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Drafting Post Nuptial Agreements

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					   ANCILLARY RELIEF UPDATE


Pre-Nuptial Agreements (PNAs)


           Sarah Kilvington

                                       Ancillary Relief Update
                                                 16 June 2010
Young Street Chambers         Marriott Victoria & Albert Hotel
   An agreement before marriage
purporting to govern the rights of the
   parties should the marriage be
              dissolved



                                      Ancillary Relief Update
                                                16 June 2010
     Young Street Chambers   Marriott Victoria & Albert Hotel
                PNAs =

Potential money-spinner, but
   negligence minefield!



                                  Ancillary Relief Update
                                            16 June 2010
 Young Street Chambers   Marriott Victoria & Albert Hotel
Drafting the perfect PNA




                                 Ancillary Relief Update
                                           16 June 2010
Young Street Chambers   Marriott Victoria & Albert Hotel
What a PNA may NOT do




                                 Ancillary Relief Update
                                           16 June 2010
Young Street Chambers   Marriott Victoria & Albert Hotel
•   Oust the jurisdiction of the court




                                                  Ancillary Relief Update
                                                            16 June 2010
       Young Street Chambers             Marriott Victoria & Albert Hotel
•   Oust the jurisdiction of the court

•   Allow the wealthier parent to contract out of
    supporting their child and the carer-parent




                                                  Ancillary Relief Update
                                                            16 June 2010
       Young Street Chambers             Marriott Victoria & Albert Hotel
•   Oust the jurisdiction of the court

•   Allow the wealthier parent to contract out of
    supporting their child and the carer-parent

•   Achieve a fundamentally unfair result, EXCEPT
    when the parties have a strong connection with
    another country and have elected in an
    agreement to be governed b that country’s laws

                                                  Ancillary Relief Update
                                                            16 June 2010
       Young Street Chambers             Marriott Victoria & Albert Hotel
  Oust the Jurisdiction of the court

  Long-established principle

• Hyman v Hyman [1929] AC 601




                                                Ancillary Relief Update
                                                          16 June 2010
         Young Street Chambers         Marriott Victoria & Albert Hotel
  Wealthier parent “contracting out”
• K v K (Ancillary Relief: Pre-nuptial Agreement
  [2003] 1 FLR 120

  High Court held the Wife to her agreement as to capital.

  However, judge dealt with child’s needs almost as a
  discrete issue – like an application under Sch. 1 Chilrden
  Act 1989

                                                      Ancillary Relief Update
                                                                16 June 2010
          Young Street Chambers              Marriott Victoria & Albert Hotel
  Achieve a fundamentally unfair result, EXCEPT when the
  parties have a strong connection with another country and
  have elected in an agreement to be governed by the
  country’s laws
• Ella v Ella [2007] 2 FLR 35

  Case went to the rabbinical court in Israel in accordance
  with agreement, even though it stipulated Wife was to have
  no right to any of Husband’s assets

                                                    Ancillary Relief Update
                                                              16 June 2010
          Young Street Chambers            Marriott Victoria & Albert Hotel
Agbaje v Agbaje [2009] 1 FLR 987

Ancillary relief order was made by the courts in
Nigeria

Held - parties’ connection with Nigeria was more
significant then with England and the Nigerian court,
which had made an award to the Wife, had not done
her a serious injustice, case would not be re-considered
in the English Courts
                                               Ancillary Relief Update
                                                         16 June 2010
    Young Street Chambers             Marriott Victoria & Albert Hotel
    What a PNA may do




                                 Ancillary Relief Update
                                           16 June 2010
Young Street Chambers   Marriott Victoria & Albert Hotel
•   Provide a moderate capital sum for wife if
    marriage breaks down in a specified period




                                             Ancillary Relief Update
                                                       16 June 2010
       Young Street Chambers        Marriott Victoria & Albert Hotel
•   Provide a moderate capital sum for wife if
    marriage breaks down in a specified period
•   Exclude spousal-only claims altogether




