PRENUPTIAL
AGREEMENTS
IN
CONTEMPLATION OF DIVORCE:
EUROPEAN
AND ITALIAN PERSPECTIVES
“To leave poor me thou hast
the strength of laws,
Since why to love I can allege no cause.”
(Shakespeare, Sonnet 49)
|
Table of Contents: 1.
Prenuptial Agreements in Contemplation of Divorce: an Historical Overview. – 2. Prenuptial Agreements in Contemplation of Divorce in the
U.S.A. – 3. Prenuptial Agreements in Contemplation of
Divorce in the United Kingdom. – 4. Prenuptial
Agreements in Contemplation of Divorce in Continental Europe: Catalonia and
Germany. – 5. The Case of France. – 6.
Prenuptial Agreements in Contemplation of Divorce in Italy. |
1. Prenuptial
Agreements in Contemplation of Divorce: an Historical Overview.
A prenuptial agreement,
antenuptial agreement, or premarital agreement, commonly abbreviated to prenup
or prenupt, is a contract
entered into prior to marriage by the people intending to marry. The content of a prenuptial
agreement can vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of marriage. They
may also include terms for the forfeiture of assets as a result of divorce on
the grounds of adultery; further conditions of guardianship may be included as
well.
Postnuptial agreements are similar to prenuptial
agreements, except that they are entered into after a couple is married.
Coming to the history of prenups, I
have to point out that the widespread idea, according to which they would be something
“new,” something foreign to our legal tradition, is not entirely true. Let me
cite some examples.
Many rules of the Roman Law referred to the
agreements between prospective spouses (or their families), called pacta nuptialia (marriage agreements), very often called as
well “pacta antenuptialia,” or “pacta ante nuptias,” with a terminology which
is very similar to some current expressions, still in use nowadays, such as
“antenuptial agreements.” One of the most recurring elements in such contracts
was the right of spouses to provide for the restitution of the dowry. Dowry was the transfer
of money and/or of other kinds of assets (movable, real estate, etc.) from the
bride (or, more often, her family) to the groom, at the moment of the marriage,
in order to contribute a share of the costs involved in setting up a new household (ad onera matrimonii ferenda). The
husband had the right to manage those assets, to perceive their fruits and
interests (in order to use them for the family’s sake), but he was not their legal owner, at
least in the full meaning of the word, as, the moment of the dissolution of marriage,
he (or his heirs) had to give
back the dowry.
Pacta nuptialia could therefore include agreements
concerning, among other things, the person to whom the dowry had to be given back (either the wife, or
her family: father, brothers, heirs, etc.). Grounds of dissolution of marriage
in Roman Law were not only death or capitis
deminutio maxima (e.g. if the spouse was taken as a prisoner of war and was
sold as a slave), but also divorce. Therefore roman sources inform us extensively on this matter and we may find
there many rules on
how, to whom, in what time, etc. the
dowry should have been given back in case of divorce. Moreover, many laws of
the Digest and of the Codex of
Justinian show that the envisaged scenario “par
excellence” of dissolution of marriage was divorce, as the event that in most cases
parties had in mind while concluding an agreement on patrimonial consequences
of their future marriage.
|
“Cum quaerebatur, an verbum: Soluto matrimonio
dotem reddi, non tantum
divortium, sed et
mortem contineret, hoc est, an de hoc quoque casu contrahentes
sentiant? Et multi putabant hoc sensisse; et quibusdam aliis contra videbatur:
secundum hoc motus Imperator pronunciavit, id actum eo pacto, ut nullo casu remaneret dos apud maritum.”
(D. 50, 16, 240). |
“It was asked, whether the
expression ‘dowry to be given back in case of dissolution of marriage’ should encompass not only divorce, but
also the case of death: which is to say, whether parties to such an agreement
would intend that this contract refers also to this latter case [i.e. to death and not only to
divorce]. Many (jurists) thought this was the case, but some others had a
different mind. The Emperor decided that in no case dowry should stay with
the husband.” (D. 50, 16, 240). |
Also in the following centuries we
find evidences of prenuptial agreements aimed at setting patrimonial rules on
the assets of the parties in case of marriage crisis (legal separation, in this
case, as, of course, divorce was not allowed by the Catholic Church). The first
case I would like to mention deals with a decision issued at the end of the 16th century
by the Rota Romana on the validity of a marriage
contract that we could surely describe, in modern terms, as a prenuptial
agreement in contemplation of the marriage crisis.
|
«Placuit Dominis, sententiam
esse confirmanda: quia cum convenerit, ut in eventum separationis tori, D. Constantius
teneretur D. Lisiae eius uxori praestare scuta 270, pro alimentis, et si in
solutione eorum cessaverit per annum, ipsa possit agere ad restitutionem
totius dotis: & D. Constantius dictam summam non solverit anno 1589.
necessario sequitur, quod dos eidem D. Lisiae debeat restitui». |
«The Judges [of the Rota Romana] decided to uphold the
[first instance] judgement: as it had been agreed upon that, in case of legal
separation, (a) Mr. Constantine would be obliged to pay to Mrs. Lisia, his
wife, [every year] 270 scuta [silver
currency unity of the time, in the Papal States, the current
value of one scutum being of
about € 75,00], as alimony, and (b) should Mr. Constantine stop to pay the
said amount for one year, she could sue him and ask the Court to oblige him
to give back all the dowry; [it happened that] Mr. Constantine did not pay that amount for
the year 1589; therefore it was decided that he had to give back the dowry to
Mrs. Lisia» (Bononien. restitutionis dotis, 16 May 1595, in Mantica,
Decisiones Rotae Romanae, Romae, 1618, p. 539). |
|
|
|
In this case the Rota Romana
(second instance and supreme court in the Papal States) decided to uphold the
first instance court decision, taken by the Rota
of Bologna, that had declared valid and enforceable the agreement concluded before the marriage by a
couple of that city. According to such premarital contract, the husband had
promised to pay every year a certain amount of money in case of legal
separation. He also had promised that, should he breach that obligation for one
year, his wife could sue him and ask for restitution of the whole of her dowry.
