Having entered into a pre-nuptial agreement, WA (‘the wife’) married HA (‘the husband’) in 1997. The wife was an heiress and the husband brought modest assets of his own to the marriage. They kept their finances separate. The couple and their three children lived on a very large estate (‘the Z estate’) during the marriage and restored it using the wife’s finances.
The marriage broke down in 2014. Both the wife and husband instructed expert family lawyers which supported the brokerage of an agreement. Following disclosure of their respective gross and net incomes, it was agreed that the wife would pay the husband £17.34m (‘the lump sum’) in full and final satisfaction of his claims. An order of deputy district judge McHardy in November 2014 (‘the order’) provided that the lump sum would be paid in two halves of £8.67m, the first to be paid within 14 days and the second within 14 days of the husband’s elderly mother vacating a cottage on the Z estate that she was occupying. The first half was paid on 28 November 2014. Less than a month after the order was approved, HA committed suicide. The second half has not been paid, initially by agreement between the parties and later as a stay ordered by Moor J on 23 April 2015.
The wife gave written notice of her intention to seek permission to appeal out of time on 22 January 2015. The wife sought to have the entirety of the order set aside so as to extinguish her obligation to pay the second half of £8.67m and to have £7.17m of the first half repaid to her. She also sought that a first charge be placed on the £1.6m property purchased by the husband for his mother from the first half.
Upon appeal to the High Court, Moor J gave permission to appeal out of time on 23 April 2015. The issues were:
- (a) Was the husband’s death foreseeable?
- (b) If not, was his award a sharing award (and hence not susceptible to challenge) or a needs-based award?
- (c) If it was a needs-based award, what order is now appropriate?
Held (allowing the appeal):
- 1) Having examined the husband’s history following the breakdown of the marriage, Moor J held that, in addition to the wife not foreseeing the husband’s suicide, it was also not foreseeable. Applying Wilson J’s test in Reid v Reid  1 FLR 736, the husband’s suicide could not have been seen as significant possibility by the court, the wife or her professional advisers. Emphasis was placed on findings made in other family proceedings relating to the husband’s contact with the three children where a consultant psychiatrist had produced nine different letters/reports relating to the husband.
- 2) The husband’s claim was primarily needs-based. The marriage had run its course with the couple’s finances kept separate. While it was accepted that negotiations had been relatively informal in this respect, as far as the court was concerned prior indications as to the claim by both parties confirmed that it was to be a needs-based award. Applying Barder v Caluori  AC 20, the claim was susceptible to be set aside: the fundamental assumption underlying the order was that the husband had long-term needs for housing and income. This assumption was totally invalidated by his death soon after the order was made.
- 3) Having considered the strands of sharing and need, Moor J confirmed that some award would be justified even though the husband had had less than one month to live. Applying Miller/McFarlane  1 FLR 1186, a sharing award of one-third of the value of the Z estate (£5m) was appropriate given the length of the marriage and the husband’s contributions as a husband and father. The existence of the pre-nuptial agreement did not alter this since it was ignored in negotiations. The husband’s needs were deemed to include the responsibility to rehouse his elderly mother in a £1.6m property. Since the sharing award of £5m exceeded the husband’s reasonable needs, that figure would not be reduced. Accordingly, the lump sum was reduced from £17.34m to £5m. The second half of the lump sum was set aside and the estate was ordered to repay £3.67m to the wife.