Family Law Hub

Edgar v Edgar [1980] EWCA Civ 2

  • Neutral Citation Number: [1980] EWCA Civ 2

    IN THE SUPREME COURT OF JUDICATURE

    THE COURT OF APPEAL

    ON APPEAL FROM FAMILY DIVISION

    Royal Courts of Justice,

    23rd July 1980

    B e f o r e :

    LORD JUSTICE ORMROD

    LORD JUSTICE OLIVER

    ____________________

    Between:

    ROBERTA HILARY ANN EDGAR (Respondent)

    and

    ANTHONY SAMUEL EDGAR (Appellant)

    ____________________

    (Transcript of the Shorthand Notes of the Association of Official Shorthandwriters, Ltd., Room 392, Royal Courts of Justice, and 2 New Square, Lincoln's Inn, London, W. C. 2.)

    ____________________

    MR. J. JACKSON, Q.C. and MR. N. WALL (instructed by Messrs. Sharpe Pritchard & Co., London Agents for Messrs. North, Kirk & Co. of Liverpool) appeared on behalf of the Appellant.

    Mr. R. JACKSON, Q.C. and MR. N. WILSON (instructed by Messrs. Raymond Tooth & Co. of London) appeared on behalf of the Respondent.

    ____________________

    HTML VERSION OF JUDGMENT

    ____________________

    Crown Copyright (c)

    LORD JUSTICE ORMRCD: This is an appeal by a husband from an order made on 27th March 1980 by Eastham J. in proceedings for financial provision following a divorce. It is a wholly exceptional case on the facts, and this judgment must be read in the light of the strange and, in seme ways, unsatisfactory state of the evidence.

    The learned judge was dealing with applications under sections 22 and 23 of the Matrimonial Causes Act 1973, by the wife of an extremely rich husband for a lump sum and periodical payments for herself and four children, of whom she has the custody. The husband is a multi-millionaire, who is in a position to make a very large payment without liquidity problems. The main issue at the hearing was the husband's contention that the court should give effect to an undertaking by the wife, contained in a Deed of Separation, not to apply, after divorce, for additional capital provision, beyond that provided by the Deed, which had been fully complied with by the husband.

    After hearing the evidence and argument at length, the judge decided that he could properly ignore the wife's undertaking, and so proceeded to assess the lump sum under the provisions of section 25 of the Act. He ordered the husband to pay the sum of £670,000 by 28th July, 1980, and upon payment of this sum:-

    "(a. The existing order for periodical payments to the wife and the children be discharged.

    b. All other financial claims of the wife be dismissed.

    c. The Deed of Separation, dated 1st April, 1976, be discharged.)"

    The order was made in this form with a view to producing a 'clean break' between the parties, notwithstanding that they have four children, in whose lives both are playing, and intend to play, as full as part as they can in the circumstances. The consent of the wife to the dismissal of her claim to periodical payments was not obtained. (The case of Dipper v. Dipper, decided by this court on 5th March, 1980, was not brought to the attention of the learned judge). Nor, apparently, had she consented to the discharge of the order for periodical payments to the children, a very unusual, if not unprecedented, order in such circumstances.

    The marriage took place on 23rd August, 1967, and the four children are aged 12, 9, 8 and 6. The marriage had run into serious difficulties by the Summer of 1975, and by October 1975, the wife had made up her mind to leave her husband as soon as arrangements could be made for her to do so. She was extremely anxious to retain the care and control of the children, but had no alternative accommodation and, without her husband's co-operation, had no means of providing an alternative home for herself and the children. The husband wished to keep the marriage going and the family together, and had made it clear to her that he would not agree to her leaving with the children unless she had a proper and suitable home for them.

    The wife consulted solicitors and, on 6th October, 1975, they spoke on the telephone to the husband's solicitors saying she wanted to leave and wanted a divorce. On 15th October, 1975, she had a conference with counsel, and on 16th October her solicitors wrote to the husband's solicitors confirming her decision, and setting out her requirements in detail. I will return to this and other letters at a later stage in this judgment. This letter, however, expressly stated that the wife was not asking for a full capital settlement at that stage. However, by 25th November, 1975, at the latest, the wife seems to have agreed that she would not ask for any further capital provision in the event of a divorce, and confirmed this in an interview with her husband's solicitor and her own solicitor on that date. On 5th December the husband's solicitors wrote a letter setting out in full proposed heads of agreement, including the following:-

    "5. Your client agrees that she will not ask for, now or in the future, any capital or lump sum payment or provision pending, during or following any divorce proceedings, nor during the subsistence of the Deed of Separation."

