In a decision that sees the third largest divorce settlement in English legal history, a wife has been awarded £230m after the court decided a post-nuptial agreement was signed without proper legal advice, financial disclosure, and under undue pressure.
The case centres on wife PN and husband SA, a serial entrepreneur who had accumulated significant wealth after listing his technology company on the Nasdaq. The couple married in 2005 with the business founded in 2012 and subsequently floated generating an estimated $1.5bn for the couple. Through a series of financial planning undertakings, including the movement of sizeable assets into trusts for the couple’s three children, a post-nuptial agreement was signed in 2021 in which it was agreed the parties would share equitably the ‘overall wealth of the parties.’ It is accepted in the case both parties had entered into the agreement freely and without coercion or undue influence; a key tenet of the Supreme Court decision in Radmacher v Granatino. The court noted there is little dispute on the content and understanding of the 2021 agreement.
The dispute arose when a second agreement, signed in 2023 post-separation, was attempted to be enforced by the husband. One of the main challenges with the 2023 agreement was the differences between its original drafting in the couples’ native language Portuguese, and the English translation. In addition, the 2023 agreement, which Justice Cobb concluded was not a ‘complete and concluded agreement’ was not a ‘manifestation’ or ‘implementation’ of the 2021 agreement, as the husband argues, but rather
‘proposed a wholly different structure containing numerous materially different provisions: the 2023 Settlement Agreement restricted both parties’ access to the divisible property, given that the vast majority of the assets would be placed into the trusts in respect of which the parties would be merely beneficiaries; the husband would retain an effective veto over the wife’s ability to make any further withdrawals from the trust and she would be dependent upon him to manage the assets.’
In the context of pre and post-nuptial agreements, any decision on the enforceability of the 2021 or 2023 agreement would have to align with the precedents in Radmacher and a ‘relatively rare and important judgment’ NA v MA [2006] EWHC 2900 (Fam), [2007] 1 FLR 1760 cited by Justice Cobb in which as assessment of whether the wife’s will was ‘overborne’ by her husband exercising undue pressure must be taken. Critically the nature of the relationship and the power imbalance between the husband and wife, the conduct of the husband in what the judge described as ‘scare tactics’ and efforts to ostracise his wife from her lawyer, and the lack of legal scrutiny to the 2023 agreement meant the 2021 agreement was ‘determinative’ and ‘fairness and justice for these parties will be achieved in this case through a straightforward division and distribution of the marital assets.’
Justice Cobb lamented to legal costs expended in the case, around £5.5m, adding how sorry he was ‘these personable, engaging, intelligent people could not resolve this financial post-matrimonial dispute for themselves’ awarding the wife £230,778,588, approximately 44.4% of the marital assets.
Claire Gordon, Partner, Farrer & Co who represented the wife said the decision recognised the emotional role of lawyers and made it clear that restricting access to legal advice will affect the validity of pre- or post-nup agreements. She added the ruling has made clear that Courts will adopt a modern, nuanced approach when evaluating the circumstances in which an agreement was signed.
“In this landmark judgment, the Family Court has recognised the strain that a build-up of persistent and attritional conduct places on relationships, and that this can ultimately erode a person’s free will. There does not need to be a ‘blow up’ event or interaction for there to be improper pressure or control – the effects of such conduct are insidious. It was a privilege to support our client in this case, which we expect to have wider implications for others in a similar situation.
“Whilst the Family Court has endorsed pre-nups and post-nups which are freely entered into with the benefit of legal advice and financial disclosure, this decision also underlines that agreements which fall foul of these requirements are vulnerable to challenge.
“Significantly, the judgment recognises the vital emotional support that family lawyers often provide to their clients, alongside legal advice. It has now been made clear that attempts to restrict a person’s access to their lawyer could undermine a pre-nup or post-nup, for this reason. Spouses who have signed a pre-nup or post-nup against a backdrop of pressurising or controlling behaviour can now feel more confident that the Family Court will scrutinise the circumstances in which the agreement was signed through a modern lens”
