Home > Family > England and Wales > 2010-10-20 - High Court of Justice, Radmacher (formerly Granatino) v (...)

2010-10-20 - High Court of Justice, Radmacher (formerly Granatino) v Granatino, [2010] UKSC 42

Family · England and Wales · Divorce

In case of divorce in UK, due weight should be given to the marital property regime, even if the pre-nuptial agreement was passed abroad

Key facts of the case - Just prior to their marriage, the parties had signed a pre-nuptial (or ante-nuptial) agreement in which they had mutually agreed not to make claims for maintenance against each other upon divorce under any circumstances. At the time of the marriage the husband (H), a French national, was employed by a bank in England and his earnings rose substantially after the marriage. The wife (W), a German national, had wanted both parties to enter into the agreement because she was independently wealthy, including having shares in two German family businesses. The pre-nuptial agreement was W’s father’s idea and a condition of his agreeing to the marriage. She engaged a notary in Germany to draft and execute the agreement. At the time of the agreement, the extent of her wealth was not revealed to H and, after the marriage, her father devolved further money to her. H subsequently took up a position as a researcher thereby experiencing a considerable drop in earnings. Two children were born during the marriage. The marriage eventually broke down.
In connection with ancillary relief proceedings, section 25 of the Matrimonial Causes Act 1973 provides: “(1) It shall be the duty of the court in deciding whether to exercise its powers … to have regard to all the circumstances of the case”. The High Court judge (Baron J) held that, under section 25, she was bound to consider all the circumstances of the case and that included the fact that the agreement would have been enforceable in both their countries of nationality (Germany and France). However, she also found the following facts to have been present: the husband received no independent legal advice; the agreement deprived the husband of all claims to the permissible legal extent, even in a situation of want, and that was manifestly unfair; there was no disclosure by the wife and no negotiations; and two children had been born during the marriage.
Taking those factors into account Baron J awarded a lump sum to H. The Court of Appeal unanimously reversed Baron J’s decision. The Court of Appeal held that although the judge had accepted that the contract should be treated with due weight, she had not given it the proper weight and H’s claims should have been accordingly reduced to reflect his housing and income costs as father, but not as husband.

Reasoning of the court - The Supreme Court by a majority of 7 to 2 agreed with the Court of Appeal’s reasoning. The Supreme Court welcome the doing away, by previous cases, of the objection to nuptial agreements (whether pre-nuptial or post-nuptial) on grounds of public policy which used to apply in English law preventing them being taken into account by a court.
If a nuptial agreement is to carry full weight, (a) the husband and wife must enter into it of their own free will, without undue influence and after being informed of its implications; (b) while legal advice and full disclosure of any owned assets is desirable it is not necessary to accord reduced weight to an agreement if both parties are aware of the legal implications and if either party is indifferent to the particulars of the owned assets; (c) the parties must intend that the agreement is effective and, although in the past they may have been advised that such agreements were void, in future it will be natural to infer that the parties to a pre-nuptial agreement to which English law is likely to be applied intend that effect should be given to it. Any standard vitiating factors including duress, fraud or misrepresentation, as well as any pressures upon a party to agree, emotional state, unworthy conduct, or exploitation of a dominant position, may affect the weight to be attached to the agreement. Other factors that could influence the weight to be given to an agreement would be whether the reasonable requirements of the children of the family are prejudiced, changes in circumstances occurring to an extent which could not be envisaged, or if a partner was left in a predicament of real need. In the facts of the case, the majority of the Supreme Court decided to uphold the unanimous view of the Court of Appeal i.e. that the husband should be held to the agreement subject to the needs of the children.

Comment - This judgment currently stands as a milestone in English law for the recognition of pre-nuptial (or ante-nuptial) contracts. In fact, the wording of the majority’s judgment is such that all nuptial agreements seem to be covered. The Supreme Court marks a clear departure from the previously applicable legal situation in that it signals that there will be an assumption, subject to all the vitiating factors outlined, that nuptial agreements will be binding. Legal advice from now will presumably have to be that such agreements are valid unless some overriding circumstances exist.
Both the Court of Appeal (unanimously) and the Supreme Court (by majority) also expressed the view that the construction given to nuptial agreement is done as a matter of English law and not foreign law. In the background is the English legal situation with respect to ancillary relief by which it is presumed that when an English court exercises jurisdiction and it is English law which applies. The Supreme Court noted that the British approach was different in this regard to most other European countries. While the UK has opted in to Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law and enforcement of decisions and cooperation in matters relating to maintenance obligations, the rules relating to applicable law do not apply in the United Kingdom. This is because the UK does not want to be obliged to apply foreign law as the applicable law given the low amount (in monetary terms) of claims and the disproportionate costs of proving the foreign law.
In the Court of Appeal’s judgment, particularly in the speech by Thorpe LJ, there are comments made in passing with respect to shari’a marriage contracts which give the impression that Muslim marriage contracts would be scrutinised carefully by English judges if they are ever given effect as a matter of domestic law. These comments are not repeated by the Supreme Court and no other specific consider is given to Muslim marriage contracts.
In the much earlier case of Shahnaz v Rizwan [1964] 3 W.L.R. 759 it was noted by Winn J (the judge) in relation to a Muslim marriage contracted in India that "As a matter of policy, I would incline to the view that, there being now so many Mohammedans resident in this country, it is better that the court should recognise in favour of women who have come here as a result of a Mohammedan marriage the right to obtain from their husband what was promised to them by enforcing the contract and payment of what was so promised, than that they should be bereft of those rights and receive no assistance from the English courts.

See the decision: Radmacher (formerly Granatino) (Respondent) v Granatino (Appellant), 20-10-2010.