29th christopher sharp qc st john’s chambers, bristol · christopher sharp qc . st john’s...

PRE- and POST-NUPTIAL AGREEMENTS

– INCREASINGLY RELEVANT?

29th April 2009

CHRISTOPHER SHARP QC

St John’s Chambers, BRISTOL

Contents

A. Introduction page 2

B. The Ante-Nuptial Agreement 2

Hyman v Hyman [1929] AC 601 4

The Issues 4

The Facts 4

The Decision 5

C. Another Rationale 8

D. Things have changed since 1929 11

E. Pre-Nuptial Agreements: some case law 13

F. Post-Nuptial Agreements: some case law 27

MacLeod v MacLeod 28

G. The Case Law Summarised 32

H. Pre-nuptial agreements and ante-nuptial settlements

distinguished 33

I. The Position Elsewhere 34

J. Straws in the Wind? 36

K. What considerations are essential to give the best

chances of a pre- or post-nuptial agreement being effective? 39

L. Conclusion 41

Pre- and Post Nuptial Agreements – Increasingly Relevant? © Christopher F. Sharp QC 2009

__ NOTES

A. Introduction Barely a month goes by just now without a clutch of articles on the

status, or the drafting, of agreements designed to regulate the

financial affairs of a married couple, whether entered into before or

after the ceremony of marriage. Most recently the discussion has

been informed by Baroness Hale’s words of wisdom in delivering the

decision of the Privy Council in MacLeod v MacLeod [2008] UKPC 64

[2009] 1 All ER 851. This decision indicated that there would be ‘no

change’ in respect of what she called “ante-nuptial agreements”

but which the rest of the world calls “pre-nupts”, but the position in

respect of agreements entered into once the parties have

“committed themselves to the rights and responsibilities of the

married state” gives rise to a number of interesting and, to an

extent, novel considerations.

The developing case law has identified differing judicial attitudes to

three classes of agreement:

- the pre- or ante-nuptial agreement (see the cases cited

below)

- the post nuptial agreement entered into before

separation, i.e. after the ceremony but before marital

breakdown (eg MacLeod); and

- the post-separation agreement (eg Edgar v Edgar)

B. The ante-nuptial agreement

It is commonly said that pre- or ante-nuptial agreements are not

worth the paper they are written on and that the court will guard

jealously its jurisdiction to control the financial affairs of parties

following divorce. While there is or has been some truth in this

proposition, the supposed rationale is largely based upon a decision

now nearly 80 years old and reached in a different era. It is

instructive, so as to understand how we got here, to look at the

jurisprudential history.


Until 1857 no Court could dissolve a marriage which was validly

contracted. In order to effect such a dissolution it was necessary to

have recourse to a private Act of Parliament (within which Act

financial provision might be included). In 1857 the Legislature for

the first time gave to the Courts the power to dissolve the marriage

tie by a decree of divorce. The legislation which introduced that

power also gave to the court a power to make financial provision,

albeit of a limited nature, and importantly (for current purposes) for

the wife by the husband.

On July 18, 1923, the Matrimonial Causes Act of that year became

law, whereby for the first time a wife was given the right to obtain a

divorce solely on the ground of adultery by her husband. By s. 190

of the Supreme Court of Judicature (Consolidation) Act, 1925 (in

words derived from s.32 of the 1857 Act and which clearly point the

way to s. 23-25, and ss.5 and 10, of the 1973 Act), it was provided

(emphasis supplied):-

"(1.) The court may, if it thinks fit, on any decree for divorce

or nullity of marriage, order that the husband shall, to the

satisfaction of the court, secure to the wife such gross sum

of money or annual sum of money for any term, not

exceeding her life, as having regard to her fortune, if any, to

the ability of her husband and to the conduct of the parties,

the court may deem to be reasonable, .... and may, if it

thinks fit, suspend the pronouncing of the decree until the

deed or instrument has been duly executed.

"(2.) In any such case as aforesaid the court may, if it thinks

fit, by order, either in addition to or instead of an order

under sub-section (1.) of this section, direct the husband to

pay to the wife during the joint lives of the husband and

wife such monthly or weekly sum for her maintenance and

support as the court may think reasonable."

Hyman v Hyman [1929] AC 601


Against such a background the House of Lords came, in April 1929

to hear the case of Hyman v Hyman. Since Hyman is still used as

identifying the basis from which the law relating to agreements

between parties to control their own affairs has developed1, and

indeed was considered by the Privy Council in MacLeod, it is

important to look at it to see how valid it is as a foundation for the

modern approach, and what its remaining legacies may be.

The Issues

The issues which exercised the House (and had exercised the Full

Court of Appeal from whom the appeal came) continue to exercise

some commentators to-day. On the one hand was the sanctity of

marriage and on the other the sanctity of the freedom of parties to

contract and to have that contract upheld by the court. In addition,

and importantly, the House was concerned with the consequences

of the change in status which derives from divorce, and whether

there was a matter of public interest arising from that which

required the court as a matter of public policy to ensure its

jurisdiction was not ousted.

The Facts

Hyman was not in fact a case of a pre-nuptial or ante-nuptial

agreement but, like MacLeod, a post-nuptial agreement, albeit an

agreement (unlike MacLeod) entered into after the marriage had

broken down. What it was contended the agreement did, however,

was to preclude the wife from seeking the exercise of the court’s

powers over and above the provision made for her under the terms

of the agreement. It sought to oust the court’s jurisdiction (and the

husband sought to rely on such a term despite his adultery).

The parties were married in 1912, there were no children. In 1919,

by which date the husband was living in adultery with another

woman (but this – without more, eg bestiality or incest – did not

then entitle the wife to seek a divorce), the parties entered into a

1 See eg Wright v Wright [1970] 1 WLR 1219 per Sir Gordon Wilmer and N v N (Jurisdiction) [1999] 2 FLR 745 per Wall J


deed of separation whereby the husband agreed to pay some

capital sums and a guaranteed weekly income to the wife for life (i.e

not simply for joint lives). In exchange she covenanted (inter alia) not

to bring any proceedings for financial provision against the husband.

Following the change in the law in 1923, however, she brought

proceedings for divorce on the basis of his adultery and for

maintenance. The husband contended she was barred from

pursuing the financial claim by reason of her covenant. The judge at

first instance, and subsequently the Court of Appeal, held she was

entitled to bring the claim.

The Decision

Their Lordships did not all speak with one voice. Lord Shaw focussed

on the perceived sanctity of the status of marriage and the

proposition that an agreement which prevented the court from

reviewing an agreement between spouses, when the marriage is

dissolved by virtue of adultery (or other grounds which then involved

fault) was contrary to public policy, and in effect a licence to commit

adultery. He said:

“The true principle is that whenever the aid of a Court is

invoked to grant a judicial allowance and there is presented

to it an agreement as in bar of the exercise of the right or

the discharge of the duty under statute then the Court is

bound to look at such an agreement and to decline to be

turned from the performance of its judicial duty or the

exercise of its judicial rights when the agreement so tabled is

of a nature repugnant to and defiant of those obligations

which are inherent in the sanctity of marriage itself. To hold

otherwise would bring the law into confusion and Courts

into contempt, for, as already indicated, it would be using

Courts of law for purposes essentially subversive of society.

…… the principle, so put, applies all round, that is to say,

not only to applications for alimony in cases of divorce but in

those also of judicial separation.”


