to point during the course of cross-examination. I believe her evidence that she intended to abide by the terms of the agreement when she signed it. Whilst no doubt upset by the dilemma which confronted her, I find that she chose to reject the professional advice which she had received. The fact that she took this course for what may have been the best of reasons and motivated principally by what she perceived to be in their son’s best interests does not, without more, enable me to conclude that I should disregard this agreement entirely as having no legal consequence or significance in terms of outcome in this case.

However, that is not a final answer to the question which this case poses: do the terms of the prenuptial agreement now regulate the financial outcome of the wife’s extant application for financial remedy orders ?

In Luckwell v Limata [2014] EWHC 502 (Fam) 130 to 131, [2014] 2 FLR 168, at 198 to 199, para 130, Holman summarised the law in this way:

“(1)

It is the court, and not the parties, that decides the ultimate question of what provision is to be made;

(2)

The over-arching criterion remains the search for ‘fairness’, in accordance with s 25 of the MCA 1973 as explained by the House of Lords in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, [2006] 2 AC 618, [2006] 2 WLR 1283, [2006] 1 FLR 1186 (ie needs, sharing and compensation). But an agreement is capable of altering what is fair, including in relation to ‘need’;

(3)

An agreement (assuming it is not ‘impugned’ for procedural unfairness, such as duress) should be given weight in that process, although that weight may be anything from slight to decisive in an appropriate case;

(4)

The weight to be given to an agreement may be enhanced or reduced by a variety of factors;

(5)

Effect should be given to an agreement that is entered into freely with full appreciation of the implications unless in the circumstances prevailing it would not be fair to hold the parties to that agreement. That is, there is at least a burden on the [claimant] to show that the agreement should not prevail;

(6)

Whether it will ‘not be fair to hold the parties to the agreement’ will necessarily depend on the facts, but some guidance can be given:

(i)

A nuptial agreement cannot be allowed to prejudice the reasonable requirements of any children;

(ii)

Respect for autonomy, including a decision as to the manner in which their financial affairs should be regulated, may be particularly relevant where the agreement addresses the existing circumstances and not merely the contingencies of an uncertain future;

(iii)

There is nothing inherently unfair in an agreement making provision dealing with existing non-marital property including anticipated future receipts, and there may be good objective justifications for it, such as obligations towards family members;

(iv)

The longer the marriage has lasted the more likely it is that events have rendered what might have seemed fair at the time of making the agreement unfair now, particularly if the position is not as envisaged;

(v)

It is unlikely to be fair that one party is left ‘in a predicament of real need’ while the other has ‘a sufficiency or more’;

(vi)

Where each party is able to meet his or her needs, fairness may well not require a departure from the agreement.”

To this succinct summary, his Lordship added a further factor which, he said, needed no citation of authority:

“[132] … The court must be scrupulous to avoid gender discrimination or gender bias. Of course gender may, and often does, impact heavily on outcome. If in fact a wife, in her role as mother, is the primary carer for the children, then her need for secure and suitable accommodation may outweigh that of the husband. If a wife, due to her commitments to caring for the children, is less able to work than is the husband, then that is likely to impact upon her maintenance needs. So, too, if it is a fact of the case that a wife has lower earning capacity because of gender discrimination in the relevant employment markets…..”

Thus I turn now to the over-arching search for a fair outcome in this case. The existence of the agreement and its terms are but one component element of that enquiry, albeit, in the light of my findings, an important element. However, Mr Pointer and Miss Gray contend that, in this context, there is a further hurdle for the husband to clear before I can attach any significant weight to the agreement.

It is clear from the terms of the husband’s open proposal that, in the context of these proceedings, he does not seek to implement the full terms of the prenuptial agreement. In two material respects he accepts that there should be a departure from its terms. In particular, he no longer seeks to calculate the lump sum payable to the wife by reference to a base line figure of £600,000 indexed up or down in accordance with any increase in RPI or decrease in the overall computation of his net wealth. As currently drafted, there is no ‘floor’ or safety net in terms of the wife’s capital entitlement. Had the husband’s pre-existing capital base been wiped out completely by the time her claims crystallised on divorce, she would have received nothing under the terms of the agreement. In fact, as the agreed schedule of assets demonstrates (Footnote: ³), his global wealth today is more or less the same as it was in 2008 when the parties married.

Instead, he offers to pay a fixed lump sum of £750,000 in addition to the sum of £300,000 which he has already made available to the wife to meet an ongoing liability for legal costs. Insofar as any balance remains from the global sum of £1.05 million which is not absorbed in costs, he accepts that she should retain it as part of her award. In addition to that sum, she will retain other assets in her name to which I shall come shortly. The second departure from the terms of the prenuptial agreement in terms of his open offer is his willingness now to capitalise the maintenance element of the agreement on a full life basis. The figure he proposes is £537,000 which is a straight-line Duxbury calculation based upon her actuarial life expectancy.

In these circumstances Mr Pointer submits that it is not for the husband to cherry-pick the terms which should be enforced and those terms which should not. Instead, he submits that the court must look at the agreement in its entirety to ascertain whether or not it is a fair agreement. I accept that submission. However, in the context of the weight to be attached to the agreement, its principal force as a driver in this case lies, as I have said, in the fact that it captures the wife’s agreement to, and acknowledgement of, the husband’s clear intention that its fundamental utility lay (and lies) in the protection so far as legally permissible of his pre-marital wealth. That and the fact that she acknowledged his wish to be reasonable in all the circumstances are two factors which carry significance in this case.

As Lord Phillips made clear in his judgment in Radmacher, a court’s findings in relation to the circumstances prevailing at the time of an agreement prior to a marriage may well reduce or eliminate the weight to be attached to it. As his Lordship acknowledged (para [72]), the question of whether or not the marriage would have gone ahead without an agreement is an important factor.

