Family Law Hub

Luckwell v Limata [2014] EWHC 502 (Fam) and 532 (Fam)

In a tweet: Witnesses can be excluded from fam proc where necessary OR Fairness will always trump the existence of a pre-nup

  • Summary: An interesting procedural point arose during financial remedy proceedings when the husband ("H") applied to the court to have the wife's ("W") father excluded from the court whilst W was cross examined.  

    The parties had entered into a pre-marital agreement and agreed that H would not make any claim either during or after the marriage in relation to W's separate property or to gifts made or to be made to her by her wealthy family. If the pre-marital agreement had not been made, the marriage would not have taken place. At the time of the hearing, costs were substantial. H had no assets in his name. W had an unencumbered house worth about £6.7m. Neither had any significant income. 

    W came from a wealthy family. Her parents were divorced when she was 20. W was bought her first home by her parents in London around the same time. In 2002 her mother purchased and gave her another home in London. The first property was sold and the W's mother kept the net proceeds. 

    In 2004 the W and H began living together. In February 2005 the couple got engaged and in March 2005 W fell pregnant. In April 2005 she ceased working and did not return to paid employment after that date. The wedding date was advanced due to the pregnancy and was set for 23 July 2005. 

    On 11 July 2005 both parties signed the pre-marital agreement. Legal advice was given to both parties and full and accurate financial disclosure was made and summarised in the agreement. The agreement referred to and identified separate property and recorded that each party had acquired separate property independently of the other. Broadly, the pre-nup provided that H would make no claim for financial provision from W. The financial disclosure at the time of the pre-nup showed that W owned a property in London worth £750,000 and H owned a property which had equity of about £50,000. During the marriage, H earned between £50,000 - £67,000 a year whilst W did not work.  

    The wife now owned outright a property worth £6.74m which was gifted to her by the father and which was the subject of a supplemental agreement ensuring it remained solely the wife's property. The wife's parents currently voluntarily contributed allowances for the benefit of the wife and children totalling £81,000 pa in addition to school fees. She did not work.

    The husband had been living in his mother's bed and breakfast accommodation when there was a vacancy. He described living in an ad hoc way, with his possessions in bin bags and having to eat out which he could ill-afford. He was working part time in the hotel at a rate of £6.50 per hour and was undertaking an Open University degree. He had no capital or assets.

    A supplemental agreement was entered into on 18 June 2006 after W's parents contributed further funds to a large house used by the couple as their home. Again, this was based upon, and recorded, full and frank financial disclosure and was signed after independent legal advice. It was made clear that, unless H and W entered into this supplementary agreement the gift (and any future gifts) would not be made.  

    In December 2007 the parties moved from this house into W's father's house at 26 Connaught Square. Soon afterwards the father offered to W (but not H) to give the house to W. There were two conditions: (1) there must be a second supplemental agreement making specific reference to Connaught Square; and (2) W had to promise to her father, which she did, that she would never sell, mortgage or charge Connaught Square without his prior consent. Again, it was made clear that unless this agreement was signed, the gift would not be made. The parties signed it on 28 February 2008.  

    The couple went on to have a further two children. In April 2012, H became unemployed and remained so for the rest of the marriage. On 18 November 2012, after an incident in the pub where H broke a glass against his head, H left the former family home and never returned on a full time basis. W subsequently made an application for a non-molestation order. Since that date, the relationship between the parties had deteriorated rapidly. 

    W continued to live in the family home and enjoy a number of foreign holidays. H, by comparison, moved from room to room in his own mother's bed and breakfast. When the hotel was full, he slept on the sofa. In November 2013, H rented a property close to the family home despite having no means of paying the rent.  

    By late March 2013, W had issued a divorce petition. H applied for financial relief and W sought to rely on the pre-nuptial agreements and supplementary agreements.  

    The weight to be given to the pre-nuptial and subsequent agreements was the heart of the matter, and W's promise not to do anything with the Connaught Square property was a key consideration. W's father's position was that, if W were to sell or mortgage the property (or be forced to do so), so as to pay monies over to H, he would withdraw his financial support to W and would refuse to pay the children's school fees. This financial support was put at £81,000 a year of which £50,000 came from W's father and £31,000 came from W's mother. The judge accepted the father's evidence on this point and noted that W's mother had said she would continue to support W.  

    This rather messy picture was heard in open court (r.27.10(1)(b) FPR 2010).  Holman J held that r. 27.10 "does not create a presumption that hearings of this kind should be held in private, but merely a starting point. There is a huge legitimate public interest in open justice in family cases, just as much as in criminal, or in civil cases." As a result, journalists were present throughout most of the hearing. 

    W's parents had been present for the majority of the hearing. Holman J stressed that even had the hearing not been in public he would still have invited the parents to be present because the majority of the assets were in W's hands and had been given to her by her parents. In addition the parents were providing W with substantial ongoing financial support for W and the children.  

    Whilst giving evidence, H conceded that W had promised not to sell or charge the property. However, there was a dispute over whether those conversations had taken place in front of W's father or her mother. As a result, the issues that needed exploring were W's father's true intentions and the circumstances of some payments made by W to her father after the transfer of the Connaught Square property. H had therefore applied for W's father to be excluded from court during part of W's cross-examination. 

