Pre-nuptial agreement ignored in divorce that sees husband awarded £1.3 million

Mr Justice Mostyn has awarded the lump sum of £1,333,500 to a husband having ignored a pre-nuptial agreement that 'slanted heavily in favour of the wife' and neglected the needs of the husband.

The Ipekçi v McConnell [2019] EWFC 19 case involved the great-granddaughter of the founder of cosmetics giant Avon (McConnell) and her husband (Ipekçi) who both bet while he was working as a hotel concierge at Le Parker Maridien in New York in 2003.

The couple, who have two children together, began cohabiting in January 2005 before getting married on 26th November 2005. The pre-nuptial agreement was drafted by the wife's lawyer, with the husband receiving independent legal advice from another lawyer; the same lawyer who acted for the wife during her divorce from her first husband.

Commenting on the agreement, Mr Justice Mostyn said: "The husband must have been very surprised by what it contained. First and foremost, it provided that the 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 regardless of where either party resided or was domiciled at the time of death or divorce or separation.

Second, 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 agreement stated that the husband would receive half of any increase in value of the three properties owned by the wife, with two in London and one in New York.

The agreement also said that the husband wouldn't be entitled to any alimony payments or any further money from the wife. As the properties saw no increase in value for the couple to split between them, the husband would stand to receive nothing at all, based on the terms of the agreement.

Having reviewed the agreement, Mr Justice Mostyn had no hesitation in deciding it would be unfair to honour the agreement based on the facts of the case. Mr Justice Mostyn gave the following reasons:

• The original agreement stated that it will be governed by the law in New York. The agreement suffers from a fatal defect under New York law, as the agreement was not accompanied by a duly authenticated certificate that it conformed with the local law in its attestation. The defect would mean that, according to New York law, it would carry "minimal weight, if any".
• There was a conflict of interest with the lawyer who gave the husband legal advice on the agreement as they had previously acted on behalf of the wife in her first divorce and that in the view of the judge it was a "clear situation of apparent bias".
• The needs of the husband were not met by the agreement

In determining the relevant needs of the husband, Mr Justice Mostyn took a number of things in to account including:

• The cohabitative relationship lasted 12 years
• The husband did not make any provision for himself during the marriage by way of a pension or savings
• The husband's standard of living is relevant and in this case, reasonably high
• It is in the children's best interests that the father has a reasonable home in which they can stay with him comfortably
• The husband will not be required to make any financial contribution to the maintenance or school fees of the children, other than any expenses that arise during the time that the children spend with him

This is yet another example of the fact that pre-nuptial agreements are not legally binding. If they are properly drafted and executed, they do carry some weight and can be persuasive in the event of a dispute in the future, but one of the most important criteria is that the agreement is drafted to reflect the needs of both parties.

The unfortunate reality is that more and more marriages and relationships come to an end, resulting in a number of difficult decisions regarding financial and property matters. Pre-nuptial agreements are useful for allowing couples to agree from the outset how these difficult decisions will be made if their relationship breaks down.

If you are recently married, entering a civil partnership or have recently got engaged, the team at K J Smith Solicitors can advise you on both pre and post-nuptial agreements in order to help protect your assets and finances in future.

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