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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (High Court Judges) >> WC v HC (Financial Remedies Agreements) (Rev1) [2022] EWFC 22 (22 March 2022) URL: http://www.bailii.org/ew/cases/EWFC/HCJ/2022/22.html Cite as: [2022] WLR(D) 240, [2022] 2 FCR 82, [2022] 2 FLR 1110, [2022] 4 WLR 65, [2022] EWFC 22 |
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Strand, London, WC2A 2LL |
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B e f o r e :
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WC |
Applicant |
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HC |
Respondent |
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James Ewins QC and Janine McGuigan (instructed by Stewarts Law) for the Respondent
Hearing dates: 7-11 March 2022
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Crown Copyright ©
This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.
Mr Justice Peel :
Introductory comments
i) By order made by me at the Pre-Trial Review, the parties' s25 statements were limited to 20 pages of narrative. Para 5.2 of PD27A mandates that narrative statements, among other documents, shall be typed in "a font no smaller than 12 point and with 1 ½ or double spacing". H complied. W's statement purported to comply in that it consisted of 20 pages, but because it used smaller font and spacing it was, in fact, about 27 pages compressed within the 20 page limit provided for by me. The consequence is that her statement was about 33% longer than H's. This is completely unacceptable, and W's legal team should not have permitted it to happen. Court Orders, Practice Directions and Statements of Efficient Conduct are there to be complied with, not ignored. The purpose of the restriction on statement length is partly to focus the parties' minds on relevant evidence, and partly to ensure a level playing field. Why is it fair for one party to follow the rules, but the other party to ignore them? Why is it fair for the complying party to be left with the feeling that the non-complying party has been able to adduce more evidence to his/her apparent advantage?
ii) By para 11 of the High Court Statement of Efficient Conduct of Financial Remedy Proceedings, s25 statements must only contain evidence, and "on no account should contain argument or other rhetoric". In this case, W's over long statement crossed the line and descended into a number of personal, and prejudicial matters, directed at H which, in my view, were irrelevant to the matters at hand. Parties, and their legal advisers, may be under the impression that to describe the other party in pejorative terms, and seek to paint an unfavourable picture, will assist their case. It is high time that parties and their lawyers disabuse themselves of this erroneous notion. Judges will deal with relevant evidence, and will not base decisions on alleged moral turpitude or what Coleridge J once famously described disapprovingly (albeit in a slightly different context) as a "rummage through the attic" of the marriage in G v G [2002] EWHC (Fam) 1339.
iii) Approximately 1 week before the trial, I was notified of a bundle issue. W, in putting together the first draft of the bundle index, included a 102 page section of narrative comments by W and fresh property particulars, directed towards the issue of her housing needs. No notice had been given to H, who objected. I was asked to rule on paper. I largely acceded to H's objections, concluding that this was an attempt to introduce fresh evidence, although I allowed the inclusion of W's comments on properties already produced in evidence.
iv) After the parties had exchanged and lodged skeleton arguments, H served updating disclosure. W objected either to the updates being adduced in evidence, or to the updated figures appearing in the composite schedules. I therefore started the trial with competing composite schedules, which was thoroughly unsatisfactory and defeated the purpose of having composite schedules in the first place.
v) The working day before the hearing, H served on W a financial analysis of matrimonial expenditure through the parties' joint account in 2018 and 2019. The itemised schedule consisted of thousands of entries. W's legal team unsurprisingly objected to late receipt of this analysis. Commendably, in short order, they responded with a schedule of their own in respect of sole accounts so as to give a more complete picture. I deprecate the practice, which appears to be prevalent, of lawyers producing at the eleventh hour spreadsheet analysis of expenditure during the marriage (and/or since separation) based on primary documents such as bank and credit card statements which have been in their possession for many months. If an exercise such as this is to be relied upon, it must be provided well in advance of the final hearing (I suggest before the PTR or final directions hearing) so that the issues, and evidence, can be properly identified and case managed.
