In 2010 the case of Radmacher v Granatino made headlines in England. The case confirmed that pre-nuptial agreements could be binding in the UK in the right circumstances.
Recently this issue has been re-examined in the case of Luckwell v Limata. Victoria Luckwell is the daughter of one of Britain’s wealthiest men, Mike Luckwell, the director of the media company that created the children’s programme ‘Bob the Builder’. Mike Luckwell is estimated to have a £135,000,000 fortune. Victoria Luckwell began living with her then boyfriend Francesco Limata in 2004. The parties became in engaged and were married on 23rd July 2005. They now have three young children. Shortly before the marriage both Victoria and Francesco signed a pre-nuptial agreement (also referred to as a pre-marital agreement) confirming they would keep their own property and would not make claims against the others property. The pre-nuptial agreement specifically referred to gifts given to Victoria by her “wealthy family”. During the course of the marriage the parties signed two further agreements as and when Victoria’s family gave her substantial gifts which included a property in Connaught Square, where the former Prime Minister Tony Blair owns a home.
By the breakdown of the marriage Francesco had no property of his own, his pre-owned flat had been sold and the equity dissipated. Francesco had not been in employment since 2012 save beyond working in his mother’s hotel on an ad hoc basis for minimum wage. Victoria helped out in her mother’s business on occasions but had not been formally employed since 2005. Victoria had been maintained by way of substantial allowances from each of her parents, who also paid the children’s school fees.
A High Court Family Division Judge Mr Justice Holman ruled that despite the agreement proper provision must be made for Francesco in particular to avoid the divorce having a damaging impact on the couple’s three children. The Judge was concerned that the children could find themselves living with their mother “in relative luxury” and then staying with their father who was in debt and lacked assets “in penury”. The Judge commented that if the genders had been reversed it was “inconceivable that the agreements would outweigh making a substantial award to the wife even if the children were primarily living with the husband and only intermittently staying with her.”
The Judge looking at the pre-nuptial agreements said that though great weight would be given to them and Francesco had no claim at all on the parties’ assets based on contributions, compensation or sharing. The only consideration that outweighed those considerations was his “need”. The weakness or unfairness of the agreements in this matter were that from the start they provided nothing at all for Francesco irrespective of how long the parties had been married or how great his need was on the breakdown of the marriage. The Judge found that Francesco was now in a “predicament of real need” while Victoria enjoyed “sufficiency or more”.
The Judge ordered that the former matrimonial home at Connaught Square be sold to release the equity of £6,7400,000. Of this Victoria was then to provide up to £900,000 for the purchase of a three bedroom property for Francesco’s use, but, the property was not owned by Francesco. When the youngest child turns twenty two the property is to be sold and 45% of the net proceeds will be returned to Victoria. The rest will be used to purchase a smaller property for Francesco. Over and above this Victoria was to provide a further net figure of £292,000 to allow Francesco to furnish the property to purchase a car and to pay off his debts, of over £200,000. This left Victoria with £5,500,000 which allowed her to meet the children’s school fees estimated at £1,100,000. She then retained capital of £4,400,000 which was divided to provide a housing fund of £3,000,000 for her and the children, with a further £1,400,000 to meet her expenses going forward.
This case shows is that it is extremely important that when drafting up a pre-nuptial agreement that care is taken to deal with anticipated changes, such as children being born. Had the pre-nuptial agreement made some provision for Francesco it is clear the original agreement could have been upheld and expensive and lengthy litigation through the courts could have been avoided.