Helliwell v Entwistle – Financial Disclosure in Prenuptial Agreements

This recent case affirms the importance of seeking specialist legal advice when entering into a nuptial agreement and ensuring that the rules on financial disclosure are met.

Background

The case concerned the financial settlement awarded to a husband, Simon Entwistle, upon the breakdown of his three-year marriage to multi-millionaire Jenny Helliwell, with whom he had signed a prenuptial agreement with. It was a ‘drop-hands’ agreement, meaning that upon divorce, it provided that the parties would retain their own separate assets and split any jointly owned property. They also agreed not to make any financial claims against each other.

Yet, following the parties’ separation, Mr. Entwistle sought a financial order from the family court on the basis that the prenuptial agreement should not be given effect. He put forward several arguments to support this claim, including that Ms. Helliwell had failed to provide full financial disclosure. He had originally sought an award of £10 million, which he later reduced to just over £2.4 million before the High Court.

Following Vardags’ victory in the landmark case Radmacher v Granatino, nuptial agreements will be given effect by the courts in England and Wales, provided that both parties entered into it freely and with a full understanding of its implications, unless it would be unfair to do so. The central issue in this case was whether Ms. Helliwell’s financial non-disclosure vitiated the agreement.

the high court decision

In the High Court ruling, the judge, Francis J, criticised the “absurdity” of the husband’s initial offer of a £10 million settlement. Having noted the significant reduction to £2.4 million, Francis J stated that “starting high to try and make the midpoint higher than it should be is an unwise tactic”.

Ms. Helliwell’s case was that this was a short, childless marriage, and Mr. Entwistle had freely and willingly entered into the prenuptial agreement with legal advice, having been aware of her wealth and with an understanding of the consequences of signing the agreement. Her team contended that Mr. Entwistle’s needs could be met by his own resources, and as such, the prenuptial agreement should be given effect, and no financial award should be made to him.

In contrast, Mr. Entwistle argued that he should not be held to the prenuptial agreement on the basis that he was persuaded to enter into it by Ms. Helliwell as a concession to her father, and that she had told him that he would always be provided for. Furthermore, he contended that whilst he had received limited advice on the prenuptial agreement, he did not receive proper financial disclosure from Ms. Helliwell, and the terms of the agreement did not adequately provide for his needs.

Regarding the financial non-disclosure, the lawyers who had advised Mr. Entwistle on the prenuptial agreement had raised concerns about the lack of disclosure, but despite this, he declined to seek further disclosure.

Ms. Helliwell accepted that she had significantly understated the value of her wealth, in an effort to keep her family assets private. She had asserted her wealth to be approximately £18-£23 million, when in reality, she was worth over £70 million.

Francis J found that the husband would have understood the implications of the prenuptial agreement, and that therefore, it should be given effect despite Ms. Helliwell’s lack of full disclosure. However, Francis J did somewhat depart from the prenuptial agreement to meet Mr. Entwistle’s needs.

In considering Mr. Entwistle’s reasonable needs, Francis J strongly criticised several of his financial claims, namely £36,000 for flights and £26,000 for a meal plan. The latter claim drew significant media attention, following Mr Entwistle’s assertion that he could not “even cook an omelette” and Francis J’s retort: “My answer to that is, ‘Learn.’ It is not difficult. You do not have to be a master chef to learn how to eat reasonably well.” In concluding, Francis J ordered that Ms. Helliwell pay Mr. Entwistle a £400,000 lump sum.

Mr Entwistle appealed the High Court decision, and alleged gender bias, stating that Francis J awarded him substantially less financial provision than what would have been made to a wife in similar circumstances.

The court of appeal judgment

At the Court of Appeal, King LJ allowed Mr. Entwistle’s appeal on the basis that that Francis J had been wrong to conclude that Ms. Helliwell’s deliberate non-disclosure had not vitiated the prenuptial agreement. As such, King LJ remitted the case to be reheard in the High Court, highlighting that Mr. Entwistle’s needs, and in particular his housing provision, needed to be reconsidered. However, the court made no finding of gender bias.

Whilst a lack of financial disclosure will not always vitiate a nuptial agreement, this will normally be in cases where parties have a general idea of each other’s wealth, or where the less wealthy party is indifferent to the details of their future spouse’s wealth.

Here, King LJ found that the nuptial agreement had been vitiated as Mr. Entwistle had been “deliberately deprived of information which it had been agreed that he should have”. It was said that 73% of Ms. Helliwell’s wealth had not been disclosed, and as such, the prenuptial agreement “cannot stand”.

This judgment confirms the importance of full and frank disclosure when entering into a nuptial agreement, and furthermore, that a party’s material non-disclosure can vitiate an agreement and unravel a financial settlement.

We eagerly await updates on when this case will be heard again in the High Court for a new assessment of Mr. Entwistle’s needs.

Read the judgment in full here: Jenny Alzena Helliwell v Simon Graham Entwistle - Find Case Law - The National Archives

Vardags offers unparalleled expertise in prenuptial agreements for high-net-worth individuals. Following our landmark success in Radmacher v Granatino, we have set the standard for drafting and enforcing agreements that safeguard substantial assets and complex financial interests, both domestically and internationally.

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