Terms of prenuptial agreement overruled by High Court

19 December 2014

The High Court however ruled that to protect the "reasonable requirements" of their three children, the husband should not live in "relative penury", whilst his wife lives in "relative luxury".

This is the case of Luckwell v Limata.  Victoria Luckwell's net worth is £6.7m in addition to which her parents provide her with an annual income of £81,000 and pay the school fees of the couple's three children.  At the time of their divorce, her husband Francesco Limata, however, was in debt to the tune of £226,000 and living in his mother's bed and breakfast hotel where he was working part-time for £6.50 per hour.

The Judge in the case, Mr Justice Holman, took the view that had the agreements not been in place, any court would have made a substantial award to the husband and further, that if the genders were reversed, a wife could expect a substantial award, even if the children were primarily living with the husband and only staying with her intermittently.

It wasn't until relatively recently, in the case of Radmacher v Granatino in 2010, that prenuptial agreements were given a greater degree of consideration.  Mr Justice Holman recognised that the Radmacher ruling meant that compelling weight and serious consideration must be given to prenuptial agreements.  However, crucially the Radmacher case also provided that "nuptial agreements cannot be allowed to prejudice the reasonable requirements of any children of the family".

The outcome of the current case was that the husband was awarded around £1,240,000, including £900,000 to buy a three-bedroom house and sufficient money to settle his debts.  Even though the terms of the settlement mean that Victoria Luckwell will have to sell her home, the Judge concluded that the need to provide an adequate home for the children to visit their father outweighed the inevitable upheaval.

The downfall of the prenuptial agreement in this case was its apparent imbalance and inherent unfairness.  It provided nothing for the husband, regardless of the length of the marriage or his circumstances at the time of the break-up.  Furthermore, the prenuptial agreement went on to say that the husband should make reasonable maintenance provision for the wife and the children, without any reciprocal responsibility incurred by the wife.

In a press statement, Victoria Luckwell branded the ruling a "gold-digger's charter", concluding that there is now a strong financial disincentive for a wealthy woman to marry if she cannot be assured of protecting her family's assets.

The Law Commission agrees that nuptial agreements should only be enforceable if they meet the financial needs of each party and of the children.  The Commission recommends that prenups should become legally binding subject to stringent qualifications including that at the time of signing both parties must disclose material information about their financial situation and have received legal advice.  The report states, "It will remain open to spouses to make agreements about financial needs, but such terms will not be contractually enforceable and will be subject to the courts' scrutiny for fairness as they are at present".

This is not legal advice; it is intended to provide information of general interest about current legal issues.

If you require further information on this article or Prenuptial matters please contact Neil McNab on 01245 228132 or mcnabn@gepp.co.uk