With This Pre-Nup I Thee Wed

The long awaited Supreme Court decision in the case of Radmacher v Granatino was handed down on 20 October 2010 and clarifies the approach the English family court should take to pre-nuptial and post-nuptial agreements. By a majority of 8 to 1 the Supreme Court effectively held a husband to a German-style marriage contract he had signed prior to his marriage at the insistence of his wife's wealthy family. That agreement essentially barred Mr Granatino from making any financial claims on divorce and would have been binding on the parties in Germany (where the wife was from) and in France (where the husband was from).

After an eight year marriage with two children, the parties separated. Despite the terms of the marriage contract, Mr Granatino brought financial claims during the divorce process, seeking an order against his wife for housing and an income fund for his ongoing support. He had been an investment banker during the marriage, but at the time of the divorce was studying for a post-graduate degree at Oxford University. The wife owned shares in a family company and her total assets (which she had received from her family) amounted to around £100m. The High Court awarded the husband £5.5m. On appeal by the wife, the Court of Appeal found that the husband was a 'man of the world' and that despite the fact there had been no financial disclosure or independent legal advice, or indeed a translation of the documents from German, the Court held that the husband knew the effect of what he was signing. The husband received £2.2m by way of a housing fund on loan until the youngest child reached the age of 22 together with a capitalised fund for child maintenance to enable him to support the children when they were with him.

Decision

The Supreme Court dismissed Mr Granatino's appeal and upheld the decision of the Court of Appeal, effectively holding him to the terms of the agreement he had signed, subject to some financial provision being made to enable him to satisfy his responsibilities as a father.

The majority Judgment in the Supreme Court declared that the divorce court should 'give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement'. The criteria for 'fairness' would be assessed on a case-by-case basis. The Supreme Court removed the distinction between pre-nuptial and...