Radmacher (formerly Granatino) v Granatino
| Jurisdiction | England & Wales |
| Judge | Lord Justice Wilson,Lord Justice Lawrence Collins |
| Judgment Date | 02 July 2009 |
| Neutral Citation | [2008] EWCA Civ 1304,[2009] EWCA Civ 649 |
| Docket Number | Case No: B4/2008/2046 (LOWER COURT No. FD06D05479),Case No: B4/2008/2046 |
| Court | Court of Appeal (Civil Division) |
| Date | 02 July 2009 |
[2008] EWCA Civ 1304
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PRINCIPAL REGISTRY OF THE FAMILY DIVISION
(MRS JUSTICE BARON)
Lord Justice Wilson and
Lord Justice Lawrence Collins
Case No: B4/2008/2046
B4/2008/2046(A)
(LOWER COURT No. FD06D05479)
Mr Richard Todd (instructed by Ayesha Vardag) appeared on behalf of the Applicant Wife
Mr Nicholas Mostyn QC and Mr Deepak Nagpal (instructed by Payne Hicks Beach) appeared on behalf of the Respondent Husband
On 28 July 2008 Baron J gave judgment upon an application by a husband against a wife within divorce proceedings for ancillary relief and specifically for a lump sum payment. The husband is by ethnicity French; and the wife is by ethnicity German. They were married in London in November 1998 and lived here until the breakdown of their marriage in about 2006. The husband remains living in London and the wife now lives in Germany. There are two children of the family, namely girls now aged nine and six; under orders of the English court they spend about two thirds of their time with their mother in Germany and about one third of their time with their father in England. For most of the marriage the husband was a merchant banker working in the City. But in about 2003 he went to Oxford University to conduct research in some biotechnological area with a view to attaining an expertise which would assist him upon return to a particular niche of merchant banking. But it seems that his plans may now have changed and that, even were it now open to him to return to work in the City, such a course would no longer appeal to him.
The husband has virtually no assets; indeed now, partly as a result of this long-running litigation, he has considerable debts. The wife is a very wealthy woman and her wealth is entirely inherited. The judge found that the wife had liquid assets equivalent to £54 million; but that such was far from the full extent of her assets in that she had significant minority interests in two valuable family companies in Germany. Although the husband, by Mr Mostyn Q.C., his counsel, pressed the judge to ascribe to those minority interests a capital value of £52 million, the judge, while not rejecting that figure, said that she preferred to leave the matter on the basis that the value of the interests was so substantial as to generate for the wife an annual income of equivalent to about £2 million net.
The central issue in the case before the judge surrounded the fact that, about four months prior to the marriage, the parties had entered into a contract, therefore a prenuptial contract, in Germany, whereunder, in the event of the dissolution of the intended marriage, neither was to have any financial claim against the other. By reference thereto, it was the wife's case, strenuously put before the judge, that she should dismiss the husband's claims for himself but, of course, accede to his claims referable to the girls in respect of such periods of time as he was to be looking after them, including therefore accommodating them. Very much as a fallback position, the wife submitted in the alternative that, if there was to be any provision for the husband at all, it should be in the form of limited periodical payments to act as a bridge between his earning capacity on the one hand and his reasonable needs on the other.
In the event the judge decided to give what appears to be very limited weight to the prenuptial contract. She identified, helpfully, five reasons which led her to that decision. First, that the husband had had no independent legal advice prior to his entry into the contract. Second, that the wife had given no disclosure of the extent of her resources prior thereto. Third, that there had been no negotiations between the parties or their representatives prior to entry into it. Fourth, that, in the events which had happened, it would be manifestly unfair to hold the husband to its terms. And fifth, that the arrival of the two girls had so changed the landscape as to require it to be put to one side. The judge did, however, recognise, in the light of the expert evidence before her —which I think was unchallenged —that both in Germany and in France the contract would be fully enforced against the husband so as to preclude any financial recovery for himself.