Significantly, as Radmacher makes abundantly clear, the question of the fairness or otherwise of the terms of any agreement as they are articulated from the start is likely to be subsumed in practice in the question of whether the agreement operates unfairly having regard to the circumstances prevailing at the time of the marriage breakdown (see para [73]).

Here, Mr Pointer and Miss Gray submit on behalf of their client that an agreement which contains a fixed lump sum subject to diminution and without a floor to protect against future need can never be right. Further, the income provision of £2,000 per month bore (and bears) no relation to the standard of living which this family enjoyed and which the husband continues to enjoy. Thus, quite apart from the absence of authority in relation to the severability of clauses in an agreement such as this, the court has to look at the agreement as a whole to determine whether it operates fairly in all the circumstances of this case.

Insofar as the length of the marriage in this case is relied on by Mr Marshall and Miss Benson as a brake, I take the view that this was not a short marriage when viewed in the light of the overall length of the committed relationship between these parties. They were already in a settled and committed relationship of cohabitation when they married. Some five years later in November 2013, the wife and M moved out of the main family home and into a neighbouring property, PV, some half a mile or so away. That was itself a comfortable five bedroom home albeit without the grounds and amenities of Property G. On the wife’s case, that physical separation between them in terms of their day to day living arrangements did not disturb the underlying continuum of the marriage. For the next two and a half years, it is the wife’s case that the husband would frequently come for dinner at PV. Two of his elder sons regularly spent time at the property. The parties continued to take holidays together with M as a family. The husband maintained the financial arrangements which had been in place prior to their occupying separate homes.

I accept Mr Pointer’s submission that families come in many guises and there was no serious challenge from Mr Marshall to the wife’s case in this respect. These parties were certainly together as a couple in all senses of the word for the best part of nine years. On the wife’s case, their relationship endured for over eleven years. It seems to me that, in a case where it is accepted that outcome will be dictated by future needs, there is little purpose served by a forensic enquiry into precisely when this marriage ended. The husband accepted in his evidence that, as a couple, they were able to maintain a good relationship following the wife’s departure from Property G. He did not dispute the fact that, as a family, they saw much of one another and took holidays together. The standard of living which the family enjoyed continued unabated. That is one of the factors which drives a consideration of this wife’s, and M’s, future needs. Whether this was a 10, 12 or 13 year relationship makes little difference to my approach to outcome when that outcome involves no element of sharing the marital acquest, as here.

Whilst Mr Pointer and Miss Gray seek to make much of the husband’s conduct in relation to financial disclosure in this case, they accept that any enquiry into the precise extent of his current wealth would be a sterile exercise other than in terms of fixing a needs-based award against the broad parameters of that backdrop of wealth. In broad terms, the assets in this case from the foot of their presentation are somewhere in the region of £34 million. On behalf of the husband, Mr Marshall and Miss Benson submit that the asset base is more appropriately quantified in the sum of c.£23.3 million.

It seems to me that the figure at the bottom of the asset schedule is not in this case determinative of outcome. The wife is not seeking x% or y% of that number. Its function in this case is no more than a cross-check to ensure that any needs-based award made is fair to both the husband and the wife. For present purposes, the T Group, and the husband’s ordinary and preference shareholdings in it, represent not only a valuable capital asset but also a valuable means of future income production. In due course I shall come to consider issues of extraction and liquidity. For present purposes it seems to me that I can and should proceed on the basis that the total assets in this case are worth between £23 million and £33 million of which – by consensus - the wife’s needs-based award will represent only a small percentage in any event. The central issue for me is the assessment of those needs and the extent to which, if at all, they are constrained by the existence of the prenuptial agreement.

The only other areas of dispute on the asset schedule can be dealt with shortly.

There is an issue as to the extent to which the cash balances in the husband’s bank accounts have reduced from a total of some £1.325 million to about £378,000. The cash in one of his NatWest accounts contained the balance of his share of the remortgage proceeds from the business premises. Whilst I accept that there has not been any detailed or primary disclosure in relation to the application of those funds in the last three or four months, I am satisfied by Mr Marshall’s explanation as to how those funds have been spent. In broad terms, most of the money has been applied towards legal costs (including a significant contribution which the husband has made to the wife’s costs) and living expenses which the husband accepts continue to be discharged on the basis of a “burn rate” of c. £1 million per annum to include the support he is providing for the wife and M.

In terms of property, and aside from the former matrimonial home at Property G, the husband owns a flat on Albert Embankment in central London, SE1. He uses that flat for part of the week whilst he works from the capital. Much of his working life is spent travelling abroad but I accept his evidence that, whilst based in his London offices, he has a punishing daily schedule. Before he acquired the flat, he would stay in central London hotels. The property has a substantial mortgage and an equity of just under £1.4 million.

The property in which the wife and M live, PV, is worth just under £1 million. After discharging the mortgage, there is equity of c.£332,000 after CGT. The property is currently held in joint names. The husband has offered to transfer it to the wife as part of her settlement should she wish to retain it. She does not on the basis that it is too close to the former matrimonial home. It is therefore agreed that the property will be sold and the net proceeds will thereafter be available to meet part of the award to the wife, albeit on the basis that she is a 50% owner in her own right.

The two investment properties which she owns have a combined equity of c.£468,500. All of the properties (save for Property G which will in all probability attract PPR exemption) are likely to attract some liability for CGT in the event of a sale or disposal. Mr Marshall submits that the wife’s retention of her share of the equity in all three properties, including her 50% interest in PV, is one of the factors which needs to be borne in mind when I come to consider the overarching fairness of the terms of the prenuptial agreement.

She has minimal funds in her bank accounts and a raft of debt and other liabilities to which I shall come in due course

In terms of pension provision, the wife has funds of just under £123,000.

