|Dead Ex-Husband Entitled to GBP5 Million Divorce Award|
“Fabulously wealthy” Wife’s appeal against a consent order for financial provision on the basis that the Husband’s suicide 22 days after the making of the order constituted a Barder event. Appeal allowed and the lump sum reduced from £17.34 million to £5 million
The Wife is an heiress who is described as being "fabulously wealthy". Prior to the marriage in 1997, the Husband and Wife entered into a Pre-Nuptial Agreement which prevented either of them from making claims against the other. Whilst both were represented at the time, it appeared clear to the court that the process leading up to the signing of the agreement was, at best, limited.
The parties and their three minor children lived on a very large estate worth in the region of £30 million. The property was purchased during the marriage in a dilapidated state. Whilst neither party undertook remunerated employment during the marriage, both made significant contributions.
The marriage broke down in 2014. The Husband took the breakdown of the marriage very badly.
Following separation the parties successfully negotiated a financial settlement whereby the Wife would make a lump sum payment to the Husband of £17.34 million in full and final satisfaction of his claims. The Pre-Nuptial Agreement did not figure significantly in the negotiations.
The order provided that the lump sum would be paid in two tranches of £8.67 million. The first to be paid within 14 days and the second to be paid within 14 days of the Husband's mother vacating the cottage that she occupied on the family's estate.
The first tranche was paid on time and the Husband then transferred funds to enable his mother to be rehoused. The second tranche was never paid. The reason for this was that 22 days after the making of the final order, the Husband committed suicide. His will left his entire estate to his three adult brothers.
The wife arguing that the fundamental basis of the consent order was that the lump sum was required by the Husband to meet his needs and that basis had been entirely invalidated by his death. The Wife sought for the entirety of the order to be set aside and for repayment of monies already paid.
Having reviewed the authorities, the court asked himself the following questions:
(1) Was the Husband's death foreseeable (i.e. the Barder test)?
(2) If not, was his award a sharing award (and hence not susceptible to challenge) or a needs based award?
(3) If it was a needs based award, what order was now appropriate?
The conclusion in relation to the first question is that the Husband's death was not foreseeable. He makes that finding on the basis that the reports as to the Husband's mental health had become uniformly positive by September 2014 at the latest. Moor J states that the suicide of the Husband could not have been seen as a significant possibility by the court, the Wife or her advisors.
As to the second question, the judge states that he was "quite satisfied that the Husband's claim was primarily needs based." In the course of negotiations there had been no claim by the Husband's lawyers to a sharing entitlement and in any event, in so far as there was a sharing claim, it would have undoubtedly been for less than the needs based claim (the majority of the assets were non-matrimonial), such that the needs based claim prevailed.
The judge held that a 1/3 share of the Wife's net share in the matrimonial home would have been appropriate, i.e. £5 million. Further, he held that the Pre-Nuptial Agreement would not have prevented such a sharing award; it had clearly been ignored in the negotiations and the parties could not pick and choose the extent to which the agreement was effective.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Aug.12, 2015