A v B (Financial Relief: Agreements) [2005] EWHC 314 (Fam)

[2005] EWHC 314 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 17 th January 2005
Before
BLACK J
A v B (FINANCIAL RELIEF: AGREEMENTS)
CHARLES HOWARD QC and LESLIE SAMUELS instructed by Griffiths, Smith, Conway for the petitioner
NICHOLAS FRANCIS QC and NICHOLAS ALLEN instructed by Radcliffes LeBrasseur for the respondent
JUDGMENT
BLACK J:
[1]This is the appeal of Mr A — I hope that he and Miss B will forgive me if I call them the husband and wife — against an ancillary relief order which was made by Deputy District Judge Green. The order is dated 8 April 2004. It followed a 2-day hearing which took place on 3 and 4 February 2004 and a reserved judgment which was dated 12 February 2004. The wife cross-appeals against the deputy district judge’s costs order, but the argument of that issue has been deferred until I have given judgment on the substance of the husband’s appeal, the outcome of which is likely to have a significant bearing on the costs issue.
Venue [2]The parties to the appeal are both aged 58. They married in 1976 following 3 years of cohabitation. There are no children. They separated in 1996 after the husband had formed a relationship with another woman, Miss F. He went to live with her in Bristol and the wife remained in the former matrimonial home in Wimbledon. The wife is a property journalist. She worked throughout the marriage and still does. The husband describes himself as a project manager in his Form E. His skill is in the IT field. He was not working at the time of the separation and had not done so since about 1990, having left his employment in 1989 to make an abortive attempt to start his own business. It was early 1999 when he managed to secure work again, this time on a short-term but lucrative contract. His fortunes are now rather better and he is in secure employment although with a retirement age of 60.
[3]The parties did not sort out their joint finances immediately upon separation. However, in early 1999 with the spur that he needed accommodation because his relationship with Miss F was coming to an end, the husband approached the wife for a lump sum payment. He had found a bungalow near his parents’ home on the south coast which he wanted to buy. He rented a property to tide him over immediately prior to that.
[4]Correspondence between the parties in March 1999 shows that the wife wished there to be a written settlement of their affairs and her letter of 23 March 1999 says that her solicitor will insist on the husband showing any document to his own solicitor before signing it. The husband was instructing Messrs Lings in relation to the purchase of the bungalow. On 7 May 1999 the wife’s then solicitor, Mr Forrest, faxed a copy of a proposed agreement between the parties to Lings. The accompanying letter makes clear that the wife was to raise the funds by way of remortgage. It does not say, but it was the case, that the building society had imposed a condition in relation to the mortgage that it should be established that the husband had no further claim in relation to the former matrimonial home. The letter also says, referring to the draft agreement forwarded: ‘Your client should obtain independent advice from your firm or other solicitors before signing it’.
[5]The agreement to which both parties ultimately subscribed and which is dated 13 May 1999 recites that it is made in full and final settlement of all and any claims that either party may have against the other. The main terms are:
[5]‘The reasons of a district judge should be read on the assumption that, unless he has demonstrated the contrary, the judge knew how he should perform his functions and which matters he should take into account. This is particularly true when the matters in question are so well known as those specified in s 25(2).An appellate court should resist the temptation to subvert the principle that they should not substitute their discretion for that of the judge by a narrow textual analysis which enables them to claim that he misdirected himself.’[6]‘To decide what weight should be given in order to reach a just result, to a prior agreement not to claim a lump sum, regard must be had to the conduct of both parties leading up to the prior agreement and to their subsequent conduct in consequence of it. It is not necessary inthis connection to think in formal legal terms such as misrepresentation or estoppel, all the circumstances as they affect each of two human beings must be considered in the complex relationship of marriage. So the circumstances surrounding the making of the agreement are relevant. Undue pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, an important change of circumstances, unforeseen or overlooked at the time of the making of the agreement, are all relevant to the question of justice between the parties. Important too is the general proposition that formal agreements properly and fairly arrived at with competent legal advice should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement. There may well be other considerations which affect the justice of this case; the above list is not intended to be an exhaustive catalogue.’ (original emphasis)[7]‘My greatest criticism of this judgment is one that is perhaps not directed against the judge himself, I believe that the omissions in the judgment are probably the product of the way in which the case was presented and argued. It seems as if it was almost presented to the judge as a preliminary issue for him to decide whether the existence of the contract in September 1996 disentitled the wife, as a matter of either law or discretion, from an investigation of her statutory claims. That was simply not the judicial function. As Ormrod LJ made clear first in the unreported case of Brockwell v Brockwell [1975] and then in Edgar,when a wife brings to the court her statutory claims for determination, the existence of an earlier contract is only one of the considerations to which the judge must give weight. In the application of the statutory criteria to the case, Ormrod LJ said that it should be brought in under the head of conduct, s 25(2)(f) of the Matrimonial Causes Act 1973.’

