Radmacher v Granatino [2010] UKSC 42

Facts

• The case involved a German national (the wife) and a French investment banker (the husband) who entered into an ante-nuptial agreement at the request of the wife's family, specifying neither party would claim property owned by the other before or during marriage.
• The couple married, had two children, and after nine years of marriage, divorced.
• Upon divorce, the husband challenged the validity of the pre-nuptial agreement, arguing there was a marked disparity in wealth and a lack of independent legal advice.
• The husband contended that such agreements should be unenforceable based on earlier case law and public policy concerns.

Issues

1. Whether pre-nuptial and post-nuptial agreements should be presumed valid and enforceable in English law.
2. What conditions must be satisfied for such agreements to be upheld by the courts.
3. Whether it would be unfair or contrary to public policy to enforce the agreement in the circumstances of this case.
4. The legal significance of independent advice, full disclosure, and understanding of legal consequences in upholding nuptial agreements.
5. The extent of judicial discretion to refuse enforcement where circumstances have changed or where enforcement would cause injustice.

Decision

• The Supreme Court, by majority, upheld the validity of the pre-nuptial agreement and dismissed the husband's appeal.
• The Court ruled that the old rule rendering such agreements contrary to public policy was no longer applicable.
• A presumption of validity applies to any nuptial agreement freely entered into with informed consent, unless it is unfair to enforce it.
• There is no material distinction between pre- and post-nuptial agreements regarding enforceability.
• The Court confirmed that absence of duress, full disclosure of financial circumstances, and understanding of the implications are critical to validity.
• The majority recognized the court's residual discretion not to enforce an agreement where, in the circumstances, it would be unfair.
• Baroness Hale dissented, expressing concerns over the presumption of validity and highlighting gender and power imbalances, as well as advocating for legislative intervention.

Legal Principles

• A nuptial agreement will generally be upheld if entered into freely, with both parties fully appreciating its implications and with full and frank financial disclosure.
• There is a presumption of validity for pre-nuptial and post-nuptial agreements, rebuttable if enforcement would lead to demonstrable unfairness.
• The court retains discretion to relieve parties of agreements where changed circumstances or built-in disadvantages justify it.
• No essential distinction exists between pre- and post-nuptial agreements regarding enforceability.
• The fairness test operates as a safeguard to prevent injustice, especially for economically weaker parties or when unforeseen post-agreement circumstances arise.
• Commentary from the dissent raises issues about marital status, mutual obligations, and potential gender disadvantages.

Conclusion

The Supreme Court's decision in Radmacher v Granatino marked a decisive move toward recognizing and enforcing nuptial agreements in English law, introducing a presumption of validity conditioned by fairness and informed consent, while ensuring that the courts retain discretion to prevent injustice.