The Supreme Court have finally pronounced their judgement in the long standing case of Radmacher v Gratiano.
Most people will be familiar will the facts of this case as it has been dragged through the tabloids on so many occasions.
Briefly, this was an eight year marriage between a French husband and a German wife. The wife had inherited wealth of £50M and an income of £2M from family companies. At the time the parties married the husband was a banker. They entered into an agreement which was common in Germany and France which provided for a strict separation of assets. They then moved to England and spent most of their marriage in the UK. The husband decided that he no longer wished to be a banker but wished to study at Oxford for a Biotechnology degree. The couple had two children.
The marriage broke down and the husband applied to the court for relief and the lower court awarded him £5M outright with the generous use of a property in Germany. The wife appealed and the Court of Appeal overturned the award and held that a party could rely on a prenuptial agreement as a factor within section 25 of the Matrimonial Causes Act 1973. This act governs the factors that the court will address when deciding a case. The husband’s award was reduced. The wife appealed to the Supreme Court.
The law governing prenuptial agreements has been uncertain and it was hoped that this landmark case might simplify matters. The court did uphold the agreement but does this mean that prenuptial agreements are enforceable? I am afraid not – the case turned on its facts.
The nine justices decided the case by reference to three main issues. The first issue was the circumstances in which the agreement was made. It was made voluntarily and without any pressure. Secondly, the foreign elements that attached to the case were important. Such an agreement would be enforceable in Germany and the parties intended it to be enforceable. The final element was the question of fairness. It was felt that the husbands could cater for his needs and compensation was not a factor. He chose to give up a lucrative career in the City and on marriage he agreed not to partake of his wife’s considerable wealth so in the circumstances it was felt to be fair and upheld.
So what advice can we provide in relation to these prenuptial agreements? Well what is clear from the case is that we cannot oust the jurisdiction of the court but an agreement properly drawn up which meets the criteria of fairness in the circumstances can have a significant effect on a case.
Such an agreement will be a factor that the court will consider. It is important that both parties receive separate legal advice and there is full and frank disclosure of all assets. Furthermore, there must be no duress and there must be a reasonable period between the signing of the agreement and the wedding. Naturally, the parties must intend the agreement to have legal effect and it must be fair.
In conclusion, it seems that this is a matter for Parliament and whether they wish to fall in line with the rest of Europe or whether we are to remain subject to court jurisdiction rather than contractual status being accorded to such agreements. The British approach has led to great uncertainty and it is for this reason that there have been calls for reform. In essence, the position remains unchanged.