    The wife's solicitors sent a long, detailed letter on 15th December dealing with many points in the proposed terms, and in particular in reply to the paragraph quoted above, they wrote:-

    "5. As you know our client has been advised not to agree this, but she has instructed us that she is prepared, subject to what we write in the final paragraph in this letter, not to claim now or in the future any capital or lump sum provision, with the exception that should legislation change the tax position regarding husbands paying wives maintenance as referred by you in your point 9, our client must reserve the right to claim a capital or lump sum provision to compensate her, and this must be clearly accepted by your client."

    The final paragraph referred to, read thus:-

    "Finally, and this is not intended in any way to be a threat, our client is not prepared to go on bargaining about the position. She has made her situation quite clear. As you will appreciate, if the matters do proceed in accordance with our client's wishes, she is giving up a very sizeable capital payment which she would otherwise, in both counsel's and on our view, receive. She has instructed us that if your client is not prepared to agree the points we have raised in this letter, then we are to proceed with the divorce as a matter of urgency."

    By the time this stage in the marriage had been reached the wife was emotionally involved with another man, possibly with two other men, with one of whan she had admittedly committed adultery; the husband had corrmitted adultery on many occasions with a number of women. Both of them were, therefore, in a position to file a petition immediately.

    Negotiations, mainly involving details, continued between solicitors until the Deed of Separation was agreed and executed, by both parties, on 1st April, 1976. They were still living together, and continued to do so until November of that year, when the wife moved into her own house. Under the Deed, the husband agreed to purchase in the name of the wife a named house, or some cormensurate alternative, to pay for alterations, to provide accommodation for the wife's mother, to buy the wife a motor car, and to pay £16,000 per annun less tax to the wife, and £5,000 per annum less tax to each of the four children. These were, substantially, the provisions for which the wife had originally asked in her solicitor's letter of 16th October, 1975. We were told by counsel that the present value of the capital provisions made for the wife, is approximately £100,000. In addition, the Deed contained a clause in these terms:-

    "8. The Wife ACKNOWLEDGES that on transfer to her of the said property referred to in paragraph 2 hereof and on payment of the sums referred to therein and in paragraph 4 hereof and always provided that no reconciliation between the Wife and Husband is effected she does not intend to seek any further capital or property provision from the Husband whether by way of ancillary relief in divorce proceedings or otherwise and in the event of a decree of divorce being granted she hereby agrees not to proceed with her claims for lump sum and property adjustment orders subject only to her right to make application to the Court for lump sum or property provision in accordance with paragraph 7 hereof if in the circumstances referred to therein the parties cannot reach agreement regarding alternative financial provision."

    This clause, of course, represented the arrangements made between the solicitor solicitors in the relevant extracts from their letters, which have already been quoted.

    It was subsequently discovered that the provision in the Deed for payment direct to the children of £5,000 per annum each was not effective for tax purposes. Accordingly, arrangements were made (to use neutral language) to replace this provision in the Deed by consent orders under section 27 of the 1973 Act (the wilful neglect to maintain section), which were effective for tax purposes.

    On 3rd November, 1978, the wife presented a petition for divorce, relying on two years separation and consent. The prayer was in the usual form, asking for all forms of ancillary relief. Decree nisi was pronounced on 24th January, 1979. Notice of intention to proceed with the application for all forms of ancillary relief was given on 7th March, 1979, and it was supported by an affidavit of the wife which made it quite clear that she was claiming a 'substantial capital sum'. The affidavit referred to the contents of clause 8 of the Deed, and gave some explanation, but in very general terms of the wife's change of mind in relation to claiming further capital provision. I will refer later to this part of the affidavit in greater detail.

    Turning now to the law, it is common ground that the principle laid down by the House of Lords in Hyman v. Hyman (1929) AC 601, still applies. At page 64, Lord Hailsham L.C., said,

    "However, this may be, it is sufficient for the decision of the present case to hold, as I do, that the power of the court to make provision for a wife on the dissolution of her marriage is a necessary incident of the power to decree such a dissolution, conferred not merely in the interests of the wife, but of the public, and that the wife cannot by her own convenant preclude herself from invoking the jurisdiction of the court or preclude the court from the exercise of that jurisdiction."

