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Persad v Persad ( CA Civ 130/200) – Martin A. George & Company
Martin A. George & Company > Case Histories > Family - Property Maintenance > Persad v Persad ( CA Civ 130/200)
Civi[ Appeal No. 130 of 2008
MANICKRAM PERSAD
WENDY PERSAD
PANEL: A. MENDONCA, J.A.
P. JAMADAR , J.A
N. BEREAUX, J.A.
Mr. R. Dass and Mr. D. Punwasee for the Appellant.
Mr. R. Sowley and Ms. S. Bullen for the Respondent.
DATE OF DELIVERY: 31st October, 2811.
I have read the judgment of P. Jamadar, J.A. and I agree that the appeal be allowed and the case be remitted to the trial court, before another judge
I have also read the judgment of P. Jamadar. J.A. and I agree that the appeal be allowed and the case be remitted to the trial court, before another judge.
N. Bereaux
Delivered by P. Jamadar. ,V.A.
On the 29th October, 1981 the parties were married. They had three children, Sasha (born on the 1 1 (h April, 1982), Varsha (born on the 27th June, 1984) and Ornella (born on the 18th
th January, 1989). Unfortunately their man-iage broke down irretrievably and on the 18 December, 2003 the Appellant (husband) filed for a divorce. The fact relied on was two years separation (from July, 2001) with the Respondent’s (wife’s) consent. Paragraph 8 of that Petition cited a separation agreement dated the 10th September, 2003 and made between the parties, as evidencing the arrangements made by the parties for the suppozt of the Respondent and the children.
Both the Respondent’s consent and the separation agreement were annexed to the Petition that was personally served on the Respondent on the 24th December, 2003. In that Petition it was alleged that Ornella was the only child of the family to whom section 47 of the Matrimonial Proceedings and Property Act (MPPA) applied — an assertion, it seems, that has always been accepted. In the Petition the husband also asserted that he was and would continue to be financially responsible for Ornella, again a matter about which it seems there has not been any dispute.
On the 9th December, 2004, almost one year after the Petition had been filed and served, a decree nisi was granted on the basis of two years separation with consent. The separation agreement was not made a part of the coufi order and in fact ancillary matters were referred to a judge in chambers. Both the Petitioner and the Respondent appeared in court, though the Respondent did so in person.
Nothing further happened in the proceedings until the 13 th October, 2006, when attorneys-at-law Lynette Seebaran and Co. were appointed to act for the Respondent. Then, on the 29th December, 2006, Hyacinth Griffith was appointed as replacement attorney for the Respondent and on the same date issued a notice seeking the following ancillary relief:
2, Lump sum settlement; and
3, Settlement or transfer of property at No. 19 Aruac Road, Valsayn.
This application was duly heard and determined by Gobin j, who on the 4th June, 2008 ordered that: 1
. The matrimonial home at Aruac Road, Valsayn is to be valued by a valuer to be agreed by the parties at the husband’s cost within six (6) weeks from the date hereof.
The husband is to pay to the wife a lump sum representing 20% of the value of the said property.
Upon payment of the said lump sum the wife is to transfer all her share title and interest in the property to Sasha, in default the Registrar, Supreme Court to execute the conveyance. The husband is to continue paying to the wife the sum of $3,000.00 per month until payment of the lump sum above whereupon such payments shall cease.
4. The husband is to execute a Deed of Conveyance within 28 days of the date hereof transferring his interest in the Lange Park property to the wife, in default the Registrar, Supreme Court to execute conveyance.
5. The husband is to pay the wife’s costs of this application as well as the costs of the intervenors.
It is against this order of Gobin J. that this appeal has been filed. The grounds of appeal are focused on the following:
The judge’s failure to ascribe sufficient weight to the separation agreement.
The judge’s conclusion that the Appellant breached his duty of candor and the consequences of this.
The judge’s approach to and assessment of third party contributions to the assets of the parties and means of the Appellant.
See pages 31 — 32, paragraph 56 of the judgment.
The judge’s general evaluation of the evidence, including the value of the real estate in Valsayn and Lange Park.
The essential relief sought in this appeal is that the terms of the separation agreement be upheld. Not surprisingly therefore, a lot of time was spent in argument on the legitimacy, validity and effect of the separation agreement.
In my opinion the appeal in this matter should be allowed and the matter sent back for a rehearing in light of this judgment.
The Separation Agreement: Law and Fact
The obvious context within which the separation agreement must be considered is the application for ancillary relief brought by the Respondent. It was brought pursuant to sections 24 and 26 of the MPPA. Of primary importance is that financial provision for a party and/or the settlement and transfer of property’ upon a divorce is regulated by statute and the courts are limited in their jurisdiction, duties and powers accordingly. The MPPA is therefore the source of authority and the overarching context for any analysis of the issues raised about the separation agreement in this case.
The MPPA provides for the making, recognition, enforceability and variation of maintenance agreements between parties to a marriage which contain financial arrangements. A maintenance agreement includes one made during the continuance of the marriage which provides for the rights and liabilities of the parties towards one another, when living separately, in respect of the making of payments or the disposition or use of any property, including
undertakings with respect to the maintenance and education of children.
In this case the separation agreement was made on the 10th September, 2003 during the continuance of the marriage and in anticipation of the parties’ separation and the dissolution of their marriage. It purported to make financial provisions for the parties and to deal with the
See sections 38, 39 and 40 of the MPPA.
See section 38 of the MPPA.
disposition and use of both real and personal property between the patties and also to make provision for the three children of the family.
Of particular relevance to this case are the provisions of clauses 6, 7, 8, and 17 of the separation agreement. These stated as follows:
The Husband shall:
Forthwith transfer ALL AND SNGULAR that certain piece or parcel of land situate at Lange Park, Chaguanas together with the building thereon (more particularly described in Deed of Conveyance registered as No. 1516 of 1994) (“the Lange Park property”) to the Wife for the unexpired term of 999 years from the 21 st December, 1993, free from all encumbrance.
