GS v L

In ancillary relief proceedings, the court must apply Matrimonial Causes Act 1973, section 25, by evaluating all the circumstances and giving appropriate weight to needs, compensation and sharing. A nuptial agreement should generally be given effect only where each party entered it freely with a full appreciation of its implications, unless it would be unfair to do so. Where an agreement’s meaning and effect are uncertain, it may provide little assistance. Pre-marital assets may be used to meet the parties’ needs where fairness requires it. An alleged post-separation dissipation justifies an “addback” only in exceptional cases involving clear, wanton dissipation, assessed cautiously. A clean break may be achieved by adjusting capital rather than imposing long-term maintenance.

This was a final hearing of an application for ancillary relief following a ten-year marriage. The parties lived in Spain, had two children, and held liquid assets of approximately £4 million. The husband sought to ring-fence assets acquired before the marriage and relied on a Spanish post-nuptial agreement providing for community of assets. The wife disputed the agreement’s effect and sought provision sufficient for her and the children’s needs, initially including long-term maintenance.

The court considered the effect of the Spanish agreement, the treatment of pre-marital assets, alleged post-separation overspending, the parties’ earning capacities and whether a clean break could fairly be achieved.

1. The court applied section 25 of the Matrimonial Causes Act 1973. The statutory factors are not hierarchical. The court must weigh all relevant circumstances to achieve a fair result, with needs, compensation and sharing informing the assessment.

2. The court adopted the principle stated in Radmacher: a nuptial agreement should be given effect where it was freely entered into by each party with a full appreciation of its implications, unless it would be unfair to hold the parties to it. Neither party had understood the agreement in the same way, and the expert evidence could not establish its legal effect under Spanish law. The agreement therefore provided little or no assistance in the section 25 exercise.

3. The husband’s pre-marital assets could not be ring-fenced where they were required to meet the immediate and long-term needs of the wife and children. The pension was treated differently because it had been accrued wholly before the marriage and could not meet the wife’s short- or medium-term needs.

4. The authorities on “addback”, including Norris v Norris and Vaughan v Vaughan, required caution. The alleged overspend did not involve the clear, wanton dissipation necessary to justify re-attribution. The costs of separate children proceedings were also not added back.

5. Under section 25A of the Matrimonial Causes Act 1973, the court considered whether a clean break was achievable. Two years’ maintenance was insufficient and ten years excessive. A capital adjustment equivalent to five years’ maintenance fairly balanced the wife’s needs, her future earning prospects, the husband’s contributions and his pre-marital assets.

6. The husband retained his pension. He was ordered to transfer his interest in the Madrid property to the wife and to pay her approximately £600,000 from the joint account. The order was intended to achieve finality and a clean break, subject to consequential arrangements concerning tax, contents, maintenance pending payment and costs.