Radmacher v Granatino Sub Nom NG V KR (pre-nuptial contract): SC (Lords Phillips (president), Hope (deputy president), Rodger, Walker, Brown, Mance, Collins, Kerr, Lady Hale): 20 October 2010
The appellant husband (H) appealed against a decision of the Court of Appeal ([2009] EWCA Civ 649 [2009] 2 FLR 1181 that an ante-nuptial agreement should be given decisive weight in the exercise of the court’s discretion under section 25 of the Matrimonial Causes Act 1973 on his application for ancillary relief.
H, a French national and W, a German national, had married in the UK. They had two children and separated after eight years. W had considerable family wealth and the parties had signed an ante-nuptial agreement in Germany, a significant payment from W’s family being dependent upon it. Under the agreement, which had a German-law clause, neither party was to benefit from the property of the other either during the marriage or on its termination. H did not take independent advice. At that time he had been a banker, but when the marriage broke down he had left banking to be a student. He applied for ancillary relief and was awarded a substantial sum, the judge attaching limited weight to the agreement because of the circumstances in which it had been signed. The Court of Appeal, however, held that the agreement should have been given decisive weight. The issues were: (i) whether the circumstances attending the making of the agreement detracted from the weight that should be accorded to it; (ii) whether the foreign element enhanced that weight; (iii) whether the circumstances prevailing at the time of the court’s order made it fair or just to depart from the agreement.
Held: (Lady Hale dissenting) (1) If an ante- or a post-nuptial agreement was to carry full weight, both parties had to have entered it of their own free will, without undue influence or pressure, and they had to have been informed of its implications. However, there were no black-and-white rules, and the issue was whether there had been any material lack of disclosure, information or advice. There was no need to accord the agreement reduced weight if it was clear that a party was aware of its implications and was indifferent to particulars of the other’s assets. What was important was that each party should have all the information material to his decision, and that each should intend the agreement to govern the financial consequences of the marriage coming to an end. Given that the courts had quite properly been giving weight, sometimes even decisive weight, to ante-nuptial agreements it would in future be natural to infer that parties who entered into an ante-nuptial agreement to which English law was likely to be applied intended that effect should be given to it. Even if the agreement did not have contractual force, duress, fraud or misrepresentation would negate its effect. Equally, unconscionable conduct such as undue pressure falling short of duress would be likely to eliminate the weight to be attached to the agreement. Unworthy conduct, such as exploitation of a dominant position to secure an unfair advantage, would reduce or eliminate it. The court could also take into account what pressures a party was under to agree. The parties’ circumstances at the time of the agreement would also be relevant and would include matters such as their age, maturity and whether either had been married before. Another important factor might be whether the marriage would have gone ahead without an agreement (see paragraphs 68-73 of the judgment).
(2) Where the agreement had been concluded in the past, foreign elements might bear on the question of whether or not the parties intended it to be effective. Given that in future, the question of whether the parties intended their agreement to take effect was unlikely to be in issue, foreign law would not need to be considered in relation to that question (paragraph 74).
(3) The court was to give effect to an ante- or post-nuptial agreement that was freely entered into by each party with a full appreciation of its implications unless it would not be fair to hold the parties to it. As to whether it would be unfair, an agreement could not be allowed to prejudice the reasonable requirements of any children, and respect should be accorded to individual autonomy and the parties’ desire to make specific provision for the disposal of their property. Where the agreement attempted to address future contingencies there was more scope for it to be unfair to hold the parties to it, and the longer the marriage lasted the more likely that would be. The parties were unlikely to have intended that it should result in one being left in real need while the other enjoyed a sufficiency or more and, equally, if the devotion of one partner to looking after the family and the home left the other free to accumulate wealth, it was likely to be unfair to hold them to an agreement that entitled the latter to retain all that he had earned. Where, however, each party was in a position to meet their own needs, fairness might well not require a departure from the agreement, White (Pamela) v White (Martin) [2001] 1 AC 596 HL and Miller v Miller [2006] UKHL 24, (2006) 2 AC 618 considered (paragraphs 75-83).
(4) It was fair that H should be held to the agreement. The circumstances in which it had been made were not so tainted that it should be given limited weight, his needs were not such that it would be unfair to hold him to it, and there was no compensation issue.
Appeal dismissed.
Nicholas Mostyn QC, Deepak Nagpal (instructed by Payne Hicks Beach) for the appellant; Richard Todd, Geoffrey Kingscote, Jonathan Harris (instructed by Farrer & Co) for the respondent.
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