Background
i) Husband £12,444,101
£2,230,000 mortgage liability
£10,214,101 net
In addition, it recorded the receipt by H of £500,000-£600,000pa from his father and his anticipated inheritance prospects exceeding €100m.
ii) Wife £2,360,191 net
Computation
Joint property (`X' Street) £2,045,791
H property: Y town £640,564
H property: Z town £2,546,530
H properties: B property (ignoring usufruct) £2,818,489
Joint bank accounts £21,634
H bank accounts £285,334
H investments £3,519,065
H personal assets/cash £21,890
H Company 3 liquidation -£18,018
H pension £80,011
H liabilities -£204,621
W bank accounts £990,103
W investments £15,343
W liabilities -£399,847
W pension £117,036
GRAND TOTAL £12,479,304
This schedule is based on figures which are largely agreed. I have taken H's updated figures for his own resources, notwithstanding W's objections, because it seems to me, they give a more accurate picture. The total of H's assets is reduced by about £461,000 since the previous round of disclosure because of legal fees and general living expenses, as well as the recent decline in stock market values. A detailed explanation has been given by counsel for the reduction which I am willing to accept. I make clear that the outcome of my decision, based as it is on W's needs, would be the same whether allowing for these reduced figures or not.
Sharing principle
i) 'X' Street was bought by H in 1999 with monies gifted to him by his father. It was subsequently transferred from H's sole name into the parties' joint names pursuant to the Pre-Marital Agreement.
ii) The B properties came to H as a result of inheritances and family transfers in his favour between 1987 and 2011.
iii) The Z town flat was bought by H in 1992, long before the marriage.
iv) H received an inheritance of CHF 500,000 in 2009 which was used to renovate his property in Y town, and his father subsidised the purchase in the sum of about CHF 1m.
v) The bulk of the liquid investments (and I do not consider I need to be absolutely precise) were gifted to H by his father and grandfather.
i) First, it informs, or may inform, the circumstances surrounding the Pre-Marital and Post-Martial Agreements; and
ii) Second, it is, or may be, relevant to an assessment of W's needs.
The Issues
i) The circumstances surrounding the Pre-Marital Agreement, and whether any weight should be attached to it.
ii) The circumstances surrounding the unsigned Post-Marital Agreement, and whether any weight should be attached to it.
iii) Whether H can anticipate a resumption of the inter vivos gifts previously received from his father.
iv) Whether prospective inheritance from H's father is a relevant factor.
v) W's needs.
The Law
i) As a matter of practice, the court will usually embark on a two-stage exercise, (i) computation and (ii) distribution; Charman v Charman [2007] EWCA Civ 503.
ii) The objective of the court is to achieve an outcome which ought to be "as fair as possible in all the circumstances"; per Lord Nicholls at 983H in White v White [2000] 2 FLR 981.
iii) There is no place for discrimination between husband and wife and their respective roles; White v White at 989C.
iv) In an evaluation of fairness, the court is required to have regard to the s25 criteria, first consideration being given to any child of the family.
v) S25A is a powerful encouragement towards a clean break, as explained by Baroness Hale at [133] of Miller v Miller; McFarlane v McFarlane [2006] 1 FLR 1186.
vi) The three essential principles at play are needs, compensation and sharing; Miller; McFarlane.
vii) In practice, compensation is a very rare creature indeed. Since Miller; McFarlane it has only been applied in one first instance reported case at a final hearing of financial remedies, a decision of Moor J in RC v JC [2020] EWHC 466 (although there are one or two examples of its use on variation applications).
viii) Where the result suggested by the needs principle is an award greater than the result suggested by the sharing principle, the former shall in principle prevail; Charman v Charman.
ix) In the vast majority of cases the enquiry will begin and end with the parties' needs. It is only in those cases where there is a surplus of assets over needs that the sharing principle is engaged.
x) Pursuant to the sharing principle, (i) the parties ordinarily are entitled to an equal division of the marital assets and (ii) non-marital assets are ordinarily to be retained by the party to whom they belong absent good reason to the contrary; Scatliffe v Scatliffe [2017] 2 FLR 933 at [25]. In practice, needs will generally be the only justification for a spouse pursuing a claim against non-marital assets. As was famously pointed out by Wilson LJ in K v L [2011] 2 FLR 980 at [22] there was at that time no reported case in which the applicant had secured an award against non-matrimonial assets in excess of her needs. As far as I am aware, that holds true to this day.
