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Cite as: [2013] EWHC 3873 (Fam)

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Neutral Citation Number: [2013] EWHC 3873 (Fam)
Case No: FD11D04679


Royal Courts of Justice
Strand, London, WC2A 2LL

B e f o r e :

Mr Justice Moor

- and -



Mr David Balcombe QC and Mr Stephen Trowell for the Petitioner
Mr Nicholas Cusworth QC and Mr Simon Webster for the Respondent

Hearing dates: 13th to 17th May 2013



Crown Copyright ©

  1. I have been hearing an application by the Petitioner, (hereafter "the Wife") for financial remedies following the breakdown of her marriage to the Respondent (hereafter "the Husband").
  2. The history of the marriage

  3. The Husband was born in May 1980, so he is now just aged 33. He is a businessman. The Wife was born in October 1982, so she is 30 years of age. Prior to the marriage, she was a nurse. Recently, she has been working as a personal trainer.
  4. Both parties are Scandinavian. They were born and grew up there. Indeed, they met at school. The Husband came to this country in approximately 2000 initially to study economics at University. On graduation, he spent a year abroad but he then returned to this country to work as a banker. He has remained in this country ever since. There is no doubt that the existence of a wealth tax in his Scandinavian country has been a relevant factor in his deciding to remain here rather than return to his country of birth.
  5. The Husband comes from a very successful and wealthy family of business people. His grandfather established a successful company before the First World War. It floated on the Stock Exchange during the 1990s. The family realised their interest shortly thereafter and withdrew from the industry.
  6. During the 1960s, the family commenced a separate business. This business was eventually listed in New York and the family have realised their interest in that entity as well.
  7. On 31st March 2000, whilst he was at University, the Husband's Uncle gifted to him a very significant amount of capital, including shares in the family company. The Deed of Gift valued the assets at 374 million kroner. The shares were held by a company. At the time, the Deed indicated that the assets had been given to the Husband and his mother, but it appears that his mother was, in effect, acting as protector of the assets until the Husband's 30th birthday in 2010. The Deed states that the assets transferred are to remain the "separate property" of the Husband.
  8. In January 2006, the Husband invited the Wife to move to this country. She had never lived here before. She gave up her work as a nurse and moved in with him in his rented accommodation in Knightsbridge. Cohabitation commenced and moved seamlessly into marriage. She did not work after she moved to this country.
  9. In August 2006, the Husband purchased a two bedroom flat, 'F1' for £1,690,000. It seems that the purchase price was funded by a loan from a bank which was guaranteed by his mother. The completion statement, however, refers to a mortgage of (£1,023,750), which I assume was charged on the property.
  10. The parties became engaged to be married in 2006. The wedding was planned for August 2007 but the parties discovered the Wife was pregnant in February 2007, so the wedding was advanced to June 2007.
  11. The Marriage Settlement

  12. It is common practice in the parties' country of origin to enter into a Marriage Settlement. I am satisfied that a significant number of the Husband's family entered such Settlements prior to their marriages, including his parents. The Husband indicated to the Wife that such a Settlement was required between them prior to their marriage. He contacted his family's solicitors, who also recommended a firm to the Wife. The Wife accepted the recommendation and was subsequently advised by Mr B. Both sets of solicitors practised in the parties' country of origin.
  13. The Wife first spoke to Mr B on 11th April. Negotiations took place between the lawyers. The exact course that these negotiations took is not, in my view, material to this judgment save to say that the figure that was to be provided for the Wife as her separate property was agreed at a relatively early stage. The drafting, however, proved problematic. Some doubt was expressed by Mr B as early as 11th May as to whether a marriage settlement that regulated future assets/inheritance would be approved for registration in the marriage settlement registry. He clearly took the view that the wording could be changed to rectify the problem. Indeed, the wording was changed more than once by the Husband's solicitor.
  14. It was not until the day before the wedding, 21st June 2007, that the Husband and Wife were able to attend Mr B's office to sign the Settlement. I am satisfied that the fact that it was signed the day before the marriage is, of itself, immaterial given that the terms had been agreed some time earlier. The Settlement was prepared on a standard "tick box" form. The parties elected partial separation of property. There was brief supplementary text, the material parts of which were as follows:-
  15. "The following property shall be (the Wife's) separate property:
    10,000,000 kroner of value in the following property 'F1' or whatever shall come to replace this property, irrespective of the form it may take.
    The property was not acquired from funds received by (the Husband) with special joint property instructions from the donor or testator.
    The separate property, the value of which is given above, shall be index-linked to the consumer price index published by the Central Office of Statistics or, if such index should cease to exist, by some corresponding index.
    (The Wife's) separate property involves a gift from (the Husband) cf point III to be executed in the event of an apportionment on separation/divorce or death. This provision is also contained in (the Husband's) last will and testament.
    The following property shall be (the Husband's) separate property
    1. Shares in the family company
    2. Everything which (the Husband) has received or may at some future time receive in the matter of inheritances, including advances on inheritances
    3. The value over and above 10,000,000 kroner of the following property: 'F1'.
    (The Husband) shall have the right to acquire the items of separate property mentioned above in the event of a division. In other words, (the Husband) shall have the right to have the flat mentioned under point 3, in such manner that (the Wife) is bought out in cash or by any other means.
    Anything which replaces the items of separate property mentioned above shall be the parties' separate property."