Aside from two personal pension schemes worth c. £200,000, the vast bulk of the husband’s retirement provision is invested in a retirement benefit scheme run by the T Group through the vehicle of a Funded Unapproved Retirement Benefit Scheme. As a discretionary beneficiary of the FURBS, the trustees currently hold a further 27.54% of the shares in the T Group for his benefit. These have an agreed value of £6,372,425 giving him total pension provision of just under £6.575 million. I am asked by Mr Marshall to exercise considerable caution in accepting that figure as “hard”. First, it has been discounted by 30% to reflect the husband’s minority interest in the Group. Mr Pointer contends that I should ignore any notional discount because of the controlling interest in the Group which the husband exercises with his brother. Secondly, Mr Marshall submits that this is not an “invested” scheme: the value which is represented on the schedule of assets will be generated by the husband’s future efforts in keeping the business on course and profitable. I accept that his input in this respect has been significant. He is properly described in my judgment as a “workaholic”. The company has been, and is, his life’s work. He is committed to its future. Whilst it may well be the case that the Group will be sold at its currently assumed value or an equivalent value at the point when he wishes to retire, he is committed to passing on the business to his children or so many of them as express an interest in taking over the reins.

I take these arguments into account when considering the husband’s likely standard of living in retirement, whenever that happens. I am satisfied on the basis of the evidence I have heard that either the company will be sold or he will reach an appropriate accommodation with his children in the event that future succession planning accords with his present intentions to pass the business on to the next generation.

This wife needs an appropriate housing fund and she needs sufficient capital to provide for her future income needs. The husband accepts for these purposes that her income award should be capitalised. During the course of her oral evidence, the wife accepted that she had an earning capacity for the next 10 years. In my judgment, that was a realistic and entirely appropriate concession. As I remarked during the hearing, I take the view that she will be a significant asset to an employer once she has launched M happily and safely on the next stage of his secondary education. She told me that she considered she could earn a gross annual salary of £20,000 per annum. Taking into account her residual responsibilities for M once he becomes a full-time boarder, I regard this as a realistic assessment of her future earning capacity. Although he will be dividing his time between his parents’ homes during half-terms and holidays, there will still be demands on her time in terms of getting him off to school at the start of school terms and covering the weeks in the year when he will be with her during the school holidays.

Notwithstanding the existence of the prenuptial agreement, I have to have regard to all the factors set out in s 25(2) of the Matrimonial Causes Act 1973. My first consideration must be M and his future welfare.

The wife has produced a number of particulars for properties costing between £1.95 million and £2.25 million. In the main, these are substantial five bedroom houses of between 3,300 and 4,300 square feet. They are immaculately appointed properties which are ‘ready to move into without more’. Most have been interior designed with high specification interiors including near to the top of the range kitchen and bathroom fittings. At least two sit in substantial plots of 5.5 acres and 6.7 acres with a swimming pool and equestrian facilities. They are all substantial family homes in the Berkshire / Oxfordshire area and within reasonable proximity of the former matrimonial home. They are close to M’s next school and within relative striking distance of Property G thereby enabling him to travel easily between his parents’ two homes in the future. I have no doubt at all that the wife would make a comfortable family home in any of these properties for herself and M.

The husband’s particulars range between purchase prices of £745,000 and £800,000. In the main they are four bedroom properties but about half the size of the wife’s specimen properties in terms of floor area. They are situated in the Reading area and its environs but are not in equivalent rural or village locations. At least one is a semi-detached property. The wife has taken the opportunity to visit such of the properties as are still on the market for viewing. She has provided a number of photographs which she took during the course of her visits to those properties. I am satisfied that she has taken the time and care to look at these properties with an objective eye. I have no doubt that she was not attracted to any of them in terms of their suitability as a future home for herself and M. That said, this was not a wife who peremptorily dismissed the husband’s proposals for her future housing: she came to court and was able to explain to me why none of his specimen properties was suitable.

It is clear from a brief overview that these properties are in a different category altogether from those selected by the wife. The internal specifications and finishes are inferior and some appear to need some redecoration internally, if not modernisation. The wife described them variously as “tired and in need of an update”; “not a good location – on the corner of two housing estates”; “next to a boiler shop and backing on to a primary school”; and “not a nice area with frontage straight onto a main road”. It is clear from the photographs which she took on her viewing appointments that it is unlikely that the husband inspected any of the properties prior to putting them forward as a home for her and M. In one instance, the photographs taken by the wife reveal that the driveway to one of the properties is shared with the neighbouring premises. In another, the main railway line runs beneath one of the upstairs bedroom windows and is clearly visible from the back of the house. A further photograph taken by the wife shows that the back garden of the property is overlooked by at least three properties which are immediately aligned to the rear boundary of the subject property. In another, I can see the boiler shop to which she referred in her oral evidence. The commercial premises are immediately next to the house in question with a large free-standing area of tarmac outside which is obviously used as a customer car park.

There is no scintilla of doubt in this case that the husband is anything other than a devoted father to his son; M’s best interests in terms of his needs and welfare will be my first consideration in terms of s 25 of the 1973 Act. I appreciate that any exercise of this nature is bound to be tailored to the case which is being advanced on his behalf. Nevertheless I have to question whether, absent this litigation and the case he is advancing within it in the context of the wife’s financial entitlement, he would be advancing these properties as suitable homes for M. Of course he will continue to enjoy all that Property G has to offer in terms of its space and amenity whilst he spends time there with his father. But he also needs to feel that he has a home with his mother and that home must be one which meets both their needs.

Mr Marshall argues that the wife will not be confined to a purchase price of £750,000 in her search for a new home since she will have her half share of the equity in PV and, should she choose to do so, she can sell either or both of her investment properties. I shall have to consider her financial needs in the round when I come to consider her extant liabilities. However, in terms of what is ‘reasonable’ as a housing budget, I have to look at her ‘needs’ insofar as they are underpinned by my findings in relation to the prenuptial agreement. In this context, what does ‘needs’ mean ?

