DJ Phillips. Final hearing where the issues concerned whether a post-nuptial agreement was binding on the parties and fair. The parties were married for 9 years and had one child, 10, and, W’s older child, 19, who was treated as a child of the family, having been 6 when the parties met. Four days after the marriage, the parties signed a PNA. At the time of the agreement, H had built up significant assets and had a higher income than W. W had lived and worked in Eastern Europe. At time of the hearing, W was unemployed, had no income, modest savings and her only asset was an apartment in Europe which could not be valued or sold. H’s assets included the FMH which was held in his sole name, his investments, significant savings in his accounts. He also had a pension valued at £1.4 million and W had a minimal pension. In respect of financial provision, the PNA provided that for maintenance in the event that the parties separated 5 years after marriage, H would provide W with a modest freehold accommodation for the benefit of W which would be sold with proceeds divided upon any child or the family reaching 18, or other specified events, in lieu of maintenance.

At the final hearing, H argued that the agreement was binding on the parties and was not unfair, whilst W’s case on the PNA was that it was ‘recognised’ but ‘drafted with no consideration of a child to be born, significantly out of date, contradictory, nor specific enough, did not meet her reasonable needs and not fair’. W’s open position was that H pays her a lump sum of £675,051 comprising a housing fund (£427,500), capitalised spousal/child maintenance of £185,184, £44,092 to fund a 4-year master’s degree over 4 years allowing her to earn a greater income following qualification, legal costs and other debts £16,500, other capital needs of £1,775 and a PSO 13% in her favour against H’s SIPP. H’s open offer was to pay W a lump sum of £405,000 within 28 days of the date of the order, capitalised maintenance of £24,120, child maintenance of the youngest child as assessed by the CMS and a PSO 7.4% of his SIPP providing equality of income in retirement in respect of the marital resource. Otherwise, both sought a clean break.

The issues that the court needed to determine were: whether the nuptial agreement was binding? If so, whether the parties should be held to the provisions of the agreement and what would be a fair distribution of the parties’ matrimonial assets in all the circumstances.

The judge accepted that the wife felt pressure to sign the agreement, but it was clear that she was not forced to sign it, and she did have the benefit of independent legal advice, and the terms of the agreement were explained to her by her own solicitor. Thus, whilst the judge was satisfied that W felt under pressure at the time she signed the agreement, such pressure was not ‘undue’, and there were no vitiating factors which would invalidate the agreement. In evaluating the fairness of the agreement, the judge considered the s 25 factors (Brack v Brack 2018). A significant factor in this case was that since the PNA was entered into the parties had a child, and more than 10 years had passed. The PNA was found to be unfair as it left W without adequate income and did not meet her needs. If upheld all she would receive would be an unknown quantity of capital in 8 years when the child turned 18, and no maintenance in the intervening years whilst she was the main carer for their son. The judge therefore considered that it was appropriate for the court to take a needs-based approach with W’s needs being assessed in light of the relevant factors under s 25, keeping in mind the PNA.

Determination

The court made the following award. In terms of capital needs, W was awarded £417,000 which comprised a housing/furnishing fund of £370,000. Her reasonable housing needs were for a property costing £350,000 in an area W wished to live in, and £20,000 moving costs and purchasing appliances and furnishings for the property. The judge also ordered that W receive a £44,000 education fund as this would enable her to become financially independent on completion of her intended professional training programme to maximise her income. On this point, the judge found that W’s ability to pursue professional development had been curtailed by her role as the main carer for their son. Finally, £3,000 for a hard loan to a friend that required payment within 30 days of her receiving her financial settlement. No financial provision was made for legal fees and other costs as the PNA provided that they both bear their own costs in the divorce proceedings including obtaining a consent order as to ancillary relief. There would also be a PSO in favour of W of 7.4% applied to H’s SIPP which was in line with the actuarial report to achieve equality of income on retirement in relation to the marital resource.

In respect of W’s income needs, the judge found that H’s offer for maintenance for W was not realistic due to the number of days per week required for studying and work placements, which were likely to be longer given her role as the main carer; [59]. The judge accepted that W’s earning capacity would be limited by the fact that she would be undertaking her professional studies, and that she would require financial support during the period of 4 years. The judge determined that the amount sought by W was in excess of her reasonable needs and reductions were necessary, and £2,500 pcm (£30,000 pa) was deemed reasonable; [67]. The shortfall of the monies that W would receive on a monthly basis was c.£1,500 pcm which when capitalised over 4 years is a total of £72,000.