Prenuptial Agreements – a cast iron guarantee?

In the recent case of Ipekçi v McConnell [2019] EWFC 19, Mr Justice Mostyn gave no weight to a pre-nuptial agreement which had been entered into by the parties in New York prior to their marriage.

Before their wedding, in November 2005, the wife asked her lawyer to prepare a pre-nuptial agreement.  The husband was introduced to a different lawyer to advise him (the same lawyer who had previously acted for the wife in her first divorce). The husband met this lawyer for the first time on 3 November 2005, just 23 days before their wedding date set for 26 November 2005. The husband was advised at the time that he signed the prenuptial agreement that it was clearly slanted heavily in favour of the wife. Nevertheless, he duly signed it 15 days before their wedding.

The agreement provided that if the marriage lasted more than three years and they had two children, the husband, would, upon divorce, receive half of any increase in the value of three properties in the wife’s name.  Further, the husband would not be entitled to claim any maintenance from the wife.

By the time of their divorce, there had been no increase in value for the parties to share, and therefore under the terms of their prenuptial agreement the husband would receive nothing at all.

Mr Justice Mostyn decided that it would be wholly unfair to hold the husband to the agreement that he had signed because:

  • The parties had contracted that the agreement would be governed by New York law. The expert evidence given during the trial was that the agreement suffered from a fatal defect under New York law in that the agreement was not accompanied by an authenticated certificate confirming that it conformed with the New York  law.  The expert concluded that this defect would mean that the agreement would, in New York, have “minimal weight, if any”. The judge said that it would be unjust to attribute weight to the prenuptial agreement when under the law that the parties elected it would be afforded no weight.

  • Moreover, the judge held the husband could not 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. Furthermore, the advice the husband did have was given by his wife’s former lawyer – a situation of “apparent bias”.

The judge concluded that the prenuptial agreement did not meet the husband’s needs.

The judge went on to stress that the following issues were important in assessing the husband’s needs:

  • the parties had lived together for 12-years;
  • the parties organised their married life such that the husband had made no provision for himself from his earnings either by way of savings or pension;
  • the parties had enjoyed a reasonably high standard of living;
  • it was in the interests of the two children of the marriage that their father had a reasonable home in which they could stay with him comfortably;
  • the children would be supported financially entirely by the wife except for incidental expenses which the husband would meet when the children spent time with him;

  • the husband should not necessarily have a house bought for him outright. Rather, it would be reasonable for half of the housing sum awarded to be charged back in favour of the wife.

This case makes it very clear that we as family lawyers are drafting prenuptial agreements, we need to consider carefully both parties’ likely future needs and check whether the financial provision set out in the agreement is going to be realistic. Couples who do enter into prenuptial agreements need to be aware that they are not 100% binding and although a good line of defence to future financial claims on divorce, they are not a cast iron guarantee.

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