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Ipekci v McConnell [2019] EWFC 19

Judgment of Mr Justice Mostyn refusing to give effect to a prenuptial agreement in circumstances where inter alia it failed to meet the Husband’s needs and there had been no independent legal advice. The court also underlines the importance of compliance with FPR PD27A and the Efficiency Statement of 1 February 2016

The court considered an application by the Husband ("H") for financial remedy.

The parties met in 2003, when H was working as a concierge for a New York hotel.  The W was living in London and had been married before. The relationship developed and in 2005, they began cohabitation, marrying on 26 November 2005 and separating in 2016. The parties had two children aged 11 and 7. 

At the time that the matter came before the court, the parties were both aged 45.  H worked as Head Concierge for a London hotel, earning c £35,000 gross.  H had no capital save a 50% interest in his mother's home in Turkey, worth c £50,000.  H had debts of just over £100,000. W was a wealthy American heiress and beneficiary of trusts in the USA with an overall value of at least $65 million.  The judgment contains a detailed analysis of the W's entitlement under the various trusts. Ultimately, the court in conducting that exercise, made various findings, inter alia that W was solely and beneficially entitled to certain substantial trust assets and that there was no reason to suppose that money could not be made available to the W should she reasonably require it.

The family home was a comparatively modest property, in the W's name, in Barnes with a value of £1.675 million;  equity after deduction of the mortgage was £1.074 million.

Not unusually, a prenuptial agreement was suggested.  The agreement was drafted by W's lawyer.  The lawyer sourced to give H independent advice was an English solicitor who had assisted the W in her divorce and had no competence to advise on New York law.  The H met the lawyer for the first time on 3 November 2005 and despite advice that it was slanted in W's favour, signed the agreement on 11 November 2005, very shortly before the wedding.

The prenuptial agreement was deemed to have been made under the laws of the State of New York and that its validity and effect and construction should be determined in accordance with those laws, irrespective of where either party resided or was domiciled at the time of death or divorce or separation.  It provided that the parties wished any proceedings relating to the marriage to be determined in accordance with the laws of the State of New York and that they submitted to the exclusive jurisdiction of the courts of that State.

The effect of the terms of prenuptial agreement, in the circumstances that existed at the time of proceedings, was that the H was to get nothing. 

The judgment refers to the dicta of Lord Phillips in Radmacher and Granatino [2010] UKSC 42 at paragraphs 75 and 81 including the following:

…The parties are unlikely to have intended that their ante-nuptial agreement should result, in the event of the marriage breaking up, in one partner being left in a predicament of real need, while the other enjoys a sufficiency or more, and such a result is likely to render it unfair to hold the parties to their agreement.

The court held that it would be wholly unfair to hold H to the prenuptial agreement on the following basis:

i. The parties had specifically contracted that the agreement would be governed by New York law. The evidence of the single joint expert was that the agreement suffered from a fatal defect under New York law, the consequence of which would mean that the agreement would, in New York, have "minimal weight, if any".  It would be wholly unjust to attribute weight to the agreement when under the law that the parties elected it would be afforded no weight.

ii. H  could not be said to have had a full appreciation of the implications of the agreement when he had no legal advice at all about the impact of New York law. Further, the fact that the solicitor who gave the advice had acted previously for the W, was, a clear situation of apparent bias.

iii. The agreement did not meet any needs of H. 

The court determined the case on the basis of needs, awarding H a lump sum of £1,333,500, which included a Duxbury fund of £445,500 and £750,000 to fund a house purchase, in respect of which £375,000 would be subject to the charge-back.

The court declined to make costs orders. 

The court did conclude by expressing dismay at "the wholesale non-compliance by both legal teams with FPR PD27A and the Efficiency Statement of 1 February 2016."

Summary by Georgina Rushworth, barrister, Coram Chambers

For the full judgment (via BAILII) click here