Rupert Murdoch’s wife hires new divorce lawyer
July 31, 2013 1 comment
Wendi Deng Murdoch had previously been represented by the same lawyer who advised her on the couple’s prenuptial agreement before their 1999 marriage. According to the Huffington Post, Mrs Murdoch has now turned to a specialist in trusts and estates – a move which raises the possibility of lengthy litigation, the site claims.
Murdoch, now 82, married the Chinese businesswoman in 1999 on board his yacht The Morning Glory, two years after meeting her at a company party. They had two children together – ~Grace and Chloe – eventually announcing their separation in June this year. Former Prime Minister Tony Blair is Grace’s godfather.
Murdoch’s second marriage, to journalist Anna Torv, resulted in three children but ended after 32 years. Their divorce is reported to have cost the Australian-born tycoon $1.7 billion, one of the most expensive in history.
News reports indicate that following the signing of the original prenuptial agreement, Murdoch and Deng subsequently signed two postnuptial agreements, but there is reportedly still some room for negotiation over various assets, which happen to include a yacht, and a penthouse apartment, as well as custody arrangements and child support payments for the couple’s two daughters to be fixed.
Full access of the Murdoch family trust for the two girls has also been a bone of contention between the couple, the Mail reports. The two girls were originally not in line for the same voting rights in the trust as Murdoch’s older children, but Deng is said to have negotiated more favourable terms.
So, if true, the Murdoch divorce may yet be set to turn into a full blown courtroom battle which could well involve the status and enforceability of three nuptial agreements that were presumably originally intended to put paid to arguments about a settlement if and whenever a divorce happened – although one could argue that the more negotiation that is done in advance about any divorce settlement, the more likely it is to happen.
That’s the irony of the situation – that with the best will in the world and the best negotiated documents painstakingly drafted, redrafted and redrafted again, there is still be no such thing as a done deal, until the deal is finally done.
So what would happen in England? No agreement has the force of law until it is incorporated into a court order on the application of both parties, or in the absence of agreement, by a judge. Furthermore, there is currently no statute law permitting automatic recognition of nuptial agreements, although that is expected to change when the Law Commission reports in the autumn. A new law could be thereafter be on the statute books as early as next year. Even so, I would expect that any new law will only be able to ring fence ‘non matrimonial’ assets such as gifted, inherited or pre owned property provided the other party’s needs have been met. The extent to which needs will also be defined by statute remains for now a closely guarded secret, but it must presumably be compatible with existing law which is not set to change. Rather the Government is expected to help unrepresented parties understand the law and how it is to be applied. Existing law still requires “reasonable needs” to be met within the context of the standard of living of the couple, as well as all the other factors set out in Section 25 of the Matrimonial Causes Act 1973. Defining “reasonable needs” are is far from easy, because every couple’s needs are different. A basic requirement includes housing and income.
For now, in relation to nuptial agreements, whether made before or after a marriage, family lawyers advise their clients on judicial interpretation of existing law. The starting point here was the hard-fought divorce of German heiress Katrin Radmacher and husband Nicholas Granatino. This case involved a challenge to a prenuptial agreement which would have been upheld in both their native countries – its was drafted in German, but left the French husband with nothing. The judge at the first hearing decided it was too draconian and awarded the husband £5 million to meet his reasonable needs as she assessed them. But the original agreement was thereafter upheld by the Court of Appeal and subsequently by a heavy weight majority of 8-1 in a Supreme Court ruling, which included both the President and Vice President. Lady Hale, the only family judge however offered a dissenting opinion. “It is for Parliament to make the law” she essentially argued, not the judiciary. She doesn’t seem to have been alone, since subsequent cases have followed this view.
Clients who wish to set down the terms of any future divorce settlement in a nuptial agreement are currently advised that these will be given “decisive weight” and are likely to be upheld, provided certain, arguably hazy, conditions are met:
*That both parties fully disclose the entirety of their finances.
*That the agreement is signed voluntarily.
*That it is signed a reasonable time before the wedding.
*That both parties have received legal advice and both lawyers confirm and sign the document for good measure.
*That it provides for each partner’s needs – the nearer to meeting “reasonable” needs, the better.
These agreements are often made to ensure total privacy, away from the public gaze. A party to the agreement may decide to challenge an agreement on divorce simply to try and force the other into paying far more.
Some of these agreements in other jurisdictions contain draconian penalties for the act of challenging them. There are no doubt some very interesting arguments to come about the legality and enforceability of those clauses. Legalising nuptial agreements in this country won’t do away with work for family lawyers – it will probably give them more!
However, no matter how hard the lawyers may try, there can still be no certainty for clients anywhere in the world, in absolute terms. The agreement may ultimately be upheld, tinkered with around the edges or potentially, simply ignored. The English court, is bound after all, to consider the circumstances of the family at the time of the divorce. Lawyers (and the law) do their best, lawyers even adding their own signatures to the document, but the judge is still the ultimate arbiter and interpreter of the law.
Precisely how things will be differ when and if the law changes is a moot point. But there are indicators in other jurisdictions. For those interested in more detail, I heartily recommend this book, by the brilliant academic and barrister Jens Scherpe.
What the Deng/Murdoch divorce seems to show is something practitioners in other jurisdictions where nuptial agreements are legal all know: even enshrined into law, there is no such thing as a cast iron agreement, and unless and until it comes before a judge you will never know for sure.
Desirable for us English folk or not?
Photo by Asia Society via Flickr under a Creative Commons licence