KA v MA (Prenuptial Agreement: Needs)

A nuptial agreement should be given effect where it was entered into freely, with full appreciation of its implications, unless it would be unfair to hold the parties to it in the circumstances prevailing at the end of the marriage. Fairness remains fact-sensitive. The court must consider needs, the welfare of children, the parties’ autonomy, non-matrimonial property, the length and nature of the relationship, and any pressure or other vitiating factor.

An agreement may affect the assessment of needs, but it cannot leave a spouse or child in real need. The agreement must be considered as a whole. A party cannot selectively enforce favourable provisions while abandoning provisions which operate to the other party’s disadvantage.

The applicant wife sought financial remedy orders following the breakdown of her marriage to the respondent husband. The husband sought an order reflecting a prenuptial agreement signed approximately three weeks before the marriage in December 2008.

The agreement protected the husband’s substantial premarital wealth and provided the wife with an indexed lump sum and maintenance. The wife accepted that she understood the agreement and intended to be bound by it, but relied on pressure, the short period before the wedding, the absence of income disclosure and the inadequacy of the provision. The central questions were whether the agreement was freely entered into and, if so, what weight it should receive when assessing the wife’s and child’s needs.

1. Applicable principles. The court applied the approach in Radmacher (formerly Granatino) v Granatino [2010] UKSC 42. Effect should generally be given to an agreement entered into freely with full appreciation of its implications, unless fairness in the circumstances prevailing requires departure. The agreement is one factor in the overall assessment under the Matrimonial Causes Act 1973, not a substitute for the court’s jurisdiction.
2. Freedom and pressure. The husband’s insistence that there would be no marriage without a prenuptial agreement did not, on these facts, amount to duress or undue influence. The parties were mature adults, the wife was financially independent, had legal advice and understood the consequences. Her desire to marry and the emotional pressure she experienced did not mean that her free will was overborne.
3. Fairness and autonomy. The agreement’s purpose of protecting premarital wealth for the husband’s children was a legitimate exercise of personal autonomy. However, the court had to assess its operation at the time of divorce. The wife’s needs could not be reduced to the modest provision contemplated in 2008 where that would produce obvious hardship, particularly given her role as M’s primary home-maker and continuing carer.
4. Assessment of needs. The agreement had to be considered as a whole. The husband could not rely selectively on its restrictive provisions while departing from its provisions which might reduce the wife’s award. Applying the statutory factors, including the first consideration of M’s welfare under section 25(2), the court assessed a housing fund of £1.35 million and income needs of £100,000 net per annum until M completed tertiary education, reducing thereafter to £75,000. After crediting the wife’s assets and liabilities, a clean-break lump sum of £2.73 million was required.
5. Orders. The husband was ordered to pay the lump sum. Property PV was to be sold. He was also ordered to pay indexed child periodical payments of £30,000 per annum, reducing by 50 per cent during tertiary education, including a gap year. There was no order as to costs.