Radmacher (formerly Granatino) v Granatino

A court deciding financial relief on divorce retains its statutory discretion and cannot be deprived of jurisdiction by a nuptial agreement. It should nevertheless give effect to an ante-nuptial or post-nuptial agreement freely made by both parties with a full appreciation of its implications, unless prevailing circumstances make that unfair.

Fairness protects children's reasonable requirements and is most likely to justify departure where needs or compensation arise. Where both parties can meet their needs, autonomy and an agreement concerning non-matrimonial property may justify departure from ordinary sharing. Lack of legal advice or detailed disclosure is not automatically decisive. The question is whether a party lacked material information or understanding, or whether duress, fraud, misrepresentation, undue pressure or exploitation tainted the agreement.

The parties signed a German ante-nuptial agreement before marrying in London. It provided for separation of property and mutual waivers of maintenance, pension and succession claims. Following divorce, the husband sought financial relief despite the agreement.

Baron J awarded substantial housing and income provision: [2008] EWHC 1532 (Fam); [2009] 1 FCR 35. The Court of Appeal set aside much of that award and held that the agreement should receive decisive weight, while preserving provision connected with the husband's care of the children: [2009] EWCA Civ 649.

The central issue before the Supreme Court was the principles governing the weight to be given to an ante-nuptial agreement when exercising the statutory discretion to grant financial relief.

1. Disposition. The appeal was dismissed by a majority of eight to one. The joint judgment of Lord Phillips, Lord Hope, Lord Rodger, Lord Walker, Lord Brown, Lord Collins and Lord Kerr found no error of principle in the Court of Appeal's order. Lord Mance concurred in the result and substantially in the majority's test. Lady Hale dissented from the outcome.
2. Governing principle. The court's statutory jurisdiction cannot be ousted by agreement. A nuptial agreement remains one of the circumstances considered under section 25 of the Matrimonial Causes Act 1973. The court should give effect to an ante-nuptial or post-nuptial agreement freely entered into with a full appreciation of its implications, unless prevailing circumstances make it unfair to hold the parties to it. Contractual status does not determine the weight accorded in financial-relief proceedings.
3. Earlier authority. The majority approved the conclusion in MacLeod v MacLeod [2008] UKPC 64 that the old public-policy objection to agreements contemplating future separation was obsolete. It rejected the distinction drawn there between the contractual status of ante-nuptial and post-nuptial agreements and declined to adopt its change-of-circumstances or manifest-injustice approach as a general test.
4. Formation. Full weight requires free will and an informed appreciation of the agreement's implications. Duress, fraud or misrepresentation will negate its effect. Undue pressure or exploitation may reduce or eliminate its weight. Independent legal advice and disclosure are important safeguards, but their absence is not automatically decisive where the party understood the agreement, possessed all information material to the decision and intended it to govern the financial consequences of divorce.
5. Fairness. An agreement cannot prejudice the reasonable requirements of children. Needs and compensation are the strands most likely to make enforcement unfair, particularly where one spouse would otherwise face real need or has suffered economic disadvantage through caring for the family. Where both spouses can meet their needs, respect for autonomy may justify enforcing an agreement which modifies sharing. Agreements preserving non-matrimonial property may have strong objective justification.
6. Application. English law governed the financial-relief claim. The German choice-of-law clause was relevant because it demonstrated the parties' intention that their agreement should be effective. The husband understood the agreement, had an opportunity to obtain advice and showed no interest in further disclosure. His needs were adequately met through the provision associated with the children and payment of his debts. No compensation claim arose, and the wife's wealth was independently derived from her family. It was therefore fair to hold him to the agreement.
7. Dissent. Lady Hale considered that section 25 must remain the starting point without any presumption favouring enforcement. She would have preserved a home for the husband for life because married parenthood permits provision for needs extending beyond the children's minority.

• United Kingdom Supreme Court. The husband's appeal was dismissed by a majority: [2010] UKSC 42. The Court of Appeal's financial provision remained in place.
• Court of Appeal. The wife's appeal was allowed and Baron J's order was set aside in material part. Provision for the husband was confined principally to his role as a father. His cross-appeal concerning housing abroad was allowed and remitted: [2009] EWCA Civ 649.
• High Court, Family Division. Baron J awarded the husband capital and income provision while reducing the award to some degree because he had signed the ante-nuptial agreement: [2008] EWHC 1532 (Fam); [2009] 1 FCR 35.