This was not however the basis upon which the majority put the

decision. Lord Atkin held that the state had an interest in the way in

which a wife was provided for and the parties could not contract

out of the court’s jurisdiction, granted by the legislature, to review

the consequences of her change in status. This interest, however,

derived largely from the status of a married woman and the

obligation of the husband to provide for a wife - a duty of the

husband which could be enforced by the wife, while a wife, by

pledging his credit as agent of necessity but which was also a public

obligation, and could be enforced against him by the State under

the Vagrancy Acts and under the Poor Relief Acts. When the

marriage was dissolved the duty to maintain arising out of the

marriage tie disappeared. In the absence of any statutory enactment

the former wife would be left without any provision for her

maintenance other than recourse to the poor law authorities. In

Lord Atkin’s opinion the statutory powers of the Court were

therefore granted partly in the public interest to provide a substitute

for a husband's duty of maintenance and to prevent the wife from

being thrown upon the public for support. If that were true, the

powers of the Court in this respect could not be restricted by the

private agreement of the parties. “The wife's right to future

maintenance is a matter of public concern, which she cannot barter

away.”

Lord Hailsham LC took a similar position, also basing himself on the

importance of divorce as something which changes status (in a way

in which judicial separation does not) with the court having

jurisdiction to adjust financial provision in consequence upon the

change in status. He too adverted to the consequences for the

public purse of an unsupported spouse. He said:

“Such a decree does not merely affect the relationship of the

husband and the wife one to another, but it also changes

the status of each of them. In my view, the effect of the

section to which I have called attention is to give power to

the Court as incidental to the exercise of these powers and

as a condition of their exercise to compel the husband to


make adequate provision for the support of the wife. Such a

provision is not made solely in the interests of the wife, but

also in the interests of third parties who may deal with the

wife or who may, as in the case of Poor Law Guardians,

become responsible for her sustenance. If this be the proper

inference from the language of the statute, I am prepared to

hold that the parties cannot validly make an agreement

either (1.) not to invoke the jurisdiction of the Court, or (2.)

to control the powers of the Court when its jurisdiction is

invoked.”

Manifestly things have moved on in some respects (although,

interestingly, the possibility of a party to a marriage becoming a

charge on the public purse when he or she should be supported by

their former spouse was a factor which emerged again in the policy

considerations considered by the Privy Council in MacLeod).

Nevertheless the underlying refusal of the courts and the legislature

to allow parties to contract out of the freedom to have recourse to

the courts was subsequently enshrined in s 34(1) of the Matrimonial

Cause Act 1973. That section reads:

'If a maintenance agreement includes a provision purporting to

restrict any right to apply to a court for an order containing

financial arrangements, then—

(a) that provision shall be void; but

(b) any other financial arrangements contained in the

agreement shall not thereby be rendered void or

unenforceable and shall, unless they are void or

unenforceable for any other reason … be binding on

the parties to the agreement.'

C. Another rationale

Parliament has given the courts a power under Part II of the 1973

Act to make financial provision and property adjustment orders after

dissolution of marriage. That power is to be exercised having regard

to all the circumstances of the case and the court has a quasi-


inquisitional role to establish those circumstances, in the course of

which the parties are obliged, by virtue of the obligation for full and

frank disclosure (and the overriding objective), to assist.

Orders made by the court, even if by consent, do not draw their

authority from the agreement of the parties but from the order of

the court (de Lasala v de Lasala [1980] AC 5462). The court has an

obligation to satisfy itself that the outcome reached is fair and

equitable. It cannot do this without exercising its investigative

powers.

Marriage changes things for the parties. The introduction of children

can wholly change a party’s economic independence and the

parties’ inter-relationship. Dissolution of marriage can have

devastating results. Vulnerabilities can be exploited and unfairness

can be perpretrated. In such circumstances external regulation of the

parties’ affairs, with the possibility of protection of the vulnerable,

must be advisable3.

Under s.190 of the Supreme Court of Judicature (Consolidation)

Act, 1925 one of the factors in the exercise of the court’s discretion

when exercising its jurisdiction (so jealously guarded) was (as now)

the “conduct of the parties” and this included the fact of the

agreement itself. Lord Hailsham said this:

“In my opinion, the fact that the deed of separation has

been entered into by both parties, the fact that it was

executed by the wife voluntarily and upon independent legal

advice, the fact that the wife was prepared to accept the

provision then made as adequate at the time, the benefits

which she obtains in the shape of the guarantee by Mr.

Walter Hyman [H’s brother] and in the continuance of the

weekly payments after her husband's death, all form part of

that conduct of the parties which by the express terms of the

statute is to be taken into account by the Court in

2 see also Thorpe LJ Xydhias v Xydhias [1999] 1 FLR 683 at 691 3 see eg per Baron J NG KR (pre-nuptial contract) [2009] 1 FCR 35 at para [129]


determining what it thinks reasonable. It may very well be

that when the facts come to be investigated, the Court will

say that a sum of this magnitude, so secured, voluntarily

accepted as a sufficient maintenance ten years ago, and

faithfully paid ever since, is a sufficient provision, and that

the Court will not deem it to be reasonable to order any

further payment to be made: this is not the question which

your Lordships are considering.”

Similarly Lord Atkin observed:

“This is not to say that in any particular case the Court must

make an order; still less that in this case it must do so. I

could well understand the Court coming to the conclusion

that the parties' pre-estimate of the wife's reasonable needs

was judicious, and that the allowance, continuing as it does

after the husband's decease, and being independent of any

fluctations in the amount of his fortune, needed no

supplement. But the present objection of the husband to the

Court considering the matter at all in my opinion cannot

prevail “

Thus one sees the beginning of the concept that the court will, or

may, take into account as part of their conduct the agreement of

the parties and the circumstances in which it was reached which

was to develop later through cases like Edgar v Edgar in 1981 and

Brockwell v Brockwell [1975] Fam Law 46 and which showed that

the existence of an agreement, and the weight to be given to it, are

both factors to be taken into account in the overall balance when

the court is deciding (on the facts of the individual case) whether or

not to exercise its discretion under s 25 of the Matrimonial Causes

Act 1973 to make orders for financial provision under ss 23 and 24.

The courts have for some time given significance and weight to

agreements reached between the parties, with full disclosure and

independent advice. In Edgar v Edgar (1981) 2 FLR 19 at p.25

Ormrod LJ said in relation to a post-separation agreement, but in

words which have some resonance in the context of pre-nuptial and

pre-separation agreements too:


“To decide what weight should be given in order to reach a

just result, to a prior agreement not to claim a lump sum,

regard must be had to the conduct of both parties, leading

up to the prior agreement, and to their subsequent conduct,

in consequence of it. 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. So, the circumstances surrounding

the making of the agreement are relevant. Undue pressure

by one side, exploitation of a dominant position to secure an

unreasonable advantage, inadequate knowledge, possibly

bad legal advice, an important change of circumstances,

unforeseen or overlooked at the time of making the

agreement, are all relevant to the question of justice

between the parties. Important too is the general

proposition that, formal agreements, properly and fairly

arrived at with competent legal advice, should not be

displaced unless there are good and substantial grounds for

concluding that an injustice will be done by holding the

parties to the terms of their agreement. There may well be

other considerations which affect the justice of this case; the

above list is not intended to be an exclusive catalogue.”

