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Wife gets tenth of £2million demand after signing post nuptial agreement

 

Article date:  10/04/2015

There has been a lot of press coverage on a certain multi-million pound 'post nup' agreement case in the last few weeks, and it is easy to see why.

Cases such as the Hopkins' disputed post nuptial agreement which hit the headlines this weekend, appeal to editors and readers alike, not only because of the monies involved, but also due to the complexities of the case which give readers the opportunity to vicariously pry into the private lives of others as they sip their morning coffees. But apart from a peep into a lifestyle that many people can perhaps only dream about, what can we learn from cases such as that of the Hopkins'?

William and Caroline Hopkins married more than 30 years after embarking on an affair. However after only two years of marriage they separated, prompting a bitter row over money.

In August 2011, Mrs Hopkins signed a post nuptial agreement in which she was to receive two properties, a car and a share of Mr Hopkins' pension in "full and final settlement of any future claims".

However in 2012 Mrs Hopkins went to court to claim an additional £2 million from her husband; a claim that was rejected because the couple had entered into a post nuptial agreement.  Mrs Hopkins claimed she had been "bullied" into signing the agreement but was told by the judge that she would have to abide by the post nuptial agreement having signed it of her 'own free will'.

As a result, Mrs Hopkins went to the press to warn other wives not to enter into post nuptial agreements in similar circumstances to hers. But was she right to be so dismissive of the agreement she entered into, despite it being against the advice of her own lawyers?

Complexities

The facts of the case are relatively complicated by the fact that the parties had known each other for around 30 years and had a child together whilst having an affair at a time when they were both married to other people. The marriage itself was actually little more than two years in length, a fact that did not appear to weigh particularly heavily in the judgment by Mr Nicholas Cusworth QC, but in a short marriage situation such as this, the computation of any claims would likely have been limited in any event. 

The circumstances in which the agreement was signed are unsurprisingly contentious between the parties, however the terms provided for the transfer of the main matrimonial home and an investment property to Mrs Hopkins, along with a share of Mr Hopkins' pension fund in order to produce an income for her in retirement.  During the six day hearing of the case, Mr Hopkins offered an additional £200,000 lump sum payment to Mrs Hopkins in satisfaction of her additional claims, whereas she was seeking a further £2 million to meet her needs.

Free will or not free will, that is the question

During the case, Mrs Hopkins put forward the argument that the post nuptial agreement was invalid as it had been signed under duress due to her emotional state and Mr Hopkins' dominant position over her at the time of signing. 

The Judge rejected these claims on the balance of the evidence before him.  Mrs Hopkins had received extensive independent legal advice, however she claimed she had not sufficiently absorbed it due to the pressure she was under - a claim again rejected by the court. 

Mrs Hopkins also claimed that the agreement was dishonest as Mr Hopkins had entered into it stating he was hoping for a reconciliation but had already issued his divorce proceedings in London and therefore this was nothing more than a cynical ploy to secure a better settlement.  This was also rejected by the court on the basis that Mr Hopkins had taken his own legal advice and was issuing these proceedings as a defensive measure in order to preserve his anonymity in a small community in Somerset. 

The court also found that the letters and emails between the parties did not amount to bullying behaviour by Mr Hopkins and this was evidenced by many of the contradictory statements made by Mrs Hopkins in her communications, as was an allegation by Mrs Hopkins of a single incident of physical threatening behaviour by Mr Hopkins which was contradicted by her own evidence. 

It was also argued on Mrs Hopkins' behalf that even if the agreement was not vitiated by duress, the agreement itself was plainly unfair as it would leave her in a position of real need.  This was also rejected by the court on the basis that her needs could amply be met by the terms of the agreement, including the additional £200,000 offered by Mr Hopkins within the proceedings. 

Decisive weight

This was a case that very much turned on its own facts, but the principle in law was that Mr and Mrs Hopkins had entered into a post nuptial agreement just four months after the decision of the Supreme Court in the case of Radmacher. This case had firmly established that decisive weight would be given to such agreements in the future. 

The Radmacher case concerned a pre nuptial agreement whereas the Hopkins' concerned a post nuptial agreement, however in his judgment, Mr Nicholas Cusworth QC relied heavily on the ratio from Radmacher when directing himself upon the law. 

Tried but untested

How this matter came to be before the court is something of a mystery.  Mrs Hopkins took extensive legal advice and was represented in the High Court by Nicholas Francis QC a hugely experienced and skilled Barrister, who I can only imagine had provided her with specific advice that her chances of success were remote at best. 

Whilst the law in this area is very new and therefore the parameters of undue influence etc. are still to be tested, the facts of this case do appear to be relatively easy to interpret in Mr Hopkins' favour. 

As such, it is difficult to understand Mrs Hopkins motivation for making her application to the court for an additional payment on the evidence within the judgment.

One issue which does bear consideration however is the overall cost of this case. 

Mrs Hopkins' costs of the proceedings were £120,567 which was her total costs less her lump sum award, whereas Mr Hopkins' costs were £638,087 (his total costs added to the lump sum payment). 

It is hard to say with certainty that this motivated the application but the fact that the costs to be borne by Mr Hopkins were almost £700,000 does beg the question as to whether this application was motivated by something other than a desire for justice? 

Appropriate advice

This case highlights that in situations where parties are considering a reconciliation or a change in their arrangements, a post nuptial agreement can be effective if it is properly dealt with and subject to the appropriate legal advice. This point has been conclusively held by the High Court on the back of the Radmacher judgment. It is also underlines the fact that, despite Mrs Hopkins' allegations to the contrary, it will take real evidence of undue pressure or influence for a court to give anything other than decisive weight to such an agreement. 

With regard to financial claims; as a result of the post nuptial agreement being in place, the court specifically commented that they did not need to concern themselves with Mrs Hopkins' generously interpreted needs - a phrase that has appeared in cases over the last 10 or 15 years but rather focus purely on her actual situation and whether the terms of the agreement would leave her in a position of real financial need. These are two very different concepts.

In essence, a properly drafted, well constructed, post nuptial agreement which meets a spouse's basic needs around housing and cost of living etc. should be sufficient, irrespective of the level of assets involved in the case to be retained by the wealthier spouse.  

Clearly, some may see this as an opportunity to take advantage of that situation, but as a result of the judgment that has been handed down in this matter, there does appear to be a genuine opportunity in terms of planning and wealth protection. 

As a lawyer who works with couples trying to come to terms with the ending of a relationship, it is easy to see how emotions can, and do run high. If I were to be approached by a client similar to Mrs Hopkins I would query whether, as a result of this judgment, the advice I would now provide to her would be to do what she wants, without taking specialist legal advice. This could strengthen any future claim she had on divorce, depending upon the other circumstances of the case.

It is vital that parties such as the Hopkins' take sufficient time - and advice - to stand back and take an objective view of their situation so that decisions are made that benefit them now and in the future.

The extensive reporting of the Hopkins' case clearly highlights the perils of not going down this path.

To find out more about Higgs' offering for pre-nup agreements, click here.

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