xi) The evaluation by the court of the demarcation between marital and non-martial assets is not always easy. It must be carried out with the degree of particularity or generality appropriate in each case; Hart v Hart [2018] 1 FLR 1283. Usually, non-marital wealth has one or more of 3 origins, namely (i) property brought into the marriage by one or other party, (ii) property generated by one or other party after separation (for example by significant earnings) and/or (iii) inheritances or gifts received by one or other party. Difficult questions can arise as to whether and to what extent property which starts out as non-marital acquires a marital character requiring it to be divided under the sharing principle. It will all depend on the circumstances, and the court will look at when the property was acquired, how it has been used, whether it has been mingled with the family finances and what the parties intended.
xii) Needs are an elastic concept. They cannot be looked at in isolation. In Charman (supra) at [70] the court said:
"The principle of need requires consideration of the financial needs, obligations and responsibilities of the parties (s.25(2)(b); of the standard of living enjoyed by the family before the breakdown of the marriage (s.25(2)(c); of the age of each party (half of s.25(2)(d); and of any physical or mental disability of either of them (s.25(2)(e)".
xiii) The Family Justice Council in its Guidance on Financial Needs has stated that:
"In an appropriate case, typically a long marriage, and subject to sufficient financial resources being available, courts have taken the view that the lifestyle (i.e "standard of living") the couple had together should be reflected, as far as possible, in the sort of level of income and housing each should have as a single person afterwards. So too it is generally accepted that it is not appropriate for the divorce to entail a sudden and dramatic disparity in the parties' lifestyle."
xiv) In Miller/McFarlane Baroness Hale referred to setting needs "at a level as close as possible to the standard of living which they enjoyed during the marriage". A number of other cases have endorsed the utility of setting the standard of living as a benchmark which is relevant to the assessment of needs: for example, G v G [2012] 2 FLR 48 and BD v FD [2017] 1 FLR 1420.
xv) That said, standard of living is not an immutable guide. Each case is fact-specific. As Mostyn J said in FF v KF [2017] EWHC 1093 at [18];
"The main drivers in the discretionary exercise are the scale of the payer's wealth, the length of the marriage, the applicant's age and health, and the standard of living, although the latter factor cannot be allowed to dominate the exercise".
xvi) I would add that the source of the wealth is also relevant to needs. If it is substantially non-marital, then in my judgment it would be unfair not to weigh that factor in the balance. Mostyn J made a similar observation in N v F [2011] 2 FLR 533 at [17-19].
The Law: Pre-Marital and Post-Marital Agreements
i) There is no material distinction between an ante-nuptial agreement and a post-nuptial agreement (para 57).
ii) If an ante-nuptial agreement, or indeed a post-nuptial agreement, is to carry full weight, "what is important is that each party should have all the information that is material to his or her decision, and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end" (para 69).
iii) It is to be assumed that each party to a properly negotiated agreement is a grown up and able to look after himself or herself (para 51).
iv) The first question will be whether any of the standard vitiating factors, duress, fraud or misrepresentation, is present. Even if the agreement does not have contractual force, those factors will negate any effect the agreement might otherwise have. But unconscionable conduct such as undue pressure (falling short of duress) will also be likely to eliminate the weight to be attached to the agreement, and other unworthy conduct, such as exploitation of a dominant position to secure an unfair advantage, would reduce or eliminate it (para 71). The court may take into account a party's emotional state, and what pressures he or she was under to agree. But that again cannot be considered in isolation from what would have happened had he or she not been under those pressures. (Para 72).
v) The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement. (para 75).
The Law: inter vivos subvention
"65. Should a court inquire into the willingness of the wider family to assist one or both spouses?
66. To my mind there are 2 main categories of cases:
(i) Where a spouse has an interest in an asset together with other family members, and the court frames its order so as to "judiciously encourage" the other family members to assist in extraction by the spouse of value referable to his or her interest. The court should not cross the boundary of improper pressure in so doing. This is the so-called Thomas v Thomas doctrine (Thomas v Thomas [1995] 2 FLR 668). Importantly, it applies when the spouse has an actual interest in an asset shared with third parties (e.g. family) but is confronted by liquidity difficulties.
(ii) Where family members, who are gratuitous donors, are willing to make funds available by gift or loan to the relevant spouse. In this instance, the spouse has no legal or beneficial interest; it is a pure act of generosity for a person under no obligation to do so.