Forthwith transfer ALL AND SNGULAR that certain piece or parcel of land situate at Orchard Gardens, Chaguanas more particularly described in Deed of Conveyance registered as No. 15349 of 1983 to himself and Varsha in fee simple as joint tenants.
Purchase in the name of the Wife and insure with a full comprehensive policy of insurance a Honda Civic motor car which shall belong absolutely to the Wife.
Pay the Wife a lump sum of $500,000.00 upon the execution of this agreement (the receipt whereof the Wife hereby acknowledges) from a fixed deposit held at First Citizen’s Bank, Chaguanas.
Place the balance of the said fixed deposit, namely, the sum of $1,200,000.00 in a fixed deposit account to be held jointly by himself, Sasha and Varsha.
Pay the Wife a futther lump sum of $180,000.00 by equal monthly installments of $3,000.00 the first whereof to be paid on the date of the signing of this agreement and continuing thereafter on the ISt day of each and every months until the said lump sum has been paid in full to the Wife.
Contaibute the sum of $100,000.00 towards the refurbishment and furnishing of the Lange Park property.
The Husband and Wife agree to forthwith transfer the property jointly owned by them and situate at 19 Aruac Road, South Valsayn to the Husband and Sasha in fee simple as joint tenants.
Acknowledgement of independent legal and financial advice.
The Husband and the Wife acknowledge that each has been given the opportunity of taking and each has received separate and independent legal and financial advice pertaining to this Agreement before signing.
Future Proceedincs. The husband and wife acknowledge and agree that:
they are entering this Agreement freely and voluntarily, free from any duress constraint or influence of any kind or nature on the part of either.
this Agreement may be referred to the Court and may be incorporated with full force and effect in any decree that may be entered in any proceeding for the dissolution of their marriage.
upon complete compliance of each other with che terms of this Agreement and with any order made embodying or reflecting it neither will make any further claims upon the other in any way whatsoever including any claims upon his or her estate.
the arrangements herein are the best that can be devised to suit their common interests on a clean-break basis.
at the time of the decree nisi of divorce or so soon thereafter as may be practicable the petitioning paity will apply for an Order embodying and reflecting the terms of this Agreement and the responding party will consent to such an Order each party acknowledging that he or she will give to the Court such undertakings as the other may reasonably require to give effect to this Agreement.
It is noteworthy, that though the separation agreement was referred to in and attached to the divorce petition, it was not incorporated or embodied in any court order (despite sub-clauses
17 (b), (c) and (e) of the separation agreement).
what has transpired is that the Respondent issued the sections 24 and 26 proceedings for ancillary relief — as she was entitled to do in the circumstances. The Respondent did not apply for a variation of the terms of the provisions of the separation agreement pursuant to section 39 of the MPPA or otherwise.
The court was therefore obliged to consider the Respondent’s application and to do so having regard to the requirements of section 27 of the MPPA. In this regard the trial judge’s approach was generally correct. though her application of the mandated section 27 guidelines and objective can be criticized:
The Se aration A reement in the Context of Section 27 (1) of the M?PA
Edgar v Edgar is English authority for the proposition that a coutt when exercising its discretion under section 24 (l) of the MPPA to order a lump sum payment (and by analogy periodic payments or even a settlement or transfer of property under section 26 (l) of the MPPA), is required to consider and in appropriate circumstances give effect to a prior agreement made by the parties dealing with these matters, by treating that agreement as conduct of the parties to be taken into account pursuant to section 27 (l) of the MPPA in determining what was just in all the circumstances of the case. The weight to be given to the agreement is to be determined by the conduct of the parties leading up to, surrounding the making of and subsequent to the agreement, and including considerations such as whether there was undue pressure by one party on the other, exploitation by one party of dominant position over the other, inadequate disclosure by one party in relation to the other and any unforeseen or overlooked change in the circumstances existing at the time the agreement was made.
In Edgar’s case it was held that the wife had not established that a court was justified in going behind the agreement made, and as a consequence the wife’s application for a lump sum was dismissed. Edgar’s case was one of a post-nuptial agreement made after the marriage had
See paragraphs 13 and 15 of the judgment.
See paragraphs 40 — 55 of the judgment. [1980] 3 All E.R. 227.
run into difficulties, in anticipation of a separation between the parties and to provide for the parties and the children in light of this eventuality, and prior to divorce proceedings being commenced. The wife’s application for ancillary relief was brought after the decree nisi had been pronounced. Clearly in terms of sequence Edgar’s case is similar to the instant appeal.
Since Edgar there have been several significant decisions on the effect of separation agreements on subsequent applications for ancillary relief. However, two ate of special relevance to this appeal. The first is the Privy Council decision of the December, 2008 in MacLeod v MacLeod[1][2] (judgment delivered by Lady Hale) and the second is the Supreme Court decision of the 20th October, 2010 in Radmacher v Granatin08 (a nine panel court), the lead judgment delivered by Lords Phillips, Hope, Rodger, Walker, Brown, Collins and Keer, and separate opinions delivered by Lord Mance and Lady Hale (Lord Mance agreeing with the majority and Lady Hale disagreeing on several points ).