In Kremen v Agrest (Finanial Remedy: Non-Disclosure: Postnuptial Agreement) [2012] EWHC 45 (Fam), [2012] 2 FLR 414, Mostyn J considered the implications of fairness in the context of holding parties to the strict terms of a prenuptial agreement in the light of the guidance given by the Supreme Court in Radmacher (Formerly Granatino) v Granatino. In determining whether ‘in the circumstances prevailing it would not be fair to hold the parties to their agreement’, his Lordship confirmed that the agreement cannot be allowed to prejudice the reasonable requirements of any children of the family (para [77]). Having considered Lord Phillips’ observation that an agreement is likely to be considered unfair when it ‘leaves one spouse in a predicament of real need, while the other enjoys a sufficiency or more’ (para 81), Mostyn J continued thus:

“However, need may be interpreted as being the minimum amount required to keep a spouse from destitution. For example, if the claimant spouse had been incapacitated in the course of the marriage so that he or she was incapable of earning a living, this might well justify, in the interests of justice, not holding him or her to the full rigours of the ante-nuptial agreement.”

That latter example was one which the Supreme Court had itself postulated. However, Mostyn J went on to say (para 73) that there would have to be clear evidence of significant economic capacity on the part of the claimant before the assessment of needs was suppressed to that minimal level imposed on Mr Granatino. Similarly, he considered the decision of Moor J one year later in Z v Z (No 2) (Financial Remedies: Marriage Contract) [2011] EWHC 2878 (Fam) where, in the context of a French prenuptial agreement, a claimant wife’s needs had been ‘generously assessed’ to include ‘outright ownership of a valuable property and a Duxbury fund to provide a high level of income for the remainder of her life’.

The assessment of ‘needs’ flowing from the Radmacher decision was also considered recently by Mr Nicholas Cusworth QC sitting as a deputy High Court Judge: see WW v HW (Prenuptial Agreement: Needs: Conduct) [2015] EWHC 1844 (Fam), [2016] 2 FLR 299. Having held that, in the circumstances of that case, it would be fair to hold the parties to the terms of their prenuptial agreement, the judge went on to consider how the claimant husband’s needs should be assessed and whether, in his capacity as father of two children born during the marriage, he could be seen to be in a predicament of ‘real need’ in all the circumstances of that case. The primary purpose of the agreement in WW v HW, as here, was to protect from a sharing claim one party’s inherited property, an aspiration which, as here, both parties accepted was an entirely reasonable aspiration subject only to the issue of need.

At paras 53 to 55, the judge said this:

“[53] So, should the husband’s need here necessarily be interpreted as the minimum amount that is required to keep him from destitution ? This will not invariably be the case, even where an agreement would otherwise produce such an extreme situation. As Lord Phillis confirmed in Granatino v Radmacher (Formerly Granatino) [2010] UKSC 42, [2011] 1 AC 534, [2010] 2 FLR 1900 at [75]: ‘The fact of the agreement is capable of altering what is fair’. However, even where there is an agreement, fairness will not necessarily equate to near destitution. The level at which a party’s needs should be assessed, if they are not met by an agreement which might otherwise be binding upon them, must surely depend upon all the circumstances of the case, amongst which the fact of the agreement may feature prominently as a depressing factor. But each case will be different.

[54] In Radmacher itself, having rejected the view adopted by Wilson LJ in the Court of Appeal that the agreement should be binding irrespective of need, the Supreme Court went on to find that in that case the husband’s needs were in fact met by the award made, albeit it not at the level he might have expected absent the agreement. Given the earning capacity which they were inferentially able to attribute to him, this could hardly be equated to ‘destitution’. In Luckwell v Limata [2014] EWHC 502 (Fam), [2014] 2 FLR 168, Holman J found of the husband in that case at para [143] that: ‘He has no home, no current income, no capital, considerable debt and absolutely no further borrowing capacity’. He justified further provision on the basis at para [148] that: ‘the need to provide an adequate home in which the children can visit and stay with their father is very important’.

[55] Unlike Luckwell, and more closely like Radmacher, this is a case where any provision which W makes will have a significant effect on the quality of the children’s lives whilst they are with her. There is thus no need to balance the effect on the children of losing their home with one parent to provide adequate accommodation in which they can stay with the other. However, it should be borne in mind that any award to meet need, even absent the agreement in this case, is being made from non-matrimonial assets; and here those assets were specifically protected by the agreement which H willingly entered into. There is consequently no obvious basis for any generosity in the interpretation of these needs.”

With these observations, I respectfully agree.

On behalf of the husband, Mr Marshall urges me to take ‘a hard line approach’ to the assessment of this wife’s needs. He submits that this is the only way in which fairness can be achieved for the husband. However, as Mr Marshall himself accepts, in my search for a fair outcome, I have to do justice to both parties. The figure which is now advanced by the husband in respect of a suitable housing budget for the wife – c. £750,000 – is predicated on an indexation of £600,000, being the capital settlement captured within the prenuptial agreement. It is true that, in departing from the strict terms of the agreement in its full rigour, the husband has abandoned some elements which might have operated to the wife’s financial disadvantage. For example, he now concedes that her maintenance entitlement should be capitalised thereby leaving her free to make her own personal decisions in relation to any future remarriage or cohabitation without the requirement to balance such decisions against a future predicament of financial need.

