In a recent High Court decision, Mr Justice Francis told a husband to learn to cook as he dismissed a claim for a divorce settlement of £2.5 million which included a meal allowance of £26,000 per year. The husband had claimed he needed the meal allowance as he could not even make a simple meal such as an omelette and he got short shrift from the judge who said:
“Being married to a rich person for three years does not suddenly catapult you into the right to live like that after the relationship has ended”
The case is interesting as the couple had a pre-nuptial agreement which the husband claimed he had been asked to sign on the day of the wedding. The agreement provided that he could have £500,000 of a settlement in the event of a divorce.
In England, unlike the position here in Scotland, the courts start from the point of view that a pre-nuptial agreement should not be enforceable. The courts in England often then try to find ways around that basic idea. In this case after the trial, the judge awarded £400,000 to the husband and directed he was to pay his wife’s legal costs of £75,000.
In Scotland, there is a long history of using pre-nuptial agreements or Marriage Contracts as they were then known. The purpose of them was often to protect a wealthy daughter from the consequences of the legislation that entitled a husband to his wife’s property on marriage.
Modern use of these agreements is common and often the purpose now is to ringfence and protect both parties’ assets from becoming part of a divorce claim. The agreements have to be fair and reasonable at the point they are signed so it is a good idea to make sure sufficient time is given before a wedding for parties to take advice and consider the agreement carefully.
In this English case, the wife was the daughter of a wealthy businessman and most of her assets had come to her as gifts from her family. In Scotland gifts from third parties such as parents are not matrimonial property but complications can arise where the nature of the gift changes during the marriage. For example a gift of money which is used to buy something else. The change can convert the non-matrimonial property into part of the pot and then there can be arguments about whether it is fair to divide it in the same way as other assets that may not have come from a non-matrimonial source. The law generally provides that the net value of all of the couple’s matrimonial property is divided fairly with the starting point for that being that the property is divided equally.
It is a good idea to put a pre-nuptial agreement in place. It avoids complicated and costly legal disputes in the event of a divorce. It is important that if considering an agreement like this that you allow plenty of time before the wedding date. Both parties ideally should have their own legal advice and it is a good idea to be transparent with each other about what the assets are and their value. You should also keep your agreement under review and bear in mind that in future if there are changes of circumstances you can agree to change the terms of it. If you are already married it is not too late – these agreements can also be entered after marriage. Then they are called post-nuptial agreements.
In a situation like the one in this English case, there could have been a challenge to the pre-nuptial agreement if what the husband said was true about him being given it on the day of the wedding. If he had no legal advice and was in a far weaker bargaining position than his rich wife and her family then it may be possible to try to challenge the agreement. This would not change the basic legal position that provided the gifts the wife had received from her father had not changed in nature, none of that wealth would be matrimonial property in Scots law. The issue would be placed beyond any significant doubt by getting a pre-nuptial agreement done in a proper and timely manner.
The English case is being appealed on the basis the judge showed gender bias in his decision to reject the husband’s claim. There have certainly been a number of cases in the English courts where wives of wealthy men have received significant ongoing support payments and have been maintained in a “lifestyle” by the divorce settlement.
In Scotland these high value ongoing support cases are virtually unheard of anyway. The law here is designed to identify the matrimonial property, divide it up and have both parties make a clean financial break. In some cases where it can be justified by significant financial dependence or hardship caused by the divorce, there may be an ongoing periodical allowance ordered. This tends to be for a fixed (often quite short period) and is not based on the paying person’s future income or merely the paying person’s wealth.
In Scotland too the fact the marriage had only lasted three years, the claimant was a 42 year old city trader and there were no children would be factors that would likely go against any periodical allowance being paid.
This case also demonstrates the risk involved in litigation about these matters. Here in Scotland just as south of the Border, the judge does have a great deal of discretion in making a financial award. In the English case it is reported that the wife’s lawyers had offered £800,000 to avoid the stress and cost of a trial. The husband has ended up with egg on his face quite literally as he comes away with half that sum which is reduced further by having to pay costs to his wife and no doubt his own legal costs. Taking preventative steps such as putting in place a pre-nuptial agreement makes sense but even if you have not done that, getting early expert legal advice and trying to sensibly negotiate a settlement is a far better option than a drawn out, uncertain and costly court case.
At Thorntons, we have a dedicated and experienced Family Law team. For more information on prenuptial agreements please contact a member of the Family team on 03330 430150.
