Butcher & Barlow

Facts

Further to the judgment in the Granatino case, the High Court recently gave further consideration to the effect of pre-nuptial agreements when deciding upon financial provision on divorce in the case of V -v- V.

The case concerned a married couple who started living together in October 2002. In April 2003, the couple became engaged and a short while later, their first child was born. They decided to marry and the husband requested that they enter into a pre-nuptial agreement before doing so.  The husband in question was some years older than his wife and around 90% of the capital assets of both parties, which totalled £1,289,347 were in his sole name. A pre-nuptial agreement, upon which the wife did not seek legal advice, was entered into in June 2005 and in August, the couple were married.

In June 2006, the couple had a second child before subsequently separating in May 2008. The wife remained in the former matrimonial home and continued to look after the children. Following a redundancy from his employment, the husband commenced a new job in September 2009, earning somewhat less than he had done in his previous post.

Thereafter, divorce and ancillary proceedings were commenced.

Judicial Consideration

At first instance, the wife was awarded a lump sum of £667,100 from the husband's capital, together with periodical payments of £30,000 payable until remarriage or further Order. The husband sought to rely upon the pre-nuptial agreement as evidence of the parties' intentions in the event that the parties separated. However, the Judge placed little weight on the agreement and did not award the charge sought by him, which would have resulted in a lump sum being payable back to him upon sale of the property, pending the children attaining the age of 18 or concluding education.

The husband appealed this decision, arguing that the charge should have been awarded. The High Court considered the effect of the Granatino case. It was decided that although  a pre-nuptial agreement cannot be considered in isolation, it is relevant in respect of determining the intentions of the parties and weight should be placed upon this out of respect for the parties' autonomy, given that they knowingly and freely entered into such agreement.

As such, the High Court considered the terms of the pre-nuptial agreement and in placing weight upon the same, determined that the Judge's initial decision not to award a charge back to the husband was flawed. After determining the needs of the parties, in particular the wife's need to house herself and the children, the Court considered that the higher capital award to the wife was higher than that justified by reference to the pre-nuptial agreement. Accordingly, the Court awarded the husband, of 33.3% of the capital sum upon sale.

Effect

This case demonstrates the importance of couples entering into pre-nuptial agreements, particularly where there is a significant disparity in the capitals assets of each party. In this case, had the husband not insisted upon entering into a pre-nuptial agreement, he would not have been awarded the charge over the property and his capital resources would have been significantly depleted.

This case demonstrates that although not exclusively and strictly binding upon the Courts, a pre-nuptial agreement will be persuasive upon the final decision reached in respect of financial provision upon divorce.

Should you require any assistance, further information or advice then please contact  Helen Oakes at our Frodsham  office on 01928 733871 or Nicola Rutter at our Northwich office on 01606 47523.