Given that for Trinidad and Tobago the Privy Council is its final court, but the judges of the Supreme Court sit in the Privy Council, reconciling these two decisions and particularly Lady
Hale’s position is important in the context of the doctrine of stare decisis.[3]
MacLeod was a case of post-nuptial agreements made while the parties were living together. They purported to deal with the parties financial anangements while they were together, in the event of separation and of a divorce. However, when divorce proceedings were commenced: the wife sought full financial relief and took the position that the post-nuptial agreements should be disregarded altogether. The approach of the first instance and appellate tribunals was to apply the Isle of Man equivalent of section 27 of the MPPA (and of section 25 of the 1973 Matrimonial Causes Act, UK (UK, MCA,)). The husband appealed to the Privy Council and Lady Hale in giving the opinion of the Board examined the validity and effect of separation and maintenance agreements, concluding that by reason of sections 34 to 36 of the UK, MCA (the equivalent of sections 38 to 40 of the MP?A), post-nuptial separation and maintenance agreements were valid and enforceable and could also be varied by the court. 1 1
Lady Hale also examined the effect of separation and maintenance agreements in divorce proceedings; and in doing so considered in great detail the decision in Edgar’s case as to the weight to be given to such agreements. Lady Hale also considered whether the principles to be extracted from the above could also be applied to ante-nuptial agreements. She opined that antenuptial agreements are contrary to public policy and are not binding in the contractual sense, and further. that “the validity and effect of such agreements is more appropriate to legislative rather than judicial development”.
However, Lady Hale and the Board were clear that post-nuptial agreements were permissible, valid and enforceable “unless they are void and unenforceable for any other reason„ 13 and were subject to the courts powers of variation and to the statutory provisions that
14 deal with any purported ouster of the court’s jurisdiction.
In dealing with the weight to be given to separation and maintenance agreements in proceedings for ancillary relief, Lady Hale expressed the Board’s opinion in the following way15.
In the Board’s view, therefore, the 2002 agreement was a valid and enforceable agreement, not only with respect to the arrangements made for the time when the parties were together, but also with respect to the arrangements made for them to live separately. However, the latter arrangements were subject to the court’s powers of variation and the provisions which purported to oust the jurisdiction of the court, whether on divorce or during the marriage, were void. The existence of such powers does not deprive such
See sections 38(1) and (2) and 39(1), (2) and (5) of the MPPA.
(20081 UK?C 64, paragraphs 31 and 35.
(20081 UKPC 64, paragraphs 36 and 37; section 38 (1) ofthe MPPA; and Section 34 (1) (b) ofthe UK, MCA.
[2008] UKPC 42, paragraphs 39 and 40; Sections 38 (I) and 39 (I) and (2) of the MPPA; and Sections 34 (l) and 35 (1) and (2) of the UK, MCA.
[20081 UKPC 64. paragraphs 40, 41 and 42.
agreements of their utility. Countless wives and mothers benefited from such agreements at a time when it was difficult for them to take their husbands to court to ask for maintenance. Enforcing an existing agreement still has many attractions over going to coufi for discretionary relief.
The question remains of the weight to be given to such an agreement if an application is made to the court for ancillary relief. In Edgar v Edgar, the solution might have been more obvious if mention had been made of the statutory provisions relating to the validity and variation of maintenance agreements. One would expect these to be the starting point. Parliament had laid down the circumstances in which a valid and binding agreement relating to arrangements for the couple’s property and finances, not only while the marriage still existed but also after it had been dissolved or annulled, could be varied by the court. At the same time, Parliament had preserved the parties’ rights to go to court for an order containing financial arrangements. It would be odd if Parliament had intended the approach to such agreements in an ancillæcy relief claim to be different from, and less generous than, the approach to a variation application. The same principles should be the starting point in both. In other words, the court is looking for a change in the circumstances in the light of which the financial arrangements were made, the sort of change which would make those arrangements manifestly unjust, or for a failure to make proper provision for any child of the family. On top of that, of course, even if there is no change in the circumstances, it is contrary to public policy to cast onto the public purse an obligation which ought properly to be shouldered within the family.
The Board would also agree that the circumstances in which the agreement was made may be relevant in an ancillary relief claim. They would, with respect, endorse the oft-cited passage from the judgment of Ormrod LT in Edgar v Edgar, at p 1417, in preference to the passages from the judgment of Oliver LJ, both quoted above at paragraph 25. In particular the Board endorses the observation that “it is not necessary in this connection to think in formal legal terms, such as mispresentation or estoppels”
Family relationships are not like straightforward commercial relationships. They are often characterized by inequality of bargaining power, but the inequality may be different in relation to different issues. The husband may be in the stronger position financially but the wife may be in the stronger position in relation to the children and to the home in which they live. One may care more about getting or preserving as much money as possible, while the other may care more about the living arrangements for the children. One may want to get out of the relationship as quickly as possible, while the other may be in no hurry to separate or divorce. All of these may shift over time. We must assume that each party to a properly negotiated agreement is a grown up and able to look after him or herself. At the same time we must be alive to the risk of unfair exploitation of superior strength. But the mere fact that the agreement is not what a court would have done cannot be enough to have it set aside.
Of great significance to this appeal, is the Board’s inferred intention of Parliament in relation to reconciling the statutory powers in the MPPA under sections 24 and 26 on one hand and sections 38 and 39 on the other. That is, the principles for variation of a maintenance agreement should be the starting point in both types of applications where such an agreement (a valid one) existed.
In these circumstances the Board allowed the appeal of the husband holding that the lower courts “went wrong in principle since:
The Deputy Deemster clearly found that there was nothing about the circumstances in which the agreement was made to cast doubt upon its validity or the weight which it should be given by the court. The wife may have been under pressure, but not from her husband: “any pressure which the wife felt was occasioned in the main at least by her own circumstances, by the life which she, over 20 years her husband’s junior, was choosing to follow” (para 38). The agreement was negotiated over a long period with every eventuality in mind. It was concluded just over a year before the couple finally separated. They foresaw that separation while hoping against hope that it would not happen. . . . There was a change in the circumstances at the time of the agreement in
[20081 UKPC 64, paragraph 43.
that the couple did separate. But that was fully contemplated and provided for at the time, which was not long beforehand. There was not such a change in their circumstances as should lead a court to vary the financial arrangements made for the wife.
On the assumption that the separation agreement in the instant appeal was a valid and enforceable agreement (the ‘weight’ to be given to it being a separate issue), it is quite clear that the trial judge did not approach the application for ancillary relief in the manner stated by the
Board in MacLeod.
