Divorce Property Settlement in Hong Kong: How to deal with Matrimonial Property Agreements in Divorce Proceedings?
Pursuant to the decision of the Hong Kong Court of Final Appeal in SPH v SA [2014] HKEC 957 (FACV No. 22 of 2013), the Hong Kong courts have formally established that they follow the legal position of the English case of Radmacher in recognizing the legal effect of matrimonial property agreements, subject to certain conditions, as described in the article ‘Hong Kong Divorce Lawyer: How to Make a Prenup Agreement in Hong Kong?’
Effect of Matrimonial Property Agreements on Hong Kong Divorce Proceedings
On this premise, how do Hong Kong courts deal with matrimonial property agreements in divorce proceedings? There are at least two issues involved.
Firstly, in Hong Kong divorce proceedings, if there is a dispute over the distribution of matrimonial property, both parties are required to make full and frank financial disclosure of their financial position, see Disclosure of Property in Hong Kong Divorce Proceedings. However, in the case where the divorcing parties have entered into a matrimonial property agreement, are they still required to make the same full and frank financial disclosure?
Secondly, in the division of divorced property in Hong Kong, the court is empowered under section 7(1) of the Matrimonial Proceedings and Property Ordinance (Cap. 192) to distribute property according to the principle of ‘fairness’, having regard to all the factors set out in that section. However, in the case of a matrimonial agreement between the divorcing parties, does the court still need to consider section 7(1) of the Matrimonial Proceedings and Property Ordinance, Cap 192, having regard to all the factors set out in that section?
Crossley’s application: treating matrimonial property agreement as a preliminary issue
In the Hong Kong case of L v F (FCMC 7917/2018), the Hong Kong court adopted and developed the legal principles and approach established in the English case of Crossley v Crossley, i.e. where one party to a surviving divorce proceeding proposes to rely on a matrimonial property agreement which has been signed by the parties of their own volition, a party may, as an antecedent issue of the matrimonial property proceedings, make a preliminary application for a writ of certiorari to the court to require the other party to state the grounds on which he or she believes that he or she should not be bound by the matrimonial property agreement and for the court to make a judgement as to whether or not those grounds are valid.
Scope of disclosure of property may be limited by matrimonial property agreement
In the light of the