Pre-marital/Post-nuptial Agreements – The court considers the weight to be attributed to them when the parties decide to divorce in Luckwell v Limata [2014]

In the case of Luckwell-v-Limata (2014), which were divorce/financial proceedings, the court faced the issue of how much weight, if any, should be given to the pre-marital/post-nuptial agreements signed, prior to and during the marriage by the parties. As you may be aware, Pre-marital/post-nuptial agreements are not legally binding in the UK yet, but are becoming more popular. So if you have a post-nuptial agreement with your spouse or are thinking of entering into one, then you should be aware of how the court will treat such agreements in the unfortunate event that you decide to divorce. There are various factors/circumstances which the court will take into consideration when deciding whether the content of any such agreement is fair and whether there is a need to deviate from the agreement reached.

In this recent case, the parties had married on 23 July 2005. Shortly before they married, on 11 July 2005, they signed a pre-marital agreement (“PMA”) also known as a pre-nuptial agreement in which they stated that they intended to retain separately owned property and would not make claims against the other’s property should their marriage breakdown. The PMA also specifically considered gifts given to the wife by her “wealthy family”. During the marriage, the parties signed two supplemental agreements coinciding with the time when the wife’s family intended to give her substantial gifts, including the property in Connaught Square where the parties lived since getting married. Without the original PMA, the parties would not have married. It is understood that without the supplemental agreements there would not have been any gifts given to the wife. The husband had no assets as all, but had debts of £226,000, yet the wife was property rich and solely owed the marital home at Connaught Square worth £6.7m.

Judge Mr Justice Holman ruled that proper financial provision must be made for the husband despite the agreements that he entered into, in which he agreed not to make any claims against the family assets should the parties’ marriage breakdown, so as to avoid a damaging impact on the couple’s three children. He awarded the husband a lump sum of £1.2 m to pay off his debts and to buy a home. The Judge said that if such a lump sum had not been awarded to the husband, the children could find themselves living with their 37 year old mother ‘in relative luxury’ and living with their father, who was in debt and lacked assets, ‘in relative penury’.

The parties in this case were married for 8 years and they had 3 children together. The total assets in the case, taking debts/liabilities into account were equal to the equity in the wife’s Connaught Square property worth £6.7m. The only debts were those incurred by the husband of £226,000.

Neither the husband nor the wife worked. The husband had never been in employment other than having worked in his mother’s hotel on a casual basis for 2 years. The wife had helped out in her mother’s business, but was financially maintained by way of substantial allowances (around £80,000 p/a) from each of her parents, who also paid for the children’s school fees.

At the time of the court proceedings, the wife and the children were living in the property in Connaught Square and they had the help of two nannies. The husband, having obtained a loan, rented a two-bedroom property nearby for 6 months but faced problems repaying the loan and yet he needed the loan facility in order to pay the rent.

Upon the court hearing the financial remedy proceedings in public, Holman J said that the reason it was decided that this case would be heard in public was because ‘this matter was of considerable and legitimate public interest. In order that the public can have an informed debate about the law, they should be able to see how, under the present law, court’s resolve these cases on a case specific basis.’

In coming to a decision in this case, the court read out and considered the summary set out in the case of Radmacher. Yet the outcome in this case was clearly somewhat different to the outcome in the Radmacher case. In this case there was reason for the court to award more to the husband than had been agreed in the pre-marital/pre-nuptial agreements.

This had been a bitter divorce battle and at the end of the proceedings, the judge warned the wife that she may have to sell her home in Connaught Square, in order to give her husband the lump sum of £1.2m, as ordered by the court, so that he could pay his debts and buy a home.

It is important when going through divorce/financial proceedings or when having a post-nuptial agreement drafted that full legal advice is sought throughout the process in order to ensure that you make sound decisions.

If you have any questions concerning a matrimonial or family law issue then please contact our specialist solicitor, Satvinder Sokhal at Prince Evans Solicitors, Ealing on 020 8280 2710, or by e-mail ssokhal@prince-evans.co.uk