However, MacLeod is not the last word on the matter. The Supreme Court decision in Radmacher v Granatino followed almost two years later. These two decisions taken together are an interesting example of the fallibility of final courts and the fluidity of judicial opinion; and also of the difficulties that local courts can face when the same judges sit in the Privy Council and the Supreme Court, but only the Privy Council is the final court for Trinidad and Tobago.
The opening paragraphs of the majority decision in R2dmacher adequately set the stage for our discussion
a court grants a decree of divorce, nullity of marriage or judicial separation it has the power to order ancillary relief. Ancillary relief governs the financial arrangements between the husband and the wife on the breakdown of their marriage. Sometimes the husband and wife have already made an agreement governing these matters. The agreement may have been made before the marriage (“an ante-nuptial agreement”) or after the marriage (“a post-nuptial agreement”). Post-Nuptial agreements may be made when the husband and wife are still together and intend to remain together, or when they are on the point of separating or have already separated. The latter type of post-nuptial agreement can be described as “a separation agreement”. We shall use the generic description “nuptial agreements” to embrace both ante-nuptial and post-nuptial agreements.
[2010] UKPC 42, paragraphs i — 2.
A court when considering the grant of ancillary relief is not obliged to give effect to nuptial agreements — whether they are ante-nuptial or post-nuptial. The parties cannot, by agreement, oust the jurisdiction of the court. The court must, however, give appropriate weight to such an agreement. This appeal raises the question of the principles to be applied by the court when considering the weight that should be attached to an antenuptial agreement. The Privy Council recently considered this question in relation to a post-nuptial agreement in MacLeod v MacLeod [2008] UKPC 64, [2010] I AC 298 and it will be necessary to consider the implications of that decision.
The first point of note is that Radmacher is not only a decision of the Supreme Court, and so only of persuasive value to the local courts, but was concerned directly with ante-nuptial and not post-nuptial agreements.
In summatizing the relevant position in England the majority of the Supreme Court had the following to say:
There can be no question of this Court altering the principle that it is the Court, and not any prior agreement between the parties, that will determine the appropriate ancillary relief when a marriage comes to an end, for that principle is embodied in the legislation. What the Court can do is to attempt to give some assistance in relation to the approach that a court considering ancillary relief should adopt towards an ante-nuptial agreement between the parties.
It used to be contrary to public policy for a married couple who were living together, or a couple about to get married, to make an agreement that provided for the contingency that they might separate. Marriage involved a duty to live together and an agreement making provision for the possibility of separation might act as an encouragement to separate. Such agreements were void and the couzt would pay no regard to them: Cocksedge v Cocksedge (1844) 14 Sim 244; 13 LJ Ch 384; H v W (1857)
3 K & J 382. The same was not tille of an agreement to separate or an agreement that governed a separation that had already taken place.
Although separation agreements do not override the powers of the Court to grant ancillary relief, they have been held to carry considerable weight in relation to the exercise of the court’s discretion when granting such relief.
The majority then dealt with the decision in MacLeod, citing paragraph 31 of Lady Hale’s judgmentlS and observing that:
“The Board went on to draw a distinction between ante-nuptial and post-nuptial agreements, holding that the latter did constitute contracts (and that the former were invalid). We do not agree with this distinction .
The majority of the Supreme Court went on to hold that both ante-nuptial and postnuptial agreements can be valid and enforceable agreements’ summarizing their position as follows:
Ln summary, we consider that the Board in MacLeod was wrong to hold that postnuptial agreements were contracts but that ante-nuptial agreements were not. That question did not arise for decision in that case any more than in this and does not matter anyway. It is a red herring. Regardless of whether one or both are contracts, the ancillary relief court should apply the same principles when considering ante-nuptial agreements as it applies to post-nuptial agreements.
Having so concluded, the Supreme Coutt then considered the Board’s approach to postnuptial agreements as follows:
What yeas the approach that the Board held in MacLeod should be applied to postFauptial agreements? The Board held that the court should adopt the same approach as that laid down by Parliament for varying maintenance agreements in section 35 of the
[2010] UKSC 42, paragraph 50.
19 (20101 UKSC 42, paragraph 51.
[2010] 52 – 62.
1973 Act, ”looking for a change in the circumstances in the light of which the financial arrangements were made, the sort of change which would make those arrangements manifestly unjust” (para 41). The Board also endorsed the “oft-cited passage” from the judgment of Ormrod LJ in Edgar, which we have cited at para 38 above.-
These tests are appropziate for a separation agreement. They are not necessarily appropriate for all post-nuptial agreements. A separation agreement is designed to take effect immediately and to address the circumstances prevailing at the time that it is made, as well, of course, as those contemplated in the future. It will have regard to any children of the family, to the assets of husband and wife, to their incomes and to their pension rights. Thus it makes sense to look for a significant change of circumstances as the criterion justifying a departure from the agreement. The same will be true to a lesser extent where a post-nuptial agreement is made well on in a marriage, as in NA v MA and MacLeod itself, or at the start of a marriage if one or both parties bring significant property to it. But where a young couple enter into an agreement just after embarking on
21 Paragraph 38 stated: The husband complied with all his obligations under the separation deed but, in 1978, the wife petitioned for divorce and applied for ancillary relief, including a lump sum payment. Ormrod LJ said this about the weight to be given co the separation agreement at p 1417:
“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 in this 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 making the agreement, are all relevant to the question of justice between the parties. Important too is the general proposition chat formal agreements, properly and fairly an-ived at with competent legal advice, should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done hy holding the parties to the terms of their agreement. There may well be other eonsiderations which affect the justice of this case; the above list is not intended to be an exclusive catalogue.
agree with Sir Gordon Willmer in wright v Wright [19701 IWLR 1219, 1224, that the existence of an agreement,
… at least makes it necessary for the wife, if she is to justify an award of maintenance, to offer prima facie proof that Chere have been unforeseen circumstances, in the true sense, which make it impossible for her to work or otherwise maintain herself.’