As he failed to pay alimony for the year 1589, he was sentenced to give back
the dowry.
Even more interesting is the following case, decided on 20 June 1612 by the Supreme Court of Sicily.
|
«Sanctorus
Pagano matrimonium contraxit cum Cornelia de Pactis, Nullo expresso
contrahendi more, Graecorum, vel Messanensium: Sed cum pacto, Item che lo presenti matrimonio si intenda
con patto, che casu
(quod absit) di separatione
di matrimonio, tanto senza figli come nati figli, et quelli morti in minori età, vel
maiori ab intestato, che ogni
uno stia con le suoi doti, et beni, che ha portato, et non aliter, et detta sposa non possa disponere, nisi
tantum di unzi trenta». |
«Mr. Santoro Pagano married
Mrs. Cornelia de Pactis, without making any kind of express choice for the
“Greek” or “Messina” marriage [i.e. the system of separation of assets, with
the consequence that the marriage had to be considered as ruled by the
“Latin” system of universal community of assets], But with the following
clause: That this marriage should be intended that, in case (God forbid) of
legal separation of marriage, without children, or, should children be born,
should they die while minors, or, if come of age, die without having made
last will and testament, anyone [husband, wife and children] will keep
his/her dowries and assets he/she brought in the marriage, and nothing more,
and the said bride will have only the amount of thirty unzi [unzo, onza, or oncia was the golden currency unit of
the Kingdom of Sicily at those times, its current
value being of about € 180,00]». (See
Giurba,
Decisionum novissimarum Consistorii
Sacrae Regiae Conscientiae Regni Siciliae, I, Panormi, 1621, p. 399). |
|
|
In a curious mixture of Italian and Latin, the Sicilian
notary had provided for that, in case of separation, the customary community of goods (this
form of general co-ownership of goods being the regular default system of asset regulations
between husband and wife in the Sicilian city of Messina at those times) would
be considered as if it had never been existing for that couple.
This is not the
only example of an agreement of this kind in Europe. The French tradition knows
very well the so called “Clause
Alsacienne” (Alsatian Clause), according to which a couple can choose
the system of general
community of assets (comprising also real estates and goods acquired by
each of the spouses before the marriage), but, in case of divorce, the dissolution of marriage
will operate as a resolutory
condition.
The final result is that if
the couple does not part
and marriage comes to an end by
death, the rules of
co-ownership shall apply and the surviving spouse will keep his/her share (and of course will
add the share coming from the heritage); if, on the contrary, the marriage is a “failure,” the system of community (that logically
presupposes a couple in which husband and wife are not at odds…) will be “annulled,” as if the two of them had never
been married: what makes of course a lot of sense! (For further information on the “Alsatian Clause” see Oberto, La comunione legale tra coniugi, in Trattato di diritto civile e commerciale Cicu-Messineo, I, Milano,
2010, p. 386, note 171; II, Milano, 2010, p. 1671, footnote 198; Id., Suggerimenti
per un intervento in tema di accordi preventivi sulla crisi coniugale,
in Famiglia e diritto, 2014, p. 90,
footnote 11).
2. Prenuptial
Agreements in Contemplation of Divorce in the U.S.A.
Coming to the present state of the
situation, we know that such agreements are widely known and practised in the United States.
Historically, judges in the United States accepted the view
that prenuptial agreements were corrupting what marriage was supposed to stand for, and often they would not recognize them.
Actually, it was not until
1976 that two Supreme Courts (California, in
Re Marriage of Dawley and Connecticut, Parniawski
v Parniawski) decided to uphold and enforce two prenups. Actually this happened only
after states legislations got rid of the ancient rule of divorce based on the
fault of one of the spouses. Before such reforms, which occurred in the
mid-Seventies of the 20th Century, premarital agreements in
contemplation of divorce were seen as way for the husband “to buy himself out the marriage,
regardless of the circumstances of the divorce” (see the Supreme Court
of Maryland in the 1956 case Cohn v Cohn:
further information in Oberto, I contratti della crisi coniugale,
Milano, 1999, p. 494 ff.).
Currently prenups are recognized, although they may not always be enforced.
Both parties should have lawyers represent them to ensure that the agreement is
enforceable. Some attorneys
recommend videotaping the signing, although this is optional. Some
states such as California require that the parties be represented by counsel if spousal
support (alimony) is limited or waived.
Prenuptial
agreements are, at best, a partial solution to obviating some of the risks of
marital property disputes in times of divorce. They protect minimal assets and
are not the final word. Nevertheless, they can be very powerful and limit parties’ property rights and alimony. It may be impossible to set aside
a properly drafted and executed prenup. A prenup can dictate not only what
happens if the parties divorce, but also what happens when they die, as Common Law
systems do not know the Civil Law principle which forbids agreements on future heritage of
a living person. Therefore, American prenups can act as contracts to make a will and/or eliminate all your rights to property, probate
homestead, probate allowance, right to take as a predetermined heir, and the
right to act as an executor and administrator of your spouse’s estate.
In the United
States, prenuptial agreements are recognized in all fifty states and the District of Columbia.
Likewise, in most jurisdictions, some elements are required for a valid prenuptial
agreement:
1.
agreement must be in writing (oral prenups are generally
unenforceable);
2.
full and/or fair disclosure at the time of execution;
3.
the agreement cannot be unconscionable.