  16. It is agreed that the sum of 10,000,000 Kroner, which was broadly worth £850,000 at the time, was designed to enable the Wife to purchase a property in Scandinavia roughly equivalent to the home owned by her parents should the marriage break down. It follows that the Settlement was predicated on the basis that the Wife would be residing in Scandinavia. The Wife's evidence to me was clear. She had only agreed to live in this country for four years. She said that the parties had agreed that the children would be educated in Scandinavia. I accept her evidence in this regard. Indeed, although I find that the Husband did not share her commitment to a return there in four years, he knew that this was her position.
  17. It is also relevant to note that the Settlement said nothing about maintenance, whether for the Wife herself or for their future children. In this regard, it is relevant to remember that she was pregnant at the time the Settlement was signed. The Husband had indicated in an email from his solicitor dated 13th June 2007 that he did not want "to tie up/limit his opportunities to dispose of the apartment…This must not be interpreted as reluctance toward wanting to offer the gift should the occasion arise…but due to business related considerations, he wants to have the most room for negotiation possible."
  18. Immediately following the signing, the Wife's solicitor, Mr B wrote to the Husband's solicitors saying:-
  19. "…(the Husband) has not to date had unrestricted funds that have made it easy to create a marriage settlement that is fully satisfactory from (the Wife's) perspective.
    On this basis (the Husband and Wife) have agreed to draw up a new marriage settlement in two year's time with the purpose of securing (the Wife) more directly through a complete separate estate, through a gift from (the Husband).
    (The Husband) also stated in the signing meeting that he was in the process of preparing and signing a will…"

  20. On 26th June 2007, the Settlement was sent for registration. On 2nd July, the document was denied registration. The problem appears to have centred around the reservation by the Husband of the right to retain the flat and buy out the Wife:-
  21. "The asset arrangement is mandatorily (without exception) regulated. The divided property arrangement, second to last paragraph page 3, can thereby not be registered in a marriage settlement form 5".
  22. The advocates were clear that the text could be amended relatively easily to make it capable of registration. A further draft was prepared in November 2007 but the Wife had just given birth to the parties' son. In consequence, signing a redrafted Settlement was clearly not a priority. In January 2008, there was a suggestion by Mr B that the property might be sold and, if so, whatever was acquired should go directly into the marriage settlement. It was suggested that the new document could be signed at Easter, when the parties returned to Scandinavia. By then, the Wife was pregnant again with the parties' second child. It appears that signing a fresh Settlement was "put on the back burner". There is no further correspondence between the solicitors and no further action was taken by either spouse.
  23. The marriage

  24. As already noted, the parties married in Scandinavia on 22nd June 2007. They have two children. The eldest, a son, was born in 2007, so he is aged 5. The youngest, a daughter, was born in 2009 so she is aged 4. Both attend the same private school in London.
  25. Following the birth of their son, the parties agreed that the two bedroom flat was not big enough for them. They therefore moved to 'F2'. The property was rented and has a value today of about £6 million. They remained there until the marriage broke down in September 2011. 'F1' did not sell immediately and was therefore rented out.
  26. In 2008, the Husband left the company for which he worked. He has since been involved in a number of different business ventures on his own behalf.
  27. In 2008, the Husband had not resided in Scandinavia for five years. He was therefore no longer subject to the tax there. For the Husband, this was important. If the Husband was resident there, he would have a charge to wealth tax of over £800,000 per annum. It follows that there was a very significant tax advantage in remaining outside Scandinavia.
  28. However, the Labour Government here proposed various changes to tax law that required careful tax planning. The Husband took advice and, as a result, a number of settlements were established in Jersey. This was done in April 2008. It is clear from the evidence that the Husband made it pretty clear to his advisors that he intended to remain in this jurisdiction. The Husband's shares were subsequently transferred into the Settlements.
  29. On 5th May 2011, the Husband sold 'F1' for £1,782,000. It is of note that he did not tell the Wife that he was selling the property. Moreover, he did not give her any part of the proceeds of sale nor did he make arrangements to provide her with any alternative security for the 10 million Kroner which was her separate property according to the Marriage Settlement.
  30. The breakdown of the marriage

  31. The marriage broke down during 2011. The Husband says the separation took place in May 2011. The Wife says it was August. It matters not. It does, however, mean that this was, broadly speaking a four year marriage, with approximately one and a half years' cohabitation prior to the marriage. The Wife moved with the children to reside in another rented property. She can remain there until August 2013 but must then vacate as the owners wish to return. The Husband also vacated 'F2' following the breakdown of the marriage. He is also living in rented accommodation which is very close to the Wife's accommodation. It is a very encouraging feature of the case that, as parents, they remain on cordial terms and have worked together for the benefit of the children. Indeed, the Husband on occasions has his supper with the Wife and children. Although he sees the children regularly, their primary carer remains the Wife.
  32. The proceedings

  33. The Wife issued a divorce petition on 20th September 2011 followed by her Form A on 13th October 2011. A Decree Nisi was pronounced on 29th November 2011. It has not as yet been made Absolute.
  34. The proceedings have taken a largely conventional form although there have been various skirmishes about costs and interim maintenance. The Wife clearly considered her future very carefully. She would undoubtedly have preferred to return to Scandinavia with the children if the matter was solely down to her. The Husband, however, was extremely keen that she should remain in this country. Having weighed the various considerations, the Wife came to the conclusion that she would remain here with the children in the long term. Her decision in this regard does have significant financial consequences to which I must pay proper regard in my determination of her financial remedies application.
  35. The Husband, somewhat belatedly, decided to honour the Marriage Settlement and make a payment to the Wife of the separate property provided in the Settlement. With indexation, the amount due had increased to £1.1 million in sterling. He paid this by 12th April 2013 although I am told that he has borrowed the money from his business partner. The payment was made net of £165,000 that he had already paid on account of the Wife's costs.
  36. The parties' financial position

