IC v AD [2026] EWFC 224

Judgment date: 20 July 2026

https://www.bailii.org/ew/cases/EWFC/HCJ/2026/224.html

HHJ Hess (sitting as a deputy High Court judge). Final hearing to consider the extent to which the terms of a pre-nuptial agreement should be upheld following an assessment of the parties’ needs.

The Family Court considered the correct interpretation of the terms of a pre-nuptial agreement signed in 2012, and the extent to which it should influence the parties’ financial division following an assessment of their resources and needs. The case provides a useful distillation of the court’s approach to the interpretation of nuptial agreements and the circumstances in which the court may depart from the terms of a valid agreement.

Background and proceedings

The parties are both in their early 40s, began cohabiting in 2010, and married in 2012. The wife had previously worked as a beauty therapist but latterly had focused on being a homemaker and caring for the parties’ two children. The husband works in finance and has enjoyed a successful and lucrative career to date.

The parties’ marriage was in difficulty from 2020 onwards. The husband filed a divorce application in May 2024 and moved out of the family home in January 2025. The parties disagreed on a preliminary issue of the date of separation, with the husband adopting the date of May 2024 in accordance with the divorce application, and the wife arguing it should be in January 2025, when the husband moved out of the family home. Hess decided this preliminary issue on the facts and adopted a date of separation in May 2024, stating that:

‘While the parties continued living separate lives under the same roof for a period after that, and while there may have been moments of friendliness and togetherness and intimacy after that date which may have presented a degree of ambiguity as to the position, my overall impression is that the presentation of the divorce application was a decisive moment when the relationship moved from one where the parties were a committed couple to one where the commitment was no longer (¶8(ix)).’

The parties initially attempted to resolve financial matters voluntarily, including with the exchange of voluntary Forms E. However, the key issue of the interpretation of the pre-nuptial remained a stumbling block to settlement and the husband filed Form A and a notice to show cause application in July 2025, with the parties then attending a private FDR in October 2025. The private FDR did not lead to an overall resolution, so the matter eventually came before HHJ Hess who heard it over five days in July 2026.

The financial computation exercise was not in issue between the parties, with the financial resources being very largely agreed at final hearing. Given the parties’ constituent assets, the judge took the decision specifically to distinguish between realisable and non-realisable assets to take account of the husband’s minority shareholding in his finance business and interests in carry and co-investments in private equity funds which, although of potentially significant value in the future, were not guaranteed as to either value or timeline for realisation.

The parties’ total assets (including the husband’s non-realisable assets), were broadly as follows:

• Joint: £3,818,000 across the family home, eight investment properties, and bank accounts;
• Wife: £263,000 in bank accounts, investments, and shares in a joint company;
• Husband: £4,495,000 in property, bank accounts, investments, shares, and a director’s loan owed to him from the joint company of some £1.26m; and
• Deferred and other non-realisable assets of £32,581, being the wife’s pension, and £18,022,000 for the husband, of which approximately £17 million comprised a minority shareholding in the finance company and his carried interest and co-investments in five private equity funds.
• Total capital assets of £26,630,000.

In addition, the husband has also historically earned a substantial income, represented by £2,744,000 gross in 2024 and £2,937,000 gross in 2025. The judge saw no reason why the husband’s income should not remain at or around that level for the foreseeable future.

The pre-nuptial agreement

The main issue to be determined by the court was the appropriate interpretation of a pre-nuptial agreement which the parties signed in January 2012, seven weeks before their wedding. There was no suggestion by either party at the final hearing that the agreement had not been validly executed or freely entered into. They had both taken advice from solicitors at the time and had provided financial disclosure to each other. The only issue between them was the extent to which the agreement should govern the terms of their financial separation now, with the husband arguing by his notice to show cause application and at final hearing that there was no reason to depart from its terms, and the wife arguing that the agreement should be granted a much narrower interpretation than the husband sought to apply.

However, that was not always the position adopted by the wife. As the judge noted in his judgment, the wife ‘did not immediately accept the existence of a signed pre-nuptial agreement (¶19)’ and even, as it was clear that the marriage was breaking down, removed ‘the signed copy of the pre-nuptial agreement from the paper file in which the husband had carefully retained it in his study and hoped that, by doing this, the husband would not be able to establish the existence of a signed pre-nuptial agreement (¶19).’ The judge took an extremely dim view of these actions which he considered the wife took because she was aware that the agreement would be disadvantageous to her financial remedies case and advantageous to the husband’s case.

Once the wife eventually accepted the existence of the agreement, she then sought to establish that it had only ever had a limited effect restricted to two properties that the husband owned prior to the marriage. The judge did not accept these arguments and instead accepted the view of the husband that the parties never intended for the agreement to have such a narrow effect as that was not supported either by the agreement itself or by the judge’s assessment of their respective evidence before him.

The judge was clear that it was the wording of the agreement itself that would give it its meaning. However, he was hindered in his work of interpretation by the standard of the agreement which he unfortunately stated was ‘a piece of sub-optimal drafting’ and ‘is not a model of clarity (¶20)’.

The judge ultimately determined the operative terms of the pre-nuptial agreement to be as follows:

1. The husband’s two pre-marital properties were ringfenced as his own property, and the wife was prevented from making any claim against them;
2. Subject to a limited number of assets, the wife could not make a sharing claim against any assets in the husband’s sole name;
3. All jointly held assets were to be divided equally;
4. The wife would be entitled to 50% of the family home (it being jointly owned) but on the basis they have children together she would also be entitled to remain living in it on Mesher terms until the youngest child completes tertiary education (in or around summer 2037);
5. At the time of the agreement the husband was anticipating that he would receive £5m from a private equity fund (‘Fund T’) and the parties agreed that these would be paid to the wife on receipt and any capital representing those proceeds at the time of a divorce would be shared equally. Ultimately, the husband received £4,222,000 which he transferred to the wife, and which was invested in a portfolio of jointly owned investment properties which they continued to hold at the time of divorce;
6. Finally, the wife would be entitled to make a claim for spousal maintenance until their youngest child finishes his tertiary education.

