Radmacher v Granatino : sailing close to an applicable law approach?

1. Radmacher v Granatino: sailing close to an applicable law approach? 14th Ius Commune Conference 27 November 2009 Michael Wells-Greco Solicitor, England & Wales

2. Introduction • The Bad News • The Good News • The Fine Print • An Apology…

3. The Bad News • 40% of marriages end in divorce • It was cheaper in the old days: the recipient’s ‘reasonable requirements’ capped his/her claims: usually a house, and a capitalised income fund • Divorce is very expensive in England and other common law territories • “Toxic wives/husbands”

4. The ‘Bad’ News Mrs White and her followers: • White v White (2000) ~ the new ‘Yardstick of Equality’: ‘reasonable requirements’ held to be discriminatory to homemakers (frequently women) • Cowan v Cowan (2001) • Lambert v Lambert (2002) • Miller v Miller (2005) ~ the short-marriage millionairess with no children • Charman v Charman (2006) ~ biggest divorce order in British legal history as wife gets £48m

5. MPR? • Baroness Hale in Miller/McFarlane • ‘English law starts from the principle of separate property during the marriage’ • ‘We do not yet have a system of community of property, whether full or deferred’ • Sir Mark Potter in Charman • ‘Almost uniquely our jurisdiction does not have a matrimonial property regime…we have no regime at all, simply accepting that each spouse owns his or her own separate property during the marriage but subject to the Court’s wide distributive powers’

6. Don’t we have a MPR? • Often 50:50 division but each case fact specific • Outcome needs to be ‘fair’ having regard to three strands • Needs – parties’ financial needs going forwards • Compensation – redressing prospective economic disparity between parties e.g. one party sacrificing career/earning capacity • Sharing – marriage is a partnership of equals • incommensurability

7. The Court’s armoury • Lump sum Orders (including capitalised maintenance) • Transfer of Property Orders • Maintenance Orders (alimony) • Pension Splitting Orders • Variation of Trusts • Etc etc etc

9. S v S (1997) • Mr Justice Thorpe (as he then was) said: “There will come a case where a pre-nuptial agreement might prove influential or even crucial. Where both the USA and the EU hold parties to their rights under pre-nuptial agreements, we should be cautious about too categorically asserting the contrary. I can find nothing in [the English divorce legislation] to compel a conclusion that escape from solemn bargains, carefully struck by informed adults, is available here. It all depends”.

10. Pre-nups in practice • Hyman v Hyman (1929) FLR Rep 342 • ‘the wife’s right to future maintenance is a matter of public concern which she cannot barter away’ • F v F [1995] 2 FLR 45 Thorpe J • ‘in this jurisdiction [pre-nups] must be of very limited significance’ • Crossley v Crossley [2008] 1 FLR 1467 • ‘paradigm case…a factor of magnetic importance’ • ‘the contract entered into.. [was] akin to the separation of goods within the French system’ • NB CANNOT OUST THE JURISDICTION OF ENGLISH COURTS

11. Radmacher v Granatino [2009] EWCA Civ 649 • German W and French H - German marriage contract • Elected separate property and no financial provision • At time of divorce, H student at Oxford, with debts, W family wealth of about £100m • Marriage contract willingly signed by H and would have been no marriage without it • H ‘man of the world’ - investment banker - and understood what he was signing • H awarded £5.5m for his needs by Baron J

12. Radmacher v Granatino (2) • W’s appeal to CA mostly won – v pro prenup judgment • H’s housing fund on trust to revert back to W • H’s income fund to last until youngest child 22 • Caprice of outcome dependent on jurisdiction • Both from civil law backgrounds • Due respect for adult autonomy subject to safeguards • ‘informal presumption of dispositiveness’ • Rule that prenups are void ‘unrealistic and out of date’ • UK should reduce not maintain rules dividing it from Europe

13. Radmacher v Granatino (3) • At paragraph 53 of the judgment Thorpe LJ made the following statement: “in future cases broadly in line with the present case on the facts, the judge should give due weight to the marital property regime into which the parties freely entered. This is not to apply foreign law, nor is it to give effect to a contract foreign to English tradition. It is, in my judgment, a legitimate exercise of the very wide discretion that is conferred on the judges to achieve fairness between the parties to the ancillary relief proceedings.”

14. The Fine Print: Pre-nuptial agreements • Not binding per se, especially foreign marriage contracts • Full financial disclosure required • Independent legal advice • Signed ideally 21 days before marriage • Terms must be fair in the eyes of the judge at date of divorce • This test weakened post Radmacher? • NB Singaporean case: TX v TR 2009 (SGCA) 6

15. Implications/Questions • Why apply English law to foreigners divorcing there, especially if they have a marriage contract? • How close is Radmacher to grappling with applicable foreign law principles (in addition to or in parallel with lex fori)? • Weight of marital property regime?

16. Governing law of marriage contract? • Rix LJ remarks “it is hard to articulate why an agreement made in similar circumstances between English nationals should not receive more or less equal treatment: although it has to be recognised that English law has not prepared the groundwork for such conclusion and it will be difficult to articulate, although I suspect it will be a matter of common concern, why the English Court may pay greater regard to agreements made under some foreign systems of law than under others.”

17. Future developments – watch this space • Need for proper rational debate in England, not knee-jerk ‘Little Englander’ refusal to opt in • Law Commission to produce draft Bill by 2012

18. A final word from one who knows: “I’m such a good housekeeper, darling! I always get to keep the house”. Miss (!) Zsa Zsa Gabor