Mr Justice Cusworth handed down this judgment on 2 September 2024 following a preliminary issue hearing regarding the interpretation of a pre-nuptial agreement (“PNA”) between parties.
Background
The wife, Wei-Lyn Loh (“W”), is aged 41 and ‘enormously wealthy’. The husband, Ardal Loh-Gronager (“H”), is aged 34 and was previously a banker but left employment in 2018 to support W and manage renovations to the family home.
The history of their relationship can be stated simply: the parties started cohabitation in 2015; signed a PNA in early 2019 and married 6 months later; then separated in either 2023 on H’s case or 2022 on W’s case.
Following the First Appointment, pleadings were ordered to the preliminary issue of the proper interpretation of certain paragraphs in the PNA. It was necessary to determine this to correctly characterise, and thereby divide, chattels brought during the marriage.
Dispute
The chattels at the centre of the dispute were acquired in W’s sole name from a joint bank account and were worth several million pounds, hence the parties desire to clarify the proper interpretation of the PNA.
The PNA had three categories of property status: ‘Separate Property’, ‘Joint Property’ and ‘Jointly Acquired Chattels’ [15]. Paragraph 2.9 of the PNA stated that the parties joint bank account would be considered ‘Joint Property’ irrespective of fiscal contribution and would be used to “cover all utility bills and general household expenses at the Matrimonial Home and also both parties’ day to day living expenses”.
At paragraph 22.4 of the PNA it was also agreed that “[c]hattels acquired jointly during the marriage (other than Separate Property…) will be divided between Wei-Lyn and Ardal in accordance with the financial contribution made by Wei-Lyn and Ardal respectively”.
Counsel for H argued that the financial contribution towards the chattel should be deemed equal as it was funded by the joint account. Counsel argued the joint account rendered the money it held ‘Joint Property’ due to the paragraph 2.9 of the PNA [16]. Counsel for W argued that the chattels were not ‘jointly acquired chattels’ at all because they were purchased by W in her sole name using her funds, albeit transferred in the joint account first [17].
Decision
It was clear to Cusworth J that if the H was to be treated as making any financial contribution to the chattels, it would need to be a contribution deemed by the fact that W’s money went into the joint account before purchasing chattels in her sole name [23]. It was of note that the chattels were brought in W’s sole name, even though it was open to the parties to purchase them in their joint names [26].
Cusworth J postulated that if W moved money from her personal account and into the joint account and then back, that money would not be considered joint property. If W subsequently brought certain chattels from that sole account, those chattels would also not properly be considered jointly owned property [24]. The question was then posed: why would it be any different for W to buy sole assets in her name from the joint account? This question did not determine the case, but it is useful in illustrating Cusworth J’s conceptualisation of the matter.
At paragraph 25, Cusworth J found that one example of deemed equal contribution was the use of the joint account when it was used for its intended purposes [25]. However, whilst the joint account had been set up and agreed to cover ‘utility bills’ and ‘household expenses’, its purpose eventually expanded beyond that due to ‘administrative convenience’. As such, the parties agreement about the account being used for the household costs would not be applied to every transaction and so the use of the joint account to buy the chattels did not automatically deem the parties’ contributions as equal.
Cusworth J judged that the parties’ intention had not been for paragraph 2.9 to override paragraph 22.4 of the PNA [25]. If the joint account rendered purchases as ‘jointly acquired’, consideration would then need to be given to the parties’ respective contributions [27]. The PNA had not anticipated that the joint account would be used for purchasing chattels with significant value, rather than merely meeting living costs. Therefore, chattels brought from the joint account would be divided by the proportion of financial contribution that was the actual rather than the deemed contribution per paragraph 22.4 [28]. The fact that the money was paid from property which (whilst it sat in the account) was jointly owned, did not make the chattels brought from that account jointly owned. The chattels were W’s property.
Conclusion
Counsel for W were successful in their argument that the PNA should be interpreted as such to divide the valuable chattels, purchased in W’s sole name from the joint bank account, according to actual financial contribution and not, as H argued, deemed contribution. The chattels could not be classed as jointly acquired, given the absence of H’s contribution to them [34].
For the full judgment, click here.