68. [In respect of the second category] I apply the following principles:
(i) The starting point is that there is absolutely no obligation on a third-party family member to provide funds from his or her personal resources. As Holman J vividly said in Luckwell v Limata [2014] EWHC 502 at para 6: "I wish to stress with the utmost clarity that neither the wife's father nor her mother are under the slightest legal obligation whatsoever to pay a single penny to, or for, their daughter, nor their grandchildren, nor, still less, their son-in-law." This statement is wholly consistent with law and fairness. The court's function is to distribute the parties' resources, not the resources of wider families; see paras 66 and 67 of Alireza v Radwan [2017] EWCA Civ 1545.
(ii) That said, on occasions wider family members may show themselves prepared to assist, willingly and under no pressure from the court to do so. Two distinct scenarios spring to mind;
(a) Whether a spouse's family will be likely, if requested, to come to his or her aid in meeting specific needs personal to the spouse in question and;
(b) Whether a spouse's family will be likely, if requested, to come to his or her aid in making a payment to the other spouse to assist in bringing financial remedy proceedings to a conclusion.
(iii) The first scenario is not uncommon. If means are available, the wider family, although under no legal obligation to do so, may willingly help with buying a house or meeting income needs if the alternative is homelessness and penury. But the evidence of willingness to do so must be clear. Mere speculation, or optimistic assumption, is insufficient.
(iv) The second scenario is rarer, for obvious reasons, although it can unlock cases and bring about settlement. For example, the family of a spouse may offer to pay the receiving spouse a lump sum to avoid sale of the marital home. Again, in my judgment, there must be clear evidence to justify such a finding. Speculation and optimistic assumption will not suffice.
(v) The court should not place pressure on the third party who is perfectly entitled to decline to provide support. As Deputy High Court Judge Nicholas Mostyn QC (as he was then) said in TL v ML [2005] EWHC 2860 at para 101:
"The correct view must be this. If the court is satisfied on the balance of probabilities that an outsider will provide money to meet an award that a party cannot meet from his absolute property then the court can, if it is fair to do so, make an award on that footing. But if it is clear that the outsider, being a person who has only historically supplied bounty, will not, reasonably or unreasonably, come to the aid of the payer then there is precious little the court can do about it."
The judge was there addressing the second of my suggested two scenarios, but in my view his remarks apply with equal force to the first scenario.
(vi) In either scenario, where the evidence shows, to the requisite standard of proof, that third party family members will likely provide financial support to one or other of the spouses, that, in my judgment, constitutes a resource that a court is entitled to take into account. To do otherwise would be artificial. As to the sort of evidence which the court will evaluate when deciding upon the likelihood of future assistance:
(a) Usually, the court will look to see whether bounty has been provided in the past, in what quantity and over what amounts of time, as evidence of a pattern.
(b) Additionally, the court can look at specific offers of long-term future financial support made to a spouse before or after marital breakdown.
(c) Offers of interim provision to tide the spouse over with assistance towards legal fees and income needs during the period of litigation will be of very limited evidential relevance to the question of whether long-term future support will be forthcoming. Usually, such payments are transitory in nature, designed to assist the recipient spouse with the demands of the litigation.
(d) Absent clear evidence establishing (i) a track record of historic payment and/or (ii) reliable representations of future subvention, the court will be hard pressed to be satisfied of this class of resource."
The Law: inheritance
"32. The first question therefore is 'does the wife's father's wealth/ the wife's inheritance prospects constitute a financial resource which she has or is likely to have in the foreseeable future?'
33. Mr Peel says not and reminds the court that in the ordinary course of events a party's inheritance prospects are disregarded by the court. In Michael v Michael [1986] 2 FLR 389 Nourse LJ said (at 395):
"I am of the clear opinion that s.25(20(a) of the Act of 1973 as amended, whilst it is primarily concerned with property and financial resources in which there is a vested or contingent interest, is not exclusively so concerned. Indeed, its broad and somewhat informal language demonstrates that it was intended to operate at large and not in some strait-jacket tailored to the sober uniforms of property law. Thus, there can be no doubt that it could in certain circumstances extend to something which in the language of the law is a mere expectancy or spes successionis, for example and interest which might be taken under the will of a living person.