Adapting that statement to the present case, it means that the wife here must offer prima facie evidence of material facts which show that justice requires that she should be relieved from the effects of her covenant in clause 8 of the deed of separatioa, and awarded further capital provision.”
maried life, owning no property of value, there will be no relevant circumstances prevailing at the time of their agreement. I-n that event change of circumstances will not be such a useful test. The circumstances will almost inevitably have changed by the time the marriage flounders and the effect to be given to the post-nuptial agreement will depend on wider considerations.
What is significant for the instant appeal, is the Supreme Coun’s approval of the Board’s approach to separation agreements as summarized in paragraph 64 of the majority’s decision above.
This appeal deals not only with what is in law a maintenance agreement as defined by section 38 of the MPPA, but what is also undeniably a separation agreement as is self evident from the document itself and the circumstances in which it was made.
As already pointed out, Radmacher dealt with an ante-nuptial agreement, and it is in this context that the Supreme Court stated the issues to be determined and the relevant law. Three issues were identified on the facts. They were22.
22 [20101 67.
Did the circumstances prevailing when the court’s order was made make it fair or just to depatt from the agreement?
As to the first issue, the relevant approach was stated as follows:
If an ante-nuptial agreement, or indeed a post-nuptial agreement, is to carry full weight, both the husband and wife must enter into it of their own free will, without undue influence or pressure, and informed of its implications.
In this context the Supreme Court identified the following guidelines:
Ante-nuptial agreements/contracts will not be binding unless they are freely concluded and properly informed.[4]
Each party should have all the information that is material to his or her decision. Any material lack of disclosure, information or advice is therefore televant.24
Each party should intend that the agreement should govern the financial consequences of the marriage coming to an end.25
Each pazty should intend that the agreement would be effective.26
The circumstances attending the making of the agreement must be considered,[5]including but not limited to:
Whether any of the standard vitiating factors such as duress, fraud or misrepresentation are present.
Whether there is evidence of unconscionable conduct that could undermine or reduce the weight to be given to the agreement, such as undue pressure falling short of duress.
Whether there is evidence of any other unworthy conduct that could also undermine or reduce the weight to be given to the agreement, such as exploitation of a dominant position to secure an unfair advantage.
A party’s emotional state at the time of making the agreement.
Whether there were pressures on a party to agree, and if so what were these.28
The circumstances of the parties at the time of the marriage, including but not limited to, their age and maturity, whether they had been married or been in long-term relationships before, and whether the marriage would have gone ahead without an agreement or without the terms agreed upon.
On the issue of fairness the Supreme Court had this to say29.
White v White and Miller v Miller establish that the overriding critezion to be applied in ancillary relief proceedings is that of fairness and identify the three strands of need, compensation and sharing that are relevant to the question of what is fair. If an ante-nuptial agreement deals with those matters in a way that the court might adopt absent such an agreement, there is no problem about giving effect to the agreement. The problem arises where the agreement makes provisions that conflict with what the court would otherwise consider to be the requirements of fairness. The fact of the agreement is capable of altering what is fair. It is an important factor to be weighed in the balance. We would advance the following proposition, to be applied in the case of both ante- and postnuptial agreements, in preference to that suggested by the Board in MacLeod:
29 75 – 76.
That leaves outstanding the difficult question of the circumstances in which it will not be fair to hold the parties to their agreement. This will necessarily depend upon the facts of the pazticular case, and it would not be desirable to lay down rules that would fetter the flexibility that the court requires to reach a fair result. There is, however, some guidance that we believe that it is safe to give directed to the situation where there are no tainting circumstances attending the conclusion of the agreement.
The guidelines given by the majority were as follows:
A nuptial agreement cannot be allowed to prejudice the reasonable requirements of any children of the family.30
A court should give weight to a nuptial agreement out of respect for the individual autonomy of the parties to the agreement.
There is nothing inherently wrong with a nuptial agreement that provides for existing property by one party or the other, or property that one or the other anticipated receiving from a third party or other source (as distinct from matrimonial property accumulated duzing the course of the marriage).31
Ante-nuptial agreements that attempt to deal with unknown and unforeseen contingencies are more open to the conclusion that it is unfair to hold the parties to their agreement — depending on what has happened to the parties subsequent to the acreement.32
The principles of needs and compensation identified in White v White and Miller v
Miller can render it unfair to hold parties to an ante-nuptial agreement.33
It is ultimately for the court to attribute the appropriate weight to an ante-nuptial agreement as parc of “all the circumstances of the case” (within the meaning of section 25 (t) of the UK, MCA). 34
[2010] UKSC 42, paragraphs 77.
[2010] UKSC 42, paragraph 79.
83; and Section 27 (1) ofthe MPPA.
Lord Mance and Lady Hale
Both Lord Mance and Lady Hale were not prepared to hold that ante-nuptial agreements were legally enforceable contracts.35
Lord Mance and Lady Hale, in agreement with the majority, opined that the starting point and the guiding principle for the exercise of any statutory discretion in relation to a claim for ancillary relief is ‘fairness’ . 36
Lord Mance stated his opinion as follows:
My own inclination, in agreement with the majority, is that this is how the application of the overriding criterion should be approached. Given an ante-nuptial agreement, made freely and with full appreciation of the circumstances, it is natural in the first instance to ask whether there is anything in the circumstances as they now appear to make it unfair to give effect to the agreement. But the ultimate question remains on any view what is fair.37
Lady Hale’s opinion is however problematic for the Trinidad and Tobago courts, because of her departure from what she had said in MacLeod in circumstances where none of the other members of the Board in MacLeod were present in Radmacher except Lord Walker who agreed with the majority in approving of the approach in MacLeod to separation agreements.
