Cambridge Family Law Practice

A postnuptial agreement signed by a ‘vulnerable’ businessman with Parkinson’s Disease has been ‘set aside’ as unfair by a family court judge.

The man and his wife are both now in their 50s. They first met and married in 1994. He worked with great success in investment banking before eventually retiring in 2020 some years after he had been diagnosed with Parkinson’s Disease. The wife, meanwhile, worked for NGOs before coming a homemaker. Their son is now approaching his 18th birthday.

Later the couple had serious marital problems. The wife threatened divorce unless her husband agreed to a postnuptial agreement which would significantly improve her financial position in the event the marriage did not last. Such agreements are not automatically legally binding, but are often given significant weight by the family courts, save for in some circumstances.

The agreement was drafted by a solicitor in January 2014. It began:

“In the event of the permanent Breakdown of the Marriage, both parties intend and agree that their respective financial rights and obligations will be solely as governed by this agreement…this agreement shall be treated as binding on each of them”.

Sitting in the Family Court, Judge Edward Hess noted that:

“This document…sought to impose a financial outcome if the marriage did ultimately break down, which was significantly more advantageous to the wife than would have been the case had the matter been referred to a court at that stage.”

Under the terms, she would have received around 80 per cent of the couple’s assets in the event of a divorce, rather than the much more likely half share. Nevertheless, the husband was desperate to save his marriage and in a hurry to sign. He was encouraged by his wife’s solicitor to seek his own legal advice on the terms of the agreement and did so, but then did not heed his own solicitor’s warnings that the provisions were unfair and not in his own interests.

The husband persisted, insisting that he still wished to sign the agreement as soon as possible. He explained:

“Given my Parkinsons it makes no sense for me to have any assets in the long term. It is inevitable that one day I will have to stop working and need long term care…if [we] are no longer married, then the only provision of care will be from the state. The state is the carer of last resort.”

The husband signed the postnuptial agreement in March 2014. His solicitor reported informing him on that occasion:

“I had advised you of the effect of the agreement…I explained that although…not binding, you had to enter into them on the basis that you would be held to it.”

The wife later signed the document and the marriage resumed until November 2020. The couple once again separated, moving into separate properties.

The divorce had reached the penultimate ‘decree nisi’ stage by January 2021 (a stage now known as a ‘conditional order’ of divorce). That month the wife filed a ‘Notice to Show Cause’ concerning the postnuptial agreement – in other words, a formal request that the family court show why it should not be honoured.

Her application came before Judge Hess, who was tasked with considering the fairness of the postnuptial agreement. He explained:

“The Post-Marital Agreement of 4th April 2014 has some features which place it firmly in the category of agreement to which the court should attach weight. There was proper disclosure. Both parties had proper, indeed top quality, contemporaneous legal advice. The agreement is drafted very professionally and is clear in its content. Both parties were, when it was signed, of mature years and high intelligence and ability and, certainly on one level, knew exactly what they were doing.”

However, continued His Honour:

“…that is not the end of the matter. A number of questions have troubled me in thinking about this case. Why would somebody engaging in rational thought sign a document which was so manifestly to his disadvantage? Why would somebody who had a clear entitlement to assets worth perhaps £2,500,000 or more sign a document restricting his claim to a sum in the region of £1,000,000?”

The husband had been focused on finding a way to continue the marriage, and he had succeeded in prolonging it for a few years, but alongside that, asked the Judge:

“In the search for fairness, how should the court deal with the husband’s apparent wish to have less money or even no money to meet his likely future care needs, so as to make himself dependent on local authority support? How should a court deal with a clause in a Post-Marital Agreement which invites the disregard of needs arising from a medical condition, in particular where the existence of those likely future needs is known about at the time the agreement was drafted?”

He concluded:

“My view is that the husband does have a real and identifiable need for home care, which may be over a long period, and any needs assessment needs to take this into account. I reject as unfair any suggestion that the agreement’s invitation to ignore medical condition should be treated as overriding the requirement for the court to make an assessment of need. “

It would be wrong, he continued, for the court to put weight on the postnuptial agreement, notably taking into account evidence as to the husband’s personal notes and medical records from around the time that the agreement was entered into.

“I have reached the overall conclusion that, at the time that it was signed, he was a vulnerable person…and the wife rather took advantage of that vulnerable situation to gain a substantial financial advantage…it is my view that the agreement was not a fair one.”

The Judge added:

“Further, I have reached the conclusion that to enforce the agreement runs the risk of leaving the husband in a predicament of real need, possibly leaving him in inadequate accommodation and/or running the risk that he would have no option other than to do the one thing he wants to avoid – going into a care home.”

Consequently, the parties’ assets would be divided equally.

Kathryn Evans, one of the partners here at Cambridge Family Law Practice comments as follows: “The publication of this case is another example of HHJ Hess’ admirable efforts to give more transparency to the inner workings of the family court. His judgement sets out his careful analysis of this very difficult and rather tragic case, the issues within which are clearly extremely personal to the parties involved.”

Read the full ruling here.