Taylor Fordyce Articles

The Pandora's Box ...... Prenuptial Agreements and Enforceability

March 2014

Prenuptial agreements are becoming ever more common with more couples marrying for the second time and wishing to preserve pre acquired wealth for their children and first timers wanting to protect their assets.

More judicial help is now available thanks to Mostyn J in the recent case of BN v MA (2013) reinforcing the view expressed in the leading case of Radmacher v Granatino (2011) that “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”

Mostyn J said that in determining fairness the Court must have regard to the following:

  • No agreement can be allowed to prejudice the reasonable  requirements of a child  
  • Respect should be afforded to the decision of a married couple as to the manner in which their financial affairs should be regulated
  • No agreement can overreach basic need.

He also indicated that in his view the determining factor was not that both parties had legal advice and full disclosure but more importantly there must NOT be a MATERIAL lack of disclosure or a MATERIAL lack of legal advice. The important fact is that both parties should have the financial and other information that is material to their decision.

In conclusion Mostyn J considered that “the law adopts a strict policy of requiring the demonstration of something unfair before it will open the Pandora’s Box of litigation where there has been an agreement of this nature”

The Law Commission report on Matrimonial Property Needs and Agreements published in February formally recommends the enforceability of prenuptial agreements.