Pre-nuptial agreements have force in English law as long as they are “fair”, say Supreme Court
20 October 2010
Radmacher (formerly Granatino) (Respondent) v Granatino (Appellant) [2010] UKSC 42 On appeal from the Court of Appeal [2009] EWCA Civ 649 – Read judgment / press summary
The Supreme Court has ruled by an 8-1 majority (Lady Hale dissenting) that a court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless, in the circumstances prevailing, it would not be fair to hold the parties to their agreement.
The court robustly dismissed Mr Granatino’s appeal against a Court of Appeal decision to enforce his pre-nuptial agreement with Ms Radmacher. The agreement provided that if they were to separate, he would receive none of her considerable independent wealth.
The basic principle arising the decision is that courts will enforce pre-nuptial agreements unless there are factors which render it “unfair” to hold a party to that agreement. Clearly what amounts to unfairness is a wide question and could include many factors, but the Supreme Court has also provided guidance as to how to answer it. It would seem that if the parties freely and knowingly entered into an agreement, and it does not prejudice the reasonable requirements of children and family, then it will probably be enforceable.
Those looking for a clear statement that pre-nuptial agreements are akin to contracts in English law will be disappointed. The decision will be seen as a further step in the road towards such agreements becoming straightforwardly enforceable, which has been the direction the courts have taken in recent years. At present, however, courts will still maintain a wide discretion as to whether agreements are enforceable, and it would probably take new legislation to change this.
Lady Hale was the only dissenter. She stated that modern marriage still possesses an irreducible minimum, which includes a couple’s mutual duty to support one another and their children. The issue in this case was how far individuals should be free to rewrite that essential feature of the marital relationship as they chose. She expressed concern that the facts of this particular case obscure the fact that the object of an ante-nuptial agreement is to deny the economically weaker spouse (usually the wife) the provision to which she would otherwise be entitled, and argued that Parliament should step in to protect such vulnerable parties.
Even if Lady Hale’s concerns are valid, the fairness requirement probably provides enough wriggle-room for future courts to address them.
Our case comment is to follow. In the meantime, the official Supreme Court press summary is here.
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It is very interesting to read this blog regarding the Radmacher decision. Recent decisions in the UK and Hong Kong have shown more weight put upon prenuptial agreements signed previous to international marriages, though it is too early to tell if this will be a global legal trend. Lady Hale’s dissenting opinion that emphasizes the economics of a prenuptial agreement, is extremely significant in countries where there tends to be a large wealth gap between spouses. Thailand is an example of such countries. Though there are exceptions, the international marriages in Thailand usually involve a more financially stable Western man marrying a less financially well-off Thai woman. Prenuptial agreements in Thailand don’t usually carry a lot of weight, but if the agreement is appealed in a country other than Thailand, either spouse could find that the agreement is worth more or less than they bargained for. I think that prenuptial agreements should be signed with extreme care. Couples should actually agree on the conditions in the prenup with the worst-case scenarios in mind. A prenup is a legal document and could be either upheld or allowed on an appeals court’s docket. Couples in international marriages should ask their attorneys about what might happen to their prenup if the agreement is considered in a different jurisdiction. Couples should be encouraged to do research regarding the attorney who drafts their prenuptial agreement and how much weight it will carry in various courts.