G v H

JurisdictionJersey
CourtRoyal Court
JudgeJudy Marie O'Sullivan
Judgment Date27 June 2018
Neutral Citation[2018] JRC 111A
Date27 June 2018

[2018] JRC 111A

ROYAL COURT

(Family)

Before:

Judy Marie O'Sullivan, Registrar, Family Division

Between
G
Petitioner
and
H
Respondent

Advocate B. J. Corbett for the Petitioner.

Advocate V. Myerson for the Respondent.

Authorities

Matrimonial Causes Act 1973.

Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, [2010] 2 FLR 1900.

L v M (Matrimonial) [2017] JRC 062A.

L v M (Matrimonial) [2016] JRC 184A.

In the matter of II [2010] JRC 209.

Crossley v Crossley [2007] EWCA Civ 1491.

S v S (Ancillary Relief) [2008] EWHC 2038 (Fam).

Edgar v Edgar [1980] 3 All ER 887.

Smith v Smith [2000] 3 FCR 374.

BN v MA [2013] EXHC 4250 (Fam).

S v S [2014] EWHC 7 (Fam).

Matrimonial Causes Rules 2005.

Matrimonial — reasons for refusing a preliminary hearing to establish the validity of the prenuptial agreement.

REASONS
THE REGISTRAR:
1

The petitioner commenced divorce proceeding against the respondent in January 2018 on the grounds of the respondent's unreasonable behaviour. A decree nisi was pronounced and made absolute on in April 2018. The respondent filed an application for ancillary relief in April 2018. At the Preliminary Directions Hearing in April 2018 the petitioner (through her advocate) asked that the existence of a pre-nuptial agreement (“PMA”) should be dealt with at a preliminary hearing, where its existence, if confirmed, should defeat the need for full financial disclosure and a full hearing. It is submitted on her behalf that this will, in line with the overriding objective, ensure the matter is dealt with justly but proportionately, cost effectively, expeditiously and fairly. The petitioner accepts that a PMA cannot oust or fetter the jurisdiction of the Court but she wishes to save both parties further significant expense, and the Court time. The respondent through his advocate submits that what weight can be afforded to the PMA can only be determined by the Court having regard to all the circumstances of the case, including the factors set out in section 25, (“the section 25 factors”), of the Matrimonial Causes Act 1973 (“the Act”). He wishes a final hearing to hear argument as to the validity and fairness of the PMA.

Background
2

The petitioner is some 10 years older than the respondent. At the time of their marriage he was a bachelor, with approximately £10,000, although his advocate submitted he was earning about £10,000 per month. The petitioner was a widow, with substantial inherited wealth.

3

The parties entered into a PMA 3 weeks prior to their wedding. The petitioner wanted to protect her significant wealth which she had inherited from her husband, ring-fencing the “non-matrimonial” property. The agreement had been sent to the respondent in 2013, apparently initially stating that he would receive £1 million if the marriage lasted less than 3 years, and £5 million if it lasted more than 3 years. The parties were due to attend a pre-wedding cruise but as the agreement was unsigned the cruise was delayed. The respondent attended the petitioner's lawyer's office, and was given a hard copy of the agreement and told to get legal advice. His position is that it was not made clear to him that the terms had changed, namely that he would get £1million if the marriage broke down within 5 years, and £3million thereafter. He did go to Davies Ingram, advocates, and saw Advocate Jamie Orchard who required the respondent to sign a waiver as follows:

“I confirm that I have not received any advice from Advocate Jamie Orchard specifically in relation to the terms and effect of the Agreement nor in relation to the enforceability of the Agreement in Jersey”

4

Notwithstanding this, the respondent signed the PMA in the presence of Advocate Orchard. The PMA states that it is to be legally binding, and both parties acknowledged they had the benefit of legal advice and had entered into it “ freely and voluntarily.” The petitioner's advocate submits that the respondent is literate, and was able to read the document in front of him, and had he felt the need for further legal advice, he could have taken it. It appears he did not flag up to the petitioner or her lawyer prior to the marriage there was a waiver from Advocate Orchard, and he signed on the basis he had had legal advice. The respondent has now been paid the £1million and received several motor vehicles and other chattels from the petitioner during the marriage.

