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LIES APPEAR TO BE THE BEST POLICY

The recent case in the High Court concerning a husband who did not wish to be kept to a pre-nuptial agreement whilst his wife did highlights the fact, even in spite of any feelings of distaste, pre-nuptial agreements remain  subject to the scrutiny of the Court. 

In this case the husband ran a small production company and prior to the marriage within the pre-nuptial agreement declared assets of nearly £1.2 million and claimed he was earning £60,000.00 per annum. The true figure later turned out to be £6,000.00 whilst he claimed boxing royalties of £80,000.00 per year the real figure was £8,000.00. 

A financial agreement had been signed in 2002 not to make financial claims against the other in the event the marriage broke down. However, even though the wife and her advisors had been mislead as to the husband’s assets and income they believed the pre-nuptial agreement still protected her. She had been honest in her dealings!

Nevertheless she was ordered to make a substantial payment to her husband to meet his needs receiving £1.7 million for a home and a lump sum of £215,000.00.  The very needs she did not believe he had.

The Court confirmed in light of earlier cases such as Radmacher, the fact is there will still be a cross check by the Court to examine whether any Prenup is manifestly unfair or does not meet a party’s needs. I can tell you, the definition of ‘needs’ is a broad church.

This decision was made despite in Court the husband found to be an unreliable witness who told substantive lies. Whilst clearly a man of some artistic ability the husband, it appeared, had never generated any income as a result of that ability and instead had used his wife’s money to indulge his artistic whims without needing to try too hard. 

Whilst the husband claimed to have fully understood the implications of the pre-nup and to have”switched off” when listening to his Solicitor telling him it was not legally binding, the Judge felt “that cannot absolve him of responsibility for the consequences of the document which he signed”. Considerable weight was given to the pre-nup in accordance with the wife’s wishes but the Judge felt the husband’s “reasonable lifestyle” needed to be maintained and the wife was obliged to do more than merely save him from destitution. The wording of the Judgment is somewhat unfortunate in that  “reasonable needs” is always a mystery to be defined. 

The Judge even confirmed regarding the wife, “she entered into this marriage only upon the basis that the man agreed he would not make a claim, and yet she has nevertheless been constrained to resist a series of costly attempts to undermine their agreement.” In fact legal fees between them were reportedly nearly £1.8 million! 

If the husband had the level of income and assets he had claimed at the outset it would have strengthened the basis of the terms of the pre-nuptial agreement. If  financially independent he would not have been in need. 

The case highlights two things:

1)      disclosure by both parties at the outset and not just the financially stronger is essential,

2)       proof of what has been disclosed is similarly just as important.