The case of Radmacher v Granatino - Essay Example

The case of Radmacher v Granatino UKSC 42 was a welcome development in the area of financial relief on divorce I. Introduction The case of Radmacher v Granatino has drawn much attention because the High Court will be finally deciding how much weight it would place on the pre/ante-nuptial agreement in the area of financial relief during divorce. Pre-nuptial or ante-nuptial arrangement is typically sought by rich families, as in the case of Radmacher formerly Granatino v Granatino, to protect and preserve the assets of the wealthy party from a claim during divorce. The terms are typically spelled out on how their assets be divided or waiver of claim through a written agreement1. Pre-nuptial or ante nuptial however is traditionally viewed by English law as non-binding because it is contrary to public policy. English Courts however have discretion to how to treat ante-nuptial agreements, on what weight should be placed on them and has the power to veer away from what was agreed on the ante-nuptial arrangement. This is especially so when there are children borne out of a long marriage. There are also other circumstances when the Courts could reinterpret or set aside the ante-nuptial agreement from its original arrangement in cases where there is an indication of duress on the weaker party to agree, may cause unfairness to one party, non full disclosure of assets, or where the parties involved was not able to get independent counsel on the various implications of the ante-nuptial arrangement before entering into the agreement2. Such, the case of Radmacher v Granatino can be considered a landmark case because the court had shown its willingness to attach decisive weight on the terms of an ante-nuptial agreement which has been traditionally viewed as non-binding by English Courts. II. Background to the appeal The appeal concerns about how to deal with the assets of a couple in the event of dissolution of marriage and whether to give weight to the ante-nuptial arrangement made by the appellant and respondent before the marriage3. The appellant and respondent signed an ante-nuptial agreement under the German Law at the instigation of the wife whom she expects further inheritance will be transferred to her if an ante-nuptial agreement will be forged. The husband was a French national and the wife is a German national. The ante-nuptial agreement was signed three months before the marriage under German jurisdiction and specified that each party will keep their assets and that the other party will make no claim against the assets of the other in the event of a divorce. The wife had considerable wealth and inheritance before the marriage while the husband was a banker at the time the agreement was signed. The husband did not have an independent counsel about the implication of the ante-nuptial agreement. The agreement also contained no provision in the event that their marriage will have children. They were married in London in 1998. After eight years of marriage, the appellant and the respondent separated. Their marriage produced two daughters. During the dissolution of their marriage, the husband embarked on a research studies and had left his job as a banker and applied to the court for financial relief. The High Court then decided to grant him over ?5.5m which would enable him to have an annual income of ?100,000 for life. He was allowed to have a home in England so that his children could visit him. The wife appealed to the Court of Appeals where it was decided in favour of her to give weight to the ante-nuptial agreement where the financial relief should only be limited on the provision of him being a father and not for his own need. The husband then appealed to the Supreme Court. Decision Traditionally, English Courts do not put considerable weight to agreements between individuals who were getting married or already married4 (post-nuptial agreement) that specifies the contingency or terms of their separation on the grounds that this may encourage them to separate5. Such, ante-nuptial agreements had been traditionally considered as non-binding by English Courts it being contrary to public policy. After 1957, there has been an increasing emphasis placed on ante-nuptial and post-nuptial agreements. The Courts however still has the right to overrule the terms of these agreements6. In the case of Radmacher (formerly Granatino) (Respondent) v Granatino (Appellant), the Court is pressed on how to weight the ante-nuptial agreement between the two parties. The High Court ruled to deny the petition of the appellant 8 to 1. The reason cited for upholding the decision of the Court of Appeals was that it will not be unfair to hold the husband to the agreement and the marriage did not entitle him to the wealth of his wife which was acquired outside and prior to their marriage. The generous provision for the needs of their two daughters until the younger one turns 22, will also indirectly address his needs in addition to the fact that the husband himself is very capable of taking care of himself. Lady Hale dissent the decision of the majority for the reason that the Court of Appeals was wrong in its decision to treat the parties as if they merely cohabited and had never married. In her opinion, marriage possesses an irreducible minimum which includes mutual support to each other and their children. It was recognized that the English law on marital agreement is in a mess and needs to be reviewed and reformed. The draft of the proposal is expected to be finished in 2012 for the Parliament to consider for legislative