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Ancilliary Relief

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The case in Radmacher v Granatino [2010] UKSC 42 is concerned with whether and to what extent a court should take an ante-nuptial agreement into account in exercising its discretion under section 25 of the Matrimonial Causes Act 1973.

Section 25 matrimonial Causes Act 1973 states that the duty of the court when considering to exercise its powers and if so, and in what manner, to have regard to all the circumstances of the case with first consideration given to any child of the family who has not yet reached the age of 18 years. The court are also reluctant to have regard to numerous other matters including the financial needs, obligations, responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future.

in Radmacher, Ms Radmacher, a German national, and Mr Granatino, a French national, entered into an ante-nuptial agreement before a notary in Germany three months to the wedding. This what at the insistence of Ms Radmacher who stood to gain a significant amount of wealth from the lucrative family business and was threatened with disinheritance by her father should she proceed into the marriage without such an agreement. The main scope of the agreement was translated into English for Mr Granatino with the option for him to seek independent legal advice open to him. Mr Granatino declined to seek this independent advise and proceeded to sign the agreement.

The Radmacher-Granatino Union lasted a period of 8 years during which Ms Radmacher bore Mr Granatino 2 daughters. Mr Granatino also towards the end of their marriage, left his banking job to become a research student which significantly reduced his earning income.

After the marriage ended, Mr Granatino made an application to the high court for ancillary relief which went against what the former couple had agreed prior to their marriage. The main issue for the court thus, was whether the court should disregard the agreement and make an award which was inconsistent with what the parties had agreed.

The Court of Appeal in Edgar v Edgar [1980] 1 WLR 1410, 1417 said that " formal agreements, properly and fairly arrived at with competent legal advise should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement.

Baron J in her decision, considered that Mr Granatino's award "should be circumscribed to a degree to reflect the fact that at the outset, he agreed to sign the [ante-nuptial agreement]" (para 139). The judge's final decision however, did not attach much leverage to the agreement.

Mr Granatino was awarded a sum of £5.5 million pounds which would have afforded him an annual income of £100,000 for life and allow him to buy a home in London where his children could visit him. The judge took into account the existence of the ante-nuptial agreement but reduced the weight she attached to it because of the circumstances in which it was signed (with Mr Granatino receiving no independent legal advice, and the agreement itself being written in German-Ms Radmacher's native tongue.

Ms Radmacher successfully appealed to the Court of Appeal which held that in this case, the agreement should have been given decisive weight. the husband should only be granted provision for his role as the father of the two children and not for his own long term needs. The CA reduced Mr Granatino's initial award who subsequently appealed to the Supreme Court. The Supreme court, by a majority of 8 to 1 dismissed the appeal.

Prior to White v White, Lord Justice Griffiths in Thyseen-Bomemisza v Thyssen-Bomemisza (No 2) said "we should do a service to [the wife] if we were to state here and now that under English Law she has no prospect of receiving a significantly higher award because her husband might turn to have a fortune in the order of £1000m rather than £400m.

In other words, the separation of property established in 1882 (since the enactment of the married women's property acts 1882, England and Wales has operated system of separate property for spouses which means marriage itself has no effect at all upon property ownership. no joint property is created, although a couple may choose to won property jointly if they wish) was observed on divorce once needs had been met. In the vast majority of families the provision made for needs meant that property entitlements were largely overridden and that careful provision was made for those with the day to day care of children and the employment disadvantage which that entitled them to. But in these families where assets exceeded needs the separation of property, and the absence of a principle of redistribution beyond reasonable requirements, meant that a form of gender discrimination was entrenched in the law of ancillary relief because as a matter of fact it was largely men who held assets and ran business rather than women, who by and large were responsible e for home making and childcare.

It could be said that prior to white v white, a divorced wife was better off in England and Wales if she was poor but far better off in the rest of Europe if her husband was rich. Mrs white was unhappy with this financial settlement and appealed , ended the result at first instance highlighted the benefits to women of being business partners rather than wives: Lord Justice Thorpe in the court f appeal noted that she would have fared better financially had she joined in partnership with her husband instead of being his wife: She would not have been so exposed to such treatment had she not married her partner (white v White [1999] Fam 304, 312.)