(emphasis supplied)

See also X v X (Y and Z intervening) [2002] 1 FLR 508 in which

Munby J held that an agreement between the parties (after the

breakdown of the marriage) was a very important factor in

considering what was a just and fair outcome. The court would not

lightly permit parties to an agreement to depart from it, and a

formal agreement, properly and fairly arrived at with competent

legal advice, should be upheld by the court unless there were good

and substantial grounds for concluding that an injustice would be

done by holding the parties to it. The court must, however, have

regard to all the circumstances, in particular to the circumstances

surrounding the making of the agreement, the extent to which the


parties themselves attached importance to it and the extent to

which the parties had acted upon it

D. Things have changed since 1929

Since 1929 there has been profound social change, particularly in

the recognition that marriage is a partnership of equals and that the

role of man and woman within the marriage are commonly

interchangeable (look again by contrast at the wording of the 1925

Act set out above). Further (as Baroness Hale points out in MacLeod)

there is no longer an enforceable duty upon husband and wife to

live together – albeit that the decree of restitution of conjugal rights

was only abolished by the Matrimonial Proceedings and Property Act

1970. Against this background and at a time of increasing

international mobility and cross-border divorces it is becoming

increasingly argued that it is anomalous that in England and Wales

we deny parties that independence which we grant to parties in

commerce to make decisions about their own future.

As increasing international mobility results in married couples

bringing before English courts the agreements they have entered

into elsewhere, so the pressure will grow and is growing for the

courts here to recognise these agreements at some level. It is plain

that even in 1929 the fact of the agreement was recognised as a

relevant consideration in the discretionary function of the court.

Nevertheless, it is certainly also true that allowing a contractual free

for all without any protection given by the courts to those who

enter into agreements at a time of vulnerability, or without the

opportunity to review the appropriateness of agreements following

changes in circumstances (eg the birth of children), could lead to

great injustice. In MacLeod Baroness Hale (referring to Baron J’s

decision in NG v KR (pre-nuptial contract) [2009] 1 FCR 35 that the

variation power in s.35 of the 1973 Act that applies to separation

agreements does not apply to pre-nuptial agreements) makes the

point that if such agreements cannot be varied then it would be

unfair to render then enforceable. Any reform of the law, therefore,


would surely have to accommodate some provision to protect

parties from such injustice4.

We therefore need to look at how the law has developed and

establish what the current law is.

It will be seen that pre-nuptial agreements, at least in shorter

marriages, are beginning to have a more significant role5. As we

have seen post-separation agreements will be given significant

weight. Post-nuptial but pre-separation agreements will now

(following MacLeod) also carry greater weight. Practitioners are

more likely to be called upon to advise upon or draft such

agreements and so it is essential that, to avoid the consequences of

later litigation against the lawyer, we have a clear idea of how far

one can go.

E. Pre-nuptial agreements: some case law

The development of the law in England and Wales has been slow

and not always consistent. It is important to distinguish the forum

shopping cases from the court’s attitude to the influence of a pre-

nuptial agreement on the substantive exercise of the discretion

under the MCA 1973 and the s.25 exercise. The forum cases are

very fact dependent and largely turn on different considerations to

the s.25 principles which govern the granting of financial relief after

divorce in England and Wales. Their relevance therefore lies in the

obiter comments made by judges. The two cases below which most

clearly show the way in which a pre-nuptial agreement will be

applied by the courts are M v M and K v K. The recent case of

Crossley (the principles of which in respect of case management and

the use of a Notice to show cause were subsequently applied by

Eleanor King J in S v S (Ancillary Relief) [2009] 1 FLR 254) may show

the way forward.

4 in Florida the court can vary such pre-nuptial agreements. 5 See the observations of Baron J in NA v MA [2007] 1 FLR 1760 at para [12]


F v F (Ancillary Relief: Substantial Assets) [1994] 2 FLR 45:

Thorpe J

The parties were German. The husband’s significant wealth derived

from his family’s business which he had sold before the marriage.

The parties settled in England. W applied for interim maintenance. H

sought to rely upon antenuptial contracts drawn up in Germany, the

effect of which would be to provide the wife with a sum restricted

to the equivalent of the pension of a German judge.At 66G Thorpe J

said:

The other special condition which has to be considered in

this case, albeit briefly, is the existence of the antenuptial

contracts. It is not in dispute that contracts of this sort are

commonplace in the society from which the parties come.

They are much emphasised by the husband in his affidavits,

since if strictly applied they would have the ridiculous result

of confining the wife to the pension of a German judge,

whatever that may be. Equally, in the affidavits the wife is

urgent in protesting the circumstances in which they came

to be signed. I regard the protestations of both in relation to

these contracts as having an urgency that the documents

themselves do not demand. In this jurisdiction they must be

of very limited significance. The rights and responsibilities of

those whose financial affairs are regulated by statute cannot

be much influenced by contractual terms which were

devised for the control and limitation of standards that are

intended to be of universal application throughout our

society. It is said that these contracts would be strictly

enforced against the wife in Germany. I have declined to

enlarge the arena to allow evidence from German experts in

that field. I cannot think that even in Germany the wife

would not have the right to deploy a case either that there

was some inequality of bargaining power, alternatively

undue influence, or that they are inconsistent with social

policy in Germany. For the purposes of my determination I

do not attach any significant weight to those contracts.


S v S (Divorce: Staying Proceedings) [1997] 2 FLR 100: Wall J

It was the wife's second marriage and the husband's third. The

husband who was born in Austria was also a national of Turkey and

Israel and had enormous wealth. His business was managed from

New York. He held a US work permit and his status there was a

non-resident alien. He had permission to reside in the UK indefinitely

but was resident in Bermuda for tax purposes. The wife was

Swedish and had lived in New York since 1974 with her first

husband by whom she had had two children. After the divorce

proceedings in 1984 the wife and her daughters left New York to

live in London. The parties had met in 1983 and by 1986 were

discussing marriage, but the husband who had children from his

previous marriages was not prepared to marry again without

protecting his estate by limiting her rights against him in the event

of divorce or death. During the negotiations the wife was

represented independently. The prenuptial agreement was executed

in the State of New York on 17 November 1986. The agreement

provided, inter alia, that it was governed by the laws of the State of

New York; provision was made for the wife whereby the husband

was obliged to set up a trust fund which was to be released to the

wife in the event of divorce. After the marriage, the parties lived

together in New York and London but the wife was primarily based

in London. In 1996 there were marital difficulties and the wife

decided to petition for divorce in England and her petition was filed

on 8 November 1996. the husband applied for it to be stayed. He

had meanwhile started proceedings in New York.

Wall J said:

“I am aware of a growing belief that, in the despatch of a

claim for ancillary relief in this jurisdiction, no significant

weight will be afforded to a prenuptial agreement, whatever

the circumstances. I would like to sound a cautionary note in

that respect. No one could have more profound respect than

I for the observations of Thorpe LJ. In F v F (Ancillary Relief:

Substantial Assets) [1995] 2 FLR 45, 66G he said:

‘In this jurisdiction [prenuptial agreements] must be

of very limited significance. The rights and


responsibilities of those whose financial affairs are

regulated by statute cannot be much influenced by

contractual terms which were devised for the control

and limitation of standards that are intended to be of

universal application throughout our society.'

There is a danger that these wide words might be taken out

of context. There is no doubt that, where the English court

proceeds to determine an application for ancillary relief, s 25

of the 1973 Act precludes any choice of foreign law,

however vividly the circumstances of the case might protest

its relevance. So the application is of English law and under s

25(1) regard must be had to all the circumstances of the

case. In F v F itself, the result of a strict application of the

effect of the prenuptial agreements would have been, as the

judge said, 'ridiculous'. In those circumstances they inevitably

constituted circumstances of negligible significance. But

there will come a case - were I to refuse a stay, might this be

it? - where the circumstances surrounding the prenuptial

agreement and the provision therein contained might, when

viewed in the context of the other circumstances of the case,

prove influential or even crucial. Where other jurisdictions,

both in the USA and in the European Union, have been

persuaded that there are cases where justice can only be

served by confining parties to their rights under prenuptial

agreements, we should be cautious about too categorically

asserting the contrary. I can find nothing in s 25 to compel a

conclusion, so much at odds with personal freedoms to

make arrangements for ourselves, that escape from solemn

bargains, carefully struck by informed adults, is readily

available here. It all depends.”

