#1808 - Radmacher V Granatino - Family Law

Radmacher v Granatino [2010] UKSC 42

Supreme Court

Facts

W and H got married in a foreign country, but before doing so signed a pre nuptial agreement. It stated that should they separate, H would not claim anything from W’s vast wealth. During their marriage, H gave up his wealthy career and pursued a DPhil in Oxford. When they separated, H claimed ancillary relief.

Held Lord Phillips

• The parties cannot by agreement oust the jurisidiction of the court – s.34 any agreement that does this is void

  • But it must give appropriate weight to such an agreement.

• A court when considering the grant of ancillary relief is not obliged to give effect to nuptial agreements – whether they are ante-nuptial or post-nuptial.

  • The parties cannot, by agreement, oust the jurisdiction of the court.

    • The court must, however, give appropriate weight to such an agreement

• We wholeheartedly endorse the conclusion of the Board in Maclean v M that the old rule that agreements providing for future separation are contrary to public policy is obsolete and should be swept away

  • But this should not be restricted to post- nuptial agreements. If parties who have made such an agreement, whether ante- nuptial or post-nuptial, then decide to live apart, we can see no reason why they should not be entitled to enforce their agreement

• Is there a material distinction between ante-nuptial and post-nuptial agreements? Wilson LJ was not persuaded that there is (paras 125-126) and nor are we

  • In Maclean, the Board stated that there is an enormous difference in principle and in practice between an agreement providing for a present state of affairs which has developed between a married couple

    • and an agreement made before the parties have committed themselves to the rights and responsibilities of the married state purporting to govern what may happen in an uncertain and unhoped for future.

  • This is true, but does not apply fully to a post-nuptial agreement entered into at the start of married life, for that also purports to govern what may happen in an uncertain and unhoped for future

  • They also focused on duress

    • But duress can be applied both before and after the marriage. The same principle applies in either case. In either case the duress will lead to the agreement carrying no, or less, weight

      • It is true that the circumstances surrounding the agreement may be very different dependent on the stage of the couple's life together at which it is concluded,

        • but it is not right to proceed on the premise that there will always be a significant difference between an ante- and a post-nuptial agreement.

          • Some couples do not get married until they have lived together and had children

  • Whether they have contractual status is a red herring - regardless of whether one or both are contracts,

    • the ancillary relief court should apply the same principles when considering ante-nuptial agreements as it applies to post-nuptial agreements

• The test should be:

  • The 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

• If an ante-nuptial agreement, or indeed a post-nuptial agreement, is to carry full weight, both the husband and wife must enter into it of their own free will, without undue influence or pressure, and informed of its implications

  • Black and white rules are necessary if they are to be binding, but there’s no need for this in the current state of the law

    • The parties need not know absolutely all of the information or have consulted a solicitor

      • What is important is that each party should have all the information that is material to his or her decision,

      • and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end

• As to the circumstances of its creation:

  • The first question will be whether any of the standard vitiating factors: duress, fraud or misrepresentation, is present.

    • Even if the agreement does not have contractual force, those factors will negate any effect the agreement might otherwise have. Unconscionable conduct such as undue pressure (falling short of duress) will also be likely to eliminate the weight to be attached to the agreement,

      • and other unworthy conduct, such as exploitation of a dominant position to secure an unfair advantage, would reduce or eliminate it

  • Secondly, the court must take into account the parties’ emotional states and their ages and experience of long term relationships or marriage

    • Another important factor may be whether the marriage would have gone ahead without an agreement, or without the terms which had been agreed. This may cut either way

    • If the terms of the agreement are unfair from the start, this will reduce its weight, although this question will be subsumed in practice in the question of whether the agreement operates unfairly having regard to the circumstances prevailing at the time of the breakdown of the marriage

  • Thirdly, the agreement must be fair

    • We can’t lay down hard and fast rules, but here is some guidance

      • First consideration goes to children under s.25 – a nuptial agreement cannot prejudice their reasonable requirements

      • Secondly, courts should accord respect to the decision of a married couple as to the manner in which their financial affairs should be regulated.

      • With non-matrionial property, which the agreement may be for its disposal, there is nothing inherently unfair in such an agreement and there may be good objective justification for it, such as obligations towards existing family members

      • Needs and compensation are the most likely to lead to the inference that holding the parties to the agreement would be unfair

        • The parties are unlikely to have intended that their ante-nuptial agreement should result, in the event of the marriage breaking up, in one partner being left in a predicament of real need

        • Where, however, these considerations do not apply and each party is in a position to meet his or her needs,

          • fairness may well not require a departure from their agreement as to the regulation of their financial affairs in the circumstances that have come to pass.

          • Thus it is in relation to the third strand, sharing,

            • that the court will be most likely to make an order in the terms of the nuptial agreement in place of the order that it would otherwise have made

• Upon divorce, when a party is seeking quantification of a claim for financial relief, it is the court that determines the result after applying the Act. The court grants the award and formulates the order with the parties' agreement being but one factor in the process and perhaps, in the right case, it being the most compelling factor

Baroness Hale

• Marriage is, of course, a contract, in the sense that each party must agree to enter into it and once entered both are bound by its legal consequences.

  • But it is also a status.

  • This means two things.

    • First, the parties are not entirely free to determine all its legal consequences for themselves.

    • Secondly, their marriage also has legal consequences for other people and for the state.

  • Nowadays there is considerable freedom and flexibility within the marital package but there is an irreducible minimum.

    • This includes a couple's mutual duty to support one another and their children.

    • The question for us is how far individual couples should be free to re-write that essential feature of the marital relationship as they choose.

• there is much within the majority judgment with which I agree, there are some points upon which I disagree. Specifically

  • (1) I disagree with the view, mercifully obiter to the decision in this case, that ante-nuptial agreements are legally enforceable contracts.

    • [Ferguson: but did they say this? Maybe “full weight” = actual intention, unless countervailing considerations]

  • (2)...