To us Brits, proud of our unswerving fidelity to the tradition of judicial discretion, the pre-nuptial agreement has, traditionally, been viewed as an American curiosity. A handy plot device for saucy straight to video B-movies, and that thing which, when finally revealed at the end of the episode, gives Columbo the motive he was missing to solve the case. Or perhaps an interesting sidebar in a gossip magazine, revealing the arrangements between the wealthy heiress and her considerably younger fifth husband, designed to safeguard her Manhattan property portfolio in the event that his roving eye gets the better of her new beau.
But times change. For some time now pre-nuptial agreements have been entered into with greater frequency in our Sceptred Isle and consequently the family courts have had to grapple with the problems they present to our traditional approach towards financial remedies.
Radmacher v Granatino
The most important case in the development of the law in this area was Radmacher v Granatino [2010] UKSC 42. In this case a French husband and a German wife entered into a pre-nuptial agreement before marrying in London, and they were living in England when they separated. According to the agreement, there would be no financial provision for either party in the event of divorce. Accordingly, the wife appealed when the lower court awarded the husband £5.8 million and was successful, both in the Court of Appeal and the Supreme Court.
The approach taken by the Supreme Court was set out clearly at paragraph 52 of their judgement, where it was stated that “the old rule that agreements providing for future separation are contrary to public policy is obsolete and should be swept away.” It supported the position taken by Thorpe LJ when the case had been before the Court of Appeal, that the old rule that such contracts are void “does not sufficiently recognise the rights of autonomous adults to govern their future financial relationship”.
The Post-Radmacher Postion
So, pre-nuptial agreements are no longer immaterial to proceedings for financial remedies in divorce, but how are they to be considered? The court will normally consider such an agreement as ‘one of the circumstances of the case’ under s.25 of the Matrimonial Causes Act 1973, or perhaps, in the alternative, as ‘conduct which it would be inequitable to disregard’. In Radmacher the Supreme Court advanced the proposition that “the 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” (para 75).
The court suggested that if a pre-nuptial agreement “is to carry full weight, both the husband and wife must enter into it of their own free will, without undue influence or pressure, and informed of its implications” (para 62). So, it is not a case of all or nothing when it comes to the question of these agreements. The High Court, in the case of AH v PH (Scandinavian Marriage Settlement) [2013] EWHC 3873 (Fam), set out in its reasoning in paragraphs 67 – 70 of its judgment that it was not a matter of either fully honouring an agreement or disregarding it entirely, rather a court should attach the appropriate weight given the facts of any case. That each case will turn on its facts was seen again in B v S (Financial Remedy: Marital Property Regime) [2012] EWHC 265 (Fam). Here, the pre-marital agreement was disregarded completely as the parties had entered into it without the full appreciation of its implications, as expected by the Supreme Court in Radmacher. It is worth noting though that the absence of legal advice, although envisaged and preferred, is not always essential (Versteeg v Versteeg [2018] EWCA Civ 1050).
The courts should also consider if the foreign element of any case gives more weight to the importance of the agreement. This was particularly relevant in Radmacher, where the agreement had been signed in Germany and was binding according to German law. This spoke to the issue of whether the parties had intended for it to be adhered to in the event of separation.
The existence of a valid pre-nuptial agreement will generally have the result that any departure from its provisions will be on a needs basis. In Z v Z (No 2) [2011] EWHC 2878 (Fam) the court upheld the pre-nuptial agreement, entered into in France, to the extent that it excluded the sharing approach. Instead, the judge opted for the needs approach, which ended with the Applicant obtaining 40% of the marital assets.
A pre-nuptial agreement will not, however, be allowed to prejudice the reasonable requirements of any children of the family (Radmacher, para 77). It goes without saying that the welfare of any child will be at the forefront of the court’s mind when it considers any application involving s.25 of the MCA 1972.
So what would a hypothetically perfect (for a party relying on a pre-nuptial agreement) case look like? Thankfully we have Crossley v Crossley [2007] EWCA Civ 1491 as a reference. The facts of the case were these. The parties were married in January 2006 and the wife petitioned for divorce in August 2007, so a very short marriage. They were aged in their 50’s and 60’s and there were no children of the marriage. Both had substantial pre-marital assets, which they sought to protect by way of a pre-nuptial agreement. When the matter came before the Court of Appeal, Thorpe LJ described the case as follows in paragraph 15 of his judgment:
“If ever there is to be a paradigm case in which the court will look to the prenuptial agreement as not simply one of the peripheral factors in the case but as a factor of magnetic importance, it seems to me that this is just such a case”.
Conclusion
So, as I have hopefully made clear above, pre-nuptial agreements are very much in play in the courts of England and Wales, and they are appearing with ever greater frequency. Having considered the caselaw above the three headlines that we can take away are the following:
1) The existence of a pre-nuptial agreement does not oust the jurisdiction of the court under s.25. Each case will be decided on its own facts and any agreement given the appropriate weight depending on the circumstances.
2) Any departure from a pre-nuptial agreement will most likely be on a needs basis.
3) No pre-nuptial agreement will be upheld to the extent that it prejudices the needs of any relevant children.
Becket Chambers has a team of barristers greatly experienced in all areas of family law. For any enquiries please to not hesitate to contact us at clerks@becket-chambers.co.uk.