Lady Hale’s position in so far as it is relevant to the instant appeal was stated by her as
I disagree with the way in which the majority have formulated the test to be applied by a court hearing an application for financial relief, which believe to be an impermissible gloss upon the courts’ statutory duties. However, I agree that the court must consider the agreement in the light of the circumstances as they now exist and that the way the matter was put by the Privy Council in MacLeod v MacLeod [2008] UKPC 64, [20101 1 AC
[20101 UKSC 42, paragraphs 128, 138 (1) and (2) and 156 – 157.
UKSC 75, 129, and 169.
37 UKSC 129.
CiKSC 138 (4).
298, was too rigid, and in some cases, too strong; and I broadly agree with the majority upon the relevant considerations which the court should take into account.[6]
She summarized the position of the Board in MacLeod as follows:
The Board held that a post-nuptial agreement was valid and enforceable in the same way as any other contract between spouses, subject to the statutory power of
40 variation.
The Board held that the powers of variation applied not only to agreements for current or immediate separation, but also to agreements for a future separation.41
Ln light of (a) and (b) above42
(l) There is nothing to stop husbands and wives from making legally enforceable agreements about their property and finances which are to operate while they are living together, subject to the normal contractual requirements.
There is nothing to stop husbands and wives who are on che point of separating, or who are already separated, from making legally enforceable agreements about their financial rights and obligations while they are living apart.
UKSC 152.
UKSC 153.
CKSC 154.
Following this Lady Hale accepted that “if there is to be a starting point . . it has to be the statutory duty under section 25” of the UK, MCA (the equivalent section 27 of the MPPA), but went on to explain that because of the removal of the tailpiece from that section in 1984 and the decision in White v White, “the objective must be to achieve a fair outcome” (quoting Lord Nicholls in White v White (the principle of fairness)).43
Then Lady Hale commented on her own opinion in MacLeod, quoting paragraph 41 of that judgment and going on to say45.
With the benefit of hindsight, I would qualify that statement heavily in two ways. First, and most important, there seems no warrant for the inclusion of the word “manifestly” before “unjust”. That is nowhere to be found in the legislation. Secondly, in so far as it may be derived from cases on separation agreements, such as Edgar v Edgar [1980] I WLR 1410, it fails to acknowledge the manifold factual differences which there may be between the different types of marital agreement. It is, as the majority point out, one thing to look for a very significant change of circumstances in a case such as Edgar, which concerned a deed of separation made when the parties were already separated and quite shortly before the divorce proceedings were begun, or indeed in MacLeod, where
43 [20101 UKSC 42, 163 and 164.
See paragraph 22 above.
45 CiKSC 168.
the mariage was already in serious trouble and the parties had the possibility of early separation and divorce very much in mind. It is another to adopt the same approach when the agreement was made many years ago, before there was any question of the couple separating, and there are bound to have been many changes in the circumstances in which it was made. In this respect, therefore, I agree with the majority that the MacLeod test was too strict.
What is of great significance for the purposes of this appeal is Lady Hale’s acceptance of the need to look for “a very significant change of circumstances” in cases where a separation agreement is made when a marriage was in difficulty and separation Likely and divorce in mind, such as in the instant appeal.
However, for Lady Hale, because of the overriding objective of the principle of fairness, the critical focus of the test is “whether it is now fair to give effect to the agreement”. Thus, the
circumstances in which the agreement was made and the effect of later events on what ought to be the fair outcome of a couple’s financial relationship, including the parties subsequent conduct in relation to the agreement, are all relevant considerations.
Where does this all leave the courts of Trinidad and Tobago? Apart from the difficulty posed by the doctrine of stare decisis, there is also another challenge. This may be afiiculated as follows: is the principle of fairness as stated and justified by the House of Lords in White v
White*9 and explained in subsequent decisions in England strictly applicable in Trinidad and Tobago? In my opinion it is not. Necessarily this changes the approach to be taken in Trinidad
[2010] UKSC 42, paragraph 175.
To be ascertained, for example, by asking: did che parties intend a divorce court give effect to their agreement? What were the parties understanding of the legal effect of the agreement? Were there any vitiating factors? Has any party taken unfair advantage of the other? And, has there been full and mutual disclosure of assets and an opportunity for independent legal advice?
To be ascertained, for example. by asking: did the parties conduct their lives on Che basis that their affairs are and will be governed by their agreement? UKHL 54.
and Tobago in determining how the courts’ treat with separation agreements in ancillary proceedings for financial provision and property settlement brought after a decree nisi.
In Trinidad and Tobago applications that are provided for by sections 24, 25 and 26 of the MP?A are to be determined in accordance with section 27 of the Act. This is the statutory and only basis for the courts’ jurisdiction and powers.
Recently, some courts in Trinidad and Tobago have been uncritically applying the approach taken in England as explained in the series of decisions beginning with White v White.50 In my judgment, following White in this way is quite inappropriate at this time in Trinidad and Tobago.
First and foremost, this is because unlike in England, where the ‘tailpiece’ equivalent to section 27 (1) and (2) of the MPPA was removed prior to the decision in White v White, here in Trinidad and Tobago it remains. Indeed, in White v White Lord Nicholls, in justifying the ‘new’ approach to be taken to what is section 25 in the UK, MCA (the equivalent of section 27 of the MPPA), explained that that followed as a result of the removal of the ‘tailpiece’, which permitted an interpretation that the implicit object of the section “must be to achieve a fair outcome . Lady Hale in Radmacher reiterated this circumstance as the only basis for the ‘new’ approach to section 25 UK, MCA of achieving a fair outcome. It is important to note that in England the removal of the tailpiece to section 25 (1) of the UK, MCA occurred only after considerable debate. The UK Law Commission’s 1981 paper on ‘The Financial Consequences of Divorce’, in dealing with the tailpiece stated[7]
The primary objective of the law: the response to the Discussion Paper and our views
In the Discussion Paper we pointed out that the duty imposed on the court “so to exercise [its] powers as to place the parties … in the financial position in which they would have been if the marriage had not broken …” seemed to make it the
Contrast the approach of Pembert0f1 j. in Chang Kit v Chang Kit, H.C.A. M 1166 of 2003 (unreported).