    The learned judge, therefore, had jurisdiction to entertain the wife's application for a lump sum, and to make the order which he did, notwithstanding the provision of clause 8 of the Deed, under which the wife convenanted not to proceed with a claim for a lump sum. The real question, and it is a difficult one, is to determine the effect, if any, to be given to such a convenant, when exercising the statutory discretion under section 23 of the 1973 Act, to order the husband to pay a lump sum to the wife.

    In Hyman v. Hyman, the Lord Chancellor, having held that the existence of the covenant did not preclude the wife from making an application to the court, went on to say, at page 609,

    "this by no means implies that, when this application is made, the existence of the Deed or its terms are not the most relevant factors for consideration by the court in reaching a decision."

    This problem was considered in this court in Wright v. Wright (1970) 1 WLR, 1219. In giving the leading judgment, Sir Gordon Willmer accepted that the principle of Hyman v. Hyman applied, notwithstanding that the agreement between the parties had been approved by the court, under what was then section 5 of the Matrimonial Causes Act 1963.

    "There is no doubt that no agreement made inter parties can ever deprive the court of its right to review the question of maintenance for a wife, as was decided by the House of Lords in Hyman v. Hyman (1929) AC 601. I do not think that anything contained in the new provisions of the Act of 1965, giving the court the power to approve reasonable arrangements between the parties, is such as to cast any doubt at all upon the continuance in force of the doctrine enunciated by the House of Lords in Hyman v. Hyman (1929) AC 601. There is, therefore, scope for two diametrically opposite views. On the one hand, it may be said that the court has an absolute right to go behind any agreement between the parties so far as the question of maintenance for a wife is concerned. On the other hand, there is the judge's approach to the problem, that is, that where there is an agreement between the parties approved by the court, effect must be given to it. Under the one view, the right to award maintenance would be completely uninhibited, whereas under the other it would be strictly curtailed by the arrangement made between the parties and approved by the court at the time of the trial.

    Mr. Dean, as I understand his argument, contended for an intermediate position between those two extremes. As I followed him, he said that the fact of this arrangement having been made and having been approved by the court is merely one factor amongst the numerous factors that have to be taken into consideration when the court is called upon to award maintenance to a wife following a divorce case. I suppose the reait of this argument would be to limit or inhibit to some extent the generosity of the registrar or judge in making an award of maintenance; that is to say, supposing he would, without any such arrangement having been made, have been disposed to award X a week, he must now in deference to the arrangement made between the parties, to which some effect must be given, award only X minus Y. The difference between that and the judge's view is that the judge held that it would not be right in the absence of proof of any unforeseen circumstances of the kind envisaged by the arrangement to make any award of maintenance at all.

    On behalf of the husband, the judge's conclusion was vigorously defended by Mr. Anns who said, and said very forcibly, that this was a perfectly valid agreement between two parties, both sui juris, arrived at with the assistance they had from their legal advisors and approved by the court. It was, therefore, something to which effect ought to be given unless compelling reasons to the contrary were shown. He added (I think with a good deal of force)ithat the fact that the court had given its approval to the proposed arrangement had put the stamp of reasonableness on the arrangement which was then being made, viz, that there should be no maintenance."

    "I think, approaching the matter de novo and in the absence of authority, that the proper view is to say that this was an agreement entered into with full knowledge of all the circumstances and on the advice of both parties' legal advisers. It is therefore something to which considerable attention must be paid. I accept that it would not be right to say that it has to be construed like a statute, or that it absolutely forbids any possible award of maintenance, except upon the strictest proof of the existence of the circumstances mentioned. If and in so far as the judge so decided, I would not agree wholly with his conclusion. But I do not think that he went so far as that. I think he was thinking along the same lines as I myself think, namely, that the existence of this agreement, having regard to the circumstances in which it was arrived at, at least makes it necessary for the wife, if she wants to justify an award of maintenance, to offer prima facie proof that there have been unforeseen circumstances, in the true sense, which make it impossible for her to work or otherwise maintain herself. If that be right, I think that it is quite plain that the wife here did not ever given such prima facie proof."

