The Court of Appeal held, in December 2007, that a judge had the right to require a millionaire divorcee to show good cause why a pre-nuptial agreement should not govern her divorce settlement. Whilst this case did not decide that pre-nuptials are enforceable as of right, this case will act as a precedent for those who wish to rely on them.
- The husband was aged 62 and had an independent fortune of £45m as at December 2001. The wife was aged 50 with a fortune of £18m.
- The husband had been married once before and had four children. The wife had been married three times before and had three children.
- The parties met in June 2005 and became engaged in September after settling a pre-nuptial agreement dated 16 November 2005. Critically, the agreement provided that each party should walk away with what he or she had brought to the marriage and that neither should apply for any order for financial provision.
- The couple married in January 2006 and separated in March 2007. When Mrs Crossley petitioned for divorce she sought to argue that the pre-nuptial agreement should be ignored, on the basis that Mr Crossley had failed to disclose substantial assets which he held offshore.
Thorpe LJ gave the leading judgment in the Court of Appeal. Two of his comments are particularly noteworthy:
- Pre-nups matter ‘This is a quite exceptional case on its facts, but if ever there is to be a paradigm case in which the court will look to the pre-nuptial agreement as not simply one of the peripheral factors in the case, but as a factor of magnetic importance, it seems to me that this is just such a case.’ Whilst some lawyers are of the view that this case does not really set a precedent, because the facts are quite extreme, it will remain helpful for those who wish to establish that their pre-nup is of ‘magnetic importance’.
- Supporting legislation is needed ‘There is in my judgment an even stronger argument for legislative consideration, given the resolution of the European Union to formulate some regulation to tackle the difficulties that arise from different approaches in the Member States. There is an obvious divide between the provisions of the civil law jurisdictions and the absence of any marital property traditions in the common law systems.’ The implication is that Brussels may make the legislature act on this need sooner than it might do of its own accord. Baroness Hale’s well-known judgment in last year’s House of Lords case Stack v Dowden acknowledged that the common law of England and Wales was currently ill-placed to meet the circumstances in which parties live together in the 21st century.
There are two schools of thought about pre-nuptial agreements: some consider that consenting adults should be entitled to order their own affairs and others believe that a pre-determined agreement will never necessarily be a fair reflection of parties’ circumstances at a later date if divorce arises.
Whilst a pre-nuptial agreement cannot provide a firewall against a judge’s distribution of assets at the point of divorce, it will serve to strengthen the position immeasurably of a party who seeks to rely upon terms previously agreed with an ex-partner.