[2000] UKHL 54, paragraph 23.
primary objective of the law that the financial position of the parties be so far as possible unaffected by their divorce. As we have already said, the vast majority of those who commented on the Discussion Paper took the view that this policy was no longer appropriate. Not only did it impose on the courts a task which was rarely possible of attainment; but it was, in the great majority of cases, undesirable that it should be attained. We were impressed by the fact that these views were expressed not only by the overy,’helming majoHty of the private individuals who wrote to us from their own experience, but also by those professionally concerned with the administration of the law. We have come to the conclusion that the duty now imposed by statute to seek to place the parties in the financial position in which they would have been if the marriage had not broken down is not a suitable general criterion, and in our view it should be removed from the law.
Significantly no such process has occurred or recommendation made in Trinidad and Tobago. Further, the two statutory regimes in the two jurisdictions (section 25 of the UK, MCA and section 27 of the MPPA) have important and significant differences.
In Trinidad and Tobago the continuing existence of the ‘tailpiece’ to section 27 is therefore a clear indicator that, unlike in England, in Trinidad and Tobago “the tailpiece declared what should be the objective of the court when exercising its statutory powers to make financial provision orders and propetty adjustment orders’ , .[8]
The tailpiece therefore states unequivocally and explicitly, what the aim and objective of the court must be when exercising the wide and discretionary powers conferred on it by section 27 of the MPPA. That is, the courts should:
. exercise those powers as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards each other.54
In Trinidad and Tobago this aim and no other must be the basis for deciding what is just in all the circumstances of the case. It is stated in an open and flexible way, that permits a judge to exercise a wide discretion to achieve a practical, just and equitable outcome appropriate to the circumstances of each case (and reflective of changing social norms, values and expectations in Trinidad and Tobago). The consequence is, that the proper approach under section 27 is to ask, having had due regard to all the circumstances of the case including the eight (8) considerations listed,5 how is a court to exercise the court’s powers in a practical and common sense way, having due regard to all relevant circumstances and conduct and in a manner that is just and equitable, so as to place both husband and wife and where relevant a child57 in the financial position they would have enjoyed if the marriage had not broken down and each party had properly discharged their financial obligations and responsibilities. This approach is clearly amenable to the notion of marriage as a union of partners; and one in which each party has commensurate duties and responsibilities both to each other and the children of the family.
No doubt the idea of a marriage as a partnership of equals resonates with much of what Lord Nicholls has said in White v White about fairness and the principles of need, compensation and sharing. And no doubt a consideration of the practical consequence of equality is a useful cross-check to ensure that this view of marriage is not undermined. And no doubt these values could tend towards an equal distribution of resources on the breakdown of a marriage. But having said that, it would be quite wrong in Trinidad and Tobago, for example, to say that an equal division of matrimonial assets should be a starting point for any evaluation under section 27 or that there must be good reasons for departing from that position. Indeed, Lord Nicholls himself, in White v White, explained that in England even with the removal of the tailpiece “a presumption of equal division would go beyond the permissible bounds of interpretation of
See section 27 (l) and note that a similar tailpiece applies under section 27 (2) in relation to children.
Under section 27 (2) five (5) considerations are listed.
sections 24 and 26 applications.
In sections 25 and 26 applications.
section 25 In Trinidad and Tobago it is therefore fair to say that equity, rather than equality, is the statutory touchstone, and any requirements for fairness and principles of need, compensation and sharing can be accommodated within this value and as provided for by section 27 of the MPPA.
In Trinidad and Tobago the starting point for an assessment of the financial consequences of divorce is a consideration of all the section 27 criteria with the objective of satisfying the aim of the tailpiece. It must never be forgotten that the court’s power to make financial provision on divorce is derived from statute, and that in Trinidad and Tobago means the MPPA. Thus, any legitimate judicial development and refonn of the Law must remain wedded to the enabling statute and not divorced from it.
In Trinidad and Tobago the position in relation to applications for ancillary relief where parties have made a post-nuptial separation agreement (a maintenance agreement as defined by section 38 of the MPPA) is therefore as follows (agreeing with and adopting the summary of
Lady Hale in Radmacher)39
There is nothing to stop husbands and wives who are on the point of separating, or who are already separated, from making legally enforceable agreements about their financial rights and obligations while they are living apan.
[2000] UKHL 54, paragraph 27; and section 27 (I) of the MPPA. UKSC 42, 154.
However, the coult has power to vary the financial arrangements for their separation, made in agreements between husbands and wives, under sections 39 and 40 of the MPPA.
The court therefore has its own independent duty to check the arrangements agreed between the parties and to evaluate them in the light of its statutory duties under section 27 of the MPPA.
Further, the starting point for the court’s evaluative exercise in Trinidad and Tobago is section 27 of the MPPA, which applies to all applications for financial provision and transfer and settlement of property, and which is mandatory in terms and effect. And, the aim and objective of the exercise of the court’s discretion is to “so exercise those powers as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other”. This and this alone is the guiding principle for the exercise of a court’s discretion under sections 24 and 26 of the MPPA. It is to be applied in light of the actual and reasonably foreseeable circumstances at the time when the court makes its orders. Necessarily these circumstances would include any maintenance agreement made between the parties to the marriage and the appropriate weight to be attributed to it.
