Ipekci v. McConnell 2019 EWFC 19

Facts:

  • The parties met in New York in 2003. They began
    cohabitating in 2005 and married on 26 November 2005. They separated in 2016.
    They had two children aged 11 and 7 years-old.
  • The Wife (‘W’) was the heiress of a large
    cosmetics company and beneficiary of trusts with an overall value of at least
    $65m. She did not work. By contrast, at the time of the hearing the Husband’s
    (‘H’) liabilities amounted to just over £100,000. He owned a 50% interest in
    his mother’s property in Turkey worth just under £50,000. He earned £35,000
    gross. p.a. as a Head Concierge for a London hotel. The family home was a
    relatively modest property in Barnes worth £1.675m in W’s name. There were two
    other properties in Hanwell and New York, also in W’s name.
  • Before the marriage, a pre-nuptial agreement was
    drafted by W’s lawyer in New York. The proposed agreement deprived H of any
    financial claim save for an equal share of any increase in value in the Barnes,
    Hanwell and New York properties. Further, the agreement provided that:

    • It was deemed to have been made under the laws
      of the State of New York;
    • Its validity, effect and construction should be
      determined in accordance with the laws of the State of New York regardless of
      where either party resided or was domiciled at the time of death, divorce or
      separation.
    • The parties wished any proceedings relating to
      the marriage to be determined in accordance with the laws of the State of New
      York and
    • The parties submitted to the exclusive
      jurisdiction of the courts of that State.
  • W recommended an English solicitor to H to give
    him independent advice on the terms of the proposed agreement. The solicitor in
    question had acted for W in her divorce with her previous husband and was not
    qualified to advise on New York state law relating to the enforceability of
    pre-nuptial agreements. H met W’s former solicitor for the first time 23 days
    before the marriage and signed the pre-nuptial agreement 15 days before the
    marriage despite being advised that the agreement heavily favoured W’s
    interests.
  • By the time of separation there had been no
    increase in the value of the properties and thus the agreement gave H nothing.
    The main question for the court to determine was whether H should be held to
    the pre-nuptial agreement, and if not, what orders should be made in his
    favour.
  • A single joint expert was instructed to comment
    on the validity of the pre-nuptial agreement under New York law. The expert
    evidence was that the agreement suffered from a fatal defect under New York law
    because it was not accompanied by a duly authenticated certificate that it
    conformed with the local law in its attestation. The expert concluded that the
    agreement would have been given “minimal weight, if any” in New York.

Held:

Mostyn J.

  • Lord Phillips in Radmacher v. Granatino [2010] UKSC 42 at [75] enunciated the guiding principle
    where a prenuptial agreement exists as follows:

“The court should give effect to a nuptial
agreement that is freely entered into by each party with a full appreciation of
its implications unless in the circumstances prevailing it would not be fair to
hold the parties to their agreement”.

He continued at [81]:

"Of
the three strands identified in White v White and Miller v Miller, it is the
first two, needs and compensation, which can most readily render it unfair to
hold the parties to an ante-nuptial agreement. The parties are unlikely to have
intended that their ante-nuptial agreement should result, in the event of the
marriage breaking up, in one partner being left in a predicament of real need,
while the other enjoys a sufficiency or more, and such a result is likely to
render it unfair to hold the parties to their agreement
."

  • On the facts of this case, it would be wholly
    unfair to hold H to the pre-nuptial agreement because:

    • The evidence from the single joint expert was
      that the agreement suffered from a fatal defect under New York and would be
      given “no legal force save for the minor impact of its historical voice” in New
      York.
    • If the parties have made their bed in New York
      they must lie in it. It would be wholly unjust to attribute weight to this
      agreement when under the law that the parties elected it would be afforded no
      weight.
    • H cannot be said to have had a full appreciation
      of the implications of the agreement when he had no legal advice at all about
      the impact of New York law. Further, the fact that the solicitor had acted for
      W in the past made this a clear situation of apparent bias.
    • The agreement did not meet any needs of H.
    • In those circumstances, no weight was attributed
      to the prenuptial agreement.
  • H’s claim fell to be decided solely by reference
    to the principle of needs as all of the assets are or have their origin in
    non-matrimonial property.
  • Having considered all the relevant
    circumstances, the court awarded H a housing fund of £750,000 subject to a
    charge back in the sum of £375,000 in W’s favour on H’s death. In addition, he
    was awarded a lump sum of £186,500 to meet his capital needs and an income fund
    of £445,500.