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Family Court determines case involving pre-nup and bankrupt spouse

In S v H [2020] EWFC B16, HHJ Booth has determined a case involving the interaction between divorce proceedings and insolvency law; the validity of a pre-nuptial gareement made five days before the wedding; allegations by the wife that the husband had hidden assets, and by the husband that the wife had failed to disclose assets; and other complex international issues.

The husband was 69 and the wife was 56. This was a second marriage for both parties and both had children from other relationships. The wife was significantly wealthier than the husband, and was found to have assets worth £3m and a net income of more than £100,000 per annum.

Five days before the wedding in 2010, a pre-nuptial agreement was signed abroad with neither party taking legal advice before signing. It was always the intention of both parties that their married life would be conducted in the UK, where the wife had a successful business and her children were being educated. The wife employed the husband part-time in her business, but his main responsibility was taking care of the wife's twin daughters.

The wife issued a divorce petition in September 2016 after six and a half years of marriage, and the decree absolute was granted in July 2019. The financial remedy proceedings were first started in 2017, where the wife sought a full range of financial relief relying on the pre-nuptial agreement. The proceedings spanned some three years finally culminating at trial in January 2020. 

With regard to the pre-nuptial agreement, the judge determined:

"[T]here is no value in the prenuptial agreement. There was no formal process of disclosure, there was no advice given to either party, other than by the notary who prepared the document and at five days before the ceremony."

The judge decided, based on the husband's needs, that the wife should pay the sum of £675,000 to pay off the husband's debts as it was determined he had received no financial support from her during the marriage, causing the debt to accrue. He would also receive a property on trust to live in mortgage-free, to revert back to the wife once he died, as well as 60 per cent of the wife's pension.

Nathaniel Groarke, partner at Irwin Mitchell, representing the husband together with solicitor Emma Bates, said:

"There are many lessons to be learned from these proceedings, namely that proper legal advice is always recommended when it comes to documents like pre-nups, and that if one of the parties is bankrupt then they will still be able to get financial support in a divorce if needed."

For the judgment, click here.

10/5/20