One of the difficulties in this case is that the open positions adopted by the parties are polarised with each adhering to a financial outcome which is pitched towards the furthest reach of their target positions. A not wholly dissimilar situation confronted Moylan J, as he then was, in H v H [2008] EWHC 935 (Fam), [2008] 2 FLR 2092. In his opening remarks, the judge said this:

“[8] Having read the papers and each party’s written arguments, at the outset of the hearing I had formed the provisional view that each party had adopted what I regarded as the most extreme possible position. Each party clearly faced substantial hurdles in seeking to achieve their respective positions. It was, of course, only a provisional view, but I was surprised that the parties appeared to consider that the bracket of reasonable orders extended as far in either direction as contended for by them. I also did not consider that this was a helpful approach for them to have adopted. To adopt such extreme positions does not assist the court or, in my view, the parties in seeking to achieve a result which is fair both in outcome and in the manner in which it is achieved.”

It is only right to say that there was no issue in relation to the enforcement or otherwise of a nuptial agreement in H v H. The key issue separating the parties was the value of a business. I accept that in circumstances where one party relies on the fairness, and thus enforceability under Radmacher principles, of such an agreement, the resulting outcome may well be the polar opposite of the level of award a claimant spouse might otherwise expect to receive. Certainly I make no criticism at all of the legal teams in this case for pitching their respective cases as they have. In circumstances where Mr Marshall seeks to rely on (more or less) the full rigours of the agreement which his client struck with the wife and where she, in response to that case, invites me to attach no weight whatsoever to the agreement, the result is bound to be binary in terms of the outcomes for which each contends. But in one particular respect, the adoption of such polarised positions has left an evidential lacuna in terms of the wife’s and M’s future housing needs.

At a late stage of the hearing, and no doubt sensing in which direction the wind was blowing, Mr Marshall advertised an application to admit further evidence of the cost of housing in the £1 million to £1.5 million bracket. Mr Pointer objected to the admission of further evidence on the basis that his client would not have the opportunity to view these properties and the application came far too late in the day. Confronted with a similar situation in H v H, Moylan J made this comment:

“52.

I have been hampered in my assessment of the availability of alternative properties for the Wife by the narrow focus of the alternative property particulars which have been provided. However, in the event this has not affected [my] decision as I consider that the Wife should, and will, have sufficient capital to enable her to stay at the house in Battersea (albeit with a mortgage). In other words, I do not consider that she should be required to move to cheaper properties, unless she chooses to do so.”

Mr Pointer reminds me about the observation made by Ormrod LJ in Martin v Martin [1977] 3 All ER 762. The appeal in that case concerned the failure by the trial judge to assess the likelihood that the claimant wife would secure an offer of council accommodation at the end of a period of years residing in the former matrimonial home. In his closing submissions in relation to his client’s future housing needs, Mr Pointer took me to a passage of his Lordship’s judgment where he said that there must be some evidential basis for a submission that a party could find alternative accommodation whether from his or share of the equity from a matrimonial home or by securing local authority council accommodation (my emphasis). That observation, made some forty or more years ago, perhaps does little more than restate the basic principle that the court acts on the basis of the best evidence put before it and cannot speculate so as to infill any evidential gaps.

However, here, there is evidence available to the court in relation to what might be the likely cost of accommodation acceptable to the wife in the environs of her preferred location. During the course of cross-examination she agreed with Mr Marshall that her home for the past four years, which has an agreed gross value of just under £1 million, is “a perfectly nice house which meets all my needs”. She accepted that, if not situated half a mile away from Property G, it might meet all of her longer term accommodation needs. She said that she had not recently investigated the availability and cost of properties in that area and it is no part of either party’s case that she should remain in PV if she wishes to put some further distance between her new home and the former family home in which the husband will continue to live. She said that it was possible that she could find a suitable property at ‘around the £1 million mark’ but she had not looked.

In this context, I bear in mind what she said in her written evidence in relation to the acquisition of PV when it came onto the market in March 2012:

“We both agreed that it was in a desirable area where prices were generally high and we felt it would be a good investment. We decided to buy it together in March 2012.”

As I say, the property has an agreed present value for the purposes of this hearing of just shy of £1 million. When it was put to her that she could deploy the equity in her existing property portfolio to supplement her housing budget, she agreed that this was an option although she told me that these properties had been notionally earmarked as her future pension fund. She accepted that the provision of a lifelong Duxbury award would provide her with a retirement income and, by implication, accepted that there was additional capital available to her to supplement the housing budget proposed by the husband.

In her section 25 statement, the wife had set out her housing needs in this way:

“In relation to capital I will require a housing fund of £2.3 million to enable me to buy a five-bedroom detached house in an affluent area, akin to [the village in which the former matrimonial home is situated], close enough to [M]’s new school for me to be able to transport him back and forth and attend school events. This figure includes SDLT, moving costs, legal costs and the cost of furnishing the property.”

In the context of a claim which proceeds from a clean sheet in terms of an assessment of ‘need’, this statement of her housing needs would be entirely unobjectionable in the circumstances of this case and the resources available to the husband. However, in the light of my findings in relation to the prenuptial agreement, I do not start with that clean sheet. I bear well in mind M’s needs which include his need to know that the home he shares with his mother in which he will spend half of his time away from boarding school is one in which his mother feels comfortable and secure. It is difficult to see how that might be achieved in circumstances where she was living in one or more of the selection of houses which the husband put forward as evidence of her future needs. I can well understand this mother’s concerns that in these circumstances the gravitational “pull” towards Property G during school holidays might be a factor which should worry the court particularly if M wished to share part of his school holidays with friends from school.

I am satisfied that a fair outcome in the assessment of both housing and income needs in this case must reflect the fact that this wife agreed to restrict the ambit of her financial claims should the marriage end in divorce. That agreement, says Mr Pointer, is reflected already in her abandonment of her claim to share part of the marital acquest in this case. In my judgment, a housing fund of £2.3 million outside central London might meet the wife’s aspirations but it does not reflect a fair outcome for the husband in the circumstances of this case notwithstanding that he himself will remain in a property worth in excess of £3.5 million. That was a property which he owned long before he met the wife. It was his first matrimonial home. I bear in mind that the property is heavily mortgaged but the husband can well afford that level of borrowing as the price for his continued occupation of a home he clearly loves. Any award I make in these proceedings in favour of the wife will not interfere with the security of that home for so long as he chooses to remain there.

