SA v PA

A nuptial agreement should be given effect where it was freely entered into with a full appreciation of its implications, unless fairness requires otherwise. An agreement may govern identified capital assets while leaving maintenance at large. Compensation is an exceptional strand of the discretionary exercise. It normally requires a proven, high-earning career relinquished during the marriage, with little or no speculation about the counterfactual position. Compensation should ordinarily be reflected by placing periodical payments towards the upper end of the needs-based range, rather than by adding a separate premium above needs.

The parties had been married for 18 years and had four children. The husband relied on a Dutch pre-marital agreement excluding community of property and preserving separately held property. The wife accepted that some assets might be non-matrimonial but sought substantially greater periodical payments, relying on the compensation principle identified in McFarlane v McFarlane [2006] UKHL 24.

The central issues were the effect of the agreement, the extent to which it should influence the division of capital and maintenance, and whether the wife’s career history justified a compensation-based award.

1. Pre-marital agreement. The court applied the guidance in Granatino v Radmacher [2011] 1 AC 534. The wife had freely entered into the agreement with sufficient advice and understood its implications. The agreement was intended to operate wherever the parties lived or divorced.
2. The agreement excluded community of property, preserved separately held external property and provided for equal sharing of jointly created capital. It did not regulate maintenance. An agreement need not address every aspect of the parties’ resources to have presumptive effect over the matters it does address. The capital provisions were therefore implemented, subject to augmentation for needs.
3. Compensation. The wife had no sufficiently established high-earning track record when she left employment. It was impossible to determine without speculation what career or earnings she would otherwise have achieved. This was not a compensation case.
4. The compensation principle remains binding, but it will succeed only in a very rare and exceptional case where the claimant relinquished a very high-earning career, practised over an appreciable period during the marriage, and the lost earnings can be established with near certainty. The award should be fixed towards the top of the needs-based discretionary bracket. A separate compensation premium should not be added.
5. The court applied a needs-based calculation, including housing, earning capacity, pensions, annuity and a stockpile payment, and made the periodical payments term extendable if an application was made before expiry.
6. The family home was transferred to the wife subject to the mortgage. The husband was ordered to pay £120,000, assume the joint debts, share his pension and annuity equally, pay £10,620 monthly from 1 March 2014 to 1 February 2019, and meet specified child support, school-fee and university costs.

First-instance financial remedy judgment. No prior or appellate decision is stated in the judgment.