reform. III. Radmacher v Granatino [2010] UKSC 42 was a welcome development in the area of financial relief on divorce It is quite unusual that for a mature society such as United Kingdom, it still adopts a family law that lags behind other countries such as Australia, New Zealand, Canada and Scotland7 . Perhaps this is due to the importance placed by English society on the sanctity of marriage that any contract between two parties that would encourage the dissolution of marriage would be considered as contrary to public policy. It views ante-nuptial agreements that puts a contingency on the terms of how assets should be divided in case of marriage dissolution as an encouragement and thus sets it aside as non-binding. Thus, even if an agreement has been reached between husband and wife that puts contingency on the dissolution of their marriage, it still does not oust the jurisdiction of the court. This leaves the Courts with a wider discretion to overrule and supersede the contents of such agreement subject to the application of a test of fairness and unfairness. Such, the decision on Radmacher v Granatino [2010] UKSC 42 becomes a subject of interest on ante-nuptial agreement because it created an opportunity of a judicial clarification at the highest level. The decision will provide an answer to the debate on what constitutes a fair ante-nuptial agreement. The decision however is not a license to the Supreme Court to change the law as they could not hold their own discretion pursuant to section 25 of the Matrimonial Causes Act 19738. Nevertheless, the decision was a welcome development in the area of financial relief on divorce because it is reflective of the wide dissatisfaction with the current law9. The drafting of the proposal that is expected to be finished in 2012 for the Parliament to consider for legislative reform is also a welcome relief that would make the mechanism of ante-nuptial agreement clear. The initiative for a legislative reform of the laws that govern the ante-nuptial agreement has long been overdue. The rationale and principles that animate the current law about ante-nuptial especially with regard to financial relief during divorce is no longer reflective of the realities of UK’s present society. While the intentions of the present law are noble, its assumptions on the configuration of the matrimonial relationship between man and wife are already antiquated. Take for example its classic view about the domestic relationship of a husband and wife and the role they perform in the family; The husband may be in the stronger position financially but the wife may be in the stronger position in relation to the children and to the home in which they live. One may care more about getting or preserving as much money as possible, while the other may care more about the living arrangements for the children. One may want to get out of the relationship as quickly as possible, while the other may be in no hurry to separate or divorce10. This assumption about the role of a man and a wife may have been true during the olden days where the wife is dependent to the husband but this is no longer the case in modern marriages. As in the case of Radmacher v Granatino [2010] UKSC 42, it was the wife who had a considerable wealth over the man. While the source of her wealth was from inheritance, the majority of the women now has a career of their own and is self-sufficient with considerable number of them who are even more economically successful than the husband. It being the case, with both parties no longer economically vulnerable, the necessity of a financial relief that led to the current law to traditionally view ante-nuptial agreement as non-binding so that the weaker party may enjoy financial relief from the separation is no longer applicable. The view also that ante-nuptial agreement encourages the dissolution of marriage that it has to be removed for the marriage to be sustainable is already passe. It is already a given that it is not ante-nuptial agreements that precipitate the end of marriage but rather other reasons which are far from ante-nuptial agreements11. Studies have shown that dysfunctional marriages are the most common reason why couple divorces and ante-nuptial agreements have nothing to do with it12. Jacobson et al (1996) also revealed that physical, emotional and psychological batteries are the surest pathway towards divorce13 and this has again nothing to do with ante-nuptial agreements. Marriage is a private affair between individuals who enter into a union of matrimony to be with the person they would like to be out of love and perhaps compatibility and convenience14. While the state has an interest for it to work as it contributes to the stability of the most basic unit of society which is family, it cannot assume jurisdiction on how the couple would write the terms of their marriage on how to protect their assets in case marriage will fail. Given the current configuration of English society, the absence or non-recognition of ante-nuptial agreements disadvantages the party which has considerable asset as what the case of Radmacher v Granatino [2010] UKSC 42 has shown us where an economically able husband still seeks financial relief after divorce knowing that the wife is wealthy. True, non-recognition of ante-nuptial agreements often protects the weaker party in the traditional society marriage where a woman is dependent to a husband but this assumption is no longer correct today because most couples are now financially capable to help themselves. Fairness implies that it should be applied to both party and that includes the party