I do not accept Mr Pointer’s submission, if indeed I have understood its thrust, that I cannot assess the wife’s housing needs to be anything other than a figure which is either within the bracket contended for by the husband or within the much higher bracket reflected in the property particulars which the wife has elected to put before the court. To accede to this submission would, in my judgment, fly in the face of both common sense and the wife’s own evidence of the suitability of PV as meeting most, if not all, of her current and future needs. The court has before it agreed evidence as to the value of that property. I was told that this couple had spent money on various works of refurbishment and decoration when it was acquired as a temporary home for the family whilst more substantial work was undertaken at Property G. Notwithstanding that it already reflects to one extent or another the wife’s taste in decoration and the like, no one suggests that she should remain there in circumstances where the marriage has now come to an end.

I have already recognised the need for her future home to be both comfortable and secure. The wife confirmed during cross-examination that she was not seeking to suggest that M had in any sense been exposed to feelings of financial disadvantage during his occupation over the last four years of his current home. On the contrary, the whole tenor of the wife’s evidence in relation to the post-separation period (when, on her case, the marriage subsisted) was that the parties would entertain together at PV and that it was a home where the husband’s elder sons were happy to visit. The property itself is acknowledged to be in a good (i.e. relatively expensive) area. It was recognised to have sound investment potential when it was purchased in their joint names. It was a property which was considered by both to be a suitable (albeit temporary) home for the entire family throughout the months when they were unable to live in Property G. It is the best evidence which I have of the wife’s likely future needs, rather than her aspirations, and in reaching my conclusions I have been careful to avoid mere speculation as to what Mr Marshall’s proposed property particulars might have shown me.

I have reached a clear conclusion, and it is a conclusion which informs my finding in relation to the wife’s future housing needs, that a similar property in a similar village location within an easy commute of M’s boarding school could be acquired for about £1 million. I accept that, in addition to that figure, she will need moving costs and stamp duty and I also consider it reasonable to allow her a sum in respect of the likely costs of redecoration. I want her to move with M into a property which she feels has her particular “stamp” on it. I am not proposing an allowance in respect of major improvements or alterations but, taking all things into account, I propose to assess her housing needs in the global sum of £1.35 million. That sum will include stamp duty, conveyancing costs and a sufficient budget to redecorate and pay for whatever new carpets and curtains may be required. It factors in an allowance of £150,000 which is her claim in respect of furnishing and equipping the property. I did not hear evidence about what, if any, agreement may have been reached about the contents of PV but I accept that she will need a sum of this order to set up her home. I regard that budget as sufficient to meet her needs in the circumstances of this particular case. It will enable her to provide a comfortable home for M and is fair to her and fair to the husband. Should she find a property into which she can move without spending money on redecoration, that will be entirely a matter for her. She may be in a position to buy a property costing slightly more than £1 million on the basis it needs little, if any, work. I am not seeking to be prescriptive: the choice will be hers but the husband will not be required to contribute more than £1.35 million towards the cost of rehousing his former wife and son.

Mr Pointer seeks a full-life capitalisation on the basis of an annual requirement of £150,000 per annum. By her open proposal, the wife sought a sum of £3.309 million which made no allowance either for her own future earning capacity or for the rental income she currently receives from her two rented properties. In answer to a question put to her by Mr Marshall during cross-examination, she confirmed that she expected to spend just under £190,000 net per annum going forward with no allowance for any step-down or reduction in later years.

By the time we reached closing submissions, Mr Pointer and Miss Gray had recalculated the Duxbury requirement to reflect their client’s concession in relation to her future earning capacity. On the basis of a gross earned income of £20,000 per annum until the age of 65 years, the sum reduced from £3.309 million to just over £3.22 million.

The husband’s offer remains as it was when he made his open proposals. On the basis that the wife’s needs are restricted to £24,000 net per annum, index-linked in accordance with the prenuptial agreement to £27,000 net per annum, he offers capitalised maintenance in the sum of £537,000. The principle of an income fund to sustain her needs throughout the rest of her actuarial life expectancy is not in issue. I regard this as entirely appropriate. This couple shared many years of family life and the wife’s ongoing contribution towards family life in terms of M’s needs as he grows into adulthood will be significant. In the circumstances of this case, I regard the husband’s concession in relation to capitalisation as well-judged and entirely appropriate. She has earned a degree of financial security as a result of her past and ongoing contributions and, absent this concession from the husband, I would not on the facts of this case have been placing any limit on the multiplier in the Duxbury equation.

Where I do take issue with the husband’s case is his expectation that, after more than ten years of reliance on the very generous financial provision which he made for his family, the wife should now be confined to a budget of no more than the personal spending allowance he was providing at the time they agreed to marry. I have already referred to the importance of M’s perception of his mother’s emotional and financial security in the home he will continue to share with her as he divides his time between his parents’ two homes. To confine her to a budget of £27,000 per annum for the rest of her life when her earning capacity has been limited by their joint decision to have a child together exposes her, in my judgment, to a degree of financial hardship which is blatantly unfair. I accept that an assessment of her future income needs must reflect, in part, her acceptance that, to the extent possible, those needs should not be met from non-matrimonial property. However, because there has not been any attempt in this case to attempt to quantify the element of any marital acquest in the husband’s global wealth, her future needs can only be met from assets which are by their provenance non-matrimonial.

