A recent decision of the English Family High Court in the case of NG v KR (Pre-nuptial contract) [2008] EWHC 1532 (Fam), has given some further support to the validity and enforceability of pre-nuptial agreements in that jurisdiction and by implication in Ireland also.
Ken Heffernan, Cork Family Law and Divorce solicitor considers whether or not the Irish courts are likely to follow suit.
Ken says that the outcome of this case is that while the pre-nuptial agreement came in for criticism it did, despite its flaws, have a major suppressing effect on the financial provision received by the husband. It is Ken’s view that if there had been no agreement in place at all the husband could have expected substantially more from a family “pot” of about £100m(€114m).
It was agreed by both parties that the pre-nuptial agreement was legal and enforceable in Germany and in France.
The Facts: The case in England concerned a couple with two children who had married in England in 1998 and separated in 2006. The mother was born in Germany and the father born in France. As a result of the separation the children now live for two thirds of their time in Germany with their mother and for one third of their time with their father in England. The wife was extremely wealthy, mainly through inheritance, while the husband had been a very successful hedge fund manager before leaving banking to pursue a doctorate at Oxford University. In the light of the imbalance in wealth before the marriage the couple had signed a pre-nuptial agreement that in effect meant the husband would not seek anything financially if the marriage broke up.
The enforceability of the pre-nuptial agreement before the court in England when deciding on fair financial provision was the main question that the court had to decide upon. It was agreed by both parties that the pre-nuptial agreement was legal and enforceable in Germany and in France. The wife argued that to ignore the agreement would be a breach of her human right’s and that it was a maintenance agreement and therefore the husband should be held to it now. The husband argued that the pre-nuptial agreement was not binding in England, that he had not received sufficient advice or disclosure before signing the agreement so it should not play a part in any award. He sought a settlement of £9m(€10.3m) out of the wife’s estimated wealth of £100m(€114m).
The Decision: The court decided that the agreement would be enforceable in both Germany and France but it was not enforceable under English Law “until adopted by the Court” and found that the agreement was flawed under English law. However in considering the relevant factors for financial provision the court said that the amount of the award would be affected by the by the husband’s decision to enter into the agreement as he “understood the underlying premise that he was not entitled to anything if the parties divorced. In essence, he accepted that he was expected to be self-sufficient. As a man of the world that was abundantly clear”.
The husband was awarded £5.56m(€6.36m), broken down as follows: £2.5m(€2.86m) for a home; £630,000(€720,350) for a property in Germany to facilitate contact with the children there but to be left to the children of the family on the husband’s death; £700,000(€800,260) for his legal costs; capitalised maintenance of £100,000(€114,000) per annum and child maintenance of £35,000(€40,000) per annum per child.
The end result was that the husband did better than the nothing which the pre-marital agreement provided for, but he received less than he would have received had there been no agreement at all. The effect of this case is that the pre-nuptial agreement (flawed as it was) did have a major effect on the financial provision received by the husband as if there had been no agreement in place at all he could have expected substantially more from a family “pot” of about £100m(€114m).
flawed and unfair pre-nuptial agreements would be refused and properly drawn and agreed pre-nuptial agreements would be enforced
Irish Implications: From the facts of the case and the decision of the court, Ken’s view is that the courts in England and Wales are moving closer to an outright acceptance of the parties’ ability to put their own shape to the financial provision that will apply on a divorce. It appears that the reason that the court did not follow the pre-nuptial agreement terms (leaving aside policy) was mainly down to the fact the terms were unfair – no provision was made for the birth of children, the parties did not have full financial disclosure, translation was an issue as was obtaining independent legal advice.
Ken believes that if such a case came before the Irish courts that the court would also refuse to follow the pre-nuptial agreement for broadly the same reasons. Ken believes that the courts here would also give some weight to the pre-nuptial agreement to reduce the share of the husband. Such a pre-nuptial agreement would therefore have achieved as much as is possible under the current law in Ireland. However if the proposals from the study group on pre-nuptial agreements referred to on this website were put into effect more certainty would apply as flawed and unfair pre-nuptial agreements would be refused and properly drawn and agreed pre-nuptial agreements would be enforced. This case serves to show that getting proper legal advice from a solicitor in this area would be well worth the effort if the unfortunate happened and the pre-nuptial agreement had to be relied upon down the line.