ND v KD [2024] EWFC 188 (B) – Tara Lyons successfully argues nuptial agreement should not be upheld in financial relief hearing

Tara Lyons, instructed by Grant Cameron at Trethowans LLP appeared for the wife in a claim for financial relief and successfully argued that a prenuptial agreement entered into by the parties should not be upheld.

At the time of trial the Husband, a property developer, was 43 years old and the Wife, a consultant in the charity sector, was 50 years old. The parties were married for 10 years and they have one child, who was 8 years old who lives with both of them. There were net assets of £3.2m.

One of the central issues concerned the validity of a prenuptial agreement (“PNA”) entered into by the parties just three days before the wedding. There was financial disclosure and both parties were advised in respect of the agreement by lawyers.

The PNA provided, inter alia, that:

1. Each party would retain his or her separate property and any subsequent property acquired by funds realised by that property.
2. If, in the course of the marriage, either party intended to make a gift of property to the other, or acquire any property together such that they owned the property in equal beneficial shares or in such other shares, then they shall register such property in their joint names and declare in writing the extent of their respective beneficial interests.
3. In the event of a divorce all separate property would remain their own and any joint property would be distributed between them in equal shares unless they have expressly declared that the beneficial interest in any property shall be held other than in equal shares in which case that declaration shall be binding upon them.
4. Inheritances acquired by either of them during the course of the marriage would remain in the sole beneficial ownership of the party who received it.
5. In relation to children, clause 12 recited:

“If the parties cannot agree a fair level of capital and income provision for any child of the parties upon divorce they will attend mediation with a family law mediator who will be jointly appointed by the parties in order to reach agreement about the appropriate level of capital and income provision any child of the parties.”

6. There be a review upon i. the birth of any child, ii. the 10^thanniversary of the marriage and iii. the inability of either party to work the medical reasons for a period in excess of 6 months and iv. either party remaining unemployed for a period in excess of 6 months.

During the course of the marriage, the Husband conducted a number of property transactions and drew up various property ownership agreements which gave had the net effect of giving the Wife a 7% interest in the family home and a 50% interest in a limited number of properties acquired during the relationship.

In considering the validity of the prenuptial agreement, Her Honour Judge Harris at the Central Family Court found that the Wife entered into the Prenuptial Agreement as a result of undue pressure. She relied upon the following matters:

• The timing of the negotiations (6 weeks before the wedding) and the timing of signing the agreement  (3 days before the wedding)
• The Husband’s clear position that he would not marry her at all unless she signed it
• The imbalance of power between the parties – despite the Wife’s intelligence – with the Husband being the controlling force
• The wife’s evidence that she felt she had no alternative

In addition the terms of the agreement were unfair and did not provide for the wife’s needs:

• There was no obligation for marital assets to be shared equally and the Husband exploited the terms by his property dealings during the marriage. Also given the Husband was a property developer and all of his portfolio was likely to be built on the premarital properties and thus excluded.
• There was no provision for the child
• The trigger events were not acted upon
• The unfairness was best exemplified by the Husband’s open offer that the Wife receive just £325,000, which should be repaid by her upon receipt of any inheritance/ gift.

The case is interesting because it appears to buck the current trend of giving weight to party autonomy and upholding nuptial agreements. It provides a useful example of the set of circumstances which could amount to undue pressure even when a party is found to be “intelligent and mature”.

The court went on to award the Wife £1.6m of the assets.

The judgment is here.