With respect to financial issues
ancillary to divorce, prenuptial agreements are routinely upheld and enforced
by courts in virtually all states. There are circumstances in which courts have
refused to enforce certain portions/provisions of such agreements. For example,
in an April, 2007 decision by the Appellate Division in New Jersey, the court
refused to enforce a provision of a prenuptial agreement relating to the wife’s
waiver of her interest in the husband’s savings plan. The New Jersey court held
that when the parties executed their prenuptial agreement, it was not
foreseeable that the husband would later increase his contributions toward the
savings plan.
In California parties can waive disclosure beyond that
which is provided, and there is no requirement of notarization, but it is good practice. There are special
requirements if parties sign the agreement without attorney, and the parties
must have independent
counsel if they limit spousal support
(also known as alimony or spousal maintenance in other states). Parties must wait seven days after the premarital
agreement is first presented for review before they sign it, but there is no requirement
that this be done a certain number of days prior to the marriage. Prenups often
take months to negotiate so they should not be left until the last minute (as
people often do). If the prenup calls for the payment of a lump sum at the time
of divorce, it may be deemed to promote divorce. This concept has come under
attack recently and a lawyer should be consulted to make sure the prenup does
not violate this provision.
In California, Registered Domestic Partners
may also enter into a prenup. Prenups for Domestic Partners can have added
complexities because the federal tax treatment of Domestic Partners differs
from that of married couples.
A sunset provision may be
inserted into a prenuptial agreement, specifying that after a certain amount of
time, the agreement will
expire. In a few states, such as Maine, the agreement will automatically
lapse after the birth of a child, unless the parties renew the agreement. In
other states, a certain number of years of marriage will cause a prenuptial
agreement to lapse. In states that have adopted the UPAA
(Uniform Premarital Agreement Act), no sunset provision is provided by
statute, but one could be privately contracted for. Note that states have
different versions of the UPAA.
In drafting an
agreement, it is important to recognize that there are two types of state laws that govern divorce – equitable distribution,
of which there are 41
states and 9 states
that are some variation of community
property. An agreement written in a community property state may not be
designed to govern what occurs in an equitable distribution state and vice
versa. It may be necessary to retain attorneys in both states to cover the
possible eventuality that the parties may live in a state other than the state
they were married. Often people have more than one home in different states or
they move a lot because of their work so it is important to take that into
account in the drafting process.
3. Prenuptial Agreements
in Contemplation of Divorce in the United Kingdom.
Prenuptial
agreements in contemplation of legal separation were considered valid and
enforceable in Britain in the eighteenth century and until the first decades of
the nineteenth century, as witnessed by one of the most important essays on
family law of those times.
|
|
|
|
|
|
|
However, as of the second half of the nineteenth century,
prenuptial agreements in contemplation of divorce have historically not been considered
legally valid in Britain, as against
public policy.
This was true until
the test case between the German heiress Katrin
Radmacher and Nicolas Granatino, indicated that such agreements can
“in the right case” have decisive weight in a divorce settlement. The judgments of the Appeal
Court and of the Supreme Court of Britain in Radmacher v Granatino stand as a landmark in the history of English matrimonial and
divorce law. They clearly established that, contrary to the previous line of
authority holding that pre-nuptial agreements were against public policy, they
were now to be given effect to so long as they were entered into by both
parties freely and with full appreciation of their consequences.
The parties were
both foreign nationals, the wife
German (whose
assets are assessed at about £ 100,000,000) and the husband French, who had signed a pre-nuptial agreement valid under German law
but then divorced
in the UK. In the High Court Baron J had awarded the husband £ 5.6m even though the
pre-nuptial agreement had stated
that neither party would seek maintenance from the
other in the event of divorce. The wife therefore appealed.
Giving the lead
judgment Thorpe
LJ allowed the wife’s appeal broadly on the grounds that Baron J had not given
sufficient weight to the existence of agreement in her initial award, though
still providing the husband with some housing and other funds to reflect the
shared residence of the couple’s children. At paragraph 53 of the judgment he
also 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.”
Other relevant parts
of the reasoning by Lord Justice Thorpe:
“There are many
instances in which mature couples, perhaps each contemplating a second
marriage, wish to regulate the future enjoyment of their assets and perhaps to
protect the interests of the children of the earlier marriages upon dissolution
of a second marriage. They may not
unreasonably seek that clarity before making the commitment to a second
marriage. Due respect for adult autonomy suggests that,
subject of course to proper safeguards, a carefully fashioned contract should be available as an alternative to the stress, anxieties and expense
of a submission to the
width of the judicial discretion.”
“I also hold my
opinion because: i) In so far as the rule that such contracts are void survives, it seems to me
to be increasingly
unrealistic. It reflects the laws and morals
of earlier generations. It does not sufficiently
recognise the rights of autonomous adults to govern their future financial
relationship by agreement in an age when marriage is not generally regarded as
a sacrament and divorce is a statistical commonplace.”
“As a society we
should be seeking to reduce and not to maintain rules of law that divide us
from the majority of the member states of Europe. Europe apart, we are in
danger of isolation in the wider common law world if we do not give greater
force and effect to ante-nuptial contracts.”
“In the
circumstances, I agree in effect with my Lords that this is a case in which the
pre-nuptial agreement
made by the parties should be given decisive weight in the section 25 exercise.
Their agreement was
entered into willingly and knowingly by responsible adults. The
husband had a proper understanding of the consequences of his agreement. It is
to be inferred that without that agreement no marriage would have taken place,
and that the wife’s father would not have made over to her the additional
resources which followed her marriage. The parties entered into their agreement with the help and
advice of a German lawyer, under German law, making an agreement which was
familiar to the civil law under which both parties and their families had grown
up in Germany and France.”
The decision by the
Court of Appeals has been confirmed by the Supreme Court, in the year 2010.
