Let couples have prenuptial agreements, say lawyers

PUBLISHED : Monday, 14 November, 2011, 12:00am
UPDATED : Monday, 14 November, 2011, 12:00am


With applications for divorce hitting almost 21,000 last year - the highest annual rate - and with multimillion-dollar claims making headlines, it may be time for Hong Kong to follow international trends and recognise prenuptial agreements. Or not.

Some experts say the deals, setting out a division of assets before the knot is tied, might work for the super-rich but others say that for ordinary couples it could destroy love and trust before a marriage even starts.

Family lawyers and some academics see the agreements as a way to cut huge legal fees in disputes that can last for years.

'Not only could a properly prepared prenup agreement help cut legal costs and court time, it could even save parties from mental trauma in the litigation,' said Dennis Ho Chi-kuen, a family lawyer for more than 20 years.

'In some matrimonial disputes, the parties sometimes even go beyond financial issues and their attacks become personal, which is really hurtful to both sides,' Ho said.

Ting Kwok-fai, a Chinese University sociology professor, agreed that prenuptial agreements would technically provide a more subjective basis to resolve matrimonial disputes. He said couples should be allowed the option.

'But from a sociologist's view, marriage is based on love and trust between a couple. So, it is questionable whether couples would want to take such a step to prepare for a divorce even before they marry,' Ting said. 'I believe prenup agreements are more for the super-rich and celebrities who try to protect their family wealth.'

Divorce applications have soared in Hong Kong in the last few decades. They stood at 20,849 last year, compared to 19,263 in 2009, which represented a 48 per cent rise from 14,063 cases in 2000, almost triple the figure of 6,767 in 1990 and almost eight times the 1980 figure of 2,421.

The caseload of matrimonial disputes in the courts is also rising - from 15,703 in 2008 to 16,374 in 2009 and 17,359 last year.

City courts have yet to accept prenuptial agreements, with judges focusing instead on fairness in dividing assets. Couples dissolving a long marriage are likely to have a 50-50 split of their wealth after divorce.

Prenuptial agreements have been adopted in many other places including the mainland, the United States, some European countries, Australia and recently Britain.

In October last year, the Supreme Court of England and Wales ruled prenuptial agreements enforceable under British divorce law for the first time. In a case, judges found in favour of 40-year-old German heiress Katrin Radmacher, who had sought to protect her ?06 million (HK$1.32 billion) fortune in the eventuality of a marriage breakdown. In January, the Law Commission for England and Wales published a consultation paper seeking the public's view on agreements for martial property.

In Hong Kong's Court of First Instance, a couple are now in a legal battle where the wife is claiming HK$5.5 billion from her wealthy ex-husband - more than half his assets.

Barrister Tanie Toh Wai-yin, who practises family law, said she believed that legislating prenuptials would be a viable option here to keep pace with social changes, considering that divorce and matrimonial disputes are no longer a social taboo.

'What I mean by legislation is not to make prenups mandatory, but to restrict the agreements to cover only inherited, gifted and pre-acquired property. That will give more certainty when disputes arise after divorce,' Toh said.

Courts have been reluctant to recognise prenuptial agreements because they are seen to induce separations. But Toh said there was evidence they encouraged marriage.

'Chinese people, especially the older generation, are accustomed to the stereotypical role of men who are usually the breadwinners and control the finances, and the stereotypical role of women who are mainly home-oriented. However, the younger generation is more willing to accept nuptial agreements and see it as a tool to protect their interests,' Toh wrote in an article published in Hong Kong Lawyer in September.

'Potential damage to an individual's assets with divorce is one reason why marriage is now so unpopular.'