  37. The parties' respective financial positions can be summarised very succinctly. The Wife has available to her a sum of £760,000 on a deposit account. This is the amount that remains after payment in full of her costs of these proceedings. Apart from some modest jewellery, she has no other assets of significance.
  38. The Husband has disclosed that the Jersey based settlements, which collectively own 99% of his shareholding in the family company, have a combined value of around £76 million. Since attaining the age of 30, the Husband is the primary beneficiary of these funds. He does, however, make the fair point that the assets are not liquid. He confirms that, provided he is given sufficient time to pay, he can meet any reasonable order that I might make. He puts the time required as being between 6 and 12 months.
  39. In effect, this is the Millionaire's defence. I am quite satisfied that, in any case that does not involve the principle of sharing the marital assets and is, instead, one based primarily on the needs of the claimant, it is perfectly proper for a litigant to give a broad outline of his or her overall wealth and then to run the Millionaire's defence. It is obviously important to have the broad outline of wealth to know whether the court is dealing with a case involving millions of pounds, ten of millions, hundreds of millions or even billions of pounds but there is absolutely no need to go further. The approach adopted by both parties in this case is not only sensible but also proportionate and cost effective. It complies with the law and I commend it to any other litigants in a similar position. I also make it completely clear that the concession made by the Husband was absolutely appropriate. Given the factual matrix of this case, the court was bound to come to the conclusion that he could, indeed, meet any reasonable order. It was eminently sensible that he short circuited that process by accepting the position freely and readily.
  40. It follows that I do not need to consider the Husband's Form E much further. It is, however, necessary to mention one small matter. The parties have always rented property in this country. However, the Husband does have one property in Scandinavia. In late 2007, his mother gave him what was then a modest wooden seaside summerhouse. At the time, it was worth only about £320,000 but he has since spent a considerable sum of money on it such that, by the time of his Form E, he valued it at £1,320,000 although it was subject to a mortgage of (£360,000).
  41. The parties' standard of living

  42. The parties' undoubtedly enjoyed a very high standard of living during the marriage. As the Wife puts it in her section 25 statement, "there was no need to have any concern about the amount we spent". The Husband said in his Replies to Questionnaire that the family had spent approximately £400,000 per annum net for the last three years. It is quite clear that this is far too conservative a figure. The Wife's counsel compiled a schedule of expenditure between November 2010 and January 2012. It was not significantly disputed by the Husband. On an annualised basis, it showed spending, excluding rent, business expenditure and legal costs, of £784,972. Whilst I accept that part of this may have been capital expenditure, I am satisfied that this broadly reflects overall spending during the marriage. It may be that the Husband's family was somewhat concerned as the Husband and the Wife were summoned to a meeting in August 2010, for which the Husband had to prepare a budget for discussion. The meeting, however, does not seem to have led to any noticeable reduction in spending.
  43. The Wife's budget in her Form E came to £27,076 per month for herself and £5,422 per month for the children. She revised the budget in her most recent section 25 statement to £27,269 per month for herself and the children. The Husband's budget for himself and the children was far lower. Although the total is £203,552 per annum, this includes rent at £52,000, interest on the loan for his Summer House of £18,200, the HMRC "non-dom" payment of £30,000 and school fees of £24,000. To compare like for like, these items need to be excluded. This reduces his budget to £79,352 pa. I will obviously have to return to this aspect of the case later.
  44. There was a short dispute as to the correct level of interim maintenance to be paid to the Wife. The Husband agreed to pay the Wife's rent of £13,000 per quarter and the children's school fees. He also made payments towards the Wife's legal costs. In terms of general maintenance, he initially offered £7,855 per month on an interim basis. The Wife sought £9,935 per month plus payment for a summer holiday. The Husband suggested they split the difference at £8,910 per month. This was agreed but it soon became clear that it was not nearly sufficient. The Husband agreed to increase the payments to £10,000 per month but this was not sufficient either. In fairness to the Husband, he seemed to recognise the point and made a number of additional voluntary payments.
  45. Again, the Wife's counsel have produced a table of total payments made between October 2011 and March 2013. The table shows average net payments of £179,741 per annum although there is one dispute that, if correct, would reduce the figure to £166,000 per annum. In addition, the Husband paid for a weekend for himself and the Wife in Paris to celebrate her 30th birthday and for a villa in Ibiza in the summer at a cost of £21,000. He also paid for a holiday they all had in India at Christmas. Even then, the Wife's evidence was that she was having to budget in a way that was quite unheard of during the marriage. I accept her evidence in that regard.
  46. The respective open positions

  47. The Wife's Open Proposal is contained in a letter dated 9th May 2013. She seeks:-
  48. (a) A lump sum of £7.5 million to purchase a property in Kensington; she proposes a charge in Mesher terms in favour of the Husband for, in effect, £2 million but expressed as a percentage of the purchase price. In closing submissions, this figure was reduced to £6.5 million to include the costs of purchase.
    (b) A second lump sum of 8,500,000 kroner to enable her to purchase a second property in Scandinavia (approximately £950,000).
    (c) A third lump sum of £240,000 for furniture and a car.
    (d) A Duxbury lump sum of £3,690,000 (to provide £270,000 pa for 17 years).
    (e) Periodical payments of £25,000 pa per child plus school fees etc.
    (f) But with credit for legal costs of £790,000 paid to date.

    By my calculations, this is total provision of £12,380,000 on a clean break basis but with a charge in favour of the Husband for £2,000,000.

  49. The Husband's Open Proposal in response is dated the 10th May 2013. He proposes that:-
  50. (a) The Wife retain the sum of £1.1 million that he has already given her.
    (b) He provides the sum of £3.5 million under a trust arrangement to acquire accommodation for the Wife and children in London on a Mesher basis but, thereafter, to be held in trust for the children.
    (c) Spousal maintenance of £110,000 per annum until the end of tertiary education but with the term not to be extendable.
    (d) Child periodical payments of £20,000 per annum per child plus school fees (currently £24,000 pa).

    The total provision proposed is thus £4,600,000 although this is not on a clean break basis and only £1.1 million is paid to the Wife outright. If it is not already clear from this judgment, the Husband relies heavily on the Marriage Settlement to justify this proposal.