Relevant parts of
the S.C. reasoning:
“We would advance
the following proposition, to be applied in the case of both ante- and
post-nuptial agreements, in preference to that suggested by the Board in
MacLeod: ‘The court should
give effect to a nuptial agreement that is freely entered into by each party
with a full appreciation of its implications unless in the circumstances
prevailing it would not be fair to hold the parties to their agreement.’”
“91. On 1 August, 1998 the parties attended at the office of Dr Magis near
Düsseldorf. Their meeting with him lasted for between two and three hours. The
husband told Dr Magis that he had seen the draft agreement but that he did not
have a translation of it. Dr Magis was angry when he learned of the absence of
a translation, which he considered to be important for the purpose of ensuring
that the husband had had a proper opportunity to consider its terms. Dr Magis
indicated that he was minded to postpone its execution but, when told that the
parties were unlikely again to be in Germany prior to the marriage, he was
persuaded to continue. Dr
Magis, speaking English, then took the parties through the terms of the
agreement in detail and explained them clearly; but he did not offer a
verbatim translation of every line. The parties executed the agreement (which
bears the date of 4 August, 1998) in his presence.”
“The agreement
stated (in recital 2) that (a) the husband was a French citizen and, according to his own statement,
did not have a good
command of German, although
he did, according to his own statement and in the opinion of the officiating
notary (Dr Magis), have an adequate command of English; (b) the document was
therefore read out by the notary in German and then translated by him into
English; (c) the parties to the agreement declared that they wished to waive
the use of an interpreter or a second notary as well as a written translation;
and (d) a draft of the text of the agreement had been submitted to the parties
two weeks before the execution of the document.”
“Clause 1 stated
the intention of the parties to get married in London and to establish their
first matrimonial residence there. By clause 2 the parties agreed that the
effects of their marriage in general, as well as in terms of matrimonial
property and the law of succession, would be governed by German law. Clause 3
provided for separation of property, and the parties stated: "Despite
advice from the notary, we waive the possibility of having a schedule of our
respective current assets appended to this deed.”
Clause 5 provided
for the mutual waiver of claims for maintenance of any kind whatsoever
following divorce:
“The waiver shall apply to the
fullest extent permitted by law even should one of us – whether or not for
reasons attributable to fault on that person’s part – be in serious
difficulties.
The notary has given us detailed advice about the
right to maintenance between divorced spouses and the consequences of the
reciprocal waiver agreed above.
Each of us is aware that there may be significant
adverse consequences as a result of the above waiver.”
The Supreme Court further dismisses the argument of the First
Instance Judge, according to which parties had not received independent legal advice,
remarking that the Notary
had provided sufficient information on
the consequences of that agreement.
“114. The Court of Appeal differed from the finding of the
trial judge that the ante-nuptial agreement was tainted by the circumstances in
which it was made. Wilson LJ, with whom the other two members of the court
agree, dealt with these matters in detail. The judge had found that the husband had lacked independent legal
advice. Wilson LJ
held that he had well
understood the effect of the agreement, had had the opportunity to take
independent advice, but had failed to do so. In these circumstances he could
not pray in aid the fact that he had not taken independent legal advice.
115. The judge held that the wife had failed to disclose the
approximate value of her assets. Wilson LJ observed that the husband knew that the wife had
substantial wealth and had shown no interest in ascertaining its approximate
extent. More significantly, he had made no suggestion that this would
have had any effect on his readiness to enter into the agreement.
116. The judge held that the absence of negotiations
was a third vitiating factor. Wilson LJ observed that the judge had given no explanation
as to why this was a vitiating factor, and that the absence of
negotiations merely reflected the fact that the background of the parties
rendered the entry into such an agreement commonplace.
117. We agree with the Court of
Appeal that the judge was wrong to find that the ante-nuptial agreement
had been tainted in these ways. We also agree that it is not apparent that the
judge made any significant reduction in her award to reflect the fact of the
agreement. In these circumstances, the Court of Appeal was entitled to replace
her award with its own assessment, and the issue for this court is whether the
Court of Appeal erred in principle.”
As a conclusion on
this case, we can further read in the reasoning of the judgment that “Our conclusion is that in the
circumstances of this case it is fair that he should be held to that agreement and that it would be
unfair to depart from it.
We detect no error of principle on the
part of the Court of Appeal. For these reasons we would dismiss this appeal.”
After this
benchmark case, the Law Commission, a
statutory independent body
that advises on law reform, recommended that prenups should become legally
binding subject to stringent
qualifications. One requirement should be that at the time of
signing both parties must disclose material information about their financial
situation and have received legal
advice. A further restriction, under the commission’s proposals, is that
agreements would only be enforceable “after both partners’ financial needs, and
any financial responsibilities towards children, have been met.” Introducing prenuptial agreements without protection of the
parties’ needs
“would be very damaging,”
the commission warns. That key proviso suggests tortuous legal disputes over
the fairness of maintenance
payments and financial needs would still have to be brought before courts.
The Commission has
also called on the Family
Justice Council, whose members include judges and lawyers, to produce “authoritative
guidance on financial needs” to enable couples to reach an agreement that
recognises their financial responsibilities to each other. The Government, the
Commission said, should
also fund a “long-term study to assess
whether a workable, non-statutory formula could
be produced that would give couples a clearer idea of the amounts that might need to be
paid to meet needs.”
The Law
Commission’s proposals have
been sent to the Ministry of Justice, which will examine whether it
wishes to draw up legislation on the basis of the suggestions. Past governments
have shown reluctance to revise marriage laws. Actually, in a public statement
released in 2017, the Ministry of Justice (MoJ) admitted that it “is
still considering whether or not to legalise a form of prenuptial agreement
recommended by the Law Commission.”
