BN v MA Another Boost for Pre-Nuptial Contracts

In the recent High Court decision of BN v MA [2013] EWHC 4250 (Fam) the court has enforced a pre-nuptial agreement in an application by the wife for interim maintenance.  Giving judgment Mr Justice Mostyn stated that where pre-nuptial agreements are signed by “sophisticated, highly intelligent couples” following legal advice, their decisions should be given “heavy respect””.  This ruling follows the landmark Supreme Court case Radmacher v Granatino [2011] 1 AC 534.  The Court held in BN v MA that the test which should now be applied in every case involving a pre-nuptial contract is that courts should give effect to agreements freely entered into with a full appreciation of the implications unless, in the circumstances, it would not be fair to do so.

BN v MA – The Facts

The husband (55) and the wife (40) began a turbulent relationship in 2002 and had a son in 2005. They became engaged in 2009 and married in 2012.  Over a 2 year period they negotiated (through their solicitors) the terms of a pre-nuptial agreement which was signed shortly before their marriage in May 2012.  The marriage broke down 15 months later.

The husband’s net property assets were stated to be in the region of £13 million.  In addition he had a share in the family business (which was not valued) and income from all sources of approximately £375,000 per annum.  By contrast the wife owned property in London worth £500,000 subject to 100% mortgage.  The pre-nuptial agreement set out the financial provision which the wife would receive if the marriage broke down varying in quantum depending on the length of the marriage.  The maintenance provision set out in the agreement (if the marriage were to last less than 2 years) was £96,000 per annum for herself (index linked) and £24,000 per annum for each child of the marriage.  Shortly after filing for divorce the wife issued an application to Court for interim maintenance and a costs fund of £400,000 as she claimed the husband had misrepresented his financial position so she should not be bound by the provisions of the pre-nuptial agreement.

Mr Justice Mostyn rejected the wife’s application and held the couple to the terms of the pre-nuptial agreement ordering the husband to pay maintenance at the rate agreed. Giving judgment he stated “when adjudicating the question of interim maintenance, where there has been a pre-nuptial agreement, the court should seek to apply the terms of the pre-nuptial agreement as closely and practically as it can, unless the evidence of the wife in support of her application demonstrates to a convincing standard that she has a prospect of satisfying a court that the agreement should not be upheld.” The court also held that when deciding whether to hold the parties to the pre-nuptial agreement one must have regard to the following:-

1. No agreement can be allowed to prejudice the reasonable requirements of a child.
2. Respect should be accorded to the decision of a married couple as to the manner in which their financial affairs should be regulated (i.e. there should be respect for autonomy) and
3. No agreement can overreach basic need.

Conclusion

The High Court decision in BN v MA confirms that the court will require the demonstration of something unfair before it will open the “Pandora’s box of litigation” where there has been a pre-nuptial agreement. With the Law Commission about to publish its Matrimonial Property, Needs and Agreements Report on 27th February it is likely there will be further legal developments afoot in this area.

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