The principles of Radmacher v Granatino which fundamentally changed the position in relation to pre-nuptial agreements, have now been considered in the first contested case since this high profile decision in the High Court of Z v Z [2011] EWHC 2878 [Fam]. You will recall that Radmacher changed the position in relation to pre-nuptial agreements, resulting in a gradual shift towards paying more regard to such agreements.
The facts
This case concerned a French couple who were married for fourteen years from 1994 and relocated to England in 2007. The three children of the marriage were aged 14, 12 and 9. There was a period of around 4 years pre-marital cohabitation (subject to one six month period of separation). All assets were generated during the marriage. The couple separated in February 2008, and in July 2008 informed the children that they had separated and this marked the end of their marriage. Prior to entering into a marriage the couple entered into a separation de biens agreement in France. It is the normal procedure for every married couple in France to be subject to a default community of goods matrimonial property regime unless they enter into an agreement providing for separation of goods.
The Judge accepted the husband's evidence that he would not have married his wife had she not entered into the agreement. However, the wife's version of events was that she entered into the agreement only to protect her assets from creditors in the event that the husband's business ventures failed. The Judge did not accept that this was the overriding reason for the agreement. It is important to note that neither party sought formal advice from the notaries prior to signing the agreement and no formal disclosure of financial information took place. However, as was the case in Radmacher, these factors did not impact upon the decision.
Proceedings
The wife sought an equal division of the total assets of the marriage worth in the region of £15m and that it would be unjust to hold her to the separation de biens . The husband's position was that the separation de biens excluded the sharing of the assets and that following the decision in Radmacher, it would be fair to hold the wife to that agreement. The husband agreed that the separation de biens did not exclude maintenance claims. He also argued that this was a French case and therefore the Judge should take into account what the wife would have received in France. The Judge preferred the wife's position on these issues, stating that where there is an application for financial remedies in English proceedings, the Court will normally apply English law irrespective of the domicile of the parties.
Decision
The wife relied on a letter written by the husband shortly before the parties separated in which the husband had promised not to rely on the separation de biens if he started legal proceedings. There was also an earlier draft version of the letter which did not contain this qualification and to which the wife had contributed towards its drafting. The Judge rejected the argument put forward by the wife that the draft letter should be treated as more important than the final version. As a matter of French law the agreement could only be altered by way of a further notarised agreement.
Moor J decided that sharing was not appropriate, but that it was still appropriate to perform a cross-check against the overall assets to ensure that the award was not in excess of one half of the assets. The Judge gave the wife a £3.25million housing budget and capitalised lifetime maintenance, which amounted to 40 per cent of the total assets, which the Judge held to be a suitable departure from equality to reflect the agreement.
Moor J upheld the agreement but outlined that if the agreement had tried to exclude maintenance claims his judgment may have been different. This properly reflects the approach taken by the Supreme Court in Radmacher.
What does this mean in practice?
Whilst under English law a 50/50 split in a long marriage continues to represent the starting point, the cases of Radmacher and Z-v-Z demonstrate that the Court will often move away from a sharing approach to a needs-approach where the case involves properly drawn up agreements.
If you would like any further information on the implications of this decision, or any other detail relating to pre-nuptial agreements, please contact Sally Rushton, a Solicitor in our Family team, on 0117 314 5329.
This publication is for guidance only. Reliance should not be placed upon it and nor should action be taken, without obtaining advice in respect of the specific circumstances applicable. We will be pleased to provide such advice or assistance.