34. Nourse LJ went on to give an example of a case where there was clear evidence that a person had a terminal illness, that property was left to the respondent in his will and that it was highly improbable the testator would revoke the will. Having given such an example he went on (at 396)
"…. However those facts, being extremely special demonstrate that the occasions on which such an interest will fall within s,.25(2)(a) of the Act of 1973 as amended, are likely to be rare. In the normal case uncertainties both as to the fact of inheritance and as to the times at which it will occur will make it impossible to hold that the property is property which is likely to be had in the foreseeable future."
35. Mr Todd for his part relies on the decision of Munby J (as he then was) in C v C (ancillary relief trust fund) (C v C) [2010] 1 FLR 337.
36. In C v C the husband had a vested interest in property in that, upon the death of his widowed step mother, he and his three siblings would inherit an estate as tenants in common in equal shares. This was not a discretionary trust. The trustees had no power to appoint 'even a farthing' [19] to the husband except with the written consent of the widow who could give it or withhold at her 'unfettered and uncontrolled' discretion. As Munby J said:
"…and the husband and the court have to take the widow as they find her. As against the widow there can be no question of exerting any 'judicious encouragement' (see Thomas v Thomas [1995] 2 FLR 668 at 670), as there might be if what was in issue was the exercise by the trustees of their powers if they had any that were relevant."
37. Given that the husband's interest was vested and the likelihood was that the reversion would fall in in about 15 years (that being the actuarial life expectancy of the widow), Munby J concluded:
"I confess that on this crucial issue my mind has wavered. On any view, as it seems to me, this case is at or very close to the outer extremity of what can properly be considered a 'financial resource' which a spouse is 'likely to have in the foreseeable future'. At best it is, to adopt Cumming-Bruce LJ's metaphor, only dimly visible. But on balance I have concluded that… the husband's interest is indeed such a resource. In other words, I am persuaded though I have to say without much enthusiasm, that the question posed… is to be answered in the affirmative. "
38. Munby J said that his decision would have been different had the likelihood been of the husband receiving substantially less than the current value of the estate on the death of the widow, or had the widow's life expectancy been greater than he found it to be. Munby J went on to put his decision that the husband's vested interest was a resource in context:
"[66] I must emphasise that, consistently with the terms of the preliminary issue, all I have decided is that the husband's interest in the trust fund is a 'financial resource' which he is 'likely to have in the foreseeable future'. I have not decided that it would in fact be appropriate to make an order of the kind made in Priest v Priest and Milne v Milne or, indeed, appropriate to make any order at all in relation to his interest in the trust fund. All I have decided is that his interest in the trust fund is, within the meaning of s 25(2)(a), a 'financial resource' which he is 'likely to have in the foreseeable future', and, accordingly, something which s 25(2) requires the judge at the final hearing to 'have regard to'. Having had regard to it, the judge may decide to make some order in relation to the husband's interest under the trust. On the other hand, the judge, having had regard to it, may decide not to make any order at all in relation to the husband's interest under the trust. It is entirely a matter for the judge who is called upon, as I have not been, to exercise the discretion conferred by ss 24 and 25."
39. In my judgment the words of Nourse LJ in Michael hold good 30 years on and in the ordinary course of events uncertainties both as to the fact of inheritance and as to the times at which it will occur, will make it impossible to hold that an inheritance prospect is property which is "likely to be had in the foreseeable future."
40. The present case is different. The wife's inheritance prospects do not have the inherent uncertainty found where a will is made in a country such as England where there is no concept of forced heirship. In my view, a prospective inheritance which has the certainty brought to it by the laws of forced heirship, is capable of being a "financial resource" which the wife "has or is likely to have in the foreseeable future".
41. Mr Peel sought to persuade the court that there remained uncertainties which should mean that, notwithstanding the forced heirship laws, the court should disregard the wife's inheritance prospects. He suggested by way of example that the father could give all his money away to charity or there could be some sort of cataclysmic political event which would mean he would lose his wealth. There was no evidence before the court to that effect and the wife chose not to call her father to give evidence. In those circumstances a court would be entitled to conclude, as the judge did, that a portion of the father's estate would indeed come to the wife in 16+years.
