Wednesday Nov 12
Five law lords will be asked in a test case tomorrow to uphold a pre-nuptial agreement signed by a wealthy American couple with five children who divorced after ten years of marriage.
From The Times, November 12, 2008
Pre-nuptial agreements put to the test
Frances Gibb, Legal Editor
Five law lords will be asked in a test case tomorrow to uphold a pre-nuptial agreement signed by a wealthy American couple with five children who divorced after ten years of marriage.
The case, the first of its kind, could lead to the first ruling by Britain's most senior judges on whether pre-nuptial agreements are enforceable in the courts.
At present, courts take such agreements into account but they are not binding. Because the couple live on the Isle of Man, the appeal is to the judicial committee of the Privy Council, where the law lords sit as the final Court of Appeal for UK overseas territories.
The case comes just weeks after Britain's most senior family judge, Sir Mark Potter, told The Times that he thought that pre-nuptial agreements should in most circumstances be enforced by the courts .
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In today's case, the 64-year old husband lost in the Isle of Man Court of Appeal which found in favour of his wife, now 42.
But divorce law on the island is identical to that in England and Wales so the decision will be binding and followed in the English courts.
The couple were married in Florida in 1994 and then moved to the Isle of Man a year later. They were married for ten years: both had previously been married and had children from those relationships. They went on to have a further five children from their marriage with each other.
They had signed their pre-nuptial agreement on the day of their wedding, even arranging for the signing to be videotaped.
Their marriage broke down in 2003 and they began divorce proceedings under Manx law. Had they divorced in Florida, the agreement would have been binding.
They agreed to vary the pre-nup one year before the divorce application was filed when the marriage was already "on the rocks" and the wife in an adulterous relationship.
The wife is claiming £5.6 million as against the £2 million previously agreed in the pre-nup.
She argued during the Manx proceedings that she had been pressurised into signing the varied agreement and that her husband had not fully disclosed his assets. She also maintained she had not had adequate legal advice.
The judge disagreed with those claims. But he did not consider the pre-nuptial agreement decisive and said that she could have a substantial extra sum for housing, to be paid outright to her. The husband appealed to the Isle of Man Court of Appeal but lost.
He is now going to the Privy Council, claiming that the pre-nuptial agreement, as varied, is valid.
Suzanne Todd, a partner with Withers, the City law firm, said: "It is the first time since the House of Lords case of Hyman in 1929 that a court of this level has had the ability to lift the block on enforcing pre-nups.
"In that case, such agreements were judged to be contrary to public policy. This is a chance," she added," for the House of Lords to acknowledge the evolution of social values since then and to decide whether it is appropriate for couples to take control of their own destiny in the event of a divorce - hopefully in one unified judgment."
Michael Gouriet, a partner with Withers family law team, added: "The Law Commission do not intend to publish a draft bill in this area until 2012 at the earliest so this is a great opportunity for the highest court in the land to make pre-nuptial agreements more binding and provide clarity to practitioners."
