Case Summary: MB v EB [2019] EWHC 1649 (Fam)

Last month, Cohen J gave judgment at the conclusion of a three-day preliminary issue hearing in ancillary relief proceedings. The hearing was at the direction of Roberts J, and was to determine the length of the marriage between the parties, the impact of a separation agreement that they had entered into in 2011, and to determine whether there was any marital acquest. Cohen J noted at the outset of his judgment that this was a highly unusual case, and thought it worthwhile to set out the chronology in more detail than usual, particularly given that the date of separation was so contentious.

H and W had met in 1999. At that time, W was a businesswoman and came from an immensely wealthy family, while H was a student at art college, although he had taken a year off from his studies following a nervous breakdown, and had in fact suffered from mental health issues for a number of years. H was supporting himself though modelling work, and met W when he accompanied her as a male escort.

The parties married on 17 April 2000, and lived initially in Munich and then in Vienna, where in 2004, W was embroiled in a ‘scam’, the details of which were not available to the court. She was arrested and remanded in custody, although for how long was unclear: H claimed that she spent 9 months in prison, while W asserted that it was, in fact, only for a matter of days. What was clear however was that after her release, W’s passport was confiscated and she was not permitted to leave Austria. While W remained there, H returned to the UK, and commenced a new relationship, eventually moving in with his new girlfriend. W was finally able to leave Austria in 2005, at which point she moved to Monaco. H travelled there in August 2005, and told W that his girlfriend was pregnant and that he wanted to divorce. W refused to sign the papers. H returned to London and resumed his new relationship.

W returned to the UK in 2006, and moved to London, where she saw H infrequently. H moved to Hove in 2007, and began a new relationship with another woman. He visited W in London from time to time, although he never had his own key to her London properties. There was much conflicting evidence about the state of the parties’ relationship at this time, which was plainly unorthodox, and Cohen J commented of this period that ‘whatever the expressed state of their relationship, it is clear that the parties remained emotionally entangled.’

In August 2009, H wrote to W expressing his dissatisfaction that he was reliant on state benefits despite still being married to W, who was extremely well-off. He presented W with an ultimatum, proposing that either they remain married, with the understanding that they could not live together, and W would provide H with a property that he could live in and derive an income from by renting out rooms, or else he would commence divorce proceedings. H stated that he had taken legal advice and understood that in the event of divorce, he was entitled to at least half of W’s assets. H also noted that a divorce would be disadvantageous to W, who was in the process of trying to secure British citizenship. H instructed solicitors who wrote to W in November 2009, referring to ‘the regrettable breakdown of your marriage.’

Negotiations began between the parties, and in June 2010, H’s solicitors wrote to W proposing that a separation agreement be drafted, with W paying H £240,000 to cover his housing needs, a further lump sum of £50,000 and sums to contribute towards his counselling and medical costs, in full and final settlement. Over the coming months, H’s solicitors ‘continually sought to pressurise W by threatening divorce if the agreement was not reached speedily’. On 21 July 2010, H's solicitors went further, encouraging W’s solicitors to produce an agreement and pointing out that H had agreed the terms of settlement ‘in good faith and without insisting on full and frank disclosure of your client's income and capital’.

The deed of separation was finally signed in February 2011. It recorded that the parties had separated in 2004, and that both had taken independent legal advice. Under the agreement, W was to pay H a sum of £245,000 for H to purchase a property, as well as a further lump sum of £35,000. This was to be in full and final satisfaction of any claims. H later claimed that he had proposed and signed the agreement in an attempt to procure a home and an income for himself within the marriage, which W asserted that she had agreed to pay H what was required to get rid of him. Neither of them wanted a divorce.

The parties’ relationship continued much as it had before, with H supporting W as she applied to lift the travel restriction imposed on her in Austria, and W giving H further financial assistance related to the property he had purchased in Hove, and even buying the flat above H’s.

By 2016 however, the relationship between H and W had deteriorated significantly. This appeared to have been caused by H forming a new relationship with a woman called Sabine, who moved into his property with him. There was a great deal of acrimonious correspondence between the parties, and in January 2017 H wrote to W demanding that she curtail behaviour that he considered to be intrusive and inappropriate, and importantly, stating ‘we have been legally separated for 5 years and under the Deed of Separation that we signed, we have no further claims on each other.’ He repeated similar sentiments in letters and texts of February and July 2017.

In August 2017, H issued his divorce petition, and commenced financial remedies proceedings shortly afterwards. It soon became apparent that there were major differences between the parties as to the date of separation. W said that the parties had separated in 2004, which was when they had last lived together, while H claimed that the parties had only separated in September 2016, when W had changed the locks on her Hove flat so that H could no longer access it.