    Held: 

    Financial provision and nuptial agreements
    The key paragraph in the pre-nuptial agreement was contained in article 3, and stated:

    "Victoria's separate property and Victoria's family gifts shall remain Victoria's. Francesco shall not either during or after the marriage make any claim in relation to Victoria's separate property or Victoria's family gifts and he hereby releases any and all rights or potential rights whether arising pursuant to the marriage or otherwise to Victoria's separate property or Victoria's family gifts, or any portion thereof"

    However, it was noted by the court that article 8 of the pre-nuptial agreement then stated:

    "In the event of the dissolution … of the marriage (or [permanent] separation) Francesco will make reasonable maintenance provision for Victoria and the child(ren) … in the context of all the circumstances prevailing at the time … and on the specific understanding that Victoria will fully utilise her capital to house and support herself and the child(ren) and, in particular, will purchase housing appropriate to the marriage and the prevailing circumstances"

    So, whilst this paragraph of the agreement placed a responsibility on H to support W, that was not mirrored by a similar responsibility placed on W.

    Holman J  applied Radmacher (formerly Granatino) v Granatino [2010] UKSC 42. He highlighted that the Supreme Court had said that "such agreements must always be given weight, and often decisive weight as part of the circumstances of the case. They may affect not only whether to make any award at all, but also the size and the structure of any award".

    In considering the circumstances in which the pre-nuptial agreement had been made, the judge accepted that H had signed the agreement as "a mature man of normal intelligence" i.e. H had known exactly what he was signing, that he had meant to agree to what he was agreeing to. Holman J expressed the view that H had been keen to demonstrate to W and her family that he was marrying her for love and not for her money. The wool had not been pulled over H's eyes.  

    In conclusion, Holman J said that there was no doubt "that very great weight indeed should be given to the agreements in this case. There are no vitiating factors such as duress or non-disclosure. They were entered into freely by a mature man after expert legal advice".  

    However, despite the agreement being entered into freely and in full knowledge by H, Holman J considered that "the over-arching criterion remains the search for 'fairness'". The search for fairness, he said, required achieving a balance. H was, on any view, in a predicament of real need – he had no real assets in his own name and had significant debts; his new found employment paid only the minimum wage. W's position was in stark contrast. The need to re-house H and for  H to be able to provide a home for the children when they were with him was a significant factor. Consequently, despite the effect this might have on W's housing and her father's withdrawal of financial support, Holman J did indeed made capital provision in favour of H. 

    How much did H receive? Holman J awarded H a total of £1.24million which included a housing fund of £900,000. H was allowed use, but not ownership, of the property until the youngest child reached 22 years. At that stage, the property was to be sold. 45% of the net proceeds would then revert to W with the balance being reinvested in a smaller property for H for the rest of his life. In addition W was ordered to make capital available to H to meet his CGT liability, clear his debts and put him in funds to purchase furniture. W was left with equity in the former family home of £5.5million. 

    Exclusion of witnesses
    Interestingly, there is nothing in the FPR 2010 that deals directly with the point H had raised. Instead, the court relied on r.27.11(6) which provides:

    "This rule does not affect any power of the court to direct that witnesses shall be excluded until they are called for examination."

    However, whilst this signposted the existence of a power to exclude witnesses, it did not indicate the source of the power or the appropriate test to be applied. The only relevant case was Tomlinson v Tomlinson [1981] which stated that "the proper course for justices to pursue…would be to exclude the witnesses, unless they were satisfied that that would not be an appropriate step to take…"

    However, Holman J held that the test should in fact be the other way round, and expressed it as follows:

    "If a court is, in fact, sitting in public, and if an application is made to exclude a witness or witnesses, then the court may exclude them. But it should only exclude them if the court is satisfied, on the facts and in the circumstances of the particular situation, that it would, for good reasons, be an appropriate step to take. The threshold may not be a high one. The reason may not need to be a very cogent one. But if a court is sitting in public, no one who wishes to be present should be excluded, not even a witness, without some good reason for doing so."

    Concerned with the "quality, purity and reliability" of the evidence to be heard, Holman J found that the evidence of W and her father would be more valuable if the father did not hear hers before giving his own. He therefore directed that W's father be excluded for the period requested but that as soon as the evidence moved on to issues where it would not be justifiable to exclude the father, he would be invited back. 

    Comment

    This case provides confirmation of the general principles contained in the case of Radmacher and that the court will place great weight on any pre-nuptial agreement that is entered into freely by the parties to a marriage and on the contents of which both parties are fully informed. However, it also confirms that the primary consideration of the court will remain the search for fairness, and that therefore the courts should be prepared to set aside or bypass any such pre-nuptial agreement in the event that the enforcement of such an agreement would be demonstrably unfair.

Case note, published: 28/04/2014

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See also

  • Luckwell v Limata [2014] EWHC 536 (Fam) Despite the H signing a pre-marital agreement promising that he would not make any claim either during or after the marriage in relation to the wife's separate property or to gifts made or to be made to her by her "wealthy family, the H was claiming a sum to re-house himself which would entail the selling of the FMH which had been transferred to the W by her father. The W's father made her promise not to sell the house without his permission. Counsel for the H applied for the W's father to be excluded from the court while the W was being cross-examined. The application was granted. Judgment, 03/03/2014, free
  • Luckwell v Limata [2014] EWHC 502 (Fam) Despite the H signing a pre-marital agreement promising that he would not make any claim either during or after the marriage in relation to the wife's separate property or to gifts made or to be made to her by her "wealthy family, the judge awarded him £900,000 to buy a house, with the proviso that the house would be sold when the youngest child is 22 and the proceeds split 45% to the W and 55% to the H. Judgment, 03/03/2014, free

Items referring to this

  • DB v PB [2016] EWHC 3431 (Fam) In a tweet: Achieving fairness in the face of an unfair PNA and where EU Maintenance Reg ties the English courts hands Case note, 02/02/2017, members only

Published: 28/04/2014

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