Hong Kong’s Top Court Follows Radmacher And Charman

The Withers family law team in Hong Kong continues to be at the forefront of developing family law in Hong Kong. Very few cases go to Hong Kong's most senior court, the Court of Final Appeal (CFA), but in the past few months our team has been involved in two prominent cases before the CFA - one involving a pre-nuptial agreement and the other addressing the issue of trusts as a resource of the husband.

SPH v SA [2014] HKEC 957, in which Sharon Ser and Sindy Wong represented the wife, primarily dealt with forum. However, as the parties (who were both German nationals living in Hong Kong) had signed a pre-nuptial agreement (PNA) and, subsequently, when the marriage deteriorated, a separation agreement in Germany, the treatment of the PNA was also addressed. The wife contested the validity of the agreements, alleging that they were made under undue influence. At first instance, the Hong Kong Court was persuaded that the matter should be heard in Germany, as the majority of the assets were located there and the agreements were formalised there. The Court of Appeal (CA) and the CFA disagreed with the trial judge, finding that the wife's connection to Hong Kong was overwhelming and she could issue there as of right. The CFA also found that the existence of a PNA was a factor in the exercise of discretion, that the old rule that agreements providing for future separation were contrary to public policy was obsolete and, further, that there should be no distinction between pre-nuptial agreements and separation agreements.

Following the principle of the English Supreme Court in Radmacher v Granatino [2010] UKSC 42, the CFA held that parties could not oust the jurisdiction of the court, but the court must give due weight to an agreement which had been entered into freely, unless in the circumstances it would not be fair to hold the parties to the agreement. An agreement could carry full weight only if each party had entered into it out of his or her own free will, without undue influence or pressure, having all the information material to his or her decision and intending that it should be effective to govern the financial consequences of the marriage coming to an end.

As forum cases are common in Hong Kong and are often hotly contested, the clarification in respect of the treatment of nuptial agreements on the impact of choice of jurisdiction has been a welcome development. The treatment of marital agreements will also be welcome by many wealthy...