Super-rich husbands and wives will be able to cling on to their fortunes when they divorce after a panel of the country's most senior judges upheld the validity of pre-nuptial agreements.
The Supreme Court in London yesterday ruled that divorcing couples in England and Wales could rely on signed contracts to determine how their wealth should be divided. While many lawyers welcomed the long-sought clarification in the law others warned that the judgement may have established a "rich man's charter" for the protection of wealth after a marriage breaks down.
The wealthy spouse at the centre of yesterday's case is a German heiress, Katrin Radmacher, said to be worth more than £100m. She had been taken to the appeal courts by her former husband, Nicolas Granatino, who had seen his share of the divorce reduced from more than £5m to £1m.
The couple met in Tramp, the members-only nightclub in Mayfair, London, when she was running a clothes shop in Knightsbridge with her sister. They married in London after signing a pre-nuptial contract in Germany and have two daughters.
At the time of their marriage in 1998, Mr Granatino was working for JP Morgan and earning as much as £325,000 a year. But when the couple separated in 2006 Mr Granatino had left to work as a research scientist at Oxford University. During an acrimonious divorce Ms Radmacher, 41, accused her husband of deliberately delaying his doctorate to "maximise his claim" and said that if he "wishes to be an academic he must live as such".
By the time the case reached the High Court, Mrs Justice Baron heard that Mr Granatino had "virtually no assets" whilst his ex-wife's interests in the paper industry gave her £54m in liquid assets and £52m in capital assets, providing her with an annual income of £2m.
But when the case came to the Supreme Court earlier this year Nicholas Mostyn QC, representing Mr Granatino, had told the nine justices headed by Lord Phillips that a previous ruling in the Court of Appeal 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.
By a majority of eight to one, the justices dismissed the ex-husband's appeal, saying that following their ruling "it will be natural to infer that parties entering into agreements will intend that effect be given to them".
The judges said they agreed with the Court of Appeal that in the right case a pre-nup agreement can have decisive or compelling weight.
Lord Phillips, president of the Supreme Court, said the courts would still have the discretion to waive any pre-nup or post-nup agreement, especially when it was unfair to any children of the marriage.
Richard Todd QC, representing the heiress, told the Supreme Court Justices that under the terms of the divorce settlement, Mr Granatino will have the use of a £2.5m 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.
Mr Todd said the former husband will also get £25,000 for a car and most of his debts paid off by his ex-wife.
Ms Radmacher, who was sitting in the Supreme Court during the ruling, said afterwards: "I am really pleased with the ruling but saddened at the four-year process that brought us to this point. I am delighted that Britain has upheld fairness. It is important to me that no one else should have to go through this."Reuse content