Wall J’s observations were described by Thorpe LJ in Ella v Ella

(below) thus:

“All those observations were interesting in their day, and

remain interesting, but they are essentially obiter to the

judge's fundamental decision on forum.”


This decision in which the parties’ agreement was an important

consideration in identifying the appropriate forum may be

contrasted with R v R (Divorce: Stay of Proceedings) [1994] 2 FLR

1036 (Ewbank J) where the parties were Swedish, married in

Sweden and entered into marriage contracts registered in Sweden

(effecting an opt out of Swedish community of property law). They

came to England and lived here and W intended to remain here. H

returned to Sweden and sought to stay W’s English petition. The

judge dismissed the application holding that considerations of

fairness dictated England as the appropriate forum not least because

W would be restricted in what she could obtain in Sweden by the

agreements.

Contrast N v N (Foreign Divorce; Financial Relief) [1997] 1 FLR 900

another Swedish case, where Cazalet J found that H should not

have leave to pursue a financial claim against W in England. The

connection with England post-dated the divorce in Sweden.

Although there was a prenuptial agreement (reached in Sweden), it

would be no more than a material consideration under s.25 in

determining an application for financial relief in England. It would

not conclude the matter here but would be binding in Sweden. He

saw H as seeking, in effect, to circumvent the consequences of that

agreement.

More recently the CA has considered the question of forum

following a prenuptial agreement in:

Ella v Ella [2007] 2 FLR 35 (CA)

This case should not be regarded as providing much guidance on

the agreement’s effect on substantive relief under the MCA 1973.

The parties had strong connections with Israel, but also with

England where they lived. W got pregnant before marriage and was

very keen to have the baby within wedlock. The marriage was in Tel

Aviv but immediately before the marriage the parties entered into a

prenuptial contract which provided that the law of Israel should

apply to any questions affecting property as between the spouses,

that its provisions would apply in any place or at any time and that


separation of property would apply. The agreement was reached at

a time of considerable emotional turmoil for the parties, the wife

was not independently advised and the contract was drawn up by

the notary who had acted for the husband for some time. The CA

upheld the decision that English proceedings be stayed, the pre-

nuptial agreement being a major factor making Israel plainly the

appropriate forum (and given that if the wife did not there receive

"substantial justice", she could seek remedy here by application

under Matrimonial and Family Proceedings Act 1984, Part III). It was

important to appraise the relevance of the prenuptial agreement to

the determination not of the wife's potential application for ancillary

relief but of the entirely different issue as to forum

N v N (Jurisdiction) [1999] 2 FLR 745: Wall J

This was not a financial claim (there had been a consent order) but

is relevant in establishing that a pre-nuptial agreement is not

specifically enforceable in English law (even where part performed).

Before their marriage in 1996, the Orthodox Jewish parties entered

into an antenuptial agreement which dealt primarily with property

matters, but which also required them to attend and comply with

the ruling of the Beth Din in the event of any matrimonial dispute.

The short marriage which produced one child failed and although a

decree absolute of divorce was granted under the Matrimonial

Causes Act 1973 in 1998, H did not apply to the Beth Din for a get

(a bill of divorce in Jewish law). A consent order was made in

relation to ancillary relief and the contact dispute remained

outstanding. According to Jewish law H and W remained married

and this had particularly serious consequences for W. She sought to

compel H to initiate the get by asserting that he was in breach of

both the terms of the antenuptial agreement and his agreement,

recited in the contact order, to progress the obtaining of the get

expeditiously. H argued that the court had no jurisdiction to grant

such relief and applied to strike out the summons. Wall J dismissed

W’s summons on the basis that the court lacked jurisdiction to grant

the relief she sought. On the basis of public policy, he held

antenuptial agreements as a class are not specifically enforceable in

English law. The existence of an agreement and its evidential weight

are factors to be taken into account when the court is deciding

whether or not to exercise its discretion under s 25 of the


Matrimonial Causes Act 1973 to make orders for financial provision

under ss 23 or 24. Each individual clause is unenforceable on public

policy grounds and there is no power in any statutory provision to

compel the parties to implement part of the agreement.

M v M (Prenuptial Agreement) [2002] 1 FLR 654: Connell J

The parties, both Canadians, entered into a prenuptial agreement

very shortly before their marriage in Canada. W was pregnant, and

anxious to get married; H, who had been very distressed by the

breakdown of a previous marriage, was not prepared to marry again

without a prenuptial agreement. The agreement signed by both

parties provided that, in the event of marital breakdown, H would

pay W £275,000. After 5 years of marriage the couple separated

and W sought relief for herself and the 5-year-old child of the

marriage. She argued that she should not be bound by the

agreement, having been pressured into it at a time when she was

very vulnerable, and that she was entitled to a lump sum of

£1,300,000. W’s total net worth was about £300,000, including the

value of a property occupied by her mother, H’s net worth was

about £7,500,000. By the date of the hearing, which followed a

complex forum dispute, W had incurred costs of £326,888 and H

had incurred costs of £442,092. The judge awarded W a lump sum

of £875,000, and an order for periodic payments for the child of

£15,000 pa plus school fees and expenses. He held that it did not

matter whether the court treated the prenuptial agreement as a

circumstance of the case or as an example of conduct which it

would be inequitable to disregard; under either approach, while the

court was not in any way bound by the terms of a prenuptial

agreement, the court should look at it and decide in the particular

circumstances what weight should, in justice, be attached to the

agreement. This agreement did not dictate W’s entitlement, but had

been borne in mind as one of the more relevant circumstances of

the case and had tended to guide the court to a more modest

award than might have been made without it. It would have been

as unjust to H to ignore the existence of the agreement and its

terms as it would have been to W to hold her strictly to those

terms6. Other relevant factors in departing from equality were the

6 It appears she had been advised against signing by independent lawyers, there had not been full disclosure by H and expert evidence before the judge suggested she would not have been held to the agreement in the courts of British Columbia.


comparative shortness of the marriage and the fact that H had

created the family wealth.

K v K (Ancillary Relief: Prenuptial Agreement) [2003] 1 FLR 120:

Roger Hayward-Smith QC

The husband and wife, who had one child, separated after 14

months of marriage. Prior to the marriage the wife discovered she

was pregnant and the mother exerted pressure on the husband to

marry her. The husband had wanted a long engagement but the

couple agreed to marry and entered into a pre-nuptial agreement at

the instigation of the wife's father. The wife had assets of about £1

million, most of which were held in trust, and the husband had

assets of at least £25 million. Before signing the agreement the

couple received independent financial advice and the solicitors were

informed of the pregnancy. At an earlier directions hearing, the

court refused to allow the wife to inquire into the husband's

financial affairs on the ground that he would be capable of meeting

any order that the court might make. The wife sought a lump sum

of £1.6 million and periodical payments of £57,000 pa for herself in

addition to the agreed £15,000 pa maintenance for the couple's

child. The husband offered a lump sum of £120,000 plus a further

£600,000 in trust to provide a home for the wife and child until the

child finished full-time education. According to the pre-nuptial

agreement, if the couple were to dissolve their marriage within 5

years of the date of the agreement, the wife was to receive

£100,000 from the husband (to be increased by 10% pa

compound) and the husband was to make reasonable financial

provision for any children. No valuations of the husband's assets

were given during the negotiations relating to the agreement. The

agreement made no reference to periodical payments for the wife.