5

During the marriage the parties entered into a partnership “the X Partnership”. They enjoyed some considerable success. By about November 2014 the partnership was sufficiently profitable for the petitioner to inform the respondent that she had been advised that they should convert the partnership into a Limited Company. The respondent agreed. Company A Ltd (CAL) was accordingly set up and all of their partnership assets, and some £600,000 of cash were transferred to the company. Both parties continued to receive income from the company.

6

During the course of this divorce it has been revealed that the only legal shareholder of CAL is the petitioner. The respondent believes that the petitioner holds the shares as nominee or on trust for both of them, and it is submitted on his behalf that he was never asked to give away his partnership assets, and as far as he (and the Law) is concerned he owns half of the value of CAL by virtue of a resulting trust or otherwise. The value of CAL is estimated to be several million pounds.

7

The respondent had requested that full financial disclosure be made within the ancillary relief proceedings including full affidavits of means with documentation, questionnaires, replies and schedules of deficiencies. The petitioner argues this should not be necessary on the basis that there is a PMA in place. However, the respondent now proposes that affidavits of means are exchanged without supporting documentary evidence, but does require bank statements and credit cards statements for the last 12 month's preceding separation and the petitioner provides documentary evidence as to her financial position at the time of entering the PMA. In addition, liberty is then sought to apply for further disclosure, if required, relevant to the PMA and section 25 factors, to include questionnaire and replies to them. A Case Review Hearing is to be fixed, with dates being then set for a final hearing at which the validity and fairness of the PMA will be argued.

8

Both parties do agree that the respondent should write to the petitioner setting out what further disclosure is required in relation to the partnership, CAL, the loans made by the petitioner to CAL and related requests.

The Law
9

Since Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, [2010] 2 FLR 1900, PMAs are no longer regarded as contrary to public policy. There have been numerous cases regarding the weight to be granted to PMAs since then, including the recent Jersey case of L v M (Matrimonial) [2017] JRC 062A.

10

Lord Philips at paragraph 52 in the Radmacher case said:

“If parties who have made such an agreement, whether antenuptial or post-nuptial, then decide to live apart, we can see no reason why they should not be entitled to enforce their agreement.”

The weight to be attached to a pre-nuptial agreement was to be determined by a threefold approach by a court:

Lord Philips said that:

“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” .

  • (i) were there circumstances attending the making of the agreement which should detract from weight which should be accorded to it?; paras 68 – 73

  • (ii) did a foreign element enhance the weight that should be accorded to the agreement?; para 74 which is not the case here

  • (iii) did the circumstances prevailing at the time the court made its order make it fair or just to depart from the agreement? The “fairness” test at para 75”.

11

In Jersey, the effect of pre and ante nuptial agreements have come under review. In the case of L v M (Matrimonial) [2016] JRC 184A, a preliminary hearing was held to determine the discrete issue of what weight, if any, should be attached to the PMA. The question was held not to be answerable without further information about the parties' respective needs:

“39. …, I have concluded that I do have to take into account all of the circumstances of this case and that I cannot simply make an order at this stage that no weight should be attached to the pre-nuptial agreement. I am bound by Article 29 of the Matrimonial Causes Jersey Law 1949 to “have regard to all the circumstances of the case including the conduct of the parties to the marriage insofar as it may be inequitable to disregard it and to their actual and potential financial circumstances.” I need to hear the other circumstances which the parties feel need to be taken into account before deciding on the weight to be attached, if any, to the pre-nuptial agreement.”

12

In the matter of II [2010] JRC 209 the court held that the post-nuptial agreement was not a formal agreement and had been entered into by duress.

13

In the case of Crossley v Crossley [2007] EWCA Civ 1491 there was a PMA. It was a 2-year, childless marriage, the husband having £45 million prior to marriage and the wife some £18 million, they were both mature adults and the PMA provided that each retain their own wealth on divorce, with there being no joint assets. It was asserted on behalf of the wife that the husband had not made full disclosure of the fortune upon which the PMA had been negotiated. It was submitted on behalf of the husband there is an agreement and in all the circumstances of the case, the wife should be held to it. Mr Justice Bennett ordered that Affidavits of Means be completed without documents, without...

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