It is clear that at the time the parties signed their prenuptial agreement, the husband could have had no greater expectation than that he was putting in place the optimum legal protection available to him at the time. That was the substance of the advice he received. He knew that there was no guarantee that the agreement would prove to be ‘watertight’ against any future and more extensive financial claims which the wife might make; only that its terms might be upheld or, if deemed unfair, that the agreement might in future operate as some form of ‘brake’ on those claims. (In his words, he knew the agreement had the potential to be ‘influential if not determinative’.) I have already found that on the balance of probabilities he did indeed reassure the wife in terms that the agreement would in all likelihood have less significance as the marriage endured over future years. I am satisfied that this was not advice which she received from her own solicitors and the report which she made to them on 11 November 2008 about what was said during their argument earlier that day was very likely to have been the husband’s attempt to deflect the concerns which she was expressing. Although he may now have no recollection of saying these words (which was his evidence to me), the contemporaneous documentation from the solicitors’ files suggests that he was very likely to have been the source of the report which the wife made to her own solicitor.

That factor is important not least in the context of the observations made by Lord Phillips in Radmacher. At paragraph 80 of his judgment, his Lordship said this:

“Where the ante-nuptial agreement attempts to address the contingencies, unknown and often unforeseen, of the couple’s future relationship there is more scope for what happens to them over the years to make it unfair to hold them to their agreement. The circumstances of the parties often change over time in ways or to an extent which either cannot be or simply was not envisaged. The longer the marriage has lasted, the more likely it is that this will be the case.”

The husband told me that he still viewed his income proposals as reasonable notwithstanding the fact that the family’s annual ‘running costs’ were still c. £1 million net. He told me that, as a single mother, he believed the wife should be able to live on a total monthly income of £6,400 per month or £76,800 per annum. That sum, of course, includes the amount he offers in respect of child maintenance for M (£30,000 per annum). He told me that during the two years or more when they had occupied separate homes, they had been very good friends. He said he found it all very sad but that she had walked out of Property G of her own accord. I had the impression that he honestly believed that, having made the decision to live in separate residences and, subsequently, to end the marriage, the wife must now live with the consequences of her decision (i.e. the terms of their prenuptial agreement).

I do not regard those terms as reasonable or remotely fair insofar as they relate to income provision. I have already referred to the fact that she will be unable to resurrect her previous earning capacity because of her responsibilities to M. I accept that they had a child when they married but that fact by itself does not persuade me that she should leave this marriage on the basis of the proposals which the husband advances in relation to income provision. They are unfair and do not reflect either her past and ongoing contributions or the standard of living which this family enjoyed and which the husband (and M whilst with him) will continue to enjoy.

Mr Marshall produced a table for me which demonstrates that the husband’s income between 2004 and 2009 was an average of c.£560,000 per annum gross or c.£333,350 net over that six year period. That date coincided with the conclusion of the first HMRC investigation. The husband accepted that expenditure was reined in during that period. However, it is common ground that thereafter, and for the remaining years of their relationship (which, for these purposes, includes the period when the wife and M were living at PV from November 2013 to May 2016), the family’s living costs were about £1 million inclusive of an annual holiday budget of £250,000. There is no reason to believe that this regime will change in the future. It is significant that the husband’s own budget in these proceedings is stated to be just shy of £662,000 per annum.

The single joint expert, Mr Brown, of Grant Thornton, has confirmed in his oral evidence that the husband could extract income of £1.5 million net from the company over the coming financial year although the precise figure would depend on what reserves were made for various contingencies such as tax liabilities. Even the husband himself concedes that he can “pay himself” £1 million net over that period.

The wife’s itemised budget was the subject of challenge during Mr Marshall’s cross-examination. Her original presentation suggested an annual requirement in excess of £306,000 per annum for herself and M. Mr Pointer has reduced her claim to £150,000 every year for the rest of her life. That figure is predicated in part on the basis of his submission to me that I should ignore altogether the existence of the prenuptial agreement for the purposes of assessing future need. I have made my findings in relation to the impact in these proceedings of that agreement. Consequently any assessment of her future needs must inevitably be tempered by its existence if not its terms.

It would not be appropriate in this already lengthy judgment to undertake some form of ‘blue pencil’ analysis of the wife’s individual heads of expenditure and the figures she has put forward. By implication, her concession that she can shave a six figure sum off her original budget indicates that it may represent more of an aspiration in terms of her future standard of living rather than a true reflection of future needs. A sum of nearly £20,000 per annum is included as expenses referable to the running costs of her two investment properties, including the mortgage interest on each. These expenses can properly be set off against the rental income which each produces and this process has already been reflected to an extent in the wife’s evidence about the net rental income which she has been receiving. It is significantly less than the gross rental yield from the two properties. There is a significant sum allowed for depreciation and the like. Having travelled through the budget with the wife, Mr Marshall sought to suggest that, even on her figure of £236,000 odd, there was scope for a realistic saving of some £86,000 per annum.

Having considered matters in the round and having myself revisited the figures for these purposes, I am satisfied that a Duxbury fund of £3.22 million based on a straight line calculation of £150,000 for life does not fairly reflect the wife’s agreement at the time of the marriage to place some restriction or brake on her future financial claims in the event of a divorce. Mr Pointer accepts as much by his invitation to me to assess her ongoing needs at £150,000 per annum on the basis that no weight at all is attached to the existence of the agreement. I am satisfied that a net annual budget of £100,000 per annum is what she realistically requires to run her domestic economy in a mortgage free home whilst she is providing a permanent home for M. I am satisfied that this sum will enable her to enjoy regular holidays with him and to treat him to the sort of outings he is likely to enjoy with his father. She will have the flexibility to enjoy a decent lifestyle which enables her to spend reasonable sums on clothing and other personal expenses. She will be able to run and maintain a very comfortable home for M which will be one where I have no doubt he will wish to bring his friends over the years. I assess that level of need will continue until M has completed his tertiary education at the age of about 21 years. At that stage, I consider that a step down is appropriate and I propose to reduce her annual net spendable requirement, for these purposes, by 25% to £75,000 per annum. That is the income which she should continue to receive for the remainder of her life as she moves into retirement. At that stage she may well take the view that she no longer needs to maintain a substantial five bedroom property and she will have the possibility of moving to a slightly smaller home and thereby releasing equity should she choose to supplement her spending in this way. On the basis of gross earnings from employment over the next ten years of £20,000 per annum, this level of provision for her future needs would require a Duxbury fund of just under £1.6 million. For these purposes I have not taken any account of the small private pension fund which she will retain in the sum of just under £123,000. That sum should be left in place as additional provision for her retirement and can be deployed in future years in such manner as she considers appropriate.