The judge looked at the consequences of the agreement on capital

and on income differently, largely governed by the effect of the

birth of the child.

As to capital W had understood the pre-nuptial agreement, was

properly advised as to its terms and signed it willingly without


pressure. There had not been full disclosure, but the husband did

not exploit his dominant financial position. Both parties entered into

the agreement in the knowledge that the wife was pregnant with

their child, and there had been no unforeseen circumstances arising

since the agreement which would make it unjust to hold the parties

to it. The meaning of the agreement was clear as to capital provision

for the wife and there were no grounds for concluding that an

injustice would be done by holding the parties to its terms. This was

a short marriage and the wife had contributed nothing towards the

husband's wealth. The husband had been pressurised into the

marriage by the wife's family, and had agreed to marry her on the

understanding that her capital claim in the event of the swift

breakdown of the marriage would be governed by the agreement.

The agreement should, therefore, be considered by the court as one

of the circumstances of the case under s. 25 of the Matrimonial

Causes Act 1973. Entry into the agreement constituted conduct

which it would be inequitable to disregard under s. 25(2)(g) of the

Matrimonial Causes Act 1973. The wife should receive a lump sum

of £120,000 in accordance with the agreement and the husband's

offer and should have no further capital claims upon him for herself.

However, as to income, even if the pre-nuptial agreement were to

be construed as precluding a claim for maintenance by the wife, it

would be unjust to the wife to hold the parties to that part of the

agreement because of the on-going contribution she was making in

caring for the child of the marriage. Given the time she must invest

in bringing up the child, and the prejudicial effect this would have

on her earning capacity, it would be unjust to the wife to suggest,

either because of the short duration of the marriage or because of

the pre-nuptial agreement, that she should have no maintenance.

The judge carried out a detailed analysis of all the circumstances.

The wife was 28 years old, with limited earning capacity. Her income

from all sources was likely to be around £40,000-£50,000 pa. In the

circumstances (including the length of the marriage, the pressure

put on the husband to enter into the marriage, the interference of

the wife's father in manipulating the wife's finances, the wife's post-

separation spending spree, the husband's substantial wealth, the

disparity between the financial position of the parties, the lack of


contribution of the wife to acquisition of the husband's wealth, the

wife's present and future contribution in bringing up their child, and

the likely return the wife would achieve on her capital) it would be

fair to expect the husband to pay the wife periodical payments to

enable her more easily and more comfortably to bring up their child.

The husband should pay an additional £15,000 pa during the child's

lifetime, or until he ceased full-time education, or until further order.

Interestingly, and again reflecting the existence of the child, the

judge then mitigated the effect (on W) of his capital order, to

provide accommodation during the child’s dependency. The child of

parents between whom there was great disparity of wealth was

entitled to be brought up in circumstances which bore some sort of

relationship to the current resources and standard of living of the

wealthier parent. The length of the marriage was irrelevant in this

context. It was not unreasonable of the wife to want to live in an

expensive area, nor were her objections to the properties proposed

by the husband entirely unreasonable. The husband should pay £1.2

million to provide a home and furniture for the wife and their child

until the child ceased to be in full-time education. On that event, the

capital should revert to the husband. This figure was not out of line

with the value of properties the couple had lived in in the past, and

would not be too great a burden on the husband's finances

J v J (Disclosure: Offshore Corporations) [2004] 1 FLR 1042:

Coleridge J. In a case of substantial wealth in which H had hidden

his assets in a “complex corporate undergrowth” and where the

judge found H’s credibility to be damaged by his conduct of the

proceedings, he had this to say about a pre-nuptial agreement on

which H relied:

“[41] I should also, as a preliminary point, deal with the

prenuptial agreement. I mention it only to put it to one side

in this case. Nowadays, occasionally, their existence can be

of some significance but not in this case. This contract was

signed on the very eve of the marriage, without full legal

advice, without proper disclosure and it made no allowance

for the arrival of children. It must, in my judgment,


therefore, in this jurisdiction fall at every fence, quite apart

from the fact that the terms were obviously unfair,

preventing the wife from claiming against the husband's

assets.”

Obvious lessons can be learned from these damning words.

Crossley v Crossley [2007] EWCA Civ 1491 is a recent and

interesting decision. Thorpe LJ wi th whom Keene and Wall LJ agreed hel d that there is a discretionary power in a judge to

require a party to show cause why a contractual agreement should

not rule the outcome of an ancillary relief claim, not just when the

contract is made post-separation and in contemplation of an

application, but also when the contract has been made prenuptially

or postnuptially but before the breakdown of the marriage.

The facts were that H was 62 and had an independent fortune

declared to be £45 million in December 2001. W was 50 and her

declared fortune was £18 million. H had been married once before

and had four children. W had been married three times before and

had three children. The parties met in June 2005 and became

engaged in September. There were negotiations between

experienced lawyers to settle a prenuptial agreement. The prenuptial

agreement was dated November 16, 2005 and provided essentially

that each party should walk away with what he or she had brought

in and that neither party should apply for any order for financial

provision. They married in January 2006 but by March 2007 they

had separated. In August 2007 W petitioned for divorce and then

issued Form A. H promptly issued a summons which sought an

order for the wife to show cause why the claims should not be

resolved by reference to the prenuptial agreement. Bennett J

ordered that the parties did not have to produce the customary

documentation annexed to their Forms E, on disclosure of assets in

ancillary relief proceedings, and neither party was to prepare a

questionnaire pursuant to rule 2.61B(7)(c) of the 1991 Rules.

Instead, he ordered the W's solicitor to write a detailed letter setting

out the W's case concerning alleged non-disclosure of other assets

by the husband. W appealed submitting that: (i) the judge erred in

directing the husband's summons to be heard as a preliminary issue;


(ii) the judge erred in failing to apply the 1991 Rules, which were

mandatory; (iii) the judge was wrong to find the overriding objective

in rule 2.51D permitted him to ignore rule 2.61B, and (iv) the judge

was wrong to prevent W from filing a questionnaire.

On grounds (ii) and (iii) Thorpe LJ was wholly unpersuaded that

these individual rules were intended to be some sort of straitjacket

precluding sensible case management. “I would particularly stress

the overriding objectives that govern all these rules, carefully and

fully drafted in Rule 2.51D…. It is very important that the judge in

dealing with the case should seek to save expense. It is very

important that he should seek to deal with the case in ways

proportionate to the financial position of the parties. It is very

important, more so today than it was when these rules were

drafted, that he should allot to each case an appropriate share of

the court's resources, taking into account the need to allot resources

to other cases. In his general duty of case management he is

required to identify the issues at an early date and particularly to

regulate the extent of the disclosure of documents and expert

evidence so that they are proportionate to the issues in question.”

On the issue of the pre-nuptial agreement H’s counsel accepted that

the court must conduct the section 25 exercise by reference to all

the statutory criteria. He accepted that the existence of the

agreement cannot oust the court's obligation to apply section 25.

He accepted that a prenuptial agreement is only one aspect of the

case. However, he emphasised that this was a childless marriage of

very short duration, for a substantial portion of which the parties

were living apart. The marriage was between mature adults, both of

whom had been previously married and divorced; both parties had,

and had prior to the marriage, very substantial independent wealth.

The prenuptial agreement provided for the retention by each of the

parties of their separate properties and division of joint property if

any, and finally that there was no such joint property. Thorpe LJ

observed:

Upon those facts Mr Turner, correctly in my view, adds that

the combination of these factors gives rise to a very strong


case that a possible result of the section 25 exercise will be

that the wife receives no further financial award…… All

these cases are fact dependent and this is a quite exceptional

case on its facts, but if ever there is to be a paradigm case in

which the court will look to the prenuptial agreement as not

simply one of the peripheral factors in the case but as a

factor of magnetic importance, it seems to me that this is

just such a case.”