Legal doctrine, on the other side, has welcomed such
recommendations, underlying that qualifying nuptial agreements would give
couples autonomy and control, and make the financial outcome of separation more
predictable. It must also be considered that, even before Radmacher, british legal doctrine tended to consider the
traditional view as “paternalistic
and anachronistic.” It has been remarked furthermore that these
recommendations represent a welcome
stride towards greater autonomy and certainty for couples. If implemented,
then a prenup fulfilling certain conditions will be legally binding. However, it has been
remarked that it will not be possible to avoid meeting the financial needs of
partners and children and, as always, the question is what falls under the definition of ‘needs’?
In any case scholars and practitioners agree on the positive effect of limiting judges’ discretion and of
allowing couples greater certainty and pre-agreed financial control should
their relationship disintegrate.
In the meantime, British Courts seem to follow the precedent of Radmacher v Granatino, as it is shown,
for instance, by a judgment of 2014 (SA v PA), in
which the (Dutch) husband contended that
the parties were bound by a Dutch
pre-marital
agreement and the (British) wife argued for a compensatory payment by virtue of
her having given up a high powered career. The Court upheld the agreement (signed in The
Netherlands by both parties before a Dutch notary) which contained provisions
on spousal assets, with exclusion of the immediate community (i.e. joint ownership) of all
property on marriage, which is the default marriage regime of Dutch law. On the
contrary, the contract
provided for the equal
sharing of the marital
acquest inasmuch as it provided for the joint sharing of surplus joint
income. The contract did
not provide for what maintenance,
if any, should be paid on divorce, in contrast to the German agreement in Granatino.
In any case the rationale of this
decision is clearly
the same of that
precedent, as the “core”
of it contains the following sentence: “The court should give effect to a nuptial agreement that
is freely entered into by each party with a full appreciation of its
implications unless in the circumstances prevailing it would not be fair to
hold the parties to their agreement.”
The same is true
for a more recent case decided in 2016 by the Family Division (DB
v PB).
This was an English divorce of two Swedish nationals aged 49
and 50, who had cohabited since 1994, married in 2000, and resided in England
since 2009. They have two minor children. There was a forum race to divorce in
Sweden versus England, but the wife beat the husband and “got in” first in
England (per the Brussels IIa regulation). There were 3 prenuptial agreements, a Swedish one in
July 2000, an American one in December 2000 and a further Swedish one on 26
December 2000.
All of the 3
prenups contained a prorogation clause stating Swedish law should apply on
divorce and granting exclusive jurisdiction to the court in Stockholm on a
divorce. The wife asked that the prenups be ignored on the grounds of
misrepresentation and unfairness and sought half of the family pot. The husband
asked for the prenups to be respected and accordingly for the wife simply to
have her half share in the family home.
Per the agreements,
the wife received her half share of the marital home worth approx. £560,000
after debts. But no more. Almost £11m was built up during marriage, but placed
by the husband in his sole name maintaining the separate property agreement in
the prenups. But, an
English judge could only seek to make the terms of the prenups fairer within
limitations of EU law, given the prorogation clauses. Maintenance claims (i.e. lump sum and
periodical payments) had to be heard in Sweden.
In the UK since 18 June 2011, the Maintenance Regulation (EC no. 4/2009),
Article 4 allows written agreement on choice of court within the member states
for issues of maintenance: “prorogation.”
The effect of such
prorogation was to engage the Maintenance Regulation: all maintenance (lump
sums and spousal maintenance) to be dealt with in Sweden, whereas England with claims dealing with “rights in property arising out of a
matrimonial relationship,” unless
such claims are “negated
by the terms of the pre-nuptial
agreement itself.” What regard is to be had to the prenup? Per Radmacher, the court is to give effect
to the prenup, unless it would be unfair to do so, and a prenup cannot be
allowed to prejudice the reasonable requirements of any children of the family.
If deemed unfair, (as here), does
that mean the prenup should be disregarded? The judge held no. He followed Radmacher where the agreement had
also been unfair, but in respecting
autonomy of parties to enter legal relations, extra provision was then
added in by the court, simply to alleviate the unfairness.
(He highlighted the difference between inherited wealth, as in Radmacher, and
wealth generated during the relationship, as in this case.) This means the court should
alleviate unfairness but having regard to the terms of the prenup – and not
seeking to restore the parties to the position they would have been in absent
the agreement. (Here there was a separate property regime and all was in
husband’s name save for family home, so the court could only meet the wife’s needs.) How generously
needs are to be met is considered on a case by case basis, and by invading the
husband’s separate property. (Needs include spousal maintenance, and the making of Duxbury lump sums, but that is for Sweden to deal with in this case).
As far as housing
needs of wife and children are concerned, where the European Maintenance
Regulation is effective (as here) the needs cannot be met, and sharing is
prevented per the prenup, so recourse can be had to the Children Act 1989,
within divorce proceedings, to provide housing on trust, (and here, without
contribution by the wife so she can invest her own share of the family home for
when this trust property reverts to husband.) And, further a carer’s allowance
under CA 1989, plus child maintenance (see Family
Law in Partnership,
DB v PB:
English divorce of Swedish nationals and the impact of prenuptial agreements.)
4. Prenuptial
Agreements in Contemplation of Divorce in Continental Europe: Catalonia and
Germany.
We saw that at the
basis of the rationale of Radmacher v Granatino lays the
assumption that, had such a prenup been brought before a court in France or in
Germany, it would have been considered as valid and enforceable. This remark is certainly true if we consider what
we call in Continental Europe the choice of the régime,
with particular reference to the choice for a system of separation of assets.
The situation is different if we have
regard to the antenuptial regulation of alimony (maintenance) in case of divorce or
separation. This possibility is
excluded in countries such as France or Italy,
whereas more and more countries in Continental Europe allow such provisions.
