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Traharne v Limb [2022] EWFC 27 (31 March 2022) - Post nup agreement (PNA)
Classed by the judge as ‘not a big money case’, the parties assets totalled over £4m. Big money for most of us I’d say !
Costs were in excess of £650,000, which reflects the emotional state divorcing couples get into to seek justice by taking ‘misconceived steps’ as described by the judge.
Turning to the facts, W is 59 and H 68. Prior to tying the knot both parties had doubts about the marriage. Both had separately confided in a priest about marriage, which is a bit like asking a cuckoo for advice on how to raise a fledgling.
However they married in 2013, separated, got back together, separated and entered into a separation agreement. Got back together and converted the separation agreement into a post nuptial settlement.
Final separation was in 2020, and financial remedy proceedings ensued.
H issued a notice for W to show cause why she should receive any award in excess of the terms of the post nuptial agreement. That was diluted (probably in the hearing) to it being ‘a magnetic factor’ (what ever that meant in financial terms isn’t clear). W claimed that she was coerced into the post nuptial settlement and or it didn’t meet her needs. That latter issue was quickly resolved by the judge who noticed there was no pension provision for W in the PNA.
The judge considered the starting point for the law on agreements is the well-known case of Edgar v Edgar [1981] 2 FLR 19 where at page 25 Ormrod LJ said: 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.
The Edgar approach was approved by the Supreme Court in Radmacher v Granatino [2010] 2 FLR 1900 where Lord Phillips said at paragraph 71:
In relation to the circumstances attending the making of the nuptial agreement, this comment of Ormrod LJ in Edgar v Edgar at p 1417, although made about a separation agreement, is pertinent:
"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."
The first question will be whether any of the standard vitiating factors: duress, fraud or misrepresentation, is present. Even if the agreement does not have contractual force, those factors will negate any effect the agreement might otherwise have. But unconscionable conduct such as undue pressure (falling short of duress) will also be likely to eliminate the weight to be attached to the agreement, and other unworthy conduct, such as exploitation of a dominant position to secure an unfair advantage, would reduce or eliminate it.
The judge continued: Applying the test set out in MacLeod v MacLeod [2008] UKSC 64, I ask whether "in the circumstances prevailing it would be fair to hold the parties to their agreement". I consider (as per paragraph 81 of Radmacher) that the parties are unlikely to have intended that their (in that case ante-nuptial) agreement should result, in the event of their marriage breaking up, one partner being left in a predicament of real need while the other partner enjoys a sufficiency of wealth and that if this is the result it would be likely to be unfair to hold the parties to their agreement.
W failed on coercion and the judge decided what W’s needs were and made capital and pension provision rejecting W’s claims that a garden office was necessary in her role as a film maker, (probably not reality films).
Interestingly although H had made LSPOs the sum of £211,000, the judge ordered H pay £80,000 costs to W, because ‘H’s somewhat half-hearted reliance on the PNA was not realistic’.
The real moral of the case seems to be if you are drafting pre/post nuptial agreements make sure they are water tight to start with and advise they should be reviewed from time to time.