    In Brockwell v. Brockwell, (5th November, 1975) (unreported), Stamp L.J., having cited these passages from Sir Gordon Willmer's judgment in Wright v. Wright (supra) said,

    "Nevertheless, the wife ought, in my judgment, to have the opportunity of showing that in all the circumstances, and notwithstanding the agreement, the court should exercise in her favour this discretion to award her some lump sum payment."

    That case, of course, arose under the current Matrimonial Causes Act, and, in an attempt to integrate the Hyman v. Hyman principle with the new provisions relating to the exercise of the discretion in financial matters, set out section 25, I suggested in my judgment in that case, that an agreement not to claim a lump sum should be taken into account under the heading of conduct, and added,

    "When people make an agreement like this it is a very important factor in considering what is the just outcome of the proceedings".

    I see no reason to resile from that statement.

    Under Section 25(1) it is the duty of the court to have regard to all the circumstances of the case, and, in particular, to the matters detailed in paragraphs (a) to (g), and to exercise its powers so as to place all parties, so far as practicable, and having regard to their conduct, just to do so, in the financial position they would have been in had the marriage not broken down. The ideal, of course, is rarely if ever, attainable; so, inevitably, in most cases, the phrase "so far as practicable" dominates the issue, modified, where relevant, by conduct.

    To decide what weight should be given in order to reach a just result, to a prior agreement not to claim a lump sum, regard must be had to the conduct of both parties, leading up to the prior agreement, and to their subsequent conduct, in consequence of it. It is not necessary in this connection to think in formal legal terms, such as misrepresentation or estoppel, all the circumstances as they affect each of two human beings must be considered in the complex relationship of marriage. So, the circumstances surrounding the making of the agreement are relevant. Undue pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, an important change of circumstances, unforeseen or overlooked at the time of making the agreement, are all relevant to the question of justice between the parties. Important too is the general proposition that, formal agreements, properly and fairly arrived at with competent legal advice, should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement. There may well be other considerations which affect the justice of this case; the above list is not intended to be an exclusive catalogue.

    I agree with Sir Gordon Willmer in Wright v. Wright (supra) at page 1224, that the existence of an agreement,

    "at least makes it necessary for the wife, if she is to justify an award of maintenance, to offer prima facie proof that there have been unforeseen circumstances in the true sense which, make it impossible for her to work or otherwise maintain herself".

    Adapting that statement to the present case, it means that the wife here must offer prima facie evidence of material facts which show that justice requires that she should be relieved from the effects of her covenant in clause 8 of the Deed of Separation, and awarded further capital provision.

    Eastham J. in the present case, approached the problem on these lines. At page 22 of his judgment he summarized the law in five propositions as follows:-

    "(1) (And this is not contested) notwithstanding the deed of 1st April, the wife is entitled to pursue a claim under section 23 of the Act.

    (2) If she does pursue such a claim, the Court not only has jurisdiction to entertain it but is bound to take into account all the considerations listed in section 25 of the Act.

    (3) The existence of an agreement is a very relevant circumstance under Section 25 and in the case of an arm's length agreement, based on legal advice between parties of equal bargaining power, is a most important piece of conduct to be considered under Section 25 of the Act.

    (4) providing that there is equality above, the mere fact that the wife would have done better by going to the Court, would not generally be a ground for giving her more as, in addition to its duty under Section 25, the Court had a duty also to uphold agreements which do not offend public policy.

    (5) If the Court, on the evidence, takes the view that having regard to the disparity of bargaining power, it would be unjust not to exercise its powers under Section 23 (having regard to the considerations under Section 25), it should exercise such pavers even if no fraud, misrepresentation or duress is established which, at cannon law, would entitle a wife to avoid the deed."