The wife has a raft of liabilities which she has incurred as this litigation has progressed. There remains an issue in relation to the extent to which she should embark upon an independent financial existence with a “clean slate” so far as that debt is concerned. Those debts total some £346,813 which includes a figure for CGT on realisation of her two investment properties and her share of tax on a sale of PV. Some £125,000 is owed to a litigation fund provider. She has various outstanding credit card debts and a car financing debt of just over £70,000. That relates to a new Range Rover which she purchased in May 2017 for £73,000 odd. There is no contra-entry in the asset schedule for the value of this vehicle but I accept that it is a debt which needs to be cleared, not least because the husband accepted that she wife would be provided with a new car as part of the original prenuptial agreement. The other element of her indebtedness is a loan which her brother made in the sum of £48,625 to assist her with legal costs and living expenses in the early stages of this litigation. I accept that the wife believes that she is under a heavy moral obligation to repay this loan even if she is not under a legal obligation to do so.

Mr Pointer accepts that this is a case where the wife can reasonably be expected to utilise her own assets to meet her liabilities. Leaving pension aside, those assets together with her 50% share of the sale proceeds from PV. are together worth c. £570,000 net of CGT (Footnote: ⁴). It will be entirely a matter for this wife to determine how she arranges her finances in future and whether she chooses to sell one or both of the investment properties in order to supplement her purchasing power in relation to a new home and/or to provide additional cash flow in relation to her discretionary spending over and above her needs as I have assessed them to be in all the circumstances of this case. To discharge in full her current liabilities (£346,813) will leave her with assets of just over £220,000 excluding her small private pension.

She needs a total lump sum of £2.95 million for housing and a Duxbury fund. With her liabilities discharged in full, she will be left in round figures with c.£220,000 to apply towards those needs. She will therefore require a contribution of £2.73 million from the husband to achieve a clean break. Any funds which are left from the sum of £300,000 which the husband has paid to the wife in respect of her legal costs to date will be retained by her and offset against his financial obligations to her.

Is that a fair sum to require him to pay in the circumstances of this particular case ? I have no doubt that it is.

This was not a long marriage when viewed in terms of its legal existence but, in terms of their shared life together as a family, I have assessed this wife’s needs on the basis of an uninterrupted continuum of 10 years. Even when she moved out of Property G, the rhythm of family life continued to an extent albeit that the dynamic of their personal relationship may have changed to a degree. The contribution which I have assessed she needs from the husband in order to achieve a clean break is only slightly in excess of 12% of the husband’s global wealth as assessed by Mr Marshall. I have factored into my award the fact that the husband has conceded capitalisation on an open basis. That was an appropriate concession given the wife’s ongoing and future contributions. She will be approaching her mid-sixties by the time M is successfully launched in life and, insofar as the capitalised maintenance award makes provision for her retirement years, she will have earned that entitlement. I am satisfied that there is sufficient liquidity in this case to enable the husband to raise the lump sum in fairly short order although I accept there may need to be deferment of part of the award to enable him to make the appropriate arrangements. PV will be sold and the proceeds will be available to each of these parties to meet their respective obligations and needs. The husband has a significant borrowing capacity and I see no need at this juncture for a sale of the Embankment apartment unless as a last resort. The husband enjoys a close and supportive relationship with his brother and I have no doubt that discussions can now go ahead with his fellow director and shareholder and with his accountants to ensure that the means is found for a tax efficient extraction of funds in whatever way is deemed appropriate.

The parties have agreed that the wife will receive an indexed sum of £30,000 per annum towards M’s support. They are not agreed on the term of that provision. The wife seeks an order which extends to the end of M’s tertiary education. The husband proposes that M’s order should end at 18 years or when he completes his secondary education. He accepts that he will meet in full the future costs of M’s education to include his school fees and related expenses but he wishes to make his arrangements with his son privately during the years he spends at university. The wife wishes to be involved in these important decisions as to how M is funded once he leaves school. I regard that aspiration as entirely reasonable and I hope and expect that these two parents will be able to communicate effectively about the financial arrangements which should be put in place. However, M’s transition from secondary to tertiary education will not bring to an end his need for a home base during vacation periods and he will continue to maintain a base with both his mother and his father. I am going to order a continuation of child support throughout M’s tertiary education but the sum payable directly to the wife will reduce during his tertiary education to 50% of whatever sum is then payable at the end of his secondary education. That will enable her to maintain his home base in terms of a contribution towards running costs and the like and it will also enable her to make some contribution to M’s personal expenses at university. A single gap year at the end of his secondary education will be included within the term.

In terms of chattels, and absent specific agreement between the parties in relation to any particular items, each will retain those items which are in their possession. In addition, I have provided the wife with an appropriate fund for refurnishing and equipping her new home.

I have not made any allowances in the computation aspects of my judgment for the small cash balances which the wife retains nor for the sums currently held in the two joint bank accounts (currently some £30,000 odd). Those latter accounts will be closed and the funds will be retained by the husband and can be used, in part, to defray his obligations to the wife.

In summary, my award is as follows:-