NEWSLETTER
MARCH 2009
MacLeod –
the vaLidity and effect
of post-nuptiaL agreeMents
After a brief respite the case of MacLeod v MacLeod [2008] UKPC 64 has placed
pre and post nuptial agreements firmly back under the spotlight and led to renewed
calls for legislation on the validity and effect of these agreements.
Despite comment in the press to the contrary MacLeod did not review the position
in respect of pre-nuptial agreements, which, as a matter of public policy, are still
technically not “valid and enforceable”. They will, however, be taken into account
by the Court and their persuasiveness will depend upon all the circumstances of the
case at the time of the divorce but they are becoming increasingly influential.
MacLeod instead concentrated on the validity and effect of post nuptial agreements,
i.e. agreements signed after the marriage while the couple are still living together
and dealing with their financial arrangements while together and often also in the
event of a divorce.
T h e Fa c T s T h e L aw
The facts of the case (briefly) were that the husband and Whereas a pre-nuptial agreement is technically invalid for
wife married in Florida on 14 February 1994 with a pre- reasons of public policy, a post nuptial agreement comes
nuptial agreement (which are enforceable in the State of within the definition of a “maintenance agreement” – a
Florida). By the time of the proceedings in 2005 they had written agreement containing financial arrangements made
five children and were living in the Isle of Man. They entered during or after the dissolution/annulment of the marriage.
three agreements during the marriage, including the pre-
nuptial agreement. The final one (and the subject of these These agreements are binding unless there is a reason for
proceedings) was signed in July 2002, shortly after which the them to be void or unenforceable (e.g. purporting to restrict
marriage broke down. This agreement was signed following a right to apply to Court or to oust the Courts jurisdiction,
a lengthy period of negotiations (14 months) during which misrepresentation, undue influence etc).
both parties had independent legal advice.
This would therefore seem to suggest that all post nuptial
The main area of disagreement between the parties was in agreements will be binding on the parties (subject to
respect of the issue of housing and whether the wife’s housing voidable/unenforceable provisions) and can provide certainty
should be held in Trust and revert to the husband at a fixed without the need for litigation in financial proceedings on
point in time or whether it should be given outright to the wife. divorce, something of a holy grail in the family law world!
“A ‘high calibre’
private client practice.”
From Chambers UK – A Client’s Guide to the Legal Profession
NEWSLETTER
MARCH 2009
As ever, however, with family law the Courts retain discretion
and the final say because “maintenance agreements” are concLusion
always subject to the Courts powers of variation. These
can be used if there has been a change in circumstances The upshot is that although post nuptial agreements
(even if foreseen) or the agreement does not contain proper are not binding as a matter of course the law has
arrangements for the children of the family. This will moved forward to the extent that there will need
determine the validity of the agreement in any financial to be a good reason for such an agreement not
application, as will any circumstances in which the agreement to be upheld either in its entirety or excluding
was made which might be relevant! The best example of such any void/unenforceable provisions or taking into
a circumstance is the exploitation of an unequal bargaining account variations by the Court. As a result post
power. nuptial agreements now provide more certainty
than pre nuptial agreements although the extent
Although seemingly wide and uncertain it is not all doom of that certainty will still remain at the discretion
and gloom. of the Courts and just like pre-nuptial agreements,
influenced by further passage of time pre divorce and
significant changes in circumstances. It does, however,
Per Baroness Hale at paragraph 42: “We must assume give those who wish to regulate their finances (as is
that each party to a properly negotiated agreement is increasingly the case in modern times) a better chance
a grown up and able to look after him or herself. At of doing so for better or for worse!
the same time we must be alive to the risk of unfair
exploitation of superior strength. But the mere fact
that the agreement is not what a Court would have
done cannot be enough to have it set aside.”
In Macleod at the time of the 2002 post nuptial agreement
the wife was fully aware of the husband's financial position
and had had independent legal advice. In addition following
the agreement the marriage broke down very quickly and
therefore the position had not changed significantly from
when the agreement was signed. The Court therefore felt (as
in Crossley) that there was no good reason not to hold her to
the agreement save in respect of provision for the children
(which was not considered to be proper) and so they varied it
to that extent.
This article offers general guidance only. It reflects the law as at March 2009. The circumstances of each case vary and
this article should not be relied upon in place of specific legal advice.
For further information, please contact:
Ann Northover on 020 7863 8533 or aenorthover@forsters.co.uk
Forsters LLP | 31 Hill Street | Mayfair | London | W1J 5LS
t: 020 7863 8333 | f: 020 7863 8444
www.forsters.co.uk
| REFERENCE NO: 101/160209 |