WC v HC: Bad practice and an unsigned agreement
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The financial remedies judgment of Mr Justice Peel in WC v MC is quite lengthy, but I am going to concentrate here on just two aspects: the judicial criticism of the parties' preparation for the trial, and the approach taken to a post-marital agreement that the wife had not signed.
Bad practiceIn these days of copious rules, practice directions, guidelines and close judicial supervision of financial remedy proceedings one may have thought that the opportunities for one side or the other to gain a 'procedural advantage' over the other were few and far between. Sadly, the opening comments of Peel J in this judgment make it clear that there are still such advantages to be had, or perhaps at least to be sought...
Peel J described five different ways in which one party or the other had failed to comply with the rules/PDs/guidance/his directions, or at least the spirit of the rules etc., in a way that may have achieved an advantage:
1. The wife filed a statement that used a font and spacing smaller than that mandated by PD27A, para 5.2, with the result that her statement was about 33% longer than the husband's. Peel J described this as "completely unacceptable", and said that the wife's legal team should not have permitted it to happen. He went on: "Court Orders, Practice Directions and Statements of Efficient Conduct are there to be complied with, not ignored.", and lamented: "Why is it fair for the complying party to be left with the feeling that the non-complying party has been able to adduce more evidence to his/her apparent advantage?"
2. Rather than just containing evidence, as required by para 11 of Mr Justice Mostyn's 'Statement on the Efficient Conduct of Financial Remedy Hearings Allocated to a High Court Judge whether Sitting at the Royal Courts of Justice or Elsewhere', the wife's statement "descended into a number of personal, and prejudicial matters, directed at H which, in [Peel J's] view, were irrelevant to the matters at hand." This led Peel J to comment: "Parties, and their legal advisers, may be under the impression that to describe the other party in pejorative terms, and seek to paint an unfavourable picture, will assist their case. It is high time that parties and their lawyers disabuse themselves of this erroneous notion."
3. Approximately one week before the trial the wife, in putting together the first draft of the bundle index, included a 102 page section of narrative comments by her and fresh property particulars, directed towards the issue of her housing needs. No notice had been given to the husband, who unsurprisingly objected. Peel J largely acceded to his objections.
4. The husband was not entirely innocent either. We are told by Peel J that: "After the parties had exchanged and lodged skeleton arguments, H served updating disclosure. W objected either to the updates being adduced in evidence, or to the updated figures appearing in the composite schedules. I therefore started the trial with competing composite schedules, which was thoroughly unsatisfactory and defeated the purpose of having composite schedules in the first place."
5. Lastly, we are informed that: "The working day before the hearing, H served on W a financial analysis of matrimonial expenditure through the parties’ joint account in 2018 and 2019. The itemised schedule consisted of thousands of entries. W’s legal team unsurprisingly objected to late receipt of this analysis." This led Peel J to comment: "I deprecate the practice, which appears to be prevalent, of lawyers producing at the eleventh hour spreadsheet analysis of expenditure during the marriage (and/or since separation) based on primary documents such as bank and credit card statements which have been in their possession for many months. If an exercise such as this is to be relied upon, it must be provided well in advance of the final hearing (I suggest before the PTR or final directions hearing) so that the issues, and evidence, can be properly identified and case managed."
And we also had this weary comment: "It seemed to me at the start of the trial that far and away the most material aspect of the case was W’s reasonable needs. By the end of the trial, my view on that had not altered. It is a moot point whether the wide-ranging, and at times bad-tempered, inquiry by the parties into a multiplicity of other issues achieved much of value."
And so to the unsigned post-marital agreement. How was this to be approached? Should it be given effect as in Radmacher, or ignored entirely?
The answer lay somewhere in between.
To keep this post relatively short I won't go into the detail of the circumstances surrounding the agreement. Suffice to say that the parties agreed terms after taking legal advice, which would provide the wife with about £7.1 million, plus child provision. However, in the event the wife did not sign the agreement.
Peel J made the following findings:
"Article 1 provides that “This Agreement shall come into force on the date upon which the last of [H] and [W] signed the Agreement”, and the preamble to the Post-Marital Agreement contains the usual notice “Do not sign this agreement unless you intend to be bound by its terms”."
"Normally, an agreement will take effect as a result of both parties signing. The principle of autonomy ... is relevant. I would not want, however, to lay down an immutable law. Each case is fact specific. It may be, for example, that parties agree in correspondence that agreement has been reached, and signatures are not required. It may be that parties do not sign, but clearly consider themselves bound and act accordingly. But in this case, it seems to me to be unreasonable for an agreement to be formally binding upon W in the absence of her signature when that very same agreement expressly, and in terms, only takes effect upon both parties signing. The purpose of such agreements is to achieve as much certainty as possible, and it strikes me as unfair for W to be strictly held to a document which was carefully drawn up to require, as an express clause of the agreement, both parties’ signatures."
Thus, he said:
"I am satisfied therefore that it is not a formally arrived at agreement in the Radmacher sense, whereby the presumption is that it should be given effect to unless in the circumstances it would not be fair to hold W to its terms. In other words, I decline to find that it binds W unless she can demonstrate it operates unfairly."
However, he continued:
"But nor am I willing simply to discard and ignore it, as W submits. To do so runs contrary to the s25 requirement to take account of all the circumstances of the case. Although not a strict Radmacher agreement, this was an agreement reached by the parties, with the benefit of legal advice, and upon full disclosure. Even though W did not sign it, in my judgment I am entitled to take it into account and attach such weight to it as I think fit. It is one of the factors, to be considered in the mix. The terms agreed ... are relevant, albeit not determinative."
Peel J therefore concluded (inter alia) that:
1. The absence of the wife's signature, in circumstances where she consciously decided not to sign, took the agreement outside the Radmacher category of cases.
2. The agreement fell to be considered as one of the factors in the case, but it was not presumptively dispositive as would be the case if it fell into the Radmacher category.
For the sake of (some sort of) completeness: Peel J awarded the wife £7.45 million, which was about 60% of the total assets of £12.47 million, saying: "Stepping back and looking at it in the round, in the light of all the s25 criteria, with the children as my first consideration, I am confident that this is a fair outcome for both parties. It approximates to that which was contained within the Post-Marital Agreement, but goes beyond it so as to meet what I consider to be W’s needs judged against all the relevant factors."