who has the considerable resources from the unjust demand of the party who has less such as the case of Radmacher v Granatino15. IV. Conclusion Everybody wants a marriage to work. It is the precursor of the most basic unit of society which is family whose stability depends largely on the institution of marriage. But in as much as we would like marriages to be work, some marriages fail. A working marriage cannot be legislated by removing the enforceability of the agreement that provides the contingency for its failure such as the arrangement of how properties will be divided and how to treat financial relief during the dissolution of marriage. Ante-nuptial agreement may be unromantic but it is important during a financial dispute on divorce16. The decision on Radmacher v Granatino is a welcome development in the area of financial relief on divorce because it made the position of the Highest Court with regard to ante-nuptial clear. It does not mean however that all prenuptial agreements with regard to financial relief will be automatically recognized because the operating law with regard to ante-nuptial agreements is still unclear. The Supreme Court decision however has some positive implications in the area of financial relief during divorce. First is the legal certainty that courts are now more receptive of ante-nuptial agreements in case of a marriage breakdown. While this does not categorically mean that all ante-nuptial agreements will be automatically recognised by the Courts, the decision provided a certain degree of legal certainty of recognition of the ante-nuptial agreement if the element of fairness is present in the agreement. Second, the decision is a welcome development in the area of financial relief on divorce in terms of reducing litigation costs17. Since the precedence has already been established that Courts are now more predisposed to giving significant weight to ante-nuptial agreements, future ante-nuptial agreements will become less complicated and less contentious hence reducing the legal costs attached to the litigation of financial relief. Lastly, making pre-nuptial agreements binding would put the UK in line with other jurisdictions18. This has been one of the major causes of the complication of the case because UK law did not recognize the ante-nuptial agreement which was enforceable in the jurisdiction (Germany) where the Radmacher v Granatino ante-nuptial agreement was executed. Finally, the case prompted the review for legislative reform of the family law in the UK with regard to financial relief during divorce to make the criteria of what makes a binding ante-nuptial agreement more clear and definitive. . References Barton, Chris; Hibbs, Mary, “Ancillary Financial Relief and Fat Cat(tle) Divorce”, Modern Law Review, Vol. 65 Issue 1, Jan2002, pg.79. Gottman, J. M., Coan, J., Carrere, S., & Swanson C., “Predicting marital happiness and stability from newlywed interactions”, Journal of Marriage and the Family, Vol. 60, 1998, pg. 5-22. Hayward, Andrew, “The Gender Dimension of Prenuptial Agreements: Radmacher v Granatino [2010]”, 02 November 2010, http://inherentlyhuman.wordpress.com/2010/11/02/the-gender-dimension-of-prenuptial-agreements/ [accessed 05 February] Hill, C. T., & Peplau, L. A., “Premarital predictors of relationship outcomes: A 15-year follow-up of the Boston Couples Study. In T. N. Bradbury (Ed.)”, The developmental course of marital dysfunction, New York: Cambridge University Press, 1998, pg. 237-278. Horne, Suzie, “An agreement that could cut stress?” Farmers Weekly, 00148474, 7/5/2002, Vol. 137, Issue 1. Available at http://ehis.ebscohost.com/eds/detail?sid=4e29c7a1-5bf2-4a31-98a9-ae74cf6d4a8d%40sessionmgr104&vid=1&hid=121&bdata=JnNpdGU9ZWRzLWxpdmU%3d#db=f5h&AN=7140936 [Accessed 04 February 2012). Jacobson, N. S., Gottman, J. M., Gortner, E., Berns, S., & Shortt, J. W. “Psychological factors in the longitudinal course of battering: When do the couples split up? When does the abuse decrease?” Violence and Victims, Vol. 11, 1996, 371-392. Kentridge, Janet, “Case Comment” Radmacher (formerly Granatino) v Granatino [2010] UKSC 42. http://ukscblog.com/case-comment-radmacher-formerly-granatino-v-granatino-2010-uksc-42 [Accessed 04 February 2012. Kingston, Suzanne, “With None of My Worldly Goods”, Accountancy, Vol. 144 Issue 1392, Aug2009, p54-55. Narain, Jaya, “Are Legally Binding Pre-Nups on the Way?”, Daily Mail, 03077578. Perkins, Lauren, “The Importance pf Radmacher v Granatino, 29, November 2011, http://thestudentlawyer.com/2011/11/29/the-importance-of-radmacher-v-granatino/ [Accessed 05 February 2012] Rashid Razaq, “I'll be bankrupt if you back pre-nups, husband tells judges”. Evening Standard, 14725223, 3/22/2010. Available at http://ehis.ebscohost.com/eds/detail?sid=73d9563f-7c68-4850-b5d3-d694ba655a04%40sessionmgr114&vid=1&hid=124&bdata=JnNpdGU9ZWRzLWxpdmU%3d#db=bwh&AN=48681177 [Accessed 04 February 2012] Richard E. Heyman and Amy M. Smith Slep, “The Hazards of Predicting Divorce without Crossvalidation”, Journal of Marriage and Family, Vol. 63, No. 2 (May, 2001), pp. 473-479. The Supreme Court of the United Kingdom, Radmacher v Granatino [2010] UKSC 42, http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2009_0031_Judgment.pdf [Accessed 03 February 2012] Thomson, Sharon, “Cases: Racmacher (formerly Granatino) v Granatino [2010] UKSC 42”. Journal of Social Welfare and Family Law. Vol. 33, No. 1, 2011, pg. 61-70 Turner, James, “Radmacher v Granatino: Preliminary Thoughts on the Decision of the Supreme Court”, 2010, http://www.familylawweek.co.uk/site.aspx?i=ed68527 [Accessed 05 February 2012). Read More