In determining the date of separation, Cohen J considered paragraph 68 of IX v IY [2018] EWHC 3053 (Fam), in which Williams J considered how the court will find the point in time at which it can be considered that a relationship has acquired ‘sufficient mutuality of commitment to equate to marriage.’ Cohen J stated that the analysis of Williams J could equally apply to determining the date of the end of the marriage. He noted that this was an extremely unusual and difficult case, and H and W’s relationship was unlike most marriages. H himself described it as a ‘toxic co-dependent relationship’, and Cohen J thought this an apt description.

However, even though he reminded himself that marriages come in all different shapes and sizes, and what may be important to one couple may be trivial to another, Cohen J found that the parties had separated in 2004. There were a number of factors that pointed to this being the date of separation: the parties were apart far more than they were together after this point; H was having sexual relationships with other women; H had his own home elsewhere that he had chosen and purchased for himself; he received no regular financial support from W after this point; and the parties were not able to enter the property where the other lived without permission. Of course, the parties had also instructed their respective solicitors to state the date of separation as 2004 in the Deed. While finding that 2004 was the date of separation, Cohen J went on to state that ‘there remained a clear emotional involvement between them and neither of them, in truth had really moved on emotionally before 2016. I therefore regard it as inappropriate to exclude from all further consideration the whole of the period after 2004. Whether in fact this will have any impact on the financial outcome of the case is another matter altogether.’

The judge then briefly considered the question of whether there had been any marital acquest during the period up to 2004. He easily found that there was not, stating that W had been dependent on her family’s wealth. H himself did not suggest that W had increased her wealth during the marriage, instead presenting her as a gambler and a socialite.

Finally, Cohen J turned to the separation agreement, which he described as ‘the most difficult part of the case.’ H argued that there were vitiating factors present which meant that the agreement was void, and in the alternative, that it would not be fair to hold him to the agreement because the parties did not in fact separate, as the agreement contemplated, and that holding H to the agreement would leave him in a predicament of real need.

Cohen J quoted at length from Radmacher v Granatino [2010] 2FLR 1900, including paragraphs 68-83 (concerning the factors that give greater or less weight to an agreement) in his judgment. Turning first to the alleged vitiating factors, Cohen J was greatly persuaded by the fact that the process leading up to the separation agreement was entirely instigated by H. Both sides instructed solicitors, and the final agreement was based entirely on the framework that H himself had suggested. In short, he had received exactly what he had asked for. H had not had full financial disclosure from W, but Cohen J found that H had known already that W was extremely wealthy and did not have to work. It was not necessary for him to know more. H could not (and indeed, did not) claim that he had received bad legal advice. His claim that he had never considered the possibility of divorce was insupportable, given that any competent solicitor would have advised H that the separation agreement covered divorce, and the Deed itself made it clear that it was intended to cover all situations, current and future. Furthermore, there was no evidence of W pressuring H or exploiting a dominant position.

The judge was more troubled by the question of H’s needs. The separation agreement did not provide for any income for H other than what he could get by renting out rooms in his property, an idea that originated with H. This was in the context of H having longstanding health issues, no employment history and minimal income from sales of his artwork. Cohen J noted that H had essentially got what he wanted, but asked himself why H’s income needs had not been given greater consideration: ‘how could the provision of a rental income which could only be achieved if he did not live in the premises that were being purchased and instead lived in the converted garage amount to a proper meeting of his needs?’

Ultimately, Cohen J concluded that H had no grounds for vitiating the separation agreement, save for a potential argument that it did not meet his income needs. Applying A v B (No 2) [2018] EWFC 45, Cohen J found that had the parties been asked at the time of signing the Deed whether they had any further claims against each other, they would have answered in the negative. However, he noted that this was not a conclusive test.

He was satisfied that H’s capital needs had been met, because he had a property to live in and to work from. However, H’s only income was from renting out rooms in his property, which required him to live in the converted garage, and in any event, only generated a net income of £15,000 per year, against H’s stated needs of £50,000 per year. Cohen J was not in a position to enquire into either H’s income or stated income needs, and had not received detailed submissions on the issue. It not something that he was able to adjudicate on, but did trouble him.

Cohen J finished his judgment with a cautionary note, commenting that between them, the parties had already spent £1million on legal costs, a sum that he considered to be wholly disproportionate. H’s position was particularly troubling: his only asset was his house, valued at c.£300,000, against which there was a charging order pursuant to a LASPO in the sum of £236,000. He owed his solicitors £170,000, and had minimal income, which derived entirely from his property. Without further provision, H would be bankrupt and without a home or an income, a ‘bald fact’ that led Cohen J to urge the parties to deal with any future consideration of whether H’s needs should be met any further than they already had been ‘speedily and without significant further expenditure.’