    The expert evidence

  51. Both parties obtained expert evidence from the country in which the settlement was signed. The evidence of the experts was in complete agreement. I did not need to hear from them and I can summarise the position as follows:-
  52. (a) A Marriage Settlement has to be judicially registered to protect the assets from creditors of the other spouse.
    (b) A properly constituted Marriage Settlement is, however, binding on the parties even if it is not registered.
    (c) This particular Marriage Settlement would not be upheld following a divorce in the particular country concerned as it included an advance agreement for the distribution of assets which is not permitted pursuant to the Marriage Acts. If, as in this case, the invalid provision was a prerequisite of one of the parties for entering the agreement, the other provisions will also fall.
    (d) The fact that the Husband's Uncle provided for the gift he made in 2000 to be separate property means that it remains as separate property and the Wife would not have a claim against it following a divorce in that country.
    (e) In general, maintenance is only payable where marriages have lasted more than fifteen years but there is a provision for maintenance if a Wife can show that her ability to ensure adequate support for herself has been reduced by caring for the children. It would be unlikely that such maintenance would be payable for more than a year or two and there would be a three year maximum. Any maintenance so payable would be at a modest level.
    (f) The highest level of child maintenance payable would be around £700 per month per child.

    The relevant law

  53. This is not, of course, a Scandinavian divorce. There was some evidence from the Husband that the parties had agreed to divorce in the country of the parties' origin. Indeed, the Wife did take advice from Mr B before she petitioned here. The Husband had the opportunity to issue divorce proceedings in Scandinavia between the separation and the date of the Wife's petition. He did not do so. It follows that I am dealing with this case pursuant to English law. There is no doubt that, in this jurisdiction, when dealing with an application for financial remedies in English divorce proceedings, the court will normally apply English law, irrespective of the domicile of the parties, or any foreign connection (see Paragraph 103 of Radmacher v Granatino [2010] UKSC 42; [2010] 2 FLR 1900). Nevertheless, Paragraph 108 of Radmacher makes it clear that issues of foreign law are relevant to the intentions of the parties (eg whether or not they intended that the Marriage Settlement should be binding upon them).
  54. Although I have outlined the applicable foreign law, it is, therefore, largely irrelevant to my decision. I accept that it might be said that this is unfair on the Husband. The Wife's counsel's response was to say that the Husband had come to this country to take significant advantage of the tax regime here and has saved a very large amount of tax in consequence. He cannot therefore complain that the quid pro quo is that he also has to abide by our divorce laws and, in particular, our approach to claims by wives for financial remedies. There is, in my view, considerable force in this point.
  55. I must apply section 25 of the Matrimonial Causes Act 1973 as amended. In essence, I must come to a fair solution. Although it is now enshrined in our law that there are three different strands to applications for financial remedies, namely sharing, needs and compensation for relationship generated disadvantage, it is not suggested by anyone that this is a sharing case. All the assets are "non-matrimonial", given that they were inherited by the Husband prior to the marriage. There was a suggestion from Mr Balcombe for the Wife in cross-examination that there may have been some marital acquest but I am satisfied that it would be inappropriate for me to venture down that road. There was an agreement between the parties. The Husband accepted that he could meet any reasonable order on the basis that the Wife accepted this was a needs based claim only. In any event, from the limited evidence I heard, I was by no means convinced that there was any significant marital acquest.
  56. Subject to the issue as to the relevance of the Marriage Settlement, this case is quintessentially one that falls to be considered on the basis of consideration of the Wife's reasonable needs, generously assessed. It is, however, necessary, in conducting such an assessment, to consider a number of other relevant factors to be found in section 25, including in particular, as the first consideration, the welfare whilst minors of the children as well as the duration of the marriage and the age of the parties. In the latter regard, the court must bear in mind the so-called Duxbury [1992] Fam 62 paradox. A young applicant after a short marriage will give rise to a significantly larger Duxbury calculation than an older applicant after a longer marriage.
  57. I must now turn to the law as to Marriage Settlements. There has, of course, been a tremendous shift in this area since the case of Radmacher v Granatino was decided by the Supreme Court. Until Radmacher, the law was vague albeit moving gradually towards paying more regard to such agreements. It will be remembered that as recently as 1994, a German agreement was almost entirely ignored in the case of F v F [1995] 2 FLR 45.
  58. Radmacher, however, changed the position fundamentally. The majority of the Supreme Court held at Paragraph 75 that:-
  59. "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".

  60. The Court declined to lay down rules as to the circumstances in which it would not be fair to hold the parties to their agreement, saying it would not be desirable to fetter the flexibility that the court requires to reach a fair result. As I noted in Z v Z (No 2), it is right that Mr Granatino was, in effect, held to an agreement that most English family lawyers prior to Radmacher would have considered unfair.
  61. The Supreme Court took the view that it would be easiest to show that an agreement was not unfair if it excluded sharing but did not prevent the court from providing for the reasonable needs of the applicant. At Paragraph 81, the majority say that it is "…needs and compensation which can most readily render it unfair to hold the parties to an ante-nuptial contract".
  62. At Paragraph 82, they add:-
  63. "Where, however, these considerations do not apply and each party is in a position to meet his or her needs, fairness may well not require a departure from their agreement as to the regulation of their financial affairs in the circumstances that have come to pass. Thus it is in relation to the third strand, sharing, that the court will be most likely to make an order in the terms of the nuptial agreement in place of the order that it would otherwise have made".

  64. Indeed, Lady Hale, agreed at Paragraph 178 in a judgment in which she otherwise dissented, saying:-
  65. "In the present state of the law, there can be no hard and fast rules, save to say that it may be fairer to accept the modification of the sharing principle than of the needs and compensation principles."

