HUSBAND AND WIFE — Divorce — Ancillary relief — Lump sum award — Parties entering into ante-nuptial contract — Marriage subsequently breaking down — Judge awarding husband lump sum to meet his needs — Whether contract given sufficient weight in calculating settlement — Matrimonial Causes Act 1973, s 25 (as substituted by Matrimonial and Family Proceedings Act 1984, s 3)
Radmacher (formerly Granatino) v Granatino
[2009] EWCA Civ 649; [2009] WLR (D) 227
CA: Thorpe, Rix, Wilson LJJ: 2 July 2009
A judge should give due weight to the marital property regime into which a couple entered so as to legitimately exercise the very wide discretion conferred on judges to achieve fairness between the parties to ancillary relief proceedings.
The Court of Appeal so held when allowing the appeal by the wife, Katrin Radmacher (formerly Granatino) from the judgment of Baron J, sitting in the Family Division on 28 July 2008, by which the judge ordered her to pay the husband, Nicolas Joseph Jean Granatino, inter alia, a lump sum of £5,560,000 to meet his needs.
The judge found that at the time of the formation and execution of the ante-nuptial agreement: (a) the husband received no independent legal advice; (b) the agreement deprived the husband of all claims to the further permissible legal extent, even in a situation of want, and that was manifestly unfair; (c) there was no disclosure by the wife; (d) there were no negotiations; and (e) two children had been born during the marriage. In assessing the husband’s needs the judge found that she would take account of all of the circumstances of the case and that, while from an English perspective the agreement was flawed, the husband had understood the underlying premise that he was not entitled to anything if the parties divorced, and so his decision to enter the agreement must therefore affect the award.
Section 25 of the Matrimonial Causes Act 1973 provides: “(1) It shall be the duty of the court in deciding whether to exercise its powers … above … to have regard to all the circumstances of the case”.
THORPE LJ said that, contrary to Baroness Hale of Richmond’s views of the policy issues relating to ante-nuptial contracts in her speech in the judgment of the Privy Council in Macleod v Macleod [2009] 1 All ER 851, due respect for adult autonomy suggested that, subject to proper safeguards, a carefully fashioned contract should be available as an alternative to the stress, anxieties and expense of a submission to the width of the judicial discretion. That was because: (i) any provision that sought to oust the jurisdiction of the court would always be void but severable; (ii) any contract would be voidable if it breached proper safeguards or vitiated under general principles of the law of contract; and (iii) any contract would be subject to the review of a judge exercising his duty under s 25 of the Matrimonial Causes Act 1973 if asserted to be manifestly unfair to one of the contracting parties. Further reasons were: (i) in so far as the rule that such contracts were void survived, it seemed to be increasingly unrealistic and reflected the laws and morals of earlier generations. It did not sufficiently recognise the rights of autonomous adults to govern their future financial relationship by agreement in an age when marriage was not generally regarded as a sacrament and divorce was a statistical commonplace. (ii) As a society the United Kingdom should be seeking to reduce and not to maintain rules of law that divided it from the majority of the member states of Europe. (iii) Europe apart, the United Kingdom was in danger of isolation in the wider common law world if it did not give greater force and effect to ante-nuptial contracts. Despite the judge giving the appearance of considering the ante-nuptial agreement as a factor, the overall impression was of a negligible resulting discount. Her discretion was exercised sufficiently erroneously for some or all of the order to be set aside. A discount for the ante-nuptial agreement was logically achieved by limiting the enjoyment of the elements of the award to the years of the husband’s parenting responsibility for the two children. The major funds were to be provided for him in his role as father rather than as former husband.
RIX LJ and WILSON LJ gave concurring judgments.
Appearances: Richard Todd QC and Geoffrey Kingscote (instructed by Ayesha Vardag) for the wife; Nicholas Mostyn QC and Deepak Nagpal (instructed by Payne Hicks Beach) for the husband.
Reported by: Benjamin Urdang, barrister
