Radmacher v Granatino
Citations:  UKSC 42;  1 AC 534;  3 WLR 1367;  1 All ER 373;  2 FLR 1900;  3 FCR 583;  Fam Law 1263.
A couple entered into a pre-nuptial agreement a few months before they got married. This was for the wife’s benefit, as she came from a wealthy family. The husband was also quite well-off, but not to the same extent.
The agreement contained a choice of law clause stating that the effect of the marriage was subject to German law, and was binding under German law. It also stated that any statutory marriage regime was excluded, any rights to joint pensions or maintenance waived, and that each party would independently manage their assets. It did not make any provision for what would happen if the couple had children.
The couple had two children, born after the marriage. In 2006, they separated and the wife filed for divorce. The court awarded shared custody of the children: they would spend 2/3rds of the time with their mother and a 1/3rd with their father. The husband then claimed ancillary relief under the Matrimonial Causes Act 1973 for periodical payments and a lump sum from the wife.
The first instance judge granted him a considerable award, giving only minimal weight to the pre-nuptial agreement. This was because of several problems they perceived with the agreement, including:
- A lack of legal advice (though the husband had the opportunity to seek such advice and was told to obtain it);
- The fact that the husband did not know the full extent of the wife’s assets (though he knew she was very rich);
- There had been no negotiations: the wife’s family had determined the agreement’s terms;
- The agreement made no provision for any children of the marriage;
- The agreement made no provision for what would happen if the husband fell into need.
The wife appealed this order, arguing that the judge had not given the pre-nuptial agreement sufficient weight.
- What weight should the courts give a pre-nuptial agreement when deciding to award ancillary relief?
The House of Lords held in favour of the claimant. They noted that whether or not the agreement was a binding contract, the family courts are free not to follow it when granting ancillary relief under the Matrimonial Causes Act 1973.
However, the majority held that the first-instance judge was wrong to find that the circumstances of the pre-nuptial agreement were tainted. They were therefore wrong to afford the agreement so little weight. In particular:
- The husband understood the agreement and had the opportunity to seek advice;
- Precise knowledge as to his wife’s wealth would not have changed the husband’s willingness to enter into the agreement;
- The lack of negotiations merely reflected the fact that the form of the agreement was commonplace to wealthy parties like the couple.
- While the lack of provision for what would happen if the husband fell into need could be relevant in some cases, since the husband had not fallen into need it was of little relevance in this case.
The only substantive defect in the agreement was its failure to make provision for any children of the marriage. Accordingly, while the Lords did not think the agreement should be fully enforced, they granted it significantly more weight. The appropriate award was one which granted the husband relief in his capacity as a homemaker for his children only.
This Case is Authority For…
When granting ancillary relief after a divorce, the court is not obliged to give effect to pre- or post-nuptial agreements. This is true whether or not the agreement is a binding contract. This is because the parties cannot agree to oust the jurisdiction of the court.
The court must, however, give any such agreement appropriate weight when deciding the nature of ancillary relief. Factors relevant to the weight a nuptial agreement should be given include:
- Whether each party was full aware of the consequences of the agreement;
- Whether there was any element of duress, fraud, misrepresentation or unconscionable conduct involved in securing the agreement;
- The parties’ emotional states and any pressures they were under to agree;
- The parties age, experience, and past relationship history;
- The fairness of the agreement’s terms (assessed in light of the circumstances prevalent on the breakdown of the marriage);
- The need to support party autonomy;
- How the agreement treats inherited and matrimonial property, and whether it accounts for any future circumstances which emerged;
- The capacity of each party to meet their needs if the agreement were enforced;
- Whether the agreement prejudices the interests of any minor child of the family.
The fact that the agreement contains a foreign choice of law clause may be relevant, but only insofar as it indicates that the parties seriously intended to be legally bound by the agreement.
The majority indicated, obiter, that pre-nuptial agreements are no longer automatically void in contract law as contrary to public policy. The court thought that there is no difference in principle between pre- and post-nuptial agreements in this context.
Mance LJ was more cautious, and chose to express no view on whether pre-nuptial agreements are binding in contract law.
Lady Hale, by contrast, stated that pre-nuptial agreements should not be binding in contract law. She argued that there were significant dangers to spouses – particularly female ones – in enforcing such contracts. Any reform should, she noted, be decided by the democratic process and not a court comprised of (at the time) eight men and one woman.
Lady Hale also thought that the distinction between pre- and post-nuptial agreements was valid. This was because she agreed with the decision in MacLeod v MacLeod  UKPC 64 that post-nuptial agreements can be varied under ss.34-36 of the Matrimonial Causes Act 1973 if they are unfair, but not pre-nuptial agreements. The majority thought that ss.34-36 might apply to both kinds of agreement, and so could always be judicially varied if they were binding but unfair.
Mance LJ also thought that the majority’s reasoning came close to presuming that pre-nuptial agreements should shape the relief awarded unless there is a good reason for it not to. He cautioned against such an approach. Lady Hale agreed that the courts should not create any presumptions as to what ‘fair’ ancillary relief looks like.
Finally, Lady Hale noted that the parties’ conduct in the marriage could be a relevant factor. For example, it may be fair to give effect to a pre-nuptial agreement which granted the parties rights during the marriage and which the parties abided by. However, she was sceptical as to whether other kinds of marital conduct could be relevant. For example, she thought that the court should be reluctant to abide by an agreement which entitled a woman to a particular sum only if she ‘was a good housewife’.