                                             Ancillary Relief Update
                                                       16 June 2010
       Young Street Chambers        Marriott Victoria & Albert Hotel
•   Provide a moderate capital sum for wife if
    marriage breaks down in a specified period
•   Exclude spousal-only claims altogether
•   Define what is matrimonial and non-
    matrimonial property




                                             Ancillary Relief Update
                                                       16 June 2010
       Young Street Chambers        Marriott Victoria & Albert Hotel
•   Provide a moderate capital sum for wife if
    marriage breaks down in a specified period
•   Exclude spousal-only claims altogether
•   Define what is matrimonial and non-
    matrimonial property
•   Set out who owns what currently, clarifying the
    starting point




                                              Ancillary Relief Update
                                                        16 June 2010
       Young Street Chambers         Marriott Victoria & Albert Hotel
•   Provide a moderate capital sum for wife if
    marriage breaks down in a specified period
•   Exclude spousal-only claims altogether
•   Define what is matrimonial and non-
    matrimonial property
•   Set out who owns what currently, clarifying the
    starting point
•   Decide that inherited assets always remain the
    property of the party to whom they were given,
    in the absence of a court order to the contrary
                                              Ancillary Relief Update
                                                        16 June 2010
       Young Street Chambers         Marriott Victoria & Albert Hotel
•   Provide a moderate capital sum for wife if marriage breaks down in a
    specified period
•   Exclude spousal-only claims altogether
•   Define what is matrimonial and non-matrimonial property
•   Set out who owns what currently, clarifying the starting point
•   Decide that inherited assets always remain the property of the party to whom
    they were given, in the absence of a court order to the contrary
•   Provide that any post-separation assets remain
    the absolute property of spouse who gained
    them



                                                                 Ancillary Relief Update
                                                                           16 June 2010
         Young Street Chambers                          Marriott Victoria & Albert Hotel
•   Provide a moderate capital sum for wife if marriage breaks down in a
    specified period
•   Exclude spousal-only claims altogether
•   Define what is matrimonial and non-matrimonial property
•   Set out who owns what currently, clarifying the starting point
•   Decide that inherited assets always remain the property of the party to whom
    they were given, in the absence of a court order to the contrary
•   Provide that any post-separation assets remain the absolute property of
    spouse who gained them
•   Exclude some of mechanisms set out in Miller
    and Charman that can lead to a bigger award


                                                                 Ancillary Relief Update
                                                                           16 June 2010
         Young Street Chambers                          Marriott Victoria & Albert Hotel
Moderate capital sum

• KvK

Husband was worth more than £25million, but
 Wife only got £100,000 pa increasing by 10%
 of every year of the marriage



                                        Ancillary Relief Update
                                                  16 June 2010
   Young Street Chambers       Marriott Victoria & Albert Hotel
Exclude spousal-only claims

This was the case in Radmacher v Granatino
  where Husband did not have a claim in his
  own right




                                         Ancillary Relief Update
                                                   16 June 2010
   Young Street Chambers        Marriott Victoria & Albert Hotel
Define matrimonial and non-matrimonial
 property

A logical progression from Miller v Miller;
  McFarlane v McFarlane [2006] 1 FLR 1186




                                         Ancillary Relief Update
                                                   16 June 2010
   Young Street Chambers        Marriott Victoria & Albert Hotel
Miller and Charman mechanisms include:

• Concept of marital acquest




                                        Ancillary Relief Update
                                                  16 June 2010
   Young Street Chambers       Marriott Victoria & Albert Hotel
Miller and Charman mechanisms include:

• Concept of marital acquest
• Presumption of equal partnership in marriage




                                         Ancillary Relief Update
                                                   16 June 2010
   Young Street Chambers        Marriott Victoria & Albert Hotel
Miller and Charman mechanisms include:

• Concept of marital acquest
• Presumption of equal partnership in marriage
• Notion that fmh is a family asset and therefore
  jointly owned




                                          Ancillary Relief Update
                                                    16 June 2010
   Young Street Chambers         Marriott Victoria & Albert Hotel
Miller and Charman mechanisms include:

