A university researcher faces financial ruin if his former wife, an heiress said to be worth £100 million, wins her battle to have pre-nuptial agreements recognised in the UK, the Supreme Court was told today.
Nicolas Granatino took his case to the highest court in the land after appeal judges slashed his divorce settlement from more than £5 million to £1 million, saying "decisive weight" should be given to the agreement signed before he married that he would make no claims on Katrin Radmacher's fortune.
The case is being seen by lawyers as the ultimate test of whether the agreements are applicable in English law.
Nicholas Mostyn QC, representing Mr Granatino, told the nine justices headed by Lord Phillips that the Court of Appeal ruling was not only unfair, it was impermissible because it amounted to a court legislating over pre-nuptial agreements which are not recognised in English law.
He said that when Mrs Justice Baron decided the case in the High Court in 2008, she said the pre-nuptial agreement signed by the parties in 1998 was "manifestly unfair" because the husband had no separate legal advice, there was no financial disclosure by the wife and it left him with no money on divorce even if he was in serious difficulties.
The High Court judge had said the pre-nuptial agreement was void but was not irrelevant and its existence had reduced her award to the husband.
This was £4.735 million, plus money to buy a home in Germany to care for their two children, and periodical payments of £35,000 a year for each child.
Mr Mostyn said the appeal judges overthrew this ruling as "plainly wrong", saying "decision weight" should be given to the pre-nuptial agreement. He said the law had been left "in a state of confusion".
Until any change in the law, the courts will be guided by the decision of the Supreme Court in this case, said Mr Mostyn.
"We are aware that a number of cases have been stalled pending the outcome of this case. What are the correct principles to be applied when a court is faced with a pre-nuptial contract?"
If his appeal at the Supreme Court is dismissed, Mr Granatino must pay back maintenance from his former wife together with all the costs of the case from his reduced lump sum, said Mr Mostyn.
"It will mean that the husband will have no money at all with which to support himself other than the child periodical payments, which are not intended to meet his own revenue needs."
He said Miss Radmacher had accepted that if Mr Granatino fails on this appeal, he will face bankruptcy and destitution.
Mr Granatino, 38, a French national, gave up a lucrative job in the emerging markets sector in 2003 to become a £30,000-a-year biotechnology researcher at Oxford University.
He was divorced from his former wife, a German heiress to a paper company and reputed to be one of the richest women in Europe, in 2007.
They have two children aged 10 and seven and spent most of their life together in Chelsea, west London.
Miss Radmacher, in her argument before the justices, denies that her former husband is facing "financial catastrophe".
Richard Todd QC, representing her, will say during the two-day hearing that Mr Granatino will have the use of a £2.5 million property rent-free for 15 years, meaning he would have been housed by his ex-wife for 20 years from their separation.
He will also have a holiday home near his parents in the south of France which will be returned to his former wife when their youngest child is 22.
Mr Granatino will also have a personal income of £76,000 a year for the next 15 years and child maintenance, even though he is not the primary carer, of £70,000 a year, said Mr Todd.
He said the former husband will also get £25,000 for a car and most of his debts paid off by his ex-wife.
"By the end of the maintenance provision he will have been supported by the wife for 20 years following this eight-year marriage.
"The husband chooses to work as a researcher at the relatively low figure of £30,000. He could earn more if he chose."
Mr Todd said any inheritance he might receive from his multi-millionaire parents will be free of claim by his former wife.
He said pre-nuptial agreements should now be treated as binding by judges exercising their discretion when deciding on a marriage settlement.
Most other countries treat them as such, including Germany and France.
Mr Todd said the couple married in reliance on the pre-nup and Miss Radmacher's father also trusted the agreement when he advanced her more than £20 million of shares in a family company.
He said the agreement also protected Mr Granatino's "considerable inheritance" and the "millions" he planned to make as an investment banker which he could still do.
"At the time of the agreement he was arguably in as strong an economic position as the wife. He suffered no detriment by this agreement; not least because had there been no agreement there would have been no marriage."
The case continues tomorrow when judgment will be reserved to a later date.Reuse content