In the divorce case of Ipekçi v McConnell [2019] EWFC 19, the Judge, Mr Justice Mostyn, decided to ignore a pre-nuptial agreement between the parties in making a financial remedies award in favour of the husband.
Ipekçi v McConnell – Background
The case involved Morgan McConnell (the wife), the great-granddaughter of the founder of Avon Products, and Anil Ipekçi (the husband), whom she met when he worked as a concierge at Le Parker Meridien in New York in 2003.
The couple began cohabiting in January 2005, and then agreed to marry later that same year.
A pre-nuptial agreement was drafted by the wife’s private client lawyer, and a lawyer was also found to provide the husband with independent legal advice. The husband’s lawyer was the solicitor who acted for the wife in her divorce from her first husband. The husband met this lawyer for the first time on 3rd November 2005. By this time, the marriage had been arranged to take place on 26th November 2005. The lawyer took the husband through the draft agreement, and in the words of Mr Justice Mostyn…
“The husband must have been very surprised by what it contained. First and foremost, it provided that the agreement was deemed to have been made under the laws of the State of New York and that its validity and effect and construction should be determined in accordance with those laws regardless of where either party resided or was domiciled at the time of death or divorce or separation. Second, it provided that the parties wished any proceedings relating to the marriage to be determined in accordance with the laws of the State of New York and that they submitted to the exclusive jurisdiction of the courts of that State.”
The substantive provision to be made to the husband, in the events which have occurred (e.g. the marriage lasting for more than three years, and there being two children during the marriage), was that any increase in the value of three properties in the name of the wife cited in respectively Barnes, Hanwell and New York would be divided equally between the parties on divorce. Further, the husband would not be entitled to claim any other money from the wife.
In the agreement those three properties were attributed with a value of £1.24 million. At the hearing it was not possible to establish what happened to the proceeds of the three named properties but it was assumed that they were rolled over into the existing family home in Barnes. This has a net value of £1.074 million. Accordingly, there has been no increase in value for the parties to share, and under the agreement the husband would receive nothing at all.
The husband was advised that the agreement was slanted heavily in favour of the wife. Nonetheless, he signed it on 11th November 2005 and the parties were duly married 15 days later.
The Judge had no hesitation in deciding, on the facts of the case, that it would be wholly unfair to hold the husband to the agreement that he signed for the following reasons:
- The parties specifically contracted that the agreement will be governed by New York law. The evidence of the single joint expert is that the agreement suffers from a fatal defect under New York law. This is because the agreement was not accompanied by a duly authenticated certificate that it conformed to the local law in its attestation. The opinion of the single joint expert was crystal clear. This defect would mean that the agreement would, in New York, have “minimal weight, if any”. She cited a case on comparable facts where the New York Appeal Court held that the document would carry “no legal force save for the minor impact of its historical voice”.
- It seemed to Mostyn J that 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.
- Further, the husband could not 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 still, Mostyn J was not satisfied that the solicitor who gave the advice was not compromised by virtue of having acted previously for the wife in her first divorce. It was, in the view of the Judge, a clear situation of apparent bias.
- The agreement did not meet any needs of the husband.
- In the circumstances of the case, Mostyn J attributed therefore that no weight should be attributed to the pre-nuptial agreement.
Since all of the assets in the case either were or had their origin in non-matrimonial property, the claim was decided solely by reference to the principle of needs.
Mostyn J said:
“The following are relevant considerations in determining the reasonable needs of the husband:
- This was a 12-year cohabiting relationship.
- As a result of the way that the parties organised their married life the husband has made no provision for himself from his earnings either by way of savings or pension.
- The standard of living, whilst not by any means a determinative factor, is relevant and was in this case reasonably high.
- It is in the interests of the two children of the marriage that their father has a reasonable home in which they can stay with him comfortably and that they do not perceive him as being in some way the poor relation.
- The husband will not be making any contribution to the maintenance of the children or to their school fees – they will be supported entirely by the wife, save in respect of those incidental expenses met by the husband during the time that the children spend with him.
- In respect of the sum allowed for the husband’s housing it is not necessary for all of it to be provided to him outright. There was agreement at the Bar that it would be reasonable for half of the housing sum awarded to be charged back in favour of the wife (or her estate) on the death of the husband.”
He awarded the husband a lump sum of £1,333,500 of which £375,000 was subject to a charge-back.
How Nelsons Can Help
If you are considering entering into a pre-nuptial agreement, it is vital that any agreement addresses both parties’ needs. The agreement should be reviewed regularly as this can help to make sure that the terms are still current and can help to avoid costly litigation.
If you require advice on this specialist area, please contact a member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form. A member of the team will be happy to discuss your circumstances in more detail and give you more information about the services that our family law solicitors can provide along with details of our hourly rates and fixed fee services.
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