A pre-nuptial agreement is a contract signed by a couple before marriage, stipulating their rights and obligations regarding property division and alimony arrangements in the event of a divorce. The party with substantial assets often uses a pre-nuptial agreement to avoid future division of family property.
An important case regarding the validity of pre-nuptial agreements is SPH v SA [2014] HKCFA 56. In this case, the couple were German, with the husband being an internationally renowned hotel interior designer and the wife working as a manager in a Hong Kong company. They met and married in Hong Kong but signed a pre-nuptial agreement in Germany before their marriage, modifying their matrimonial property rights according to German law. The wife later initiated divorce proceedings in Hong Kong. The Court of Final Appeal ruled that although the pre-nuptial agreement was not absolutely binding on Hong Kong courts, it must be taken into consideration when dealing with ancillary relief and property division. The Court also adopted the guidelines set by the UK Supreme Court in Radmacher v. Grantino [2010] UKSC 42, stating that if both parties fully understood the implications of the agreement when entering into it, did so voluntarily, and enforcing the agreement would not lead to unfairness, the court would generally enforce it and grant relevant orders. However, in divorce proceedings, if both parties agree to the terms of the pre-nuptial agreement, they must apply to the court by way of a consent summons.
While pre-nuptial agreements can undoubtedly reduce disputes in the event of a future divorce, this type of contract that anticipates divorce before marriage and prioritizes financial matters goes against the pure nature of marriage and lays a foundation of distrust in the couple's relationship.
August 2024
Dr. Anthony Lai, Mr. David Lam, and Mr. Howard Luk
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