The £4m prenup case: A banker, mistress and a court warning
A recent High Court decision over a banker and heiress’s multimillion-pound divorce is a reminder that prenups aren’t bulletproof, writes Joanna Farrands
A recent High Court decision serves as a crucial reminder that prenuptial agreements, while persuasive, have never offered concrete certainty in divorce proceedings.
The case in question concerns a City banker who drained thousands from a joint marital account to finance an affair and has lost approximately £4m despite having a prenup in place.
In a nutshell, while prenups can carry real weight in English law, they are not a free ride for financial misconduct during marriage.
The £4m prenup lesson
Ardal Loh-Gronager, a former Goldman Sachs banker, married Wei-Lyn Loh, described as an ‘enormously wealthy’ businesswoman and heiress, in 2019. Their prenuptial agreement entitled him to receive nearly £6.5m upon divorce. However, Mr Justice Cusworth slashed this payout by around £4m after finding that Loh-Gronager had systematically misused joint marital funds.
The judgment revealed that the husband made regular payments to his mistress, frequently disguising them as expenditure on ‘flowers’. He even transferred £1m on the day his wife was undergoing a therapy session before the end of their relationship. Perhaps most egregiously, he allowed his mistress to use a Bentley that his wife had given him before they married.
‘Financial cheating’ is a term which has been coined to explain the dishonesty in relationships when it comes to financial matters. In this case, using joint money without transparency, attempting to disguise payments and treating marital assets as personal spending accounts was punished by the courts. The judge found that Loh-Gronager had been “doctoring” emails to boost his claim and had begun taking amounts from the joint account almost as soon as it was set up, suggesting he had “throughout the marriage been preparing the ground for as lucrative a separation as he could contrive”.
Conduct still matters
More needs to be done around myth busting and prenups. This ruling alone epitomises that people cannot use such agreements to protect bad behaviour. It’s surprising just how many people believe that as long as the agreement is properly drafted and executed, their conduct during the marriage is irrelevant. This is absolutely not the case.
Prenups help manage risk and provide certainty about financial outcomes. However, English courts retain discretion to move away from prenuptial agreements where fairness demands it. Financial misconduct, lack of transparency and behaviour intended to disadvantage the other spouse can all justify significant departures from agreed terms.
With the current tax environment placing additional pressures on family wealth, I expect courts will place even more emphasis on conduct than before.
Ultimately, conduct still matters, disclosure is essential and fairness always has the final word. A prenup is a valuable tool for protecting wealth, but it cannot and will not shield financial misconduct. Those who treat it as a silver bullet for questionable behaviour do so at their peril.
Joanna Farrands is partner and head of family law at Moore Barlow