    I agree with these propositions, subject to two reservations. First, as to proposition (4), I am not sure that it is helpful to speak of the court having ' a duty ' to uphold agreements, although I understand the sense in which the word was used. Secondly, the reference to 'disparity of bargaining power' in proposition (5) is incomplete. It is derived from a phrase taken from Brockwell v. Brockwell, and for which I must accept ultimate responsibility. I used it as a short-hand way of describing a situation with which all experienced practitioners are familiar, where one spouse takes an unfair advantage of the other in the throes of marital breakdown, a time when emotional pressures are high, and judgment apt to be clouded. It is unfortunate, because the learned judge has based his decision solely on this notion of disparity of bargaining power as such, and not on the use, if any, made of it by the husband. The wife, herself, in her affidavit in support of her application, gave as her reasons for disregarding the advice of her counsel and solicitors, and entering into the covenant not to claim a lump sum, the fact that she felt over-powered by her husband's enormous wealth and position, coupled with her fears of losing the children. There can be no doubt that in this case, as in so many, there is a disparity of bargaining power. The crucial question, however, for present purposes is not whether the husband had a superior bargaining power, but whether he exploited it in a way which was unfair to the wife, so as to induce her to act to her disadvantage. It is at this point that this case becomes so puzzling. At no time has the wife alleged that the husband put accept his terms during the negotiations which led up to the Deed, and the judge expressly found as a fact that the husband

    "did not make threats with the intention of forcing his wife to take far less than a court would award her after a divorce."

    The course of the negotiations for the Deed of Separation were not gone into in any detail at the hearing, although both parties gave oral evidence. Much time was taken-up in investigating the wife's emotional involvements in the Summer and Autumn of 1975, to show that she might have been disposed to agree to almost any terms to get away from her husband, but there was no evidence that the husband was stipulating for an abandonment by her of her claim to a lump sum as a condition precedent to arrangements which would enable her to leave. All we know is that the wife put forward at the outset, in the letter of 16th October, 1975, her detailed demands for a house, a home for her mother, an allowance totalling £36,000 a year for herself and the children, and expressly reserved her right to claim a lump sum after divorce. There is a forthrightness and a sense of urgency about this letter, which does not suggest that she was conscious of much disparity in bargaining power. Three weeks later there is a letter from the husband's solicitor, dated 7th November, saying that an agreement has apparently been reached by the parties themselves on the basis of the letter of the 16th October with 'appropriate amendments'. Then comes the meeting on 25th November 1975, at the wife's solicitor's office between the husband's solicitor, and the wife's solicitor, at which the wife insisted on being present. She again stated her terms. The husband's solicitor, according to his note of the meeting,

    "asked it to be made clear that Mrs. Edgar would not ask for any further capital or lump sum payments to be made by her husband once the financial arrangements now being discussed had been set out in a Deed of Separation, and in fact implemented. Mrs. Edgar said she agreed to this but she was not prepared to wait indefinitely whilst her husband made up his mind before taking any further steps.'

    In a revised version of the note he put it more neutrally.

    "I asked if it was quite clear that she would not ask for any further capital etc."

    These notes were agreed as a fair record of the interview. There is nothing to suggest any pressure on, or exploitation, of the wife by the husband or his solicitor. So the mystery remains unsolved as to why the wife so determinedly rejected the wise advice of her counsel and solicitors not to enter into an agreement to forgo her further claim for a lump sum.

    In my judgment, therefore, there is no evidence which reflects adversely en the husband's conduct in the negotiations, and no, or no adequate, explanation of the wife's conduct, and no grounds are shown for holding that justice requires the court to relieve her from the effects of the covenant.

    Mr. Johnson Q.C., for the wife in this court, has accepted that he cannot point to any evidence of pressure from the husband on the wife to act as she did, and he has not submitted that the disparity in bargaining power is enough by itself to justify this court in ignoring the Deed. Instead he has relied on a line of argument forshadowed by Sir Gordon Willmer in Wright v. Wright (at page 1223 E - FG) that the court in carrying out its duty under section 25 should look at the facts and decide, disregarding the Deed at this stage, what provision is required to put the wife into a position she would have been in had the marriage continued, and then taken into account the financial provisions of the Deed. If this is done, he submits that the shortfall is obvious; the provision in the Deed is plainly inadequate; and, therefore, the inference must be that it would be unjust to hold the wife to her agreement not to claim a lump sum.

    This argument gives no weight at all to the wife's covenant, and tacitly assumes that a wife, in the position of this wife, would be likely to receive a much larger capital provision than that already provided for under the Deed, but with no periodical payments, instead of a large order for periodical payments and a relatively small capital sum. This court has not yet had occasion to consider the application of the principles of section 25 to cases involving very rich people although a little assistance may perhaps be had from O'D v. O'D (1976) Fam. 83, a case involving a rich, but not extremely rich, husband. The point does not arise directly for decision in the present case, so I shall not say any more about it on this occasion.

