This question was at the centre of the case AH v BH whereby the Family Court heard a dispute over financial remedies following a short marriage and with restrictive pre-marital agreement (PMA) terms (also referred to as a pre-nuptial agreement).
Background:
AH and BH were married for about five and a half years and have two children. The assets were found by the Court to be around £50 million, almost all in the name of the husband. The wife only had very modest resources.
The main issue relates to the interplay between the terms of a PMA which severely limited the wife’s financial remedies claims and both her and the children's financial needs.
Decision:
The Court ruled in favour of the wife by providing her with significant financial remedies despite the terms of the pre-nuptial agreement. The Judge found that the PMA was clear and comprehensive but did not adequately meet the financial needs of the wife and children.
The Judge looked at the facts and the fact that the wife sold her flat in her country of origin and stopped working for the marriage and to take care of the children. She was, therefore, in a vulnerable position. She also put some of the proceeds of her flat to fund the renovation of the family home which belongs solely to H. The Court took into account that when the wife signed the PMA she was financially independent with no children and signed it with anticipation that she would never need to use it. She did not try to escape it but rather asserted that the provisions of the PMA did not adequately meet her financial needs.
The Court held that had the parties not signed the pre-nuptial agreement, the wife might have been entitled to receive on a sharing basis as much as £7.5 million, possibly more. Similar findings applied to her needs which, in the absence of a PMA, would have been greater. Without the PMA, the wife would have sufficient resources to meet her needs and those of the children.
Based on all the facts and changes in circumstances, the Court felt the terms of the PMA were unfair. The Judge ordered for the family house to be sold and for the wife to receive 56.7% of the price outright for the purchase of an alternative property (£2.75m). The husband was ordered to pay a lump sum for stamp duty and other costs, as well as interim maintenance and child maintenance until such a time as the children complete their tertiary education.
Implications:
This case might be a great relief for those who have entered a PMA with restrictive financial remedies claims but which would leave them in a difficult financial situation in case of separation. The judgement highlights the importance of meeting the financial needs of the primary carer and the children, even where there is a PMA in place.
The Judge also commented on the husband's minimal recognition of what the wife gave up by noting “She contributed fully to the marriage as wife and mother and made sacrifices for the sake of the relationship (the sale of the flat and giving up full-time work).” This statement highlights that contribution to a marriage does not need to be monetary.
In broader terms, this case is also a step in the right direction to combat financial abuses whereby one party stays in a marriage for fear of losing everything.