I could cite here
the case of the Family Law
Code of Catalonia
(Codi de familia), whose article 15
provided in 1998 the possibility for spouses to agree on assets and patrimonial
issues “àdhuc en previsió d’una ruptura matrimonial” (as well in contemplation
of a marriage crisis). This provision has been replaced in 2010 (see Llei 25/2010, del 29 de juliol, del llibre
segon del Codi civil de Catalunya, relatiu a la persona i la família) by article
231-20 of the Codi Civil de Catalunya,
which now dictates some interesting rules on the way such agreements have to be
made and enforced. Here it is as well interesting to remark that same
provisions are available to cohabiting
partners, according to article
234-5 of the same code.
As for Germany, one
should take into account that the contract autonomy of parties has always
played a key role, what reflects the thoughts of the greatest German
philosophers. I could her quote for instance Hegel (see Grundlinien der Philosophie des Rechts, Leipzig, 1930, p. 147), who
said that marriage contracts (Ehepakten)
were intended to regulate relations between spouses “in case of separation of
marriage for death, divorce or similar events” (gegen den Fall der Trennung der Ehe durch natürlichen Tod, Scheidung u. dergl.).
When considering
the German legal system we must always keep in mind two main factors.
(i) Since the early
16th century, Germany has known the insurgence of the Protestant doctrine,
which denied that
marriage could be considered as a sacrament: it was therefore much easier for German jurists of
the 16th, 17th and 18th century (such as
Thomasius, Struvius, Leyser, Lauterbach, Boehmer, etc.) to elaborate a new
doctrine of marriage. According to this new viewpoint, marriage could be seen just as a contract,
which, as any other contract, could be dissolved by mutual consent, with any kind of agreement on such dissolution.
(ii) Furthermore,
we must not forget that in many regions of Germany, Roman Law has been applied until 31st December,
1899; in the Roman legal system, as I have already pointed out, it was
accepted that spouses could provide for patrimonial consequences of a possible
divorce since the very moment in which they got married.
As a consequence,
German case law and German legal doctrine have always stated that such
agreements should be seen as valid
and enforceable, also when they foresaw a complete waiver of rights by
spouses in case of divorce.
So e.g., according
to a decision of the BGH (Supreme Court of
Germany) from 1995 “for agreements of financial kind, which spouses
precautionally already make during the marriage or even before the marriage
ceremony in contemplation of the case of a later divorce, exists the principle full freedom of contract
(§ 1408 Para. 1 and Para. 2 of the BGB-German
Civil Code). No special
control on the contents of such agreements has to take place, on whether
the regulation is appropriate. The enforceability of the agreement does not
depend on additional conditions, e.g. of the fact that for a maintenance
renouncement or waiver of spousal support a return or a payment of a
compensation is agreed upon” (see BGH 27.9.1995).
No effect on the
enforceability of the agreement was also played by the fact that “in such a
case the resolution to divorce could turn out to be for economic reasons far more difficult to one
spouse than the other” (BGH
19.12.1989, FamRZ 1990, 372; see also
BGH 2.10.1996).
According to this case law, German notaries have been developing different models of marriage contracts, which I describe in
my book about the “Contracts of Marriage Crisis” (I contratti della crisi coniugale). They may contain
clauses in which
one party (or both) waive any right to
alimony, such as: “the husband [or the wife, or both of them] gives up to
any pretension concerning alimonies in case of divorce, also in a situation of
need.” Among the many other
different possibilities we may find agreements in which alimony or divorce support are
not waived, but are determined
in a precise way, for instance by setting a limit (no more than € … for each month),
or by fixing the amount
of alimony as a ratio of the income of the “richest” party (e.g.: 20% of
the net income of the party who will have the highest income), or by setting a time limit (sunset provision) for
such alimonies (e.g.: for no longer than 5 years after dissolution of the
marriage). German marriage contracts (Eheverträge)
can also contain provisions in
case of death
of one of the spouses.
Some changes
were brought about by a decision
of the Federal
Constitutional Court in 2001 (BVerfG 6.2.2001), followed by a decision of
the Federal Court of
Justice (BGH 11.2.2004).
These two judgments ruled
that notarized prenuptial agreements that seriously disadvantage one party in a marriage could be
deemed invalid. The
judges stated that while, in principle, a contract may state that one of the
partners has renounced his or her right to receive alimony, if the agreement is one-sided
it would be morally unacceptable and could therefore be challenged. The court
also ruled that a spouse is free to contest the contract in instances of
imbalance where her partner’s income has risen dramatically during the marriage
because, for example, she was home caring for children.
Many scholars
have criticised
this view,
according to which the traditional freedom of parties in a contract is “patronized” by judges’
personal views. Moreover, powers of judges in Civil Law legal system do not
allow such kind of intervention on the “fairness” of an agreement, if parties do
not breach certain rules of the civil code: rules that however do not provide parties
(who freely and knowingly concluded an agreement) with the right to get rid of their
contractual engagements, simply because they changed their minds.
5. The Case of
France.
Also in France, as in any other country of Continental Europe, spouses
have the possibility to sign a marriage contract prior or during the marriage.
A French marriage contract (contrat de mariage)
deals (as in Italy, Spain, Germany etc.) with the possible consequences of the
marriage on the spouses properties acquired before or during the marriage. This
is the reason why in French law, as in Italy, Spain or Portugal, we use the
expression “matrimonial
regime,” the word “regime” meaning “rule” in languages of Latin origin
(in Latin language “regimen” means “governance,” or “management,” or
“administration”). A matrimonial regime is a body of rules about the effect of the marriage on the administration, the
enjoyment, the disposal of their property by the spouses during the marriage.
