Radmacher v Granatino – Initial thoughts on Decision of Supreme Court
28th October 2010Today the Supreme Court, the highest appellate court in the land, handed down its long-awaited decision in the case of Radmacher.
The decision has been awaited by family practitioners for some time, to see whether there is likely to be a significant shift in judicial emphasis towards giving pre-nuptial agreements binding weight in ancillary relief cases. Especially given that it appears this is something that Government, even the present hybrid incarnation, are reluctant to give statutory credit to.
The members of the Supreme Court voted overwhelmingly in majority (8 to 1) to dismiss the appeal of the husband, Mr. Granatino a French national, from the wife Ms. Radmacher (formerly Granatino) a German national. Ms. Radmacher who had successfully appealed to the Court of Appeal, following a first instance judgement in ancillary relief proceedings where the court reduced the decisive weight of to be given to the agreement, on the basis of the circumstances in which it was entered. The first instance decision had awarded the husband a sum in excess of £5.5m, which would afford him an annual income of £100,000. The purpose of the pre-nuptial agreement sought to preserve a significant amount of the wife’s assets, which she had held prior to entering the marriage. Upon the wife’s appeal, the Court of Appeal held that in this case, the agreement entered should be given far more decisive weight than attributed at first instance, and reduced the husband’s award significantly.
The question to be decided upon the husband’s appeal to the Supreme Court to overturn the Court of Appeal ruling was what weight should be given to such pre-nuptial agreements. It was decided that the issues which the court would have to address on such a question would be:-
- Did the parties enter the agreement voluntarily, without undue pressure and were clearly informed as to the agreements intentions. Is there a question of any material lack of disclosure, information or advice?
- Do foreign elements of the case enhance the weight that should be attached to such an agreement? For instance, what price the fact that the jurisdiction in which the agreement is made provides for such agreements to be binding, versus the them not being binding in the jurisdiction where the divorce is taking place.
- Did the circumstances prevailing at the time the court made its order make it fair or just to depart from the agreement?
The principle to be applied and it follows, the reason why the husband’s appeal to the Supreme Court was dismissed, is that a court should give effect to a nuptial agreement that is entered into by each party freely and without outside pressure. The court will also expect that the parties have a full appreciation of an agreement’s implications. It is important to note however, that a nuptial agreement cannot be allowed ‘to prejudice the reasonable requirements of any children of the family’. Meaning that fairness of the outcome of such an agreement will always be a considered factor of the court when taking into account what weight should be attached.
The Supreme Court members felt that the Court of Appeal were correct to rule that there were no mitigating factors which rendered it unfair to hold the husband to the terms of the nuptial agreement.
This decision therefore, seems to add a further judicial extension to the existing factors that a court already has regard to. Early commentary and consideration of this judgement seem to indicate that pre-nuptial agreements can have decisive or compelling weight now, provided the above considerations can be shown to have been met by the parties. It is important to note however, that what this decision does not do is confirm that pre-nuptial agreements will be completely binding upon the parties who enter into them.
The law in the area of marital agreements remains very confused and in need of symmetrical alignment, so that clear rather than hazy advice can be given to clients. The Law Commission has a project to examine the status an enforceability of such agreements, with a hope that detailed proposals for legislative reform can be provided to Parliament.
Please click on the link below to view the Supreme Court judgment.
http://www.supremecourt.gov.uk/docs/UKSC_2009_0031_ps.pdf
IBB Solicitor’s family team based in Chesham are highly experienced in advising on all forms of pre and post nuptial settlements for High Net Worth individuals.
If you would like to talk to us about the issues raised by this note, please contact:
Ian Davies Family and matrimonial solicitor
ian.davies@ibblaw.co.uk 01494 790038 ©IBB Solicitors 2010