  66. I have had my attention drawn to a number of first instance decisions that post-date Radmacher, including my own decision of Z v Z (No2) [2011] EWHC 2878; [2012] 1 FLR 1100, the decision of Mostyn J in B v S [2012] EWHC 265; [2012] 2 FLR 502 and Eleanor King J in GS v L [2011] EWHC 1759; [2013] 1 FLR 301.
  67. It goes without saying that any such agreement will be vitiated by duress, fraud or misrepresentation. None of those considerations apply in this case. What though of the need for the parties to be fully aware of the implications of the agreement? Mr Balcombe submits, and I accept, that to enable a party to be fully aware of the implications of a nuptial agreement, he or she should have all the information that is material to his or her decision whether or not to enter into it. He further submits, and again I accept his submission, that where a party is not fully aware of the implications of the agreement because he or she lacks all the information that is material to his or her decision, it will invariably be unfair to hold the parties to the agreement. Where I part company with his submissions is that he adds that, in such circumstances, the court, in the exercise of its discretion, should not afford the agreement any weight. My conclusion is that this last point will depend on the circumstances of the case. It may be unfair to afford it any weight but this will not invariably be the case. It all depends.
  68. Mr Balcombe relies on the cases of B v S and GS v L as authority for the proposition that a party will not have a full appreciation of the implications of the agreement if there is a realistic prospect that the parties' marriage may end in divorce in a jurisdiction that operates a system of discretionary equitable distribution and he or she is not made aware of the fact that the agreement will, or at least, may have an effect in such a jurisdiction and may thereby deny the party the possible benefits of discretionary equitable distribution.
  69. I find this latter point quite difficult. In general, it is a requirement for each party to such an agreement to have been independently legally advised. Why is it not the role of the independent legal advisor to deal with such matters? Is it the fault of the other party if an advisor does not do so? A failure to advise properly may, after all, result in a claim in negligence.
  70. It cannot be a requirement to have received specific advice as to the operation of English law on the agreement in question, otherwise Mr Radmacher would not have been held to his agreement. Fortunately, I do not consider that I need to resolve the issue further as I agree with Mostyn J in B v S at Paragraph [20] where he says that, to have effect, the parties must have intended the agreement to apply wherever they might be divorced and, in particular, if they were divorced in a regime that operated a system of discretionary equitable distribution. It undoubtedly follows that it is wise for the other party's advisor to insert a clause dealing with this in the final agreement.
  71. I have already indicated that, even where it is not fair to hold a party to an agreement, it may be that it is right to pay some regard to the agreement. I say this as I am not dealing here with strict contract law. I am applying section 25 which requires me to consider "all the circumstances of the case". The existence of the Marriage Settlement is undoubtedly one of the circumstances of this case. Prior to the decision in Radmacher, there were a number of authorities in this jurisdiction to the effect that the very fact that an agreement was signed prior to a marriage could be relevant to the quantum of the award. For example, in M v M [2002] 1 FLR 654, Connell J held that, while the court was not bound by the terms of the agreement, the court should look at it and decide in the particular circumstances, what weight should, in justice, be attached to it. It would be very odd indeed if the effect of Radmacher was to prevent a non-binding agreement having any weight at all in the exercise of the court's discretion when it might have been given appropriate weight prior to the Supreme Court's decision. I am satisfied that the law remains that, even if non-binding, the very existence of the agreement can, in an appropriate case, be relevant.
  72. The evidence of the parties

  73. Before reaching my conclusions as to the Marriage Settlement and its effect on this case, it is important that I should deal with the written and oral evidence of both parties both in general and, in particular, in relation to the Marriage Settlement itself.
  74. I am quite satisfied that both parties did their best to give me truthful oral evidence. I need to qualify that in one respect. When they gave evidence in relation to the Marriage Settlement, I find that their recollections were not always reliable and they tended to tailor their evidence to the case each is currently running as to the Settlement. This was not, however, deliberate dishonesty.
  75. It is right to note that the Wife found giving evidence very difficult. She was tearful and distressed. She is at present taking medication for depression. I am sure that her need to do so is related to the breakdown of the marriage and the stress of these proceedings. The problem should resolve itself pretty quickly once the case is concluded. She is working as a personal trainer. She is training to undertake yoga classes as well. She has earned approximately £6,000 in the past six months. I consider her earning capacity, consistent with her commitments to the children, to be in the region of £15,000 per annum. In the context of this case, this is not significant.
  76. Perhaps more significantly, I have to assess her understanding and appreciation of the significance of the Marriage Settlement. It was soon clear that she is neither commercially astute nor sophisticated in relation to legal concepts. I mean no criticism of her in this regard, but she is no Mr Radmacher. She is simply not well versed in the ways of business. This is in stark contrast to the position of this Husband. He is most definitely financially astute. I soon concluded that he also has a good grasp of legal matters.
  77. The Husband gave his evidence in a very engaging way. He was forced to concede that his expenditure was very much higher than the budget I have already referred to. He accepted that the Wife's evidence as to their lifestyle and spending patterns was an accurate description. He initially tried to claim that spending £100,000 per annum on shooting was justified business entertaining but he subsequently accepted that he enjoyed the activity enormously and benefitted from reciprocal entertaining by others. He also accepted that it was reasonable for the Wife to employ a full-time nanny although he said it would not be reasonable once the children had reached the ages of 10 – 12 and that it should in due course be reviewed. It is however right to note that the parties work together well in this regard. The cost of the live-in nanny of £410 per week has been shared between them and the nanny has worked for both of them when they have each had the children with them.
  78. The Husband also agreed in cross-examination that he had led the Wife to believe that he was agreeable to a return to Scandinavia for the children to be educated there, whilst indicating to his advisors that he wanted to be able to live in this country indefinitely. Indeed, I am quite satisfied that this was the case. The Wife thought the stay here was intended to be temporary. The Husband expected it to be permanent. He told me he was very unhappy with the Wife's plan to return to Scandinavia.
  79. The evidence as to the Marriage Settlement

  80. I have already indicated that I did not find the parties' evidence in relation to the Marriage Settlement to be quite so reliable. For example, the Wife said in her evidence in chief that she did not believe the Settlement was linked to a divorce. In cross-examination, she was constrained to admit that it was indeed providing for what should happen on a divorce. Equally, she said that she would never have signed the Settlement after she had children. Yet, she did sign when she was pregnant and knew that she would be having at least one child. I am sure she would have signed again had she been pressed to do so by the Husband.
  81. The Husband's evidence, however, was equally self-serving at times. When asked why he had not told the Wife about the sale of 'F1', he told me that he considered that the property was his to do with as he wished. This is entirely inconsistent with his case, put to me forcefully in his evidence, that he considered the Settlement to be binding on both of them, notwithstanding the refusal of the relevant authorities to register it.
  82. I have come to some clear conclusions as to the correct factual matrix in relation to the Marriage Settlement:-
  83. (a) The Husband made it quite clear to the Wife that she had to enter a Marriage Settlement prior to the marriage in accordance with his family tradition and to protect his inherited wealth. The Wife knew he required this. She agreed quite readily. As she said to me, she did not want to appear to be greedy in the run up to their marriage.

