A v B (Financial Relief: Agreements)

An agreement concerning matrimonial finances is a circumstance to which the court must have regard when exercising its statutory ancillary-relief discretion. It is not a preliminary issue that determines whether the statutory claims will be examined. The court must apply all the relevant Matrimonial Causes Act 1973 section 25 factors, including needs and resources, while giving appropriate weight to a properly and fairly reached agreement.

Pressure, inadequate disclosure, poor legal advice, material changes, inheritance and post-separation acquisitions may affect the weight given to an agreement. Inherited or post-separation assets cannot be excluded automatically, although their source, timing and circumstances may justify treating them separately. A fair agreement should not be displaced merely because asset values later change, particularly where the parties have arranged their affairs in reliance upon it.

The husband appealed against an ancillary-relief order made by Deputy District Judge Green on 8 April 2004. The order implemented a written agreement made by the parties in May 1999, under which the husband received a lump sum and other assets in full and final settlement.

The husband sought a further lump sum. He argued that the agreement had been made without adequate advice and disclosure, was unfair when made, and had been treated as determinative without a proper assessment of the statutory factors and his current needs. The wife opposed the appeal and relied on her reliance upon the agreement. The central issue was whether the agreement should be upheld after a fresh assessment of the parties’ circumstances in 2004.

1. The husband’s appeal was dismissed. The district judge’s order, which gave effect to the 1999 agreement and made no further financial provision, was within the range of permissible decisions.

2. An agreement is one circumstance in the overall section 25 exercise. The court must evaluate the statutory claims at the date of the hearing and must not treat the agreement as a preliminary issue or as automatically determinative. This was the approach identified in Edgar v Edgar [1980] 1 WLR 1410, Camm v Camm (1983) 4 FLR 577 and Smith v Smith [2000] 3 FCR 374.

3. The circumstances relevant to the weight of an agreement include pressure, exploitation, knowledge, legal advice, changes of circumstance and the parties’ subsequent conduct. The advice given to the husband was less comprehensive than desirable, but the agreement was fair when made, there was no undue pressure, and the wife had arranged her affairs in reliance upon it.

4. Inherited and post-separation assets remain within the section 25 assessment. Their source, timing and circumstances may nevertheless justify treating them separately. The court may conclude that an inherited asset should be retained by the inheriting spouse where the other spouse’s reasonable needs can be met without recourse to it. The approach in White v White [2001] 1 AC 596 was applied and the analysis in Norris v Norris [2002] EWHC 2996 (Fam) approved.

5. On the current evidence, the husband could meet his needs from his own resources, although adjustments might be required. Changes in property values and the parties’ differing financial choices did not justify disturbing the agreement.

• High Court (Family Division): The husband’s appeal against the order of Deputy District Judge Green dated 8 April 2004 was dismissed. The wife’s costs cross-appeal was adjourned.