April Case Law Update 1 – WC V HC [2022]

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WC v HC [2022] EWFC 22
https://www.bailii.org/ew/cases/EWFC/HCJ/2022/22.html

Peel J summarises the law applicable to financial relief claims in 16 points (para 21) and sets out the essential propositions in relation to pre-and post-marital agreements drawn from Radmacher v Granatino [2010] UKSC 42. He also considers the law in relation to financial assistance from family members and family trusts and in relation to inheritance prospects, particularly in cases where forced heirship applies.

The parties were both in their 50s and had 2 teenage children. The marriage lasted some 16-17 years. H came from a very wealthy family and the parties met when W was working as a PA at Goldman Sachs and H worked in the City. W had not worked since birth of the eldest child. The parties initially lived in England but came to spend increasing amounts of time in Switzerland from where H’s family office was run. They had entered into a pre-marital agreement as well as a post-marital agreement. Their standard of living was very affluent but not of the “super-rich variety”. Total assets were approximately £12.479 million which almost entirely emanated from gifts and inheritances on H’s side during the marriage or were owned by H before the marriage. The post-marital agreement provided for W to receive about 56% of the total assets.

Peel J identified the main issues as:

  1. The circumstances surrounding the Pre-Marital Agreement, and whether any weight should be attached to it
  2. The circumstances surrounding the unsigned Post-Marital Agreement, and whether any weight should be attached to it.
  3. Whether H could anticipate a resumption of the inter vivos gifts previously received from his father.
  4. Whether prospective inheritance from H’s father was a relevant factor.
  5. W’s needs.

 

He set out the general law and then went on to look at the pre- and post-marital agreements, setting out the essential propositions from Radmacher. The pre-marital agreement had largely been overtaken by events, but he noted that it was relevant that the agreement expressed that all dynastic property already acquired by H or acquired during the marriage should be free of claims by W, save as necessary to implement the agreement. Peel J said that he was confident both parties were under a degree  of pressure when it came to entering into the agreement but W was not under undue pressure.  The circumstances surrounding the post-marital agreement were considered in some detail. W had been reluctant to enter into negotiations about this agreement, but ultimately both parties had instructed solicitors in England and Switzerland. Peel J rejected W’s contention that she was under undue pressure to enter into this agreement and her argument that no agreement was reached. However he found force in the argument that the agreement was not signed by the parties. Article 1 of the agreement provided that it should come into force upon the date it was signed by H and W and there was a preamble which stated: “Do not sign this agreement unless you intend to be bound by its terms.” Peel J was satisfied that the agreement was not a formally arrived at agreement in the Radmacher sense; in other words he did not find that it should bind W unless she could demonstrate it operated unfairly. He found that he was entitled to take it into account and attach such weight to it as he found fit – it was one of the factors in the case.

 

H’s father had made handsome provision to the family during the years. However that support had ceased since the divorce proceedings began, and had been marginalised from his wealth management role in the family office. Peel J did not accept that this was the product of collusion between H and his father and doubted that H’s father would resume payments once the divorce proceedings were at an end. He took the view that H’s father was there, in the background, as a safety net in the event of calamity rather than as a foreseeable ongoing financial resource. As far as H’s prospective inheritance from his father was concerned,  Peel J found that it was more likely that H would receive a significant inheritance, than that his father would take active steps to avoid forced heirship and disentitle his children. However, such inheritance would be entirely non-matrimonial; in addition, it had been recorded in the two agreements and understood by the parties that future inheritances should be excluded from claims by the other party and it may be several years away.

 

W’s award was based principally on an assessment of W’s needs, in light of the length of the relationship, the primacy of the children’s needs, the available resources, the standard of living and the origins of the wealth. W was awarded £4 million for housing in London; a capitalised budget of £324,000 pa for herself and the children. This made her total award £7.45 million, including a small cushion to allow for unforeseen contingencies. The represented about60% of the assets. As an aside, Peel J felt compelled to make some introductory comments to his judgment about the preparation for trial for the proceedings. He criticised W’s representatives for failing to comply with para 5.2 of PD27A by using a smaller than specified type font, thereby allowing her a longer s.25 statement’s statement was also criticised for descending into personal and prejudicial matters directed at H which were irrelevant, and introducing fresh evidence at the last minute. H’s advisers produced a vast spreadsheet analysis of expenditure the day before the hearing and Peel J made clear his displeasure with this practice.

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