Such being her view, Baron J ordered the wife to pay to the husband a lump sum of £5,560,000 by 31 July 2008. Unusually, but for a particular reason, she directed that such payment should be made out of one or other of the wife's accounts with UBS. Of the liquid capital of the wife equivalent to £54 million, some £19 million was understood to be in accounts with UBS. The judge had said that, in alighting upon her figure of £5,560,000, following assessment of aspects of the husband's perceived needs, she had given some reducing effect to the prenuptial contract notwithstanding that in no way did she consider that it precluded her from making a substantial order. Asked by the wife to grant permission to appeal to this court, the judge refused. Asked by the wife to grant a stay of execution of her order that the lump sum be paid within three days, the judge indicated that she would be minded to grant it only if the wife in return would provide security for the payment; and, faced with that indication, the wife (so we are told) withdrew her application for a stay of execution of the order. The result is that the lump sum remained payable on 31 July 2008; that it has not been paid; and that thus the wife is in contempt of court.
An order for interim periodical payments in favour of the husband against the wife had been made by another judge on 15 July 2007 in the sum of £215,000 per annum, i.e. of £17,916 per month. Baron J ordered the wife to continue to comply with that order until the lump sum had been paid in full. She directed that the lump sum should carry interest at the judgment debt rate but that payments under that interim order after 31 July 2008 should be credited against the interest thus due. The judge then addressed the need for the children to be maintained by the wife during the substantial periods for which they were to be with the husband. One order in that regard was that the wife should pay to the husband for each child the sum of £35,000 per annum. Another order was that, by 1 December 2008, the wife should provide a fund for the purchase of accommodation in Germany for the children, and for the father when with the children, such to remain available for them and him until the children had ceased further education. There was also provision for a small, further element of the lump sum then to be paid to the husband so that he could furnish that accommodation.
The wife comes to this court seeking permission to appeal against —I believe —every one of those orders. When I considered the application on paper in the usual way, I had before me a letter from the husband's solicitors in which they requested that, before consideration be given to the wife's application, there should be an oral hearing at which they would seek the opportunity to raise certain matters. I acceded to the request in that letter and set up the hearing which I and my Lord have conducted this afternoon.
I —and I know that my Lord shares this view —have come clearly to the conclusion that, subject to the issue of conditions to be attached to it, there should be a grant of permission to appeal. I believe that the wife has a reasonable prospect of success in her challenge to the orders of Baron J. I also consider that the proposed appeal raises an important point of principle. It is tempting at this stage to proceed to explain the reasons for that conclusion. But it is a temptation which I propose to resist and not simply because I speak at almost 4.15 pm. My experience is that, when he has granted permission at a hearing, a judge may later regret the way in which, perhaps without much preparation, he has sought to articulate his views as to why the appeal should proceed. I say, therefore, nothing further on that subject.
I should add that I have looked at all twelve of the grounds of appeal settled by Mr Todd on behalf of the wife and have wondered whether one could reasonably abstract some of them as being not worthy of articulation in this court. Most of them, as one would expect, relate in some way or another to the alleged failure of the judge to give proper weight to the contract; and although, for example, a complaint about the locality in London considered by the judge to be suitable for the husband's accommodation might seem at first sight not to be fit for argument in this court, it is in fact related to the wife's fall-back complaint that, even if it is not to have complete effect, the contract should have lowered the husband's need for, or entitlement to, accommodation well below the level of value favoured by the judge. So, one way or another, all of Mr Todd's grounds really relate to the important nub of this case, namely the contract; and subject to what I am about to say and subject to what my Lord may say, all of his grounds deserve this court's full consideration.
But should the grant of permission be made subject to conditions? Following dialogue with counsel this afternoon, there seems to be common ground that the relevant rule is CPR 52.3(7), which provides that an order giving permission may be made subject to conditions. Prior to our dialogue this afternoon, counsel (I believe on both sides) have...
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