Later Thorpe LJ says:

[8]‘The reality is that the judge’s task ... was to make a proper evaluation of the wife’s claims for ancillary relief, which she was bringing to the court for the first time and which fell to be judged on the full range of s 25 criteria.’

Later again he says:

[9]‘But in the end the reason why the appeal succeeds, in my opinion, is well illustrated by something Miss Lambert said at the end of her submissions. She said the judge’s task was to ask himself if the agreement was just between the parties at the date it was made. That is a fallacy. The duty of the judge was to adjudicate upon the wife’s entitlement to financial provision under the statute and particularly to reach a determination that applied all the relevant s 25 criteria to the circumstances of the case. Of course, the agreement was within that range but it was no more than one ingredient within a complex equation.’[10]‘Plainly, when present this factor is one of the circumstances of the case. It represents a contribution made to the welfare of the family by one of the parties to the marriage. The judge should take it into account. He should decide how important it is in the particular case. The nature and value of the property and the time when and circumstances in which the property was acquired are among the relevant matters to be considered. However, in the ordinary course this factor can be expected to carry little weight, if any, in a case where the claimant’s financial needs cannot be met without recourse to this property.’[11]‘It is quite clear that I must approach the case by applying all the s 25 criteria in the usual way and taking the agreement into consideration as one of the circumstances or as “one ingredient within a complex equation” as it was put in Smith v Smith at 382.[12]It is quite clear from the authorities that I do not look at the agreement as a preliminary matter but that I look at all the s 25 criteria factoring in the agreement where relevant and taking particular notice of the arguments raised by each side based upon the guidance contained in Edgar v Edgar and Camm v Camm in particular. Section 25 requires me to have regard to all the circumstances of the case and of course the agreement is relevant as a circumstance.’[13]‘The position seems to me to be that inherited moneys stand to be taken into account to increase one party’s share where there are sufficient funds to allow the other party to be properly provided for without recourse to the inheritance moneys.’

And, similarly, in relation this time to the Jerusalem flat at p 9:

[14]‘My conclusion is that having taken into account the full history of contribution of this marriage and the fact that there was (sic) sufficient funds for the husband to receive a fair proportion of the assets sufficient for his needs without resorting to her inheritance,leads me to the conclusion [sic] that it would not be reasonable for the husband to have expected a share of it.’ (my emphasis)[15]‘Does that mean that I should award provision for the husband now when I have already reached the conclusion that had the application come before the court shortly after the agreement I would not have done so? It was argued strongly on behalf of the wife that I should in this regard have in mind the further dicta in Edgar v Edgar as follows:
“important too is the general proposition that formal agreements properly and fairly arrived at with competent legal advice should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement”
. It is also argued strongly on behalf of the husband that the key words in that sentence are “competent legal advice”. I have already given my reasons for concluding that the husband should not be able to resile from his agreement on that ground. The agreement was entered into some four years ago and the wife has acted and arranged her affairs in reliance upon it. The particular circumstances of this case lead me to the conclusion that it would be unfair to the wife to allow the husband to succeed by adopting the argument that he knew perfectly well what the agreement said and what the agreement meant but that he had his fingers crossed at the time he was signing it. This was an agreement which in my view was properly and fairly arrived at and was fair at the time that it was entered into. I do not consider that an injustice would be done by holding the parties to the terms of the agreement. I consider, on the contrary, that an injustice will be done to the wife in this case by not upholding the terms of the agreement and I therefore dismiss the husband’s application.’