German heiress claims English court victory over pre-nuptial agreement

One of Germany’s richest women, Katrin Radmacher, has claimed victory in her bid to get a pre-nuptial agreement recognised in the English courts.

Miss Radmacher, said to be worth £100 million, won a ruling from the Court of Appeal that the pre-nuptial contract should be taken into account by the courts when they divide assets after a marriage fails.

Her former husband, Nicolas Granatino, had agreed not to make any claims on her fortune if they split up, but was awarded £5.85 million for his own use by a High Court judge last year.

This has been cut to about £1 million as a lump sum in lieu of maintenance with a fund of £2.5 million for a house which will be returned to Miss Radmacher when the youngest of their two daughters, who is six, reaches the age of 22.

His debts of about £700,000 are to be paid off by the heiress, who had always agreed to this settlement.

The couple’s marriage was said to have broken down after Mr Granatino, 37, gave up a lucrative job in the emerging markets sector in 2003 to become a £30,000-a-year biotechnology researcher at Oxford University. They divorced in 2006.

Mr Granatino is expected to seek permission to take the case to the House of Lords for the issue of pre-nuptials to be reviewed by the highest court in the land.

Representing Miss Radmacher, Richard Todd QC told a panel of three Court of Appeal judges headed by Lord Justice Thorpe at a hearing in April that the freedom to agree a contract was “at the heart of all modern commercial and legal systems”.

He said Miss Radmacher had never said that her former husband would leave the marriage with nothing.

Miss Radmacher, 39, said in a statement: “Firstly, I will never regard my marriage as a mistake. I have no regrets as our marriage has given me two wonderful daughters.

“I am delighted that the court accepts that the agreement Nicolas and I entered into as intelligent adults before our marriage should be honoured.

“Ultimately, this case has been about what I regard as a broken promise.

“When we met and married, Nicolas and I were broadly on an equal footing financially. He too is an heir to a multimillion-pound fortune and, when we met, was an investment banker earning up to £330,000 a year.

“The agreement was at my father’s insistence as he wanted to protect my inheritance – this is perfectly normal in our countries of origin, France and Germany. My father taught me the value of hard work and family values.

“Like all wealthy parents, he feared gold-diggers.

“As an heir himself, Nicolas perfectly understood this. The agreement gave me reassurance that Nicolas was marrying me because he loved me as I loved him… that we were marrying for the right reasons.

“The arrangements the court has ordered will enable our daughters to live comfortably when they are with their father, and that is the way it should be. Nicolas and I made each other a promise and all I have been asking is that he be kept to it.”

Her solicitor, Ayesha Vardag, commented: “For 160 years prenuptial contracts were said to be void for public policy reasons. They were put in the same category as contracts to kill your hated spouse.

“Now, in a landmark judgment, three of the most highly-respected judges in the land have ruled that pre-nups can be decisive in determining the financial division on divorce.

“As my leading counsel, Richard Todd told the court, the genius of the Matrimonial Causes Act is that it allows the law to change with the times.

“Lord Justice Thorpe praised two modern principles: first, that there should be due respect for adult autonomy. Responsible adults should be allowed to decide the financial fate of their marriage themselves without excessive interference from a nanny state; second, that the old public policy argument reflects the laws and morals of earlier generations. We have moved on.

“The Court of Appeal, in a carefully-reasoned, thoroughly modern judgment has enabled English matrimonial law to catch up with the rest of the world.

“From today grown-ups can agree in the best of times what will happen in the worst of times.”

The solicitor said Miss Radmacher had succeeded in securing a ruling that the pre-nuptial contract should be decisive.

The heiress had accepted that, in any event, the father of her children should have a home for as long as the children were young enough to need to stay with him.

Miss Radmacher, a paper industry heiress, had challenged the Family Division ruling by Mrs Justice Baron that it would be “manifestly unfair” to hold Mr Granatino to the pre-nuptial contract, which was signed in Germany before the couple married in London in 1998.

Although the judge recognised that the pre-nuptial agreement would have been fully enforceable in Germany or France, she ruled that they have never been legally binding in this country.

She also said that the arrival of the couple’s children had “so changed the landscape” that it should be set aside.

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An Appeal Court judge has warned lawyers acting for one of Germany’s richest women that her bid to get a pre-nuptial agreement recognised in an English court was unlikely to succeed.

Katrin Radmacher, 39, a paper industry heiress, has been granted leave to appeal a High Court ruling which last year determined she should pay her ex-husband, a former investment banker, £5.6 million.

If the pre-nup is enforced, it would leave Frenchman Nicolas Granatino without a penny of her £100 million fortune.

Last July Mrs Justice Baron, sitting in the High Court, ruled that it would be “manifestly unfair” to hold Mr Granatino to the contract, which was signed in Germany before the couple married in London in 1998.

Although the judge recognised that the pre-nuptial agreement would have been fully enforceable in Germany or France, they have never been legally binding here. She also said that the arrival of the couple’s children had “so changed the landscape” that it should be set aside, and awarded Mr Granatino £5,560,000.

The pair’s marriage floundered after Mr Granatino, 37, formerly an investment banker with JP Morgan, gave up highly lucrative job working in the emerging markets sector in 2003 to become a £30,000 a year biotechnology researcher at Oxford University. They divorced in 2006.

According to earlier legal hearings, she has liquid assets worth £54 million and an annual income of £2 million.

Representing Miss Radmacher, Richard Todd QC told a panel of three Court of Appeal judges headed by Lord Justice Thorpe that the freedom to agree a contract was “at the heart of all modern commercial and legal systems.”

Despite recognising that current interpretation of the law was that the contracts were not legally binding in English courts, he said there was growing acceptance that they did carry some weight.

He said this pre-nup would have been binding in both Germany and France and therefore some weight should be given to it.

He argued that the contract was “presumptively dispositive” – or in other words, should be upheld by the court.

He added: “It has never been the case that Frau Radmacher thinks her husband should leave [the marriage] with nothing.”

However, Lord Justice Thorpe told him: “Realistically, you haven’t got much chance of getting us to say that the contract is presumptively dispositive.”

It would be “remiss” of the function of the court to make a ruling recognising a pre-nup was binding, while the Law Commission was in the process of looking into it, he said.

The courts, he added, awaited “forthcoming legislation” on the issue, but in the meantime he said that “caution” was an important consideration for the court.

Mr Granatino has hired Fiona Shackleton and Nicholas Mostyn, QC, the lawyers who represented Sir Paul McCartney in his divorce from Heather Mills.

Mr Mostyn argued it was “an oxymoronic exercise” to attempt to give weight to a void contract.

A previous legal ruling had stated that weight should only ever be given to them if, in his words, they were “blingingly obviously fair”.

The fact that both parties came from countries where pre-nups were legally binding should have no bearing in an English court, he said.

Furthermore, he argued that the contract lacked two safeguards – that Mr Granatino had not received independent legal advice before signing, and that Miss Radmacher had not fully disclosed her assets.

from: telegraph.co.uk