• Concept of marital acquest
• Presumption of equal partnership in marriage
• Notion that fmh is a family asset and therefore
  jointly owned
• Concept of “mixing” whereby separate
  property can become transmuted into
  matrimonial property

                                          Ancillary Relief Update
                                                    16 June 2010
   Young Street Chambers         Marriott Victoria & Albert Hotel
Miller and Charman mechanisms include:

• Concept of marital acquest
• Presumption of equal partnership in marriage
• Notion that fmh is a family asset and therefore
  jointly owned
• Concept of “mixing” whereby separate
  property can become transmuted into
  matrimonial property
• Ideas of “compensation” and “sharing”

                                          Ancillary Relief Update
                                                    16 June 2010
   Young Street Chambers         Marriott Victoria & Albert Hotel
Drafting Safeguards




                                    Ancillary Relief Update
                                              16 June 2010
   Young Street Chambers   Marriott Victoria & Albert Hotel
Agreement must be fair in 2 ways:

  Meeting the basic needs
  Procedurally, in how it was reached




                                        Ancillary Relief Update
                                                  16 June 2010
   Young Street Chambers       Marriott Victoria & Albert Hotel
How might an agreement be procedurally
unfair?




                                      Ancillary Relief Update
                                                16 June 2010
   Young Street Chambers     Marriott Victoria & Albert Hotel
Undue Pressure:

Actual
Presumed – where one spouse puts their faith in
the other’s superior knowledge or financial skills




                                           Ancillary Relief Update
                                                     16 June 2010
   Young Street Chambers          Marriott Victoria & Albert Hotel
Disclosure – best practice – attach a schedule of
assets to the PNA




                                          Ancillary Relief Update
                                                    16 June 2010
   Young Street Chambers         Marriott Victoria & Albert Hotel
Access to legal advice




                                    Ancillary Relief Update
                                              16 June 2010
   Young Street Chambers   Marriott Victoria & Albert Hotel
Substantive fairness. BUT a relatively minor
point if the parties circumstances remain
unchanged.

Try to “future-proof” the order.




                                            Ancillary Relief Update
                                                      16 June 2010
   Young Street Chambers           Marriott Victoria & Albert Hotel
Remember: Even the best PNA cannot oust the
jurisdiction of the court.

The court must carry out the s.25 exercise.




                                          Ancillary Relief Update
                                                    16 June 2010
   Young Street Chambers         Marriott Victoria & Albert Hotel
The court may consider the force of a PNA at a
preliminary hearing rather than a full trial

• Crossley v Crossley [2008] 1 FLR 1467:
Agreement was not a peripheral factor, but one of “magnetic
importance”.

The ancillary relief rules were not a straitjacket, and the
overriding objective in r 2.5 1 D of FPR 1991 governed it all. A
judge was required to identify issues at an early stage and deal
with the case in a mannor proportionate to the financial
position of the parties.

                                                      Ancillary Relief Update
                                                                16 June 2010
    Young Street Chambers                    Marriott Victoria & Albert Hotel
Radmacher v Granatino
CA held:
The court is obliged to undertake s.25 exercise, thereby a PNA is
not a preliminary defence to an ancillary relief application.
They endorsed the trend of greater weight being given to properly
negotiated PNAs.
This was not to apply foreign law, but was a legitimate exercise of
the very wide discretion conferred on judges to achieve fairness.
In this case the High Court judge was wrong to find that the PNA
was defective, it should have been given decisive weight as a
contract entered into willingly and knowingly by responsible
adults.

                                                         Ancillary Relief Update
                                                                   16 June 2010
         Young Street Chambers                  Marriott Victoria & Albert Hotel
“whatever unfairness there was to the husband in
precluding any claim by him, even in circumstances of
real need, must be balanced against the unfairness to
the wife of ignoring the husband’s signature of a
contract without which the wife would not have
agreed to marry.”




                                                Ancillary Relief Update
                                                          16 June 2010
     Young Street Chambers             Marriott Victoria & Albert Hotel
What will the Supreme Court
       decide?.......




                                  Ancillary Relief Update
                                            16 June 2010
 Young Street Chambers   Marriott Victoria & Albert Hotel

				
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