Radmacher v Granatino [2008] EWCA Civ 1304

The wife sought permission to appeal the orders made by Baron J in

NG v KR (Pre-nuptial contract) [2008] EWHC 1532 (Fam) [2009] 1

FCR 35. The marriage had been celebrated in England between the

French H (who had very limited assets) and the German W who had

inherited a substantial amount of wealth which provided her, the

trial judge found, with an income of £2 million per annum. She had

at least £54m liquid. The marriage lasted 8 years. 4 months prior to

marriage the parties had entered into a pre-nuptial agreement in

Germany to which the judge had, in the Court of Appeal’s words,

given ‘very limited weight’. It had provided that the husband would

not benefit after any divorce. The judge made lump sum and

periodical payments orders. Baron J gave five reasons for giving little

weight to the agreement:

1. the husband had had no independent legal advice prior to his

entry into the contract.

2. the wife had given no (or no full) disclosure of the extent of

her resources prior thereto.

3. there had been no negotiations between the parties or their

representatives prior to entry into it.

4. that, in the events which had happened, it would be

manifestly unfair to hold the husband to its terms.

5. that the arrival of the couples two daughters had so changed

the landscape as to require it to be put to one side.

Baron J compared the facts in the case with the six safeguards set

out in the Green Paper Supporting Families (see below) and found

them wanting.


The judge did, however, recognise, in the light of the expert

evidence before her that both in Germany and in France the

contract would be fully enforced against the husband so as to

preclude any financial recovery for himself. She said that in awarding

a lump sum of £5,560,000 she had reduced the award to allow for

the agreement.

Wilson and Lawrence Collins LJJ allowed the application for

permission because, they found, the wife had a reasonable

prospect of success and the case raised an important point of

principle regarding how the contract should influence any awards

made. Thorpe LJ has indicated an intention to preside. However, the

Court attached conditions to the permission, as allowed under CPR

52 because of the ‘compelling reason’ that the wife had to date

sought to evade payment of any of the orders made by Baron J. The

Court therefore ordered that the wife pay in the lump sum as

security, and make the periodical and other payments outstanding,

including security for costs. Whether she will do so remains

doubtful.

F. Post-nuptial agreements: some case law

Hyman was, of course, such a case (see above) and the classic later

cases such as Edgar v Edgar (1981) 2 FLR 19 (see above) are well

known. Both Hyman and Edgar were post separation agreements. In

Edgar there was a valid and enforceable separation deed (but the

court had still to decide its influence on the wife’s ancillary relief

claim). In cases such as Xydhias and X v X (Y and Z Intervening the

court was concerned with agreements to compromise court

proceedings.

In NA v MA [2007] 1 FLR 1760 Baron J considered the effect of a

post-nuptial agreement drafted by the husband after he discovered

W had committed adultery with his best friend. He had not provided

full disclosure of his assets, and had made clear that W must sign or

the marriage was at an end. Attendance notes of her solicitors

showed she was greatly distressed and signed against advice. The

judge found that W had been placed under undue influence (the


law on which she reviews) but held that even if the agreement were

not overturned the court must be satisfied that it was fair. She held

the agreement was not premised on fairness, and it would not be

fair even to use its terms as a starting point with which to assess the

fairness of any award.

The importance of the existence of concluded agreements has been

stressed not only in Edgar and X v X (Y and Z Intervening) (see above

at page 10) but also recently in the Court of Appeal in Soulsbury v

Soulsbury [2008] 1 FLR 907, and most recently by Eleanor King J in

S v S (Ancillary Relief) [2009] 1 FLR 254. However as Eleanor King

J pointed out in S v S (at para [23]) the case law establishes that the

agreement is only one of the s.25 considerations and even where it

is of ‘magnetic importance’ the court should only ever consider it

against the backdrop of all the s.25 factors. It is of course trite law,

now, that no agreement can oust the jurisdiction of the court.

MacLeod v MacLeod [2008] UKPC 64, [2009] 1 All ER 851.

The Privy Council judgment in MacLeod appears to give a concluded

post-nuptial agreement, reached with appropriate disclosure,

independent advice and absent any of the other factors vitiating the

validity of a contract, a weight of even greater significance.

The facts were that both parties were American and had been

married before, but there was a significant difference in their

wealth. They married in Florida in 1994 and on the day of the

wedding they entered into a pre-marital agreement to be constued

according to Florida law. Under Florida law this agreement was valid

and binding. This agreement was subsequently reviewed on two

7 In Soulsbury the wife agreed (orally by telephone) to refrain from claiming maintenance (there

had been a previous joint lives order) if H left her £100,000 in his will. The agreement was not

approved by a court. He executed the will but remarried on the day of his death thereby

revoking the will. The second wife refused to make the payment but the court upheld the

agreement holding that it was not an agreement to oust the jurisdiction of the court, nor a

compromise of an ancillary relief claim (which would have to be enshrined in an order) but a

unilateral contract which bound his estate.


occasions, the second being in 2002 by which time they had 5

children and had lived in the Isle of Man since 1995. The 2002

agreement confirmed the 1994 agreement but made substantial

variations to it in W’s favour, but made no express provision for the

children (who would be dealt with separately under Florida law). The

Deputy Deemster in the Isle of Man found that W entered the

agreement freely, voluntarily, with a full understanding and having

had proper legal advice which she chose not to follow. H had

complied with his obligations under the agreement (transferring

property to W and making various payments to her). The marriage

however broke down by August 2003. W sought to resile from the

agreement but H sought its enforcement (save that he proposed

that W should have a housing fund during the children’s minority

which would revert to him on their majority). The Manx court

ordered an outright payment to W of a larger sum than H had

proposed. When the case reached the Privy Council the sole

question was whether the housing needs of W and children should

be met by an outright lump sum or a by a trust, as proposed by H,

with the reversion to him. The Privy Council upheld the agreement,

found for H on the trust fund and remitted the case for the drafting

of the trust deed.

The Board concluded that a post nuptial agreement (here, the 2002

agreement) was very different from a pre-nuptial agreement:

“The couple are now married. They have undertaken

towards one another the obligations and responsibilities of

the married state. A pre-nuptial agreement is no longer the

price which one party may extract for his or her willingness

to marry.” (para [35]).

The Board believed that the public policy grounds for ruling that a

post-nuptial agreement was null and void, because it provided for

the consequences of a future separation, should disappear since the

enforceable duty of spouses to live together no longer exists.

Therefore, unless the agreement is invalid for the usual contractual

reasons (absence of intention to create legal relations, absence of


consideration [overcome by the execution of a deed], illegality,

misrepresentation, undue influence, etc) it will be valid and

enforceable.

