Prenup: where are we now after the Court of Appeal’s decision in Radmacher v. Granatino 2009?

Radmacher v Granatino [2009] EWCA Civ 649

This was an Appeal by a wife (one of Germany’s richest woman said to be worth £100 million) against an award in ancillary relief proceedings where the couple, both born overseas, had signed a pre-nuptial agreement in Germany. The Appeal was allowed.

The parties were both foreign nationals, the wife German and the husband French, who had signed a pre-nuptial agreement valid under German law but then divorced in the UK. In the High Court, Justice Baron had awarded the husband £5.6m even though the pre-nuptial agreement had stated that neither party would seek maintenance from the other in the event of divorce. The wife therefore appealed.

Giving the lead judgment Lord Justice Thorpe allowed the wife’s appeal broadly on the grounds that Justice Baron had not given sufficient weight to the existence of agreement in her initial award, though still providing the husband with some housing and other funds to reflect the shared residence of the couple’s children. At paragraph 53 of the judgment he also made the following statement

“in future cases broadly in line with the present case on the facts, the judge should give due weight to the marital property regime into which the parties freely entered. This is not to apply foreign law, nor is it to give effect to a contract foreign to English tradition. It is, in my judgment, a legitimate exercise of the very wide discretion that is conferred on the judges to achieve fairness between the parties to the ancillary relief proceedings ”

The wife therefore secured victory in the Court of Appeal in enforcing a prenuptial agreement with her former husband. The court ruled that a prenuptial contract should be decisive when the courts divide a couple’s assets after a marriage fails. Until now, judges have regarded prenuptial agreements as “persuasive” but in future, courts will regard them as binding unless there are compelling reasons not to do so, for instance in the case of lack of legal advice, or a failure by one side to disclose his or her true assets. Lord Justice Thorpe brought England into line with European law. In Germany the contract agreed between the parties would have been accepted and enforced as it would have been in France.

However, the husband is expected to seek permission to take the case to the House of Lords for the issue of prenuptials to be reviewed by the Highest court in the land.