Nuptial Agreements: Case Law Update since Cummings v Fawn [2023] EWHC 830 (Fam) – will the Court impose a ‘spartan lifestyle’?

Nuptial Agreements: Case Law Update since Cummings v Fawn [2023] EWHC 830 (Fam) – will the Court impose a ‘spartan lifestyle’?

“spartan: adjective meaning: showing or characterised by austerity or a lack of comfort or luxury. 

Similar words: austere, harsh, frugal, stringent, arduous, severe, ascetic, abstemious, grim, bare, stark, self-denying, hair-shirt, bleak, joyless, uncomfortable.” [Oxford Languages]

In December 2023 I wrote an article [link] reviewing the case law on Nuptial Agreements from their ‘legalisation’, subject to a needs assessment by the Court, [by way of Radmacher v Granatino [2010] UKSC 42] across the years to Mostyn J’s judgment in Cummings v Fawn [2023] EWHC 830 (Fam) which gave us the imaginative and memorable ‘book-end’ analogy with its reference to a ‘spartan lifestyle’: 

“In every ‘needs’ case there is a range of possible future standards of living of the applicant within which the court can alight in a pure exercise of discretion immune from appellate review.”

“Imagine that the discretionary range is a line of books on a shelf bracketed left and right by book-ends. The book-ends may be quite far apart. The right book-end represents a comfortable, perhaps even luxurious, life-style. The left book-end represents a spartan lifestyle catering for not much more than essentials. The space in between is the discretionary range. When the Supreme Court says that it may not be fair to uphold an agreement which leaves the applicant in a ‘predicament of real need’, it is clearly saying that if the result of the agreement would place the applicant in a standard of living to the left of the left-hand bookend, then that would be unfair. It is also saying that to make the agreement fair it should be augmented by no more than is necessary to move the applicant’s lifestyle just to the right of that left-hand bookend.”

How has the Case Law developed since?

Mostyn J’s final case was Baker v Baker [2023] EWFC 136 and involved a 2015 Separation Agreement with both capital and income provision, which the Wife was attempting to enforce, to inclue payment by the husband of all the substantial income arrears and also captialisation of all future income provision arising from the Agreement. This  would have resulted in the wife obtaining 65% of the total assets; Mostyn J held the husband to the capital aspects of the Separation Agreement, but not the income provision. 

In doing so Mostyn J likened separation agreements to consent orders: such that the capital terms would ‘not be variable unless they amounted to a lump sum payable by instalments, and even then, they would only be variable as to quantum if the Barder standard was met’, whilst the income terms would be ‘readily variable’ if there had been a ‘change of circumstances’. 

It has been noted by commentators that this analysis appears to ignore the essential role of the Court in approving consent orders: there should be no ‘unfair’ consent orders, because if the terms were unfair then the Court would call the parties in and ensure they were changed before approving the settlement. By contrast,  post nuptial agreements are negotiated directly between husband and wife and so may be unfair to one party, despite being a valid agreement.

BL v OR [2023] EWFC 229 (Fam)

This case involving a pre-nuptial agreement [to protect the husband’s significant pre-acquired assets] which had been implemented by payment to the wife of £738,341 was heard by Cohen J. By final hearing the husband had already accepted that the PNA was deficient [his payment having been swallowed by the wife’s legal costs!] and had offered an additional lump sum payment of £4m to meet the wife’s housing and income needs.

The wife sought a needs-based award of £5.6m, however, her case was complicated by the fact that during the marriage she had transferred her own London flat to her adult children without informing the husband. Given the existence of the PND, this secret transfer was considered by the Court to be an important part of the overall circumstances of the case.

At final hearing, Cohen J awarded the wife £4.9m overall, to include a £2.6m housing fund, with only 40% charged back to the husband [he had argued for 100% chargeback]. So, this was an award significantly in excess of the terms of the PNA and not easily characterised as ‘spartan’ [see Cummings v Fawn supra].

AH v BH [2024] EWFC 125

This case saw a wealthy (£50m) husband seeking to enforce a restrictive pre-nuptial agreement (payment of £800,000) upon the wife who was now the primary carer of the parties’ two children aged 2 and 4 years. There had been no review of the PNA since the children had been born and the husband’s business interests had prospered throughout the five year marriage so that the wife’s notional sharing claim was assessed by the Court at £7.5m.

Peel J heard this case and within his judgment he deliberately stepped away from Mostyn J’s ‘bookend’ analogy [Cummings v Fawn supra] stating that it would not be appropriate to impose upon this wife (and, of course, thereby the minor children) “a spartan lifestyle catering for not much more than essentials”. 

The Court awarded the wife a £2.75m housing fund outright, together with a £300,000 moving fund and £110,000 per annum income provision for 10 years, capitalised. Peel J made it clear that in every case a full Section 25 analysis must be undertaken to ensure that implementing the nuptial agreement does not cause unfairness and he stated that in this case ‘the scale of the wealth [of the husband] cannot be ignored’.

Conclusion

Mostyn J has now retired and it would seem that other High Court Judges may be less willing to impose a ‘spartan’ lifestyle on the ex-partners of very wealthy people, despite those parties having entered into a valid nuptial agreement.

So where does all this leave our clients? Dealing with an application for Financial Remedy which involves a Pre-Nup or any Nuptial Agreement will likely raise complex factual and legal issues and need case-specific advice. Contact our family clerks [link] to arrange a Conference with one of our experienced and specialist barristers, who will provide full advice on the impact of the Agreement and all other issues arising.