However, such an agreement falls within the meaning of a

‘maintenance agreement’ within the meaning of s.34(2) MCA 19738

and as such is subject to the court’s power under ss.35 and 36 to

vary or revoke any financial arrangements contained in it, or to

insert in it financial arrangements for the benefit of one of the

parties to the agreement or of a child of the family

Further, by s.34(1) any provision in an agreement purporting to

restrict any right to apply to a court for an order containing financial

arrangements is void, although any other financial arrangements

contained in the agreement shall not thereby be rendered void or

unenforceable and shall, unless they are void or unenforceable for

any other reason (and subject to sections 35 and 36), be binding on

8 “maintenance agreement” means any agreement in writing made,

whether before or after the commencement of this Act, between the

parties to a marriage, being—

(a) an agreement containing financial arrangements, whether made during

the continuance or after the dissolution or annulment of the marriage; or

(b) a separation agreement which contains no financial arrangements in a

case where no other agreement in writing between the same parties

contains such arrangements;

“financial arrangements” means provisions governing the rights and

liabilities towards one another when living separately of the parties to a

marriage (including a marriage which has been dissolved or annulled) in

respect of the making or securing of payments or the disposition or use of

any property, including such rights and liabilities with respect to the

maintenance or education of any child, whether or not a child of the

family.


the parties to the agreement. Moreover, s.35(6) specifically

preserves the right of a party to such a maintenance agreement to

apply to the court for an order making financial provision.9

Where the court is considering an application for ancillary relief

under Part II of the Act, and applying s.25 in considering the weight

to give to the agreement, it should apply the same tests and

principles as in a variation application – viz looking for a change in

circumstances in the light of which the financial arrangements had

been made, such as would make those arrangements manifestly

unjust; or for a failure to make proper provision for a child (and see

s.35(2)).

A further public policy gloss was imposed (an echo of Hyman – see

above) that even if there were no change in circumstances, it would

be contrary to public policy if the agreement cast upon the public

purse an obligation which should properly be shouldered within the

family.

The Board also agreed that the circumstances in which the

agreement was made may be relevant to an ancillary relief claim,

and endorsed the observations of Ormrod LJ in Edgar (see pages 9

and 10 above) about effect of the conduct of each party and that

“all the circumstances as they affect each of two human beings

must be considered in the complex relationship of the marriage”.

In the circumstances of the instant case, although there had been a

change of circumstances in that the parties had separated, this was

plainly contemplated and provided for, but the agreement had not

made proper provision for the children (as opposed to the mother).

9 s.35(6) provides:

For the avoidance of doubt it is hereby declared that nothing in this section or in section 34

above affects any power of a court before which any proceedings between the parties to a

maintenance agreement are brought under any other enactment (including a provision of this

Act) to make an order containing financial arrangements or any right of either party to apply for

such an order in such proceedings.


The Manx court, by ordering the lump sum for the wife, had made

additional provision for the mother, so the Board accepted H’s

proposal for a trust fund which would revert to him after the

children’s need for housing had ended.

G. The Case Law summarised

- Neither pre-nuptial nor post-nuptial agreements can

exclude the jurisdiction of the court

- They will be taken into account as either a relevant

circumstances under s.25(1) or as a matter of conduct

under s.25(2)(g) MCA 1973

- They will not be the sole consideration as the court must

consider all factors under s.25

- Pre-nuptial agreements (entered into before the parties

have committed to the marital relationship, and often at

times of vulnerability, but in particular because they are

legislating for “an uncertain and unhoped for future”)

remain contrary to public policy and thus not valid or

binding in the contractual sense.

- The weight to be given them will be entirely fact

dependent – as Wilson J said in S v S (and it remains true

to-day) – “It all depends”.

- The rule as to public policy which affects ante-nuptial

agreements does not apply to post-nuptial agreements

- There is an increasing inclination to give effect to the

informed agreement between parties of equal

bargaining power to arrange their own affairs.

- The mere fact that one party might have done better by

going to court is not of itself generally a ground for

permitting that party to resile from what was agreed10

- The passage of time, changes in circumstances and (in

particular) the arrival of children in a relationship may

have significant consequences upon what is fair.

10 See eg per Munby J in X v X (Y and Z Intervening)at p.536.


H. Pre-nuptial agreements and ante-nuptial settlements

distinguished

Pre-nuptial agreements are not to be confused with ante-nuptial

settlements. An ante-nuptial settlement is an instrument made in

contemplation of marriage and settling property (including both

income and capital) of which the parties to the marriage (or their

children) are the beneficiaries. Such settlements (assuming they are

in contemplation of the marriage of the husband and wife whose

marriage is in question) have been variable since the Matrimonial

Causes Act 1859 (s.5) and remain so now under s.24(1)(c) of the

1973 Act. Such a jurisdiction involves the exercise all the

conventional considerations of the court’s discretion.

A pre-nuptial agreement for current purposes, on the other hand,

involves an agreement in contemplation of the failure of the

relationship, seeking to legislate for the manner in which the parties’

financial resources should be disposed, what limitations should be

imposed upon the parties to apply for the exercise of the court’s

discretion or what jurisdiction or forum they should submit to.

Wall J in N v N (Jurisdiction) [1999] 2 FLR 745 put it this way:

The difference between an antenuptial settlement and an

antenuptial contract or agreement is that the former seeks

to regulate the financial affairs of the spouses on and during

their marriage. It does not contemplate the dissolution of the

marriage. By contrast, an agreement made prior to marriage

which contemplates the steps the parties will take in the

event of divorce or separation is perceived as being contrary

to public policy because it undermines the concept of

marriage as a life-long union.

I. The position elsewhere

In nearly every other jurisdiction outside England and Wales (and

perhaps Eire where divorce is a relatively new concept in any event)

agreements between spouses have significantly greater weight than


here. In Australia parties entering upon marriage may make binding

financial agreements (Family Law Amendment Act 2000) but the

statute sets out the circumstances in which such agreements may be

set aside. In most European jurisdictions the property consequences

of divorce are dealt with by marital property regimes. Further afield

in China by art 19 of the marriage law of 2001 the parties to a

marriage may make binding arrangements about the property

regime of their marriage.11

In most jurisdictions where such agreements have a significant role

there are nevertheless provisions enabling the court to set aside the

agreement (eg) for failure to disclose all assets, or if there is evidence

of fraud, duress, unfairness, or lack of representation at the time of

signing the agreement. Further, for instance in Florida, the courts

have power to vary ante-nuptial agreements (see MacLeod at para

[35])

In England and Wales in 1998 the government produced a Green

Paper “Supporting Families” in which it was proposed that written

pre-nuptial agreements should be binding for those wishing to use

them (but not obligatory). However, the proposals were set about

with qualifications to protect the interests of an economically

weaker party and the interests of children so that the agreement

would not be binding where:

- there is a child of the family

- where the general law of contract would make the

agreement unenforceable

- where one or both parties had no independent advice

- where the court considered enforcement of the

agreement would cause significant injustice (to one or

both parties or a child)

- where there was not full disclosure

- where the agreement was made less than 21 days

before the wedding.

11 See J. Posnansky at [2007] Fam Law 444.


The Law Commission, which is addressing the status and

enforceability of agreements made between spouses and civil

partners (or those contemplating marriage or civil partnership)

concerning their property and finances (see: Tenth Programme of

Law Reform, Law Com No 311 (2008) para 2.17), is currently

advertising for someone to join their Property, Family and Trust Law

to work on the marital property agreement project. The post is

initially for 3 years with a closing date for applications of 1 May

2009. It follows that it would seem unlikely that there will be any

final recommendations for some time!

J. Straws in the wind?

In Miller v Miller; McFarlane v McFarlane [2006] 2 WLR 1283 the

House of Lords addressed the question of how the courts should

deal with “non-matrimonial property” which the parties bring to the

marriage either from before its inception or by inheritance – take for

example the inherited estate or farm which is expected to be

handed on down the generations, or family heirlooms. One of the

factors referred to by Lord Nicholls (para 25) as a relevant matter, in

addition to the matters to be taken into account set out in White, in

his view was the way the parties organised their financial affairs.

However, in Miller Baroness Hale does make a point which is of

importance to prenuptial agreements and resonates with the

principle which derives from White (that the origin of wealth

becomes less relevant the longer the marriage) that “What seems

fair and sensible at the outset of a relationship may seem much less

fair and sensible when it ends.” Circumstances change and unless a

prenuptial agreement provides for changing circumstances there is a

real danger of injustice arising.