The result in White v White could be seen to explain why the majority of the supreme court in radmacher recognised that "need" had been "generously interpreted" but also spoke of "real need" which sounds narrower, while referring in the same paragraph to the compensation of long term disadvantage generated by the devotion of one partner to the family and the home (radmacher at [81]). That sort of advantage has always ben regarded as part of the concept of need.

The third strand is "sharing" and this is the element that was absent before White v White. Lord Justice Nicholls repeated that, unless there was good reason to the contrary ( for example if there was property required to meet needs ), each of the parties were entitled to an equal share of the assets of the relationship. However the uncertainties remain and the house of the Lords' judgements in Miller v Miller, Mcfarlane v Mcfarlane, carefully repeat the warning given in White v White that the yardstick of equality is t be applied as an aid not a rule.

Stephen Cretney in comment of property imposed by judicial decision (2003) 119 Law Quarterly Review 349 said that White v White inaugurated system of community of property, whereby the couples pool of asset would be divided equally once needs have been addressed.

Lady Hale disagrees with Cretney saying that there is no community of property, either immediate or deferred [Miller v Miller, Mcfarlane v Mcfarlane [2006] 2 ac at [151] ]. Lord Phillips in Radmacher said that "although the economic effect of Miller/Mcfarlane may have much in common with the community of property, it is clear that the exercise under the 1973 act does not relate to a matrimonial property regime".

The Great Britain Law Commission stated that it is worth articulating the reasons why it might be said that we do nt have a community of property regime White v White has brought english law closer to the majority of European jurisdictions, where such sharing is the norm (while needs are dealt with under separate maintenance provisions).

Under current english law, a marital property agreement is not a sure way out of discretion. An agreement remains simply one of the circumstances the court will take into account in the exercise of its discretion as seen in Crossley vs Crossley (2007) EWCA civ 1941, the supreme court in Radmacher r Granatino has confirmed that, although an agreement still cannot be used to oust the jurisdiction of the court, the court will exercise its discretion in accordance with the agreement's terms if it was freely entered into, unless it would be unfair to do so.
The assessment of whether or not it was freely entered into may depend upon a wide range of factors; and unfairness in outcome of a very open textured concept.

The supreme courts decision in radmacher confirms that the law has moved on from the nineteenth century, cases; no longer are enter pre-or post nuptial agreements to be regarded as void for the reason that they might encourage separation (The Law commission.justice.gov.uk/docs/cp198_marital_property_Agreements_Ciommunication.pdf. PG 1-10).

Accordingly, although the supreme court's decision has emphasised the weight the courts will give to marital property agreements,the extent to which such agreements will give to marital property agreements, the extent which such agreements will determine the outcome of the ancillary relief process depends upon an agreement of fairness. legal advisers who draft them may build up considerable experience in assessing what's fair.

The decision in radmacher v Granatino is perhaps as far as the courts can go in providing a structure for the enforcement of marital property agreements within the framework of the current legislation, should the law change so that it is possible to exclude, by agreement in advance, the courts discretionary jurisdiction under the Matrimonial Causes Act 2004 ? Arguably that would give far greater weight to the autonomy of individuals and would facilitate financial planning as well as perhaps preventing litigation.
That might be a popular step in some questions but would it be the right one ?
There are many reasons for caution when we consider the implication of an agreement. We have to ask whether it is possible to be sure that the agreement was entered into freely, whether before or after the celebration of marriage or civil partnership. We also have to ask about the risk off the agreement made a long time before they are put into effect and at a time when it it is to be hoped- both parties believe that it will not be put into effect.

In conclusion, in examining marital property agreements, we have to be "concerned not only about enforceability and predictability". The law commission states that "when we ask whether marital property agreements should be able to oust the jurisdiction of the court, so as to give the advantages of autonomy and predictability, we give careful consideration to the downsides of allowing a party to a divorce or dissolution to force his or her partner to abide by an agreement about financial provision. Such a reform could have a positive impact on relationship breakdown by minimising litigation; it could also have a very negative impact upon individuals if it means that they are deprived of financial provisions to which they would have otherwise been entitled. And if the effect of an agreement is to leave one of the parties, or their children in need then, there is a considerable social cent.

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