Pre-nups Rule

by Kidd Rapinet on August 12, 2009

The Court of Appeal decision in the divorce of Miss Radmacher and Mr Granatino is probably one of the most important cases relating to how the English Courts will now view pre-nuptial (or pre-marital) agreements.

While such agreements may not be the most romantic thing to organise before a wedding, along with the rings, bride’s dress, reception, wedding cake and honeymoon, Sandra Meakins, the Family Law Partner in the Farnham office of Kidd Rapinet has seen an increased interest in such agreements as couples prepare for their big day. Many more couples want to determine themselves what should happen with regard to their financial affairs in the event that the marriage fails. Sandra Meakins, the Family Law Partner at our Farnham office has seen a change in the way Courts regard these documents over the last 25 years since she has been a solicitor. She says, “Although pre-nuptial agreements are still not legally binding in England and Wales, they are in fact binding in many other countries, particularly in Europe”.

It was perhaps that European element that led the Court of Appeal to decide that they would take a different view to the Court below which originally decided to give Mr Granatino £5m. Miss Radmacher wanted Mr Granatino to sign the pre-nuptial agreement because she wanted to be sure that he was marrying her for love, and not her money. It was reported that her wealth amounted to about £100m. The document was in German and it provided for Mr Granatino to receive nothing if there was a divorce.

The Court of Appeal was satisfied that Mr Granatino knew what he was signing, that he knew broadly what the wealth of Miss Radmacher was, had chosen not to take independent legal advice and having signed the document in Germany, knew and believed the document to be binding under German law. The parties lived the majority of their married life in England and it was the English Court that was asked to grant the divorce and to consider the financial issues arising from the divorce.

However, in the end the Court of Appeal reduced his award from £5m to just over £1m instead of receiving maintenance and he also had the use of a £2.5m fund to provide a home for the children when they visited him, to be returned to Miss Radmacher when the children had grown up.

In the 1990s, the Courts had set out a number of safeguards that had to be in place to ensure that pre-nups were considered by the Court as a relevant factor. In this case Miss Radmacher and Mr Granatino did not adhere to all of the safeguards. However, the Court of Appeal did not consider this to be fatal. There was sufficient other evidence to show that both of them knew what they were signing and the effect of the document should there be a divorce. However if there are elements of duress or pressure then it may well be that the Court will not give such weight to such an agreement.

In giving judgment the Court of Appeal has signalled a change in the way the Court will now look at such documents. Although pre-nups are still not legally binding in England and Wales, the Court will give “due weight to the marital property regime into which the parties freely entered”. They have called for a change in the law, to recognise the fact that some couples want to specify what their financial division will be if there should be a divorce. This is particularly so as international barriers, particularly within Europe, come down, and where there are more and more couples entering into second marriages where they have accumulated assets previously.

Sandra Meakins, Family Law Partner in our Farnham office says, “Until there is legislation there is still going to be uncertainty about outcomes as the English Courts maintain their discretion in interpreting these documents in deciding how much weight to attach to them. However, it is clear from Radmacher that the onus of proving that the agreement should not be upheld is squarely on the party who wishes not to be bound by it. The view of the Court of Appeal which is trying to bring us into line with our European neighbours, many of whom regard such documents as legally binding, is likely to result in more enquiries about these documents as people want to provide some degree of certainty in the event of a relationship failing”.

Sandra Meakins is the Family Law Partner in our Farnham office – 17 South Street, Farnham. Tel: (01252) 713242.