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1. Introduction To Prenuptial Agreements
A prenuptial agreement is a signed and written contract entered into by parties to a prospective marriage. The agreement sets out how their assets and liabilities are to be divided if the marriage is later dissolved.
The terms in the agreement will usually cover the divisions of capital and earnings. The agreement may also specify the financial and custodial arrangements for children of the marriage or the religious beliefs they are to be taught. However, the jurisdiction of the court over children can never be ousted.
The benefits of a prenuptial agreement are not solely for the protection of the assets of a wealthy spouse. The advantage of a prenuptial agreement is that both parties enter the marriage with clearly defined and honest expectations.
2. Enforceability Of Prenuptial Agreements In Hong Kong
Whilst English authorities are persuasive they are not binding on the Courts in Hong Kong. It is likely that Hong Kong Courts will give substantial consideration to recent developments in the law relating to prenuptial agreements in England.
The English courts were traditionally reserved on prenuptial agreements. Although over the years the English courts have accepted prenuptial agreements as a factor for consideration when determining the division of matrimonial assets, the relative weight to be attached to such agreements was unclear.
However, following the English Supreme Court decision in Radmacher v Granatino [2010] UKSC 42 on 20th October 2011 the position seems to have significantly changed. Although not binding, the persuasive effect will be felt by the Courts in Hong Kong.
In Granatino, the Supreme Court, by a majority of eight to one, ruled that it was not unfair to hold the parties to the prenuptial agreement signed almost 10 years earlier. The overriding criteria to be established in ancillary relief proceedings (where an application is made by a spouse for financial relief) was that of fairness. In assessing what is fair and just a reasonable prenuptial agreement was held to be of paramount importance.
A prenuptial agreement, made in the appropriate manner will now be given far greater weight unless in the circumstances it is unfair to do so.
3. Reasonable Prenuptial Agreement
Although, what is reasonable will depend on the individual circumstances of each case, Granatino has given general guidelines as to what constitutes a reasonable prenuptial agreement capable of determining fairness. A prenuptial agreement is generally reasonable if it is procedurally fair and substantively fair.
Procedural fairness refers to matters between the parties such as consent, free will, full disclosure and the obtaining of independent legal advice. The Agreement must not be signed by either party under pressure, duress or undue influence and should be signed within a reasonable time before the marriage. There should be an interval between the making of the agreement and the marriage so that neither party is pressurized as to the agreement and to the consequences of calling off the marriage at a late stage.
Substantive fairness relates to matters such as provision for the children of the family, provision for the spouse, provision for unforeseen circumstances that may arise (although this may be difficult to contemplate) and provision for a complete disclosure of all assets.
4. Jurisdiction of the Hong Kong Courts in Divorce Proceedings
The courts in Hong Kong have jurisdiction in divorce proceedings (where a prenuptial agreement will be a factor to be considered by the courts) if either party to the marriage satisfies the three main criteria specified in Section 3 of the Matrimonial Causes Ordinance (Cap 179).
The three criteria to be satisfied are:-
one of the parties was domiciled in Hong Kong at the date of the petition for divorce.
OR
one of the parties was habitually resident in Hong Kong throughout a three year period immediately before filing the petition for divorce.
OR
one of the parties has a substantial connection with Hong Kong at the date of filing the petition for divorce.
Although exceptions exist, a petition for divorce in Hong Kong will not be accepted until one year after the date of the marriage has passed.
It does not matter where the marriage took place provided the validity of the marriage is not in doubt. Likely, it matters not where the prenuptial agreement was signed provided the validity of the agreement is not in doubt.
Whilst every effort has been made to ensure the accuracy of this article it is general in nature and does not constitute legal advice of any kind. You should seek your own personal legal advice before taking legal action. We accept no liability whatsoever for loss arising out of the use or misuse of this article.
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