We are almost a week on from judgment being handed down by the Court of Appeal in Helliwell v Entwistle. Naturally, I am delighted with the result for my client, who has faced several years of litigation and is understandably keen to move forward. I’m also pleased for clients and practitioners more generally, as the judgment has provided us with some real clarity which will no doubt be crucial for pre-nuptial agreements now and in the future.
Mr Entwistle appealed a decision to uphold the pre-nuptial agreement that he entered into on the day of his wedding with his former spouse, Ms Helliwell. Pursuant to the agreement, upon separation, the parties were to each walk away with the assets they brought to the marriage. For Ms Helliwell, this was approximately £66m. For Mr Entwistle, the court departed slightly from the terms of the agreement to meet needs, awarding him a settlement of £400,000 (reduced to £325,000 when accounting for a costs order made in Ms Helliwell’s favour).
At the heart of my client’s appeal was the fact that Ms Helliwell failed to disclose the full extent of her assets and that this material non-disclosure should vitiate the agreement. The Court of Appeal unanimously agreed, and Mr Entwistle’s needs are to be reconsidered by the High Court without reference to the terms of the pre-nup.
Having read the judgment innumerable times, there are several observations I would make on the impact it has for pre-nups going forward. These range from the emphasis the court placed on the course of negotiations between the parties to the messaging that exceptional wealth may not act as a barrier to full disclosure. All important features, highlighting the significance of the context in which a pre-nup is negotiated and entered into.
The most crucial observation for me is the commentary by the Court of Appeal on the 'form and extent of disclosure' by the parties. It’s this guidance and direction that clients and their lawyers need to have at the forefront of their minds.
The Court of Appeal is clear that Radmacher remains binding, insofar as disclosure is desirable, but not essential when entering into a prenup. The new judgment takes us further in clarifying that when the parties agree the extent of disclosure, and they record that within the agreement, then they must adhere to it.
The Court of Appeal closely scrutinised recitals within the pre-nup that outlined the parties… 'have fully and frankly disclosed to each other their financial resources and liabilities' and '…disclosure has been substantially complete in all material respects'.
The judgment details how this was not simply a case of Ms Helliwell failing to disclose assets, in fact, she had agreed to do quite the opposite. On the face of the agreement and pursuant to the recitals, she had fully disclosed the extent of her wealth. Her deliberate non-disclosure had the effect of falsifying the representations she had made. This amounted to fraudulent non-disclosure and vitiated the pre-nuptial agreement.
The Court of Appeal emphasised that disclosure is not simply a gold standard in circumstances where the parties have signed a binding agreement, expressly stating that full and frank disclosure has been provided.
It is clear the court will not be forgiving of similar cases in future and those entering into pre-nups must give disclosure full and proper consideration. The lesson is stark and simple: if you agree to provide full and frank disclosure, then that is what must be provided.
Michael Chapman is head of family law with national firm JMW
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