42. Having said that, as Munby J explained in C v C, all that such a finding does is to conclude that the prospective inheritance is a section 25(2)(a) resource; it does not mean that it is inevitably appropriate for the court to make an order whereby the meeting of the needs of the wife is in any way dependant on the prospective inheritance."
My findings and the parties' evidence
The Pre-Marital Agreement
i) I am satisfied that although W and H were under pressure, W was not under undue pressure to enter into it. In almost every Pre or Post Marital Agreement one or other, or both, parties are under a degree of pressure, and emotions may run high. The collision of the excitement engendered by prospective marriage, and the hard realities of negotiating for the breakdown of such a marriage, can be acutely difficult for parties. Tension and disagreement may ensue. If, as here, one side of the family is applying pressure, the difficulties are accentuated. But in the end, each party has to make a choice and unless undue pressure can be demonstrated, the court will ordinarily uphold the agreement. In my judgment, W cannot so demonstrate here.
ii) It included clauses that the agreement was entered into "of their own free will without undue influence or duress" and that "they would not be getting married unless they had entered into the agreement". I have already commented that their solicitors signed certificates to similar effect, and W's solicitor corresponded to H's solicitor saying that W was freely entering into the agreement.
iii) It was considered, discussed and negotiated over a period measured in months. W had the benefit of lawyers in both England and Switzerland.
iv) Immediately after the marriage, and in accordance with the agreement, 'X' Street and £1.3m were placed in joint names in accordance with the Pre-Marital Agreement. W thereby benefited from its immediate implementation.
The Post-Marital Agreement
i) Whether W was placed under undue pressure such that it should be disregarded.
ii) Further, or alternatively, whether the fact that it was not signed by W, dictates that it should be disregarded.
i) By March/April 2017 the parties' plan for the children to be educated in England was settled, and the children were being prepared for the move.
ii) There was some dispute about whether W told H on one occasion that if he did not let her and the children go to London, she would divorce him. I suspect this was a product of misunderstanding. Probably W made unguarded comments which were misinterpreted by H. However it came about, I am confident that H was concerned about the possibility of the marriage coming to an end, even if that was not part of W's thinking at the time.
iii) H first raised with W the subject of a Post-Marital Agreement on 24 June 2017 i.e after the children's move to be educated in England had been agreed. Her opposition is clear from an email to H that very day: "[H], just to confirm in writing what you have repeated to me verbally tonight; that unless I sign the documents you wish, namely a financial post-nup and post divorce custodial rights, you will not allow the children to attend school in the UK this autumn. Terrible we have come to this!". H told me, and I accept, that the motivation for a Post-Marital Agreement came entirely from him. His father was not involved, beyond saying that he thought H was naïve to let W go to London, and expressing annoyance with W.
iv) I am satisfied that H told W she could not go to London without signing a Post-Marital Agreement. In so doing, he threw into doubt the London schooling arrangements which were in place. He also told W that he would only agree to her having a bigger house in London if she signed the agreement.
v) W, on or about 5 July 2017, instructed English solicitors, Hughes Fowler Carruthers. She also instructed Swiss lawyers. H likewise instructed lawyers in England and Switzerland. Despite W's reservations, they entered into negotiations.
vi) The first draft of a Post-Marital Agreement was supplied by H's solicitors on 21 July 2017.
vii) On 8 August 2017 the parties and their lawyers attended a without prejudice meeting which lasted the full day. No heads of agreement were signed. I was not made privy to the course of the discussions, although it appears that significant progress was made, and W seemed to be under the impression in her evidence that agreement had been reached on headline numbers.
viii) According to W (and a WhatsApp communication with a close friend to whom she unburdened refers to this), on 16 Aug 2017 H told her that if she tried to leave the country without signing the documents, he would call the police. Having heard the parties I am confident that H told W he could go to the police, not that he would do so. This was a misunderstanding during overwrought and emotional conversations. In any event, even though W did not sign the document, she left unimpeded on 30 August 2017 to attend a school induction day with Child A, returned to Switzerland immediately afterwards and, a day or two later flew to London permanently with the children. H saw them off at the airport and did not call the police or attempt to stop them.