As to che weight to be given to a separation agreement when an application is made to the court for ancillary relief, it would appear that, based on the binding precedent of MacLeod and its endorsement by the majority in the persuasive authority of Radmacher (including that of
Lord Walker who formed palt of the panel in MacLeod), the proper approach is as follows60
Where the separation agreement is valid, then due consideration must be given to whether there is any change in circumstances in the light of which any financial arrangements contained in the agreement were made or, as the case may be, financial arrangements were omitted from it (including a change foreseen by the parties when making the agreement) being the sort of change that would make those arrangements unjust, or whether the agreement does not contain proper financial arrangements for any child of the family, or whether the consequence of the agreement would be to “cast onto the public purse an obligation which ought properly to be shouldered
within the family” (which is contrary to public policy).6i As the Supreme Court put it, one is looking for “a significant change of circumstances as the criterion justifying a depatture from the agreement”. 62 Indeed, the Board in MacLeod described this as the starting point of any exercise of evaluation and discretion under either sections 27 or 39 of the MPPA and therefore in the case of an application for ancillary relief where there exists a valid separation agreement.63
The Supreme Court in Radmacher in agreement with the Board in MacLeod, but in the context of the White v White guiding principle of fairness, formulated the following test:64
Lady Hale distanced herself from this test (but not from “the guiding principle” of fairness) and formulated the following one in order to avoid what she, in Radmacher, described as an
‘impermissible judicial gloss” of a presumption or starting point
60 [2008] UKPC 64, paragraphs 40 – 42 and [2010] UKSC 42, paragraphs 64 – 66.
[2008] UKPC 64, paragraphs 41. 62 [2010] UKSC 42, paragraphs 65.
[2008] UKPC 64, paragraphs 40 — 41 and [2010] UKSC 42, paragraphs 64 — 65.
[20101 UKSC 42, paragraphs 75.
’33 UKSC 42, 169.
Clearly both of these formulations can pose difficulties in Trinidad and Tobago because of the existence of the tailpiece in section 27 of the MPPA.
These statements are however helpful in so far as they both agree at least, that a court should give effect to a post-nuptial separation agreement that is freely entered into by each party with a full appreciation of its implications. In Trinidad and Tobago it would appear that in principle this approach must not be subject to the strict principle of fairness as articulated in White v White, but rather to the tailpiece attached Co section 27 (1) of the MPPA (which is not to say that fairness is not a relevant consideration). In this way the statutory powers contained in sections 24, 26 and 27 are upheld in the case of applications for ancillary relief for financial provision on divorce.
With respect to the considerations that a court should take into account in determining both the validity and weight of a post-nuptial separation agreement, the opinions in both MacLeod and Radmacher are in general agreement. These considerations have been identified at paragraphs 22, 36, 37 and footnote 20 above.
This then was the proper approach to have been taken in the instant matter. Clearly the trial judge did not have the benefit of either the Board’s opinion in MacLeod or that of the Supreme Court in Radmacher, and so cannot be completely faulted for not applying the ratios of these decisions.
As already stated, the trial judge was right in determining that she had to consider the separation agreement and whether it would affect the outcome of the section 27 assessment.[9]The use of the statements of Ormrod LJ in Edgar’s case were also not inappropriate as guidelines to assess the weight of the separation agreement, given the Board’s and Supreme Couzt’s approval of same. However, given her conclusion that “it would be unfair to attach too much weight” to the separation agreement, and therefore to accept that it was not an invalid agreement, she ought to have given some consideration to whether there were significant changes in the circumstances in the light of which the agreement was made. This was a necessary circumstance to be considered in the section 27 MPPA evaluations in the circumstances of this case.
Furthermore, in her application of the section 27 MPPA criteria, the statement that: “The Court’s
„ ,[10][11] incorrect if approach to these matters in the light of recent authorities is to achieve fairness is understood and applied in the strict White v White usage. As explained, the only legitimate aim and objective of the court in a section 27 evaluation is that mandated by the tailpiece to section 27 (l) MPPA. Thus, in so far as the trial judge applied the section 27 criteria in order to achieve fairness as articulated and justified by Lord Nicholls in White v W’hite and as understood by the Supreme Court of Radmacher, she fell into error.
In addition, it is difficult to approve of the trial judge’s approach to her assessment of the value of the real propezty in this matter given the absence of any expect valuations. To reduce her evaluation to the subjective view that “it is open to me to take into account prevailing market values of real estate particularly in the upper middle class income residential areas”, and so to
“I do not consider the value stated by the wife to be unreasonable „ , 68 and in light of this hold that
„ [12]
to draw inferences that led to actual orders made so as “to achieve fairness , is inappropriate in a case such as this.
In these circumstances and for these reasons the appeal in this case will be allowed. In my opinion this matter should be sent back to the trial court, before another judge, to receive
further independent evidence of the valuations of the relevant propefiies and to reassess the case in light of the approach outlined above.
It is recommended and it is useful for the parties and their legal advisors and for appellate courcs, if trial judges in section 27 assessments identified and dealt with all of the stated criteria (where that is appropriate) in a way that reveals the court’s assessment of and opinions on each in light of the guiding principles stated in the tailpiece. Where a separation agreement falls to be assessed in the context of an application for ancillary relief for financial provision on divorce, similar care should also be taken with respect to the considerations articulated above that ought to inform the evaluative exercise.
The parties will be heard on the issue of costs.
[1] (20081 UKPC 64.
(20101 UKSC 42.
[2] [20101 UKSC 42, paragraphs 124 and 138.
[3] See Lord Diplock*s opinion on this point in de Lasala v de Lasala [L 9791 2 WLR 390 PC; and query its appropriateness in this post-modern era with its acceptance of enculturation and in light of the jurisprudential value of contextuality.
[4] [20101 UKSC 42, paragraph 69.
[2010] UKSC 42, paragraph 69.
UKSC 69. 26 70.
[6] See paragraph 37 above.
[7] The Law Commission (Law Com. No. 112) “The Financial Consequences of Divorce” December, 1981) Topic 5, paragraph 17, page 7.
[8] UKHL 54, 23.
[9] See paragraphs 13 and 15 of the trial judge’s judgment.
[10] See paragraph 55 of the judgment.
[11] See paragraph 50 of the Judgment.
[12] See paragraph 55 of the Judgment.