    (b) Although the Husband did not provide financial disclosure, the Wife was well aware that he was an extremely wealthy man. As she accepted in evidence, a Rich List had said he was worth the equivalent of £50 million, which, surprisingly, at the time was remarkably accurate.

    (c) Both parties were advised fully as to the relevant Scandinavian law. In particular, the Wife knew that the provision of 10 million Kroner was more than she would be likely to get from a Divorce Court in her country of origin in the event of a divorce, given that the Husband's inherited wealth was separate property. It followed that the Wife was, initially, more anxious than the Husband when the authorities refused to register the Agreement.

    (d) The parties did agree to enter a fresh Settlement in 2010 when the Husband attained the age of 30 but, contrary to the Wife's case, there was no understanding that this would lead to more generous provision. The intention was merely to secure the Wife's 10 million Kroner in a way that could not be achieved until the Husband had free access to his inherited wealth.

    (e) The intention was that the Marriage Settlement would govern what the Wife would receive on a divorce by way of provision for her housing. Both parties knew that the Agreement did not cover maintenance claims although the Wife knew that "maintenance" would not include additional money for property, contrary to what was said on her behalf in her statement. I am unclear whether the parties had any accurate knowledge as to how limited her maintenance claims in Scandinavia would be. In any event, I am quite satisfied that the Husband told the Wife not to worry as he would always look after her financially.

    (f) Surprisingly, neither party was advised to seek any advice in this jurisdiction, although the Husband admitted that he knew the divorce courts here were "generous" to wives. I find that the Wife had no idea at all as to what she was giving up here. This is particularly important given that they were already residing here. I do find that it had never crossed her mind that she might be divorced here although it had crossed the Husband's mind. I do not accept that there was any agreement between them that they would be divorced in the country in which they were married. The Husband may have expected that would be the case but he did not take any steps to include that in the Marriage Settlement negotiations.

    (g) The Settlement itself was a very basic document, unlike the document signed in the Radmacher case. It does not say it is in full and final settlement of all the Wife's claims. It does not say, as do many such documents, that if one clause is invalid, it will not affect the rest of the agreement. As already noted, there is no clause granting the Scandinavian courts exclusive jurisdiction. There is no reference to the potential relevance of foreign law nor to the need for advice in that regard.

    (h) I am by no means clear as to what the parties were advised after the Settlement was refused registration. I am clear that they both thought they had to enter a further Settlement. It is equally clear that the Wife did not have a full appreciation of the consequences of not doing so. On balance, I think she thought the Settlement was invalid as she was worried she would not even get the 10 million Kroner. She was, of course, right to be so worried given the uncontested evidence of the two Scandinavian lawyers that the Settlement would not be upheld for different reasons. How was the Wife to know that? Most importantly, I am sure she was convinced by the Husband that she did not need to worry as he would "see her right".

    (i) I am clear that the Husband himself did not consider himself bound by the Settlement. He never provided security for the Wife's 10 million Kroner. He sold 'F1' without telling her. He did not account to her for the 10 million Kroner. Indeed, he did not pay her the money until a few weeks before the case started before me.

    (j) Finally, the Settlement was undoubtedly predicated on the assumption that the Wife would be residing in Scandinavia if the parties' marriage broke down. This has proved not to be the case, primarily as a result of the wishes of the Husband.

    The legal effect of the Settlement

  84. As pointed out by Mr Balcombe, there is a sense of irony in the fact that I am being asked to uphold a Settlement that would be invalid in the jurisdiction in which it was entered. I accept, however, that this is not the test I have to apply, although this may be relevant to whether or not the parties had "a full appreciation of its implications".
  85. It is, however, clear to me that, applying Radmacher, this Wife did not have a full appreciation of the implications of this Marriage Settlement:-
  86. (a) She knew it covered her housing in Scandinavia but it is clear that she had no idea as to what the position would be if she was to remain here. She was never advised to obtain advice here, even though she was living here. As I have already noted, she had no idea at all as to what she was giving up here. The Husband's advisors did not deal with this issue either. The Settlement itself said nothing as to its applicability outside the country in which they were married. It said nothing about maintenance. How can it therefore be said that the Wife was expected to know that it was intended to cover the position whenever and wherever they divorced and wherever she was being expected to live?

    (b) Her lack of understanding was thrown into even greater confusion by the failure of the authorities to register the Settlement. How can it be said that the Wife would have known that it would nevertheless have been binding upon her wherever she was residing when we now know that the Court itself would not have held it to be binding, albeit for different reasons? There was discussion of a further draft but one was not signed. It was agreed that the parties would look at it again in two years but they did not do so.

    (c) The Husband clearly had a greater understanding than the Wife. He has admitted that he knew the divorce courts here were "generous" to wives. I have already found that the Wife had absolutely no such knowledge. This was not a level playing field. Although it had never crossed the Wife's mind that she might be divorced here, I do not see how the Husband can rely on this given that it had crossed his mind but he had not shared that thought with her. This could, after all, easily have been dealt with in the Settlement.

  87. I am reinforced in this conclusion by the fact that it is not unjust to the Husband, in circumstances where:-
  88. (a) The Settlement was predicated on the basis that the Wife would be residing in Scandinavia but she will, in fact, be residing here at the specific request of the Husband.

    (b) The Husband himself did not consider himself bound by the Settlement in that he sold 'F1'without accounting to the Wife in any way for the 10 million Kroner, even after it was clear that the marriage had broken down.