In Charman v Charman [2007] EWCA Civ 503 Sir Mark Potter, giving

the judgment of the Court of Appeal, ended the judgment with a

section on law reform in this field including a plea for considering a

greater role for pre-nuptial agreements and the ability of the parties

to govern their own affairs. At para 124 he said:


……..Almost uniquely our jurisdiction does not have a

marital property regime and it is scarcely appropriate to

classify our jurisdiction as having a marital regime of

separation of property. More correctly we have no regime,

simply accepting that each spouse owns his or her own

separate property during the marriage but subject to the

court's wide distributive powers in prospect upon a decree

of judicial separation, nullity or divorce. The difficulty of

harmonising our law concerning the property consequences

of marriage and divorce and the law of the Civilian Member

States is exacerbated by the fact that our law has so far

given little status to pre-nuptial contracts. If, unlike the rest

of Europe, the property consequences of divorce are to be

regulated by the principles of needs, compensation and

sharing, should not the parties to the marriage, or the

projected marriage, have at the least the opportunity to

order their own affairs otherwise by a nuptial contract? The

White Paper, "Supporting Families", not only proposed

specific reforms of section 25 but also to give statutory force

to nuptial contracts. The government's subsequent

abdication has not been accepted by specialist practitioners.

In 2005 Resolution published a well argued report urging

the government to give statutory force to nuptial contracts.

The report was subsequently fully supported by the Money

and Property Sub-Committee of the Family Justice Council.

In Crossley v Crossley Thorpe LJ made these similar general

observations:

I would classify, in the circumstances of this case, the

contract into which the parties entered in December 2005 as

in many respects akin to a marital property regime into

which parties enter in civil law jurisdictions in order to

provide for the property consequences of a possible future

divorce. It can be categorised as something akin to a

contract for the separation of goods within the French legal

system. It does seem to me that the role of contractual


dealing, the opportunity for the autonomy of the parties, is

becoming increasingly important. As counsel have pointed

out, the possibility of legislation for prenuptial contracts was

raised by this government in I think 1998, and although the

responses to the white paper consultation were few in

number, there was certainly not in any way a disincentive to

further progress. Since then Resolution has formulated a very

convincing paper for the legislation of prenuptials, and much

of the debate concerning possible reform of section 25 of

the Matrimonial Causes Act has emphasised the opportunity

for some statutory acknowledgment of the importance of

prenuptials. There is in my judgment an even stronger

argument for legislative consideration, given the resolution

of the European Union to formulate some regulation to

tackle the difficulties that arise from different approaches in

the member states. There is an obvious divide between the

provisions of the civil law jurisdictions and the absence of

any marital property tradition in the common law systems.

Undoubtedly there would be some narrowing between this

European divide if greater opportunity were given within our

justice system for parties to contract in advance of marriage,

to make` provision for the possibility of dissolution. The

approach that Bennett J took in this case seems to me to

accord with a developing view that prenuptial contracts are

gaining in importance in a particularly fraught area that

confronts so many parties separating and divorcing.

The fact that the Court of Appeal so readily granted permission for

the wife to appeal in Radmacher v Granatino notwithstanding the

wife’s persistent and continuing contempt of court, and that Thorpe

LJ had indicated a wish to preside, suggests (perhaps) that the Court

of Appeal is eager to continue to stress the relevance of ante-nuptial

agreements, but at the very least it is clear that it is regarded as an

area on which more needs to said judicially at an appellate level.

However, it is equally clear from MacLeod that a clear message has

been given (albeit obiter) that ante-nuptial agreements remain (in


the absence of legislation) contrary to public policy and thus not

valid or binding in the contractual sense. Moreover, it is to be

observed that Baroness Hale expressed no disapprobation for Baron

J’s decision in Radmacher12.

As for post nuptial agreements, the decision in MacLeod has now

provided authoritative guidance, and it is plain that subject to the

Court’s powers to vary to obviate a manifestly unjust outcome (or to

ensure that appropriate provision is made for a child) the courts will

uphold valid agreements.

K. What considerations are essential to give the best chances

of a pre- or post-nuptial agreement being effective?

It will be more effective after a short marriage than a long one, and

where there are no children. Following from NG v KR it is clear that

the Green Paper Supporting Families is a good starting point.

There must be:

- full disclosure

- independent competent legal advice

- a sensible gap between the agreement and the wedding

(at least 21 days)

There should be:

- no disparity of bargaining power, but if this is

unavoidable, then manifestly no exploitation of it by one

over the other and certainly no pressure by one party on

the other;

- a recital to the effect that the parties wish to enter into a

legal agreement with the intention to enter legal

relations which will be treated as binding on them;

- a recital setting out why the parties are entering the

agreement (eg to provide security and a reasonable

home for W and children, to protect inherited assets, to

12 NG v KR [2009] 1 FCR 35


limit the expectation of the parties if the marriage does

not last more than (say) 5 years, etc);

- a recital setting out why the agreement is regarded as

fair, perhaps identifying the limits of the parties’ mutual

dependence, and recording that independent advice has

been obtained, full disclosure has been given and so on,

with a schedule of assets and resources attached;

- definition of any property regarded as non-matrimonial

property (unmatched contributions, discrete business

assets, inherited property etc);

- provision for regular (say 5 yearly) reviews and in

particular reviews following the birth of children, absent

which there must at least be provision in the event of

children being born. It is, of course, essential that such

reviews do occur, and there should be provision made

for what is to occur if the reviews do not occur. If the

parties divorce after fifteen years, and ten years after the

last review, and circumstances have changed significantly

without any significant change in the original terms, the

agreement may be regarded as having limited value.

However, in light of the decision in MacLeod, and since

the reviews, if they give rise to new agreements, will

have been conducted after the parties are married, such

post-nuptial agreements will have significantly more

weight and a better chance of being enforced.

When such factors are satisfied, then even an agreement entered

into prior to the commitment of marriage is likely to be a ‘magnetic

factor’ in the exercise of the s.25 discretion. However, it is very clear

that an agreement that provides that the weaker party shall receive

nothing will be of little or no value.

Given that the financial circumstances of parties may change from

the situation when the advice was first given, and additional wealth

may accrue, there may be some practical value in a) ensuring that

professional indemnity insurance is adequate at the outset when



drafting such agreements, and b) that at least while one remains in

a professional relationship with the client, that the relevance and

appropriateness of any such agreements are kept under review.

L. Conclusion

There can be little doubt that there is a distinct inclination amongst

at least some of the senior judiciary to give greater weight to

decisions taken by adults, properly informed and advised, to

regulate their own financial futures. However, there are also those

who recognise that there is immense potential for exploitation,

perhaps even unconscious exploitation, of a position of emotional or

financial strength at times of great potential vulnerability when love

or the stress of separation blind parties to the advice they are given,

or even the need for such advice. It is noticeable that it is judges like

Baron J who deal with the raw emotion at first instance who

perhaps most keenly recognise this.

Manifestly, therefore, while it seems probable that properly

prepared agreements, especially those entered into after marriage (it

will take legislation to change the position in respect of pre-nuptial

agreements), will take an increasingly important role, it is essential

to remember that any decision in an ancillary relief case will be

taken after considering all relevant factors under s.25, that the

circumstances in which an agreement was entered into will be

carefully examined, and that the court will, in its search for a fair

outcome, jealously guard its right to adjust the terms of agreements

which produce (in the circumstances as they have developed)

manifest injustice or inadequate provision for children.

CFS QC

10.04.09

29th christopher sharp qc st john’s chambers, bristol · christopher sharp qc . st john’s...

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