The judge was satisfied that the only private equity fund payments which would be subject to the sharing principle under the agreement would be the proceeds that the husband received from Fund T which had already been paid to the wife, with the remainder of his interest in other funds (together with the shareholding in the finance business) remaining his separate property and not subject to sharing.

On this basis, under a strict interpretation of the pre-nuptial agreement the wife would receive the following capital:

1. The realisable assets in her sole name plus an additional £12,701 for the payment of her costs (£275,737);
2. Her SIPP (£32,581);
3. A half share in the family home plus a right to the husband’s half share on Mesher terms (£703,250);
4. A half share of the funds owing from the joint company to the husband (£620,284);
5. Half of the other jointly owned assets (investment properties and bank accounts) (£1,205,839);

This would give the wife total assets of £2,837,691 against the husband’s £23,793,000 on the same basis, or 10.7% of the overall capital assets including the husband’s deferred interests in carry and co-investments. The judge was acutely conscious that this represented a significant imbalance in the husband’s favour so next had to consider whether it would be fair and reasonable to hold the wife to the terms of the agreement in the circumstances.

Fair and reasonable?

The judge conducted the assessment as to overall fairness by reminding himself of the leading authorities on the topic, highlighting the following key points from his review:

1. [75] ‘The fact of the agreement is capable of altering what is fair. It is an important factor to be weighted in the balance…The Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement…[78] The reason why the court should give weight to a nuptial agreement is that there should be respect for individual autonomy...It would be paternalistic and patronising to override their agreement simply on the basis that the court knows best.’ Granatino v Radmacher [2010] UKSC 42 (Per Lord Phillips).
2. [85] ‘These agreements are intended to give certainty. Those signing them need to know that the law in this country will provide that certainty. Litigants cannot expect to be released from the terms that they signed up to just because they do not now like what they agreed.’ MN v AN [2023] EWHC 613 (per Moor J)

Addressing the circumstances in which the court may impose a solution which departs from the terms of an agreement, the judge considered the following authorities:

1. [82] ‘Where… each party is in a position to meet his or her needs, fairness may well not require a departure from their agreement as to the regulation of their financial affairs in the circumstances that have come to pass.’ Granatino v Radmacher [2010] UKSC 42 (Per Lord Phillips)

2. [100] ‘In my judgment, in the ordinary course of events, where there is a valid prenuptial agreement, the terms of which amount to the wife having contracted out of a division of the assets based on sharing, a court is likely to regard fairness as demanding that she receives a settlement that is limited to that which provides for her needs. But whilst such an outcome may be considered to be more likely than not, that does not prescribe the outcome in every case. Even where there is an effective prenuptial agreement, the court remains under an obligation to take into account all the factors found in s 25(2) MCA 1973, together with a proper consideration of all the circumstances, the first consideration being the welfare of any children. Such an approach may, albeit unusually, lead the court in its search for a fair outcome, to make an order which, contrary to the terms of an agreement, provides a settlement for the wife in excess of her needs. It should also be recognised that even in a case where the court considers a needs-based approach to be fair, the court will as in KA v MA, retain a degree of latitude when it comes to deciding on the level of generosity or frugality which should appropriately be brought to the assessment of those needs.’ Brack v Brack [2018] EWCA Civ 2862 (per King LJ)

The judge noted that neither leading counsel in this case could identify any authorities where the court had departed from an otherwise binding nuptial agreement for any reason other than to meet needs. In addition, the judge noted that it was a common feature of binding agreements that they would result in an uneven distribution of the parties’ assets, and that this was in fact often a reason for the agreement in the first place. However, on the facts of this case and in view of the authorities, the judge concluded that ‘I have found it difficult on the facts of this case to identify any feature of the case which would cause me to depart from an implementation of the pre-nuptial agreement on the basis of anything other than need (¶27).’

Assessment of needs

The final question for determination was therefore whether the wife’s capital award under the terms of the agreement would be sufficient to meet her needs. The judge was satisfied that there were sufficient assets for him to carry out an assessment on a ‘reasonably generous basis’ and therefore assessed the wife’s income needs at £13,000 pcm for herself and £1,000 pcm per child plus other agreed extras and school fees. This compares with her own assessment of needs at £13,950 pcm for herself and £3,770 pcm for the three children, so just below her own assessment. The judge considered that the spousal element of the maintenance order should be capitalised which, on the basis that it will be payable until the youngest child finishes tertiary education in 2037, would require an additional lump sum payable by the husband of £1,500,000 on a Duxbury basis.

Finally, in relation to spousal maintenance, the judge considered whether the capitalised amount should be discounted to account for (a) the wife’s own earning capacity, which the judge assessed as being £23,000 pa net from summer 2028, and (b) an amortisation of the wife’s other capital. On a broad assessment the judge decided to discount the capitalised maintenance award to £1m, which he considered to be a fair outcome based both on the capital that the wife would have access to (including half of the investment properties and the income arising from those) and the substantial sums that the husband is likely to receive in future.

Other than the capitalisation of the wife’s spousal maintenance award and an ongoing order for child maintenance, other agreed extras and school fees, the wife was not awarded any additional capital above what she was entitled to under the terms of the pre-nuptial agreement on the basis that the terms of the agreement would meet her needs. The judge could not identify a valid reason for departing from the terms of the agreement where the agreement met the wife’s needs, even on a reasonably generous basis, and determined that the agreement was fair in all the circumstances.