    In the result, I have cone to the conclusion that the wife has failed to show sufficient grounds to justify the court in going behind the arrangements made in April 1976 and embodied in the Deed. No reasons have been given for the complete change in attitude between the letter of 16th October 1975, reserving her position in regard to capital provision, and her acceptance at the meeting on 25th November, 1975, in spite of the advice of her lawyers, that she would make no further claim; there is no evidence of undue pressure by the husband or of any other circumstances that led her to act in a way apparently so contrary to her interests. Similarly, there is no evidence to explain or justify her later decision in March, 1979, to go back on her undertaking and claim a further lump sum, or any suggestion that her circumstances had changed in some significant way between April 1976 and March 1979.

    At one stage during the argument I thought that it might be appropriate to send the case back to give the wife an opportunity to adduce further evidence on these lines, but, on reflection, I do not think that any useful purpose will be served and further costs would be involved.

    I can see, therefore, no alternative but to allow the appeal and dismiss the wife's applications under sections 23 & 24. We shall have to send the case back for determination, in default of agreement, of the amounts to be paid to the wife and the children by way of periodical payments.

    LORD JUSTICE OLIVER: I agree fully with the judgment of Ormrod L.J. and I add some observations of my own only in the light of the fact that we are differing from the learned judge and in deference to the sustained arguments which have been advanced by Mr. Johnson in seeking to uphold his decision in this court.

    The principles to be applied are not seriously in dispute. After a review of the relevant authorities the learned judge stated them in the five propositions which have already been referred to in the judgment of Ormrod L.J. and I accept them subject to the same reservations as those which he has stated and in particular as regards the reference which the learned judge made to 'equal bargaining power' and 'disparity of bargaining power'. If, by these references, the learned judge meant no more than that one must look in every case at all the circumstances to see whether there was some unfair or unconscionable advantage taken of some factor or of some relationship between the parties which enables the Court to say that an agreement was not truly entered into by one party or the other as a free agent, then I have no quarrel with them. If however he meant that the Court must engage in an exercise of dissecting the contract and weighing the relative advantages and bargaining position on each side in order to ascertain whether there is some precise or approximate equilibrium, then I respectfully disagree. Men and women of full age education and understanding, acting with competent advice available to them, must be assumed to know and appreciate what they are doing and their actual respective bargaining strengths will in fact depend in every case upon a subjective evaluation of their motives for doing it. One may, of course, find that some unfair advantage has been taken of a judgment impaired by emotion, or that one party is motivated by fear induced by some conduct of the other or by some misapprehension of a factual or legal position, but in the absence of some such consideration as that - and these are examples only -the mere strength of one party's desire for a particular result or the mere fact that one party has greater wealth than the other cannot, I think, affect the weight to be attributed to a freely negotiated bargain.

    Having said that, I do not, of course, quarrel for one moment with the proposition that the Court in every case must - indeed is enjoined by statute to - look at all the circumstances in exercising its powers under s. 25(1) of the Act of 1973 to produce the result directed by that section. That is not in issue here, but the extent to which the Court is directed and is able to produce the result of placing all the parties in the financial position in which they would have been if the marriage had not broken down is controlled first by practicability and secondly by the consideration of what is just having regard to their conduct. In that consideration the existence of a freely negotiated bargain entered into at the instance of one of the parties and affording to him or her everything for which he or she has stipulated must be a most important element of conduct which cannot be lightly ignored. Essentially therefore what is in issue in the instant case is whether, in exercising the jurisdiction which the statute required him to exercise, the learned judge was right to decline to hold the wife to a particular term of the agreement into which she had entered four years earlier. I say 'a particular term' because there is really no dispute between the parties that, if the wife makes out a proper case for additional income payments beyond those specified in the agreement, the husband is willing to provide them. There may be a lively dispute both about the necessity and the quantum, but there is, if I understand Mr. Jackson right, no dispute in principle. What is in dispute is whether, having regard to clause 8 of the Agreement, to which my Lord has already referred, the learned judge was right to award to the wife the very large capital sum which he did award.

    Substantially, the only evidence about how that clause came to be in the Agreement is provided by the agreed note of the meeting between the solicitors for the husband and the wife on the 25th November 1975 at which the wife (who is evidently a lady of some strength of character) insisted upon being present and in which she took an active part.