In French (as in Italian, Spanish, Portuguese etc.) law, the scope of a
marriage contract is to determine the matrimonial regime chosen by the spouses,
without any reference to
spousal support (maintenance or alimony) in case of legal separation or
divorce. So, marital agreements are legally valid and binding, but concern the
arm’s length division of assets and enrichment, without setting any “equitable
element” to try and pre-empt the divorce court right to “tip the scale”, whilst
in England (as well as in Common Law countries), they are essentially linked to
divorce and avoiding equitable distribution. According to many scholars, under
French law, one cannot exclude the right to a “compensatory payment” (préstation compensatoire) on the
occasion of divorce, contrary to German law, where it can be waived (as in Radmacher v Granatino).
However, I have to point out that—others than in Italy—French notaries, while
drafting a marriage contract, have a large power to “tailor” the property regime chosen by the spouses on their
needs, wishes and expectations. So, just to make an example, French courts deem
the already mentioned “Alsace
Clause” perfectly valid and enforceable; parties can furthermore provide
a community of acquests
regime in which the shares
of the spouses are not
equal, or where the rights of one of the parties can be paid off with a lump sum,
or with the conveyance of movable assets or of real estates, and so on (see on
this Oberto, La comunione legale tra coniugi, I, cit., p. 385 ff.; for some
references available online see as well Oberto,
Contratti prematrimoniali e accordi
preventivi sulla crisi coniugale, in
Famiglia e diritto, 2012, p. 69-103,
spec. §
3, footnotes 42-47).
Also
on the side of the préstation
compensatoire, more and more lawyers, notaries and scholars are advocating
for a law reform allowing parties to freely dispose of it before
entering into a marriage.
Furthermore, some decisions issued in
cases concerning international
couples are showing that French judges are not against foreign
prenuptial agreements, as it is shown, for instance, by a 2010 judgement of the
Court
of Grasse. Here the judge upheld an English prenup, in which the parties
had agreed upon the fact that, in case of breakdown of the marriage, each
spouse would keep his or her assets, she would get £ 50,000.00 (indexed) for
each year of marriage (until the filing of a divorce petition) and this amount
was to cover any financial claim or remedy of any sort. At the time of
marriage, he also bought her a flat in her name on the Cote d’Azur, then worth
about £ 300,000.00.
6. Prenuptial
Agreements in Contemplation of Divorce in Italy.
In Italy
marriage contracts can been concluded either before or during the marriage by
notary deed (see article 162 of the Italian Civil Code).
However—as I have
already explained—such deeds are mainly intended as instruments to chose a “marriage regime”
other than the default one, which is the
comunione legale (community
of acquests). However, the optional system of separazione dei
beni (separation of
assets) can be chosen
at the very moment of the celebration of marriage with a declaration of the
spouses to the mayor or to the parish priest celebrating the marriage.
By notary deed
spouses can also elect a fondo patrimoniale (capital fund, somehow
similar to a trust, by which spouses can chose to submit some assets—real
estates or negotiable instruments, such as securities, bonds, company shares,
etc.—to special rules, in order to allocate their revenues to the family
needs), but parties’ freedom
of movement in shaping the default community of acquests regime is very narrow, as no variation may be made in
the power to manage
and administer the assets belonging to the comunione
and parties cannot depart from the rule that the partition of the community
must be made in equal portions.
As an alternative
to comunione and separazione regimes spouses can chose a system of general community,
extended to (almost) all assets belonging to them and acquired either before or
after the celebration of the marriage (comunione
convenzionale).
However, as already
explained, the Italian Civil
Code does not
mention the matter of spousal
support among the subjects that a marriage contract can deal with.
Furthermore, the Supreme
Court of Cassation has always deemed null and void any agreement made in contemplation of a future divorce,
either concluded during the time of legal separation, or before.
In order to better
understand the position of the Court, one has to keep in mind that Italy is one of the last countries in the world
to allow divorce only to those couples who
have previously undergone
a judicial proceeding of legal separation. Until 2015, moreover, three years had to elapse after the
judicial proceeding of legal separation had been initiated, before starting the
procedure for divorce. In
2015 Italian Parliament approved a reform reducing such timeframe to one year
(in case of contentious judicial separation), or to six months (in case of
legal separation by mutual agreement); however, the requirement of a previous
formal separation is still required as a necessary pre-condition for the
divorce.
Having said this,
it is easily understandable that very often couples
who reached an agreement
in the process of legal
separation would like to avoid any future possible dispute
during the divorce process. However, most agreements of that kind have been declared null and void by
the Supreme Court
of Cassation, at least in
the part in which they set forth provisions to be applicable in case of divorce (e.g.: the wife
gives up to any right to alimony and pledges not to claim alimony or lump sums
during the future divorce process). The reason is that such provisions could impair the freedom of both parties to decide whether to divorce or
not. Such influence
by possible pecuniary
consequences on the “personal”
freedom of choice
about the decision to
divorce (or to abstain to divorce) would render the agreement contrary to public order
and therefore null and void. In other words, according to such viewpoint, with
this agreement parties
envisage a contract whose object
is their legal status of married people, whereas
personal legal status is non-negotiable (some
scholars cite here the biblical example of Esau, who traded his birthright to
Jacob for a bowl of lentil soup!).
I spent a lot of
energy and time in my articles and books trying to give evidence that this assumption is basically
wrong, as it makes confusion
between:
(i)—on one side—an
agreement in which a party would theoretically pledge not to divorce (or not to ask legal
separation), as well as to
divorce (or to ask legal separation), which would be surely against ordre public, and
(ii) an
agreement—on the other
side—in which parties only
provide for patrimonial consequences of the (possible) decision to divorce.
Moreover, the Italian legal system provides for examples of pre-emptive agreements on
the patrimonial
consequences of a new status.