    (c) I have found that the Husband reassured the Wife that she did not need to worry as he would provide for her generously, even if they did divorce.

  89. So should I consign the Settlement to history and ignore it altogether? In most respects, I am satisfied that I should:-
  90. (a) The Settlement does not provide for English housing for the Wife, which is now necessary as a result of the decision that she should remain here indefinitely with the children. I can see absolutely no justification for the suggestion that her housing here should be held on Schedule 1 type terms just because she signed a Settlement saying she would get the equivalent of a house in Scandinavia outright. Moreover, she needs security in her housing. It would be quite inappropriate for her to rent even though the parties, by choice, rented during the marriage. In fairness to the Husband, he did not suggest at the trial that she should be renting accommodation.

    (b) The Settlement does not prevent a claim for maintenance. As I have to apply English law, I conclude that I am entitled to deal with that claim by capitalisation, provided I would consider it appropriate to do so applying section 25 of the Matrimonial Causes Act. I cannot see what relevance the Settlement in this case can have to this issue given that it does not deal with maintenance at all.

  91. It is agreed that sharing, as understood in English law, has no part to play in this case. Yet the Settlement provided that the Wife could "share" the Husband's inheritance to the tune of 10 million Kroner. I have come to the conclusion that it would not be fair to the Husband to cherry pick that part of the Settlement and say that the Wife is entitled to a Scandinavian property just because the Settlement effectively provides for that. In so far as she has received the equivalent of 10 million Kroner index linked, I am satisfied that this should be accounted for when calculating her needs claim.
  92. There is, however, one aspect in which I consider it is relevant to pay some regard to the intentions of the parties when they entered the Settlement. I do so as "one of the circumstances of the case". The parties intended the Settlement to protect the Husband's inherited wealth. They further intended that the Wife should receive 10 million Kroner to satisfy her housing needs. Her housing needs are now different. Subject to the point I have made above about capitalising maintenance, I take the view that I should invade the Husband's inherited capital further only in so far as it is appropriate to deal fairly with those changed housing needs. Indeed, the Wife appears to accept this in that she herself proposes a charge on whatever London property I deem appropriate.
  93. Even if I was wrong about that, I would still have come to the same conclusion by reason of the short length of the marriage, the age of the parties and the origin of the Husband's wealth. I entirely accept that the existence of the children means that the Wife will be contributing to the welfare of the family for many years to come but this can be factored into the solution I propose.
  94. The Wife's needs - housing

  95. I therefore turn to the question of the Wife's housing needs. I heard a great deal of evidence as to the cost of appropriate property in Kensington & Chelsea. Whilst the general population would be amazed by the figures involved, I have to deal with the reality of the housing market. It was, after all, accepted by the Husband that the Wife and children should live relatively close to their school, to their friends and to his likely accommodation. I have come to the conclusion that she needs a five bedroom property. She requires a bedroom for herself; one for each child; one for guests and finally one for a live-in nanny. I might not have considered the latter essential were it not for the Husband's evidence as to the need for a nanny. I am quite sure that, if there is to be a nanny, it should be a live-in nanny. This is the current position. It is considerably cheaper than having a live-out nanny. It was also accepted that the Wife needed a garden, or at the very least, access to communal gardens. Finally, it is important that the property bears some relation to the quality of accommodation that the Husband is himself likely to occupy, even if he does decide, for fiscal reasons, to rent.
  96. The Wife's particulars ranged from £7.5 million to £6.3 million. The Husband's particulars went from £2.25 million to £3.95 million. It follows that I had no particulars between £4 million and £6 million. It is right that, with one exception, the Husband's properties were only 4 bedrooms. Indeed, the one that had five bedrooms was his most expensive property. I did not consider that property satisfactory. The fifth bedroom was extremely small. The house only had one main bathroom. I accept the Wife's evidence that it would also have required an "upgrade" to be suitable. I note that this property was 2,036 square feet. The cost per square foot was £1,940.
  97. Equally, however, I considered that the Wife's properties were all in excess of what was reasonably required. The smallest of her properties had 3,200 square feet, whereas 'F2' had 2,650 square feet and her current property, has 2,700. The cost per square foot of her properties ranged from £1,443 to £2,096.
  98. I have come to the conclusion that she needs approximately 2,700 square feet. A fair figure for the cost per square foot would be £1,850. This gives rise to a purchase at approximately £5 million. Stamp Duty Land Tax will be 7%, or £350,000. There will also be various other costs of purchase that I put at £25,000. She will require some furniture and/or a refurbishment fund. There was also some evidence as to whether or not she needs a new car. I consider I should apply a broad brush to this and award a figure of £150,000. I make it clear, however, that is entirely up to the Wife how she allocates her overall resources.
  99. The claim for a second property

  100. I have come to the clear conclusion that I should not allocate a separate sum for a property in Scandinavia. I accept entirely that the children should be able to return regularly, to see both the Wife's family and the Husband's family. I do not, however, consider this requires the acquisition of a property there. First, I have already made a reference to the Wife and children spending their summer holidays in Ibiza for the last two or three years. This was a perfectly valid and reasonable decision for the Wife to take but it is not consistent with an overriding wish to spend holiday periods in Scandinavia. When the family go there to visit, they can either stay with the Wife's family (parents or sister) or, possibly, with the Husband's mother. I will be allocating a considerable sum for holidays for the Wife and children. They can, if they wish, rent a house or even stay in a hotel. I have already indicated that it is up to the Wife how she allocates her overall resources. She could, if she chose, only allocate £4 million to a London property and buy a second property for £1 million. That is a matter for her.
  101. The charge