ix) During this period there were some exchanges by WhatsApp between W and a close friend which, it is said, are corroborative of the pressure W felt under. For example, on 4 August 2017 W said that the pressure was unbearable, on 17 August 2017 she referred to her "head spinning", on 20 August 2017 she said, "this has been traumatic" and on 28 August 2017 she told her friend of feeling "blackmailed…powerless…cornered and tired and abused". I regard these communications from W as being secondary, rather than primary material. They are indicative of her state of mind but do not really add to that which is apparent from what I have read, and W's own oral evidence, that (a) she wanted to leave Switzerland with the children, (b) she felt under real pressure to sign the agreement to achieve her aim, (c) she was anxious, and (d) relations between her and H were low.
x) On 21 August 2017 H's solicitors sent a revised draft agreement.
xi) On 22 August 2017 W's solicitors wrote saying "Thank you for your letter of yesterday's date and for providing a final version of the agreement, the terms of which are approved". In my judgment, an agreement was reached at that point, notwithstanding W in evidence being a little reluctant to so concede; she told me that "I did not approve the terms, but if the letter was sent in my name, I stand by it". The document was comprehensive, clear and detailed. The reasoning from W's perspective, as the letter stated, was that "[W's] primary goal is to ensure the children are able to settle in England for the start of the school year" which, I note, she subsequently achieved.
xii) On 23 August 2017, H's solicitors replied acknowledging the agreement which had been reached.
xiii) The intention was, as before, for mirror agreements in Switzerland to be drawn up.
xiv) Arrangements were made for the agreement to be signed by the parties before a notary in Switzerland on 29 August 2017 at 4pm. That morning W saw a different Swiss lawyer. At about lunchtime W, apparently on the advice of the Swiss lawyer, but not mentioned to H, went to see a GP who wrote a letter (curiously not disclosed until April 2021) in which he certified that W was showing "true mental distress" with a "major anxiety component" and as a result the mental attitude required for calm decision making "is not currently fulfilled". I do not doubt that W felt anxious and worried at that time; she was about to sign an important document, and wanted to leave forthwith to England. But agreement had been reached on 22 August 2017 (a week before) and I am not persuaded that this medical note undermines the agreement reached one week previously.
xv) At about 1.30pm (possibly after she had seen the GP), W told H by email that she would not attend to sign, referring in particular to being worried about signing mirror Swiss documents which she had not yet seen:
"I really am unhappy about signing the English documents today without even seeing the Swiss documents…".
xvi) She sent a follow up email saying that she had no intention of renegotiating, and that she planned to sign the document, although she did not in fact do so:
"I am not looking to change the English documents, or re-negotiate them, I just want to be able to sign them as a package whenever all the documents are ready, and without the time pressures of having to do so before the children are allowed to begin school".
"I want to reassure you that I have no intention of getting to London to start renegotiating the post nup….There is no tactic…"
xvii) W did not sign, although her solicitor signed a certificate confirming that she had given W independent legal advice on the agreement.
xviii) It is of note, in my judgment, that nowhere during these events of 29 August 2017 did W complain about the circumstances in which agreement had been reached on 22 August 2017, or the terms thereof. Her concern was not being able to see the Swiss mirror documents before signing.
xix) As I have indicated, on 30 August 2017 W flew to London with Child A for his school induction day; H travelled to the airport to see them off just as they were going through the departure gates. They returned that weekend. A day or two later W and the children travelled permanently to England; H accompanied them to the airport.
xx) In a sense, W achieved her goal. She was able to leave for London with the children. She was not prevented from doing so by H. And, ultimately, she did not sign the agreement.
i) The post agreement discussions were privileged, and the parties have not waived privilege to permit me to see them. I have no idea what they contain and whether they do, as W says, represent an ongoing chain of negotiations which did not achieve consensus on a final version of the Post-Marital Agreement.
ii) Far from undermining the agreement, in my view the fact that some form of without prejudice discussion took place after the agreement was reached demonstrates vividly that agreement had in fact been reached; otherwise, why attempt to renegotiate it?
iii) In any event, the correspondence to which I have referred explicitly confirms that agreement was reached on 22 August 2017. If there was an attempt to re-negotiate, nothing before me suggests that a supplemental agreement, or variation of agreement, was entered into.
i) The Post-Marital Agreement is not vitiated or tainted by undue pressure or duress.
ii) The absence of W's signature, in circumstances where she consciously decided not to sign, takes the agreement outside the Radmacher category of cases.
iii) The agreement falls to be considered as one of the factors in this case, but it is not presumptively dispositive as would be the case if it fell into the Radmacher category.