    I will not repeat the relevant parts of this note which have already been quoted by my Lord.

    Now it seems clear that this was the first occasion upon which this particular matter was mentioned, and whether it was put forward as this note suggests as a simple inquiry by Mr. Tamlin, the husband's solicitor, or (as seems to be suggested by the earlier version of the note) as a positive stipulation, seems to me to be largely immaterial. Up to this point the negotiations between the solicitors had, as the correspondence shows, been on the basis that, upon the marriage being dissolved, the wife would retain her liberty to claim that provision should be made for her by way of lump sum payment. A letter of the 7th November 1975 seems to indicate that the question of the provision to be made for the wife had been discussed between her .husband and herself personally and that they had reached broad agreement on the basis of the earlier correspondence in which this term appeared, and nowhere in her evidence does the wife suggest that her foregoing this right was, up to this point something which was insisted upon by her husband or which she was under any pressure to accept. The note of the meeting shows that when it was mentioned she immediately agreed to it and indeed that it was she who was pressing for an agreement to be concluded and threatening proceedings if it was not. Now she could not have been under any misapprehension at all about what she was agreeing to. She had, on the 15th November 1975, been taken by her solicitors to a conference with leading counsel and had been clearly advised that in any divorce proceedings she could expect to receive sums very substantially in excess of those which she was then contemplating as acceptable to her and that the provision made by the Court would be likely to include an extremely large capital provision having regard to her husband's financial position. Whether the underlying assumption that the Court would necessarily be inclined to award a capital sum of the magnitude which she was advised that she might achieve was correct is not something upon which we are called upon to express an opinion and I do not do so. I observe only that, whilst the statute casts upon the Court the burden of forming a view about what the financial position of each of the parties would have been if the marriage had not broken down, I do not find in it anything which necessarily compels a hypothesis of such continued affection, contentment or open-handed generosity as to lead either party to make a gift to the other of a substantial part of his or her fortune.

    Now there was never any secret of the fact that she entered into the agreement in deliberate defiance of the advice of her solicitors and counsel and with a full appreciation that she had the possibility of achieving a very much more substantial settlement from her husband if she was prepared to bargain for it.

    Nor was it simply a snap decision made in a moment of rashness. The negotiation of the terms of the Agreement continued for a full four months after this meeting and indeed there was specific negotiation about the terms of clause 8 having regard to the possibility, then foreseen by the parties' advisers, that changes in fiscal legislation might require the arrangements to be reviewed. So it is really difficult to imagine a clearer case of knowledge, understanding and assent. Furthermore, although as Mr. Johnson has not been slow to point out, the agreement represented for a husband as wealthy as this husband was (and is) a very cheap bargain if one assumes the inevitability of a divorce, the fact is (and the evidence is really indisputable), that he was in fact a very reluctant party to it because what he really wanted was to try to preserve the marriage. This was not a case of a disillusioned husband seeking to rid himself cheaply of a tiresome wife. It was, throughout, she who was keeping up the pressure for an agreement which would enable her to clear out with her children and live her own life independently of him. I say that in no spirit of criticism. No doubt she did find that living with him was intolerable to her, and it is profitless to inquire whether her reasons for so feeling were objectively justified. But it does mean that one must examine with great care the reasons which she now advances for having entered into the bargain of which she has since repented and which she asks the Court to ignore.

    In her affidavit of the 28th February 1979 she said that she was adamant that she did not feel able to claim the large capital sum which she was advised that she would achieve and wanted simply a house and income which, she says, she knew the Respondent was only prepared to offer. And the reason for disregarding the advice which she was given was, she said, that she felt over-powered by his enormous wealth and position. She said that her husband had told her that unless there was agreement he would contest the custody of the children, and although she was assured about the likely result of custody proceedings she was frightened that she might lose. She also said that she was concerned to avoid a bitter matrimonial struggle.

    In the light of the correspondence which passed between the parties' advisers, to some of which my Lord has already referred, this account of her motives is, to say the least, lacking in conviction although her insistence on the agreement, as it appears from the correspondence, certainly bears out her frank admission that she was desperate to leave. She was cross-examined at length and really substantially nothing emerged from her evidence which gave any clue to her ready acceptance of clause 8 in defiance of the advice which she had received. Her own account of the matter was that there were three motivating factors which, in descending order of priority, she stated as being

    1. her fears about the custody of the children

    2. her desire to get away and

    3. her desire to avoid a messy divorce.

