Heiress in landmark UK court victory

Britain's highest court today ruled in favour of German heiress Katrin Radmacher in a landmark decision that gives new status to pre-nuptial agreements.

Nicolas Granatino, husband of the German heiress said to be worth more than £100m (€113m), took the case to the Supreme Court after appeal judges slashed his divorce settlement from more than £5m to £1m.

Appeal judges had ruled that “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 was seen by lawyers as the ultimate test of whether the agreements are applicable in English law.

Nicholas Mostyn QC, representing Mr Granatino, had told the nine justices headed by Lord Phillips at a hearing in March 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.

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 justices 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.

Katrin Radmacher, who was present at the Supreme Court for 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.”

During the Supreme Court hearing Mr Mostyn had told the justices 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 £4.735m, 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.

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.

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.

Mr Todd called for pre-nuptial agreements to be treated as binding by judges exercising their discretion when deciding on a marriage settlement.

He 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 £20m 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.