Inter vivos subventions by H's father
i) On 3 June 2014 H's father settled a trust known as the X Trust, governed by Guernsey law:
a) H's father was the settlor and is the protector.
b) H's father is the named principal beneficiary.
c) H is one of the discretionary beneficiaries.
d) It is fully discretionary.
ii) H has received no distributions or loans from the trust.
iii) On or about 21 January 2019, before the separation, H's father transferred 170,300 shares in a company known as Company 1, which in turn owns about 30% of the shareholding in Company 2, into the trust pursuant to a trust resolution dated 6 September 2018. The value of the introduced shares was about €23m.
iv) In January 2020 W's petition was served.
v) On 21 February 2020 the shares were transferred out of the trust and back to H's father pursuant to an instrument of partial revocation executed by him as settlor.
vi) I assume that the original intention was to place monies in the trust by way of potential advance inheritance. The monies never became H's, and it was never suggested that the monies would have been distributed during H's father's lifetime; rather, they were intended to pass down on death. H, I accept, was not party to the discussions at the time, but simply made aware of the transactions after they had taken place. Everything was done by, and at the behest of H's father who is clearly a domineering and controlling character, and ignored H.
vii) By an instrument of amendment, clearly instigated by H's father, dated 24 April 2020, the trust terms were amended irrevocably to ensure that no monies may be paid or lent to anybody who is not an "eligible beneficiary". At the risk of speculating, it seems likely that this was designed to prevent trust monies being used for the benefit of W.
viii) Currently the trust has assets of no more than about £1,000.
Prospective inheritance
i) Such inheritance would be entirely non-matrimonial, received long after separation;
ii) It has always been understood by the parties, as recorded in the two agreements, that future inheritances should be excluded from claims by the other party;
iii) In terms of foreseeability of resource, it may be several years away, and is unlikely to be of immediate assistance to H. At best, it gives me confidence that H will not want for money in the long term.
The parties' proposals
i) In her first proposal of July 2021, she sought a net effect total of about £10m.
ii) In November 2021, she repeated the substance of her proposal, seeking £10m.
iii) By her most recent proposal dated 3 February 2022, she seeks about £10.6m.
Needs and outcome
i) £44,000pa child maintenance (£22,000 per child).
ii) £80,000 of directly paid costs.
iii) £50,000 school fees.
That is a total of about £174,000pa. Added to £150,000pa for W gives a total figure for W and the children of £324,000 per year.
i) |
`X' Street |
£2,045,791 |
ii) |
W bank accounts |
£990,103 |
iii) |
W investments |
£15,343 |
iv) |
W pension |
£117,036 |
W liabilities |
-£399.847 | |
Balance to be paid by H |
£4,681,574 |
Such sum shall be payable by H as follows, within a timeframe which he accepted he could comply with:
i) |
£3.5m by 14 June 2022. |
ii) |
The balance of £ 1,181,574 by 14 September 2022. |
This will enable W to buy a London property, without needing to sell 'X' Street until such time as it suits her.
i) I reject the claim by W that H should meet her projected costs of the Children Act proceedings which are said to be £173,000. I know nothing about those proceedings, including how proportionately or reasonably each party is conducting the litigation. In my judgment, each must bear responsibility for their own costs. It will be a matter for the judge hearing those proceedings to decide if a cost order one way or the other is warranted.
ii) I shall order child maintenance in accordance with W's proposal, together with the agreed extra items. H shall pay the school fees and, when applicable, university tuition fees.
iii) Chattels shall be divided by agreement.
iv) The interim arrangements shall continue until payment of the first lump sum of £3.5m.
v) The joint bank account ending …6196 (containing £17,269) shall be transferred to H for administrative purposes, with W receiving/retaining the monies in the account. Strictly, this takes W a touch above my determination of her needs requirement, but it is a modest sum.
vi) The rental deposit is to be repaid by W to H.
vii) I shall not provide for the additional miscellaneous costs sought by W.
viii) Airmiles to be divided equally.
ix) There shall be a clean break.
Conclusion
Costs