    As to the first, the learned judge found as a fact that the husband did not make any threats with the intention of forcing his wife to accept less than the Court would order. He made it plain that he would fight for the children if agreement was not reached, but there was no finding by the learned judge - and indeed no evidence to justify any finding - that he ever stipulated what ultimately became enshrined in Clause 8 as a sine qua non of the agreement. As regards the fear of a scandalous divorce, it is quite evident from the correspondence that that had very little influence upon her - indeed she was herself, through her solicitors, using it as a weapon to force agreement. I need only refer to her solicitors letter of the 31st October 1975 in which they say

    "whilst our client does not court publicity, please be under no illusion that she fears it and it may however be that the contrary is the case."

    Having read and re-read the evidence I am driven irresistibly to the conclusion that what motivated the Petitioner was her urgent desire to disencumber herself of the company of a husband with whom, for reasons good or bad, she fourid it uncomfortable to live. No doubt her love for her children and her sense of responsibility for them tempered her impatience to get away, but in the ultimate analysis what shines through her evidence - and she was devastatingly frank about it - is that her driving force was her urgent impulse to leave her husband upon terms which would give her the independence which she sought.

    The learned judge clearly appreciated this. He said,

    "The husband's stance relating to the children was, in fact, I find, prompted by his concern for them, but it did have the effect of facing the lady with the choice of leaving than behind - which she was not prepared to do - or accepting terms which were dictated in the husband's interests by Mr. Tamlin at the meeting which took place in Tooth's Office, the attendance not of which I have read in full."

    That the suggestion of what finally emerged as clause 8 emanated from Mr. Tamlin appears from the note itself, but if by 'dictated in the husband's interest' the learned judge intended to draw the inference that Mr. Tamlin was placing the wife under any pressure to accept, then that inference appears to me not only to be unsupported by the evidence but indeed to have been contradicted by the lady herself. She was asked, in terms, whether any undue pressure was put upon her at this meeting and her answer was that certainly none was put upon her by Mr. Tamlin. The undue pressure, she asserted, came from living in a house with a man she did not want to live with and the threat of having her children taken away, with the threat of a messy divorce. Indeed Mr. Johson was, I think, constrained to admit that he really could not point to any unfair advantage taken by the husband or even to any insistence on his part upon clause 8 as a term of the agreement. The nearest one came to it was an admission by the husband in cross-examination that the provision was 'of the very greatest importance'.

    In the last analysis the attack upon the agreement centres, as the learned judge recognised, not upon any unfair pressure or leverage, but simply upon the disparity in bargaining power between the parties, that is to say the inequality in the weapons which were available to them if they chose to use them and not in the use of them or even threats of use of them which they actually made. That does not, in my judgment, constitute any ground for going behind this agreement in the circumstances of this case, where it was, throughout, the wife who, for her own convenience, was pressing for it and threatening proceedings if it was not concluded and implemented. By its terms she achieved the independence she desired, she obtained the home of her own choosing, and she obtained a not insubstantial income for the support of herself and her children. It was a result which commended itself to her at the time and it does not become an unjust result merely because she could have done better if she had taken the professional advice which she was given. Clearly it did not give her the standard of life which she had enjoyed in the company of a husband with whom she was no longer prepared to live, but in a consideration of what is just to be done in the exercise of the Court's powers under the Act of 1973 in the light of the conduct of the parties, the Court must, I think, start from the position that a solemn and freely negotiated bargain by which a party defines her own requirements ought to be adhered to unless some clear and compelling reason, such, for instance, as a drastic change of circumstances, is shown to the contrary. No such compelling reason has been demonstrated in the evidence placed before this Court. The wife's reasons for seeking to resile from the agreement, as they emerge from her affidavit, appear to be that she feels unable to offer her children amenities comparable to those which her husband is able to offer and that she would like to buy a farm and to have a house in London. I find myself wholly unpersuaded that such considerations furnish any ground for relieving her of the bargain into which she freely entered and I would hold her to that bargain. I agree therefore that the Appeal should be allowed and I concur in the course proposed by Ormrod L.J.

    ORDER:

    Appeal allowed.

    No order as to costs.

Judgment, published: 23/07/1980

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Published: 23/07/1980

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