Until now, the general approach has been that a company cannot claim privilege against its own...
In the recent case of AH v BH [2024] EWFC 125 Mr Justice Peel had to consider the terms of a pre-nuptial agreement where the assets were around £50m and almost all of the assets were held in the husband’s sole name. If the pre-nuptial agreement were upheld, it would have severely limited the wife’s financial remedy claim.
In summary, the key points of the pre-nuptial agreement were:
- The Parties’ primary intention was that:
- Property held in the parties’ joint names should be divided equally
- Neither would make a claim against property held in the other’s sole name
- The wife would not make any claim against, or by reference to, the husband’s business.
- Neither party believed that there should be a periodical payments claim in the event of the breakdown of the marriage.
- There was a term that the pre-nuptial agreement was to be reviewed at the birth of their first child.
- Finally, the parties agreed that the terms of the pre-nuptial agreement met the anticipated needs of each party.
The wife brought the claim as she argued that the agreement did not reasonably meet her, and the children’s financial needs and it should be departed from however the husband wished to rely on the terms of the agreement as he argued that the parties entered the agreement believing it to be appropriate and it was reviewed after their first child’s birth and decided that it still covered their needs.
The judge took into consideration the significant impact that the marriage had on the wife’s financial status. She no longer had a property in her sole name, she contributed part of the proceeds of sale into the family home and her earning capacity had been diminished due to her role as a mother.
Peel J ordered the sale of the family home and for the wife to receive a lump sum of 56.7% of the proceeds (approximately £2.75m) to rehouse herself and the children. He also ordered a lump sum of £300,000 upon the sale of the family home to help cover the cost of the purchase and any refurbishments.
It was also ordered for the husband to pay the wife capitalised maintenance of £710,000 which was based on a 10-year term.
In addition, the court ordered child maintenance of £20,000pa per child until the end of their tertiary education. Orders were also made for the husband to pay maintenance pending the sale of the family home and school fees and extras with the cost of out of school activities to be split equally.
The importance of the above case is that even though the pre-nuptial agreement was departed from to cover the wife’s and children’s needs without the agreement in place the court noted that the wife might have been entitled to the business interest on a sharing basis of around £7.5m and possibly more.
Also even on a needs basis, without the pre-nuptial agreement the wife’s award would have likely been a lot greater. For example, she may have retained the family home and had maintenance for a longer period, perhaps even a whole life term.
Therefore, if you are considering entering into a marriage and have high assets or assets in your sole name that you wish to protect, it is sensible to enter into a pre-nuptial agreement with your partner as an ‘insurance’ policy for yourself.
If you have already entered into a marriage, you can consider entering a post-nuptial agreement instead.
If you would like any further information or advice in relation to pre or post nuptial agreements, please contact our specialist family lawyers based in Wolverhampton, Cradley Heath and Sutton Coldfield. We serve clients across the West Midlands and Birmingham. You can call 01902 328 355 to speak to one of our family lawyers.