Leaning one way

The ruling went eight to one in favour of Katrin Radmacher and gave substantial weight to the enforceability of pre-nuptial agreement in the courts.

But, in her dissenting judgment, Supreme Court Justice Hale, strongly criticised the ruling, arguing that the rule of law on pre-nuptial agreements should be decided by the Government in partnership with the Law Commission rather than by men in wigs.

The decision gave victory to 1 Hare Court’s Richard Todd QC, who was instructed by Ayesha Vardag of Ayesha Vardag Solicitors and later Farrer & Co partner Simon Bruce, to represent the German heiress Radmacher in her battle with her ex-husband Nicholas Granatino.

Before they were married the pair signed a pre-nuptial agreement stating that neither would make a claim to the other’s fortune were they to split.

The agreement was signed in Germany, where it was legally binding, but Granatino instructed Payne Hicks Beach partner Fiona Shackleton to challenges its enforceability through the English Courts. Shackleton instructed 1 Hare Court’s Nicholas Mostyn QC to represent Granatino. The pair also represented Paul McCartney in his divorce from Heather Mills.

An earlier High Court decision went in Granatino’s favour, granting him £5.5m of his wife’s fortune, an award that would afford him an annual income of £100,000 for life and to buy a home in London.

The Court of Appeal cut that award down and ruled that the husband should only be granted funding for his role as the father of their two children and not for his own long-term needs.

Today that decision was upheld, meaning that in this particular instance the agreement is binding because it was freely entered into by both parties. This does not mean that pre-nuptial agreements will be binding in every case, though.

Instead the decision gives additional weight to the contract and gives guidance to the court on what tests need to be applied when considering its enforceability.

Family lawyers, who have long lobbied for reform of family law, broadly welcomed the decision, but Schillings partner Rachel Atkins warned it could have some drawbacks for divorcing women.

Atkins said the judgment means that couples will be able to decide on the allocation of finances should they divorce prior to getting married. However, she added: “There’s potential for the financially weaker party, often the wife, getting a raw deal as they may have made a real contribution to the family finances but under the marriage contract agreed not to receive any part of it. 

“Was it right therefore, that the panel of the Supreme Court be made up of eight men and one woman?”

This is a point that Hale SCJ picks up on in her ruling. She states: “Above all, perhaps, the court hearing a particular case can all too easily lose sight of the fact that, unlike a separation agreement, the object of an ante-nuptial agreement is to deny the economically weaker spouse the provision to which she – it is usually although by no means invariably she – would otherwise be entitled.

She continues: “In short, there’s a gender dimension to the issue which some may think ill-suited to decision by a court consisting of eight men and one woman.”

It would be wrong to say that Hale was swayed in her decision because she is a woman, as she is the most experienced family judge within the Supreme Court. Hale was the first woman to be appointed to the Law Commission in 1984 and while there she worked on the Children Act 1989 and the Family Law Act 1996. She joined the Family Court division of the High Court in 1994 and stayed there for five years before joining the Court of Appeal.

She argues that reform of family law falls under the duties of the Government rather than the courts and says it should await the outcome of a paper by the Law Commission on this area. Hale is clearly a fan of the status quo, but she is also a fan of sensible reform that is properly consulted on.

After all, as she points out: “Marriage still counts for something in the law of this country and long may it continue to do so.”