Therefore in Italy (as everywhere in the world), marriage contracts—which, according to the Civil
Code, can be concluded before
the marriage—deal with patrimonial consequences of the new prospective status
of married people (distribution of assets acquired by spouses before or
after the marriage, making a choice among community of acquests, general
community of all goods, separation of assets, etc.); so, why on earth an agreement on future
consequences of another possible change of status
(divorce) should be deemed illegal?
A donation between future
spouses can be made dependant
on the prospective marriage (see article 785
of the Italian Civil Code), what means that an event consisting in the
alteration of a personal status (from
single to married) can influence property right
consequences of a contract (such as a donation). Why shouldn’t we apply
the same rule to the very similar situation in which we have another alteration
of a personal status (from married to
divorced)?
I use to say as
well that the above mentioned case law of our Supreme Court is “educationally harmful,” because it engenders the false idea that among spouses
“pacta non sunt servanda” (agreements
can be broken). Actually, it happens very often that a spouse “feigns” to agree
with the other in the framework of the legal separation process, with the mental reservation to re-open the discussion
(and to set forth new
claims) afterwords, during the divorce proceedings.
However, I would
like to conclude this presentation with some more optimistic notes.
First of all we
have to consider that, since 1987,
husband and wife can divorce on the basis of a mutual agreement, which must also comprise an
agreement on pecuniary aspects and maintenance: what makes clear that this
subject is not “untouchable” by parties’ consent.
Secondly, in 2014 two new kinds of divorce (and
legal separation) have been introduced, which completely “skip” any form of
intervention by a court. In case of agreement, parties can have their divorce
by mutual consent simply signing a paper before two lawyers, in the framework
of a proceedings of “collaborative
law” (negoziazione assistita)
or, as an alternative, before the civil registrar of the townhall: no judgement, order or decree
from a court is needed any longer. Actually, in the case of negotiations, the
agreement between the spouses must be concluded with the participation of
advocate and each of the spouses must be represented by at least one advocate.
The agreement is than sent to the Prosecutor, and if he/she gives an positive
opinion to it, the agreement shall be sent to the appropriate registrar’s
office.
Consequence of such
reforms is that nowadays none can claim that the very idea of an agreement on
the pecuniary consequences of a divorce should be held as in opposition to an
alleged pre-eminence of a
judicial intervention: an intervention that, in fact, the will of the
parties can completely exclude.
Actually, in recent times many scholars declared to subscribe my viewpoint,
deeming prenuptial agreements in contemplation of separation and/or divorce
valid and enforceable, whereas some judicial decisions are starting to overturn the “traditional” case law.
For instance, in 2012 a decision by my
Court (the first one of this kind in Italy) stated that agreements
reached by married couples at the moment of their separation are valid and
enforceable also as far as their provisions in contemplation of divorce are
concerned. Therefore, the President
of the Court of Turin denied
to allocate alimony lite pendente to a woman who had claimed this money from her
husband at the moment of the start of a litigation on divorce, whereas she had given up to any such pretensions (explicitly
mentioning the case of future divorce) in the agreement she had made with her
husband during the process of legal separation three years earlier.
But a new wind seems sometimes
to be blowing also
in the Supreme Court.
Among the many
cases, I would like to make here reference to a decision in which, already thirty years ago,
the Court decided that a postnuptial
agreement of an
American couple, although contrary to Italian domestic public order, was not against the
Italian international
public order and therefore was enforceable in Italy (see Cass.,
3 maggio 1984, n. 2682).
Many years later,
in 2012, the Italian Supreme Court of
Cassation ruled that the “traditional” case law was not applicable to a situation in which an Italian
couple had agreed—just
one day before the
marriage—that, in
case of divorce (or of legal separation), the wife would convey to her prospective husband the property of a flat of hers, as a compensation for expenses he had made in
order to restore another
flat of the same woman (see Cass., 21 dicembre 2012,
n. 23713).
In 2013 the same Court decided that two fiancés can agree that the sum of money that one of them has lent to the other,
can be claimed back
only if their future
marriage will end with a
legal separation (see Cass., 21
agosto 2013, n. 19304).
In both such cases
the Court claimed that these decisions would not overturn the “traditional” viewpoint, because
“prenuptial agreements in contemplation of divorce” could be considered only
pre-emptive agreements concerning
maintenance obligations or spousal support (alimony). Of course this rationale is flawed, as what pertains to the essence of
prenuptial agreements in contemplation of divorce is the fact to agree on
pecuniary consequences of divorce, regardless of the nature and scope of such
consequences: whether conveyance of real estates, or delivery of any
kind of goods, or return of money to lender, or reimbursement of expenses, or
payment of alimony, and so on.
In 2015 the same
Court decided a case concerning an agreement parties had entered into at the
moment of their separation and held it as valid and enforceable, even though it
had been “kept aside” (a latere, as
we say) and was not transposed in the agreement submitted to the court. Nothing
new under the sun, as, by the way, this principle has always been affirmed by
the Court of Cassation. The case had no reference to the situation of an
agreement which parties intended to be effective also for their divorce.
However—in the reasoning of their judgement—the supreme justices added
(incidentally, not with the force of a true ratio
decidendi) that covenants among spouses made before divorce and in view of
it are not against public policy (see Cass., 3 dicembre
2015, n. 24621).
Quite the opposite,
in 2017 two decisions of the very same 1st Civil Division of the
Court reasserted the “traditional” view, that maintenance in case of divorce
cannot be disposed of by spouses and therefore any kind of agreement involving
it and entered into prior to the moment of the divorce is null and void as
countrary to public policy (see Cass., 13 gennaio 2017,
n. 788
and Cass.,
30 gennaio 2017, n. 2224).