The Court of Appeal has allowed a husband’s appeal against a High Court decision upholding the validity of a pre-nuptial agreement (PNA), ruling that the wife’s failure to disclose a significant proportion of her assets rendered the PNA invalid.
The husband and wife had met in 2016 and had become engaged the following year. The wife came from a very wealthy family. On the day of their wedding in 2019, the husband and wife entered into a PNA under which each party would retain their own property if they divorced. The marriage came to an end after about three years.
The PNA stated that the husband and wife had fully and frankly disclosed their financial resources to each other. However, the wife had only disclosed assets worth £18.2 million, amounting to 27 per cent of her total assets. The husband contended that the PNA should be set aside for non-disclosure. The wife claimed that she had not disclosed the majority of her assets because those assets had been placed in her name due to concerns about tax and she regarded them as belonging to her parents.
The High Court found that the husband had known that the wife was extremely wealthy and he could not avoid the consequences of the PNA because the number provided was lower than it should have been. The Court awarded the husband £400,000 to meet his reasonable needs. The husband appealed on a number of grounds, including that the Court should have found that the wife had knowingly made a false and material non-disclosure and that her misrepresentation of her wealth was a vitiating factor, particularly given that he had only received preliminary legal advice.
The Court of Appeal observed that it was clear that the High Court had not started by considering whether any of the standard vitiating factors – duress, fraud or misrepresentation – was present. Given that the wife was aware that the assets were in her name and she had made a deliberate decision not to disclose them, that decision was fraudulent. In addition, the non-disclosure meant that the representation that she had made full and frank disclosure of her financial resources was untrue.
In the Court of Appeal’s judgment, had the High Court properly addressed the initial question of whether the standard vitiating factors were present, it would inevitably have concluded that the deliberate decision by the wife not to disclose the assets amounted to fraudulent non-disclosure which vitiated the PNA. Allowing the appeal, the Court of Appeal found that, since the husband had been deliberately deprived of information which it had been agreed that he should have, the PNA could not stand.
The High Court had not considered the husband’s needs by reference to Section 25 of the Matrimonial Causes Act 1973. The assessment of his needs was therefore set aside, and the question remitted to the Court to be reconsidered in the light of Section 25 and without taking into account the terms of the PNA.