Kremen v Agrest (No.11) (Financial Remedy: Non-Disclosure: Post-Nuptial Agreement)

In financial-remedy proceedings, material non-disclosure requires the court to draw only properly supported and reasonable inferences. If hidden funds are found, the court should quantify them realistically, using direct evidence first and then the scale of business activity and lifestyle. It must not allow non-disclosure to produce a better result than full disclosure.

A nuptial agreement receives no weight where it was procured by pressure, without material disclosure or independent legal advice, was not entered into with a full appreciation of its implications, fails to meet reasonable needs, or prejudices children. The court must have particular regard to foreign financial benefits under Matrimonial and Family Proceedings Act 1984, but fairness remains decisive.

The applicant wife sought financial orders under Part III of the Matrimonial and Family Proceedings Act 1984 against her former husband. An intervener sought to make a charging order final over property previously transferred into his name, while another creditor sought substantial payment and related relief.

The husband did not attend the final hearing and maintained that he had no assets. The wife alleged substantial wealth concealed through offshore companies and nominees. The court also had to assess a post-nuptial agreement made in Israel, approved by an Israeli court, and later reaffirmed during the parties’ divorce. The central issues were the effect of non-disclosure, the weight of the foreign agreement, the appropriate financial award, and the intervener’s charging-order application.

1. Non-disclosure. The court applied the discipline stated in NG v SG: material deficiency in disclosure permits reasonable adverse inferences, but not findings of assets which the evidence disproves. Hidden funds should be quantified realistically, using direct evidence, the scale of business activities and lifestyle. Vague reputation evidence is inadmissible, and the Al-Khatib v Masry approach of assuming assets at least twice the claim must not be the sole metric. A non-discloser should not obtain a better outcome through concealment.
2. The husband’s evidence was deliberately misleading. The court inferred that his fortune was approximately £20m–£30m. The wife’s needs totalled £8.3m, including housing, income, debts and the children’s maintenance and school fees. Applying need and sharing, the fair award was £12.5m.
3. Post-nuptial agreement. The court applied the guidance in Granatino v Radmacher. Effect should ordinarily be given to an agreement freely entered into with full appreciation of its implications unless fairness requires otherwise. Material absence of disclosure, information or advice is relevant; duress, fraud, misrepresentation, undue pressure and exploitation of a dominant position may eliminate or reduce the agreement’s weight. The reasonable requirements of children cannot be prejudiced, and an agreement which leaves one spouse in real need or deprives a spouse of a fair share of wealth generated during the marriage is likely to be unfair.
4. The agreement was procured by pressure, without prior disclosure or truly independent advice. The wife did not understand the rights under English law that she was giving up. The agreement did not meet her reasonable needs or the children’s needs. It was therefore accorded no weight.
5. Charging order. Under section 1 of the Charging Orders Act 1979, the court retained a broad discretion. The intervener’s application sought to reverse an earlier transaction-avoidance judgment and was an abuse of process. The application was dismissed and the interim charging order discharged.
6. The husband was ordered to pay the wife £12.5m, with the net proceeds of sale of South Lodge and most funds held in court credited against the award. £8.3m was certified as maintenance. The creditor’s application was dismissed. Costs were reserved for further argument.

This was a first-instance determination. The judgment records earlier proceedings and appellate decisions in the same litigation, including decisions of the Court of Appeal, but those decisions were not appeals from the present judgment.