Hong Kong's Status As Legal Hub Bolstered By Major Pre-Nup Case - Withers

Vanessa Doctor and Tom Burroughes

10 June 2014

Hong Kong could become increasingly used as a place for warring couples to deal with pre- and post-nuptial marital cases, following a landmark ruling in the jurisdiction, at first instance held that Germany was clearly and distinctly the more natural and appropriate forum for the case. In reaching his decision, the Judge placed considerable weight on the prenuptial and post separation agreements executed by the parties,” it said. “The judge concluded that the balance of fairness would be achieved by staying the proceedings in favour of Germany, but without prejudice to the Wife’s right to apply for financial provision in Hong Kong following a divorce in Germany. The Wife appealed. The Court of Appeal allowed the Wife’s appeal on the ground that the Husband failed to meet the burden of proving that Germany was distinctly the more suitable and appropriate forum in which to hear the case. The Husband then appealed to the Court of Final Appeal and, in November 2013, his leave to appeal was granted,” it continued.

“Following a one-day hearing on 12 May, the five Justices of the Court of Final Appeal unanimously upheld the Court of Appeal’s decision in favour of the Wife,” it said.

“The Court recognized that the issues before the court had a wide significance involving the impact of agreements to vary the parties’ matrimonial property rights under foreign law and separation agreements which purported to restrict the wife’s rights to claim maintenance. As the Court said, ‘this is an opportune occasion to consider whether Radmacher v Granatino represents the law in Hong Kong.’ The court unanimously decided that it did,” Withers said.

Radmacher v Granatino is an English Supreme Court case from 2010 in which the court gave clear guidance as to how the English court would deal with pre nuptial and post nuptial agreements. It was held that the court should give effect to an agreement which is freely entered into by both parties with a full understanding of its implications unless in the circumstances it would not be fair to hold the parties to their agreement. Previously in Hong Kong such agreements were not enforceable, but could be taken into account as one of the circumstances of the case.

“The Court did have a word of qualification in respect of agreements reached in some civil law countries: the agreement may only be to adjust the matrimonial property regime in a civil law country rather than made in anticipation of divorce. The Court of Final Appeal said that, although a Radmacher type of prenuptial agreement should be upheld in Hong Kong, not all prenuptial agreements may be if they involve an adjustment to a contractual matrimonial property regime and that this remained a grey area both in England and in Hong Kong,” it added.