  102. I have already indicated that I accept the justification for a charge on the Wife's London property. I take the view that the Wife's Open Proposal that this should be for £2 million is appropriate, even though I recognise that I have reduced the sum I am awarding to her significantly. The charge should be for such percentage of the purchase price as would give the Husband £2 million. The Husband is not to be disadvantaged should she decide to buy for only £4 million and acquire a second Scandinavian property. In other words, if the Wife buys for £5 million, the charge will be for 40%. If she buys for only £4 million, it will be for 50%. The parties can, if they wish, agree a different percentage, if for example, the Wife wants to spend money on improving a property that she has purchased at a lower figure but this can only be done by agreement.
  103. I have considered carefully the terms on which the charge should be exercisable. It was proposed that it be on Mesher terms, in other words on the children respectively completing their full-time education. I consider this is right, as the Wife will not, at that point, need such a large valuable property. I would make it clear that it should be the completion by both children of tertiary education, to the end of a first degree. I do not consider that it should include sale on remarriage or cohabitation although it would be exercisable on further order in the meantime. I do, however, consider that it should be exercisable were the Wife to relocate either by agreement or court order. The reason she needs the London property is because she is going to be living here. I accept that this is her genuine intention. I hope this intention will not change but, if it did, and she convinced either the Husband or a court to permit her to relocate, it would only be right for the charge to be exercisable.
  104. I have thought very hard as to the correct percentage for the charge. I have chosen £2 million quite deliberately. On exercise of the charge, the Wife will, in round figures at today's prices, be left with £3 million. This will be sufficient for her to buy a suitable Scandinavian property (currently put at around £1 million) and a home here. This would probably be a flat. £2 million would, in my estimation, be the appropriate figure. She can either live in a smaller property in a more expensive area or in a larger property further out from the Centre. I am quite sure it is reasonable for her to have such a property. She has made a significant commitment in agreeing to remain here. By the time the children complete full-time education, she will have been here for around twenty five years. This will have become her home. Her children may well remain here. She should have the ability to be here as well.
  105. Maintenance

  106. I have already mentioned that the Wife's budget is £27,269 per month (£327,228 per annum). Whilst I accept that this sort of level of provision broadly reflects the standard of living enjoyed by the parties during the marriage, there are items in the budget that are not appropriate and need to be removed.
  107. In particular, it is appropriate to remove the figures for a second home in Scandinavia (£1,497 per month). The figure for professional advice should be reduced by £500 per month. The children's expenses will be covered by their maintenance (£3,385 per month). This reduces the figure to £21,887 per month. I also accept the submission of Mr Cusworth for the Husband that a number of the other items are simply too high. I consider an appropriate overall budget for the Wife alone is £200,000 per annum, excluding her earning capacity. In essence, what she earns will enable her to improve her standard of living over and above this figure either to a greater or lesser extent.
  108. I have concluded that it is right to capitalise this figure. English law favours a clean break wherever possible. It has very significant advantages for both parties in that they can end their financial ties and move on with their lives. Mr Cusworth was unable to draw my attention to any significant "big-money" case in which there had not been a capitalisation of the Wife's maintenance.
  109. Mr Cusworth did, though, submit that it was highly unlikely that a maintenance order would continue for more than five years and, if I was against him as to continuing periodical payments, I should capitalise at that figure. I do not agree. Given my conclusions as to the Wife's earning capacity, it is clear that her maintenance would continue indefinitely as she would be quite unable to adjust without undue hardship to the termination of the payments. Mr Balcombe rightly submitted that the only basis for Mr Cusworth's submission was, in effect, an attempt to get me to assess the Wife's prospects of remarriage. He drew my attention to the authority of Dixon v Marchant [2008] EWCA Civ 11; [2008] 1 FLR 655. I am quite satisfied that the law is that I must ignore the prospects of remarriage in calculating the appropriate figure for capitalisation. I accept that to do otherwise would involve a wholly inappropriate assessment of remarriage prospects that would be both invidious and unscientific.
  110. I do, however, accept that the length of the marriage, the Wife's age and the Duxbury paradox mean that it is inappropriate for me to capitalise the figure of £200,000 per annum on a full life basis. The Wife herself suggests I should capitalise on the basis of 17 years, namely to take the Wife up to the younger daughter completing full-time tertiary education. I consider that the correct figure is, in fact, to take the Wife up to the youngest child's completion of full-time secondary education or, just under 14 years. By my calculations, this gives rise to a capitalisation figure of £2,237,000. I shall round this up to £2,250,000.
  111. Child maintenance

  112. The Husband will pay the children's school fees and reasonable extras. He offers to pay £20,000 per annum per child on top. The Wife seeks £25,000 per annum per child. The position is complicated by the acceptance in oral evidence of the need for a nanny. I have provided for a live-in nanny. At present, the cost is £410 per week excluding tax and national insurance.
  113. I consider the cost of the nanny should be shared equally between them, including the tax and national insurance. The Husband will then benefit from having some help with the children from the nanny when they are with him as presently agreed.
  114. This is a significant additional cost to the Husband not anticipated in either Open Offer. I would have ordered him to pay £25,000 per annum per child but consider that, having required him to pay half the nanny, the correct figure is £20,000 per annum per child as he proposed. This figure will be index linked in accordance with the UK CPI.
  115. Conclusion

  116. The total capital award, on a clean break basis, is thus:-
  117.   (a) Housing (subject to charge) £5,000,000
      (b) Costs of purchase £375,000
      (c) Refurbishment/ Furniture/ car £150,000
      (d) Capitalised maintenance £2,250,000
      Total £7,775,000

  118. The Wife must give credit for the sum of £760,000 already paid, net of her costs. There will be no order as to costs as I have taken costs fully into account.
  119. The welfare of the children whilst a minor is my first consideration. I have borne this very much in mind. I have carefully considered the criteria in section 25(2) and, in particular, the need for fairness. I am satisfied that this award is appropriate given the length of the marriage, the ages of the parties, the fact that the assets are all inherited and non-matrimonial and the facts as I found them to be surrounding the Marriage Settlement.
  120. I will give the Husband 12 months in which to raise the money. It does follow that, until he has paid in full, he must maintain the Wife and children. I consider the correct approach is for him to pay the Wife's rent and the sum of £240,000 per annum until payment. In addition, he must pay the school fees and one-half of the nanny's costs including tax and national insurance.

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