A. Legal Status of Nuptial Agreements
Separation agreements are agreements entered between couples once they have separated or on the occasion of their separation. These are common because they are valid contracts, according to section 14 of the Matrimonial Property and Proceedings Ordinance (“MPPO”), Cap. 192. Furthermore, as in the Hong Kong Court of Appeal case of L v C, the courts have affirmed that such agreements should be upheld unless there is a compelling case of unforeseeable circumstances.
If an agreement is made during marriage but before separation, then this is known as pre-separation post marital agreement. This is not a separation agreement under section 14 of the MPPO. These agreements will be governed by similar considerations as pre-marital agreements in accordance with the Radmacher principles discussed below.
Nuptial agreements could be taken into account by the court when deciding the outcome in divorce proceedings involving ancillary relief and division of financial assets under section 7(1) of the MPPO as “circumstances of the case” or “conduct”, and may be upheld in part or in whole.
When the court needs to determine whether or not to make an order in accordance with a nuptial agreement, the question of fairness is the key issue. In the UK, it is likely that the court will follow the terms of the nuptial agreement and hold the parties to their agreement if the parties:
- are shown to have understood the terms of the agreement;
- had independent legal advice;
- gave full and frank disclosure of their financial positions;
- were not under pressure when signing the agreement;
- did not exploit a dominant position;
and if the agreement is not unjust.
This list is not exhaustive but provides a general basic guideline. A nuptial agreement should be given effect (that is, enforced) if it was “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.” (See: UK case Radmacher v Grantino)
In Hong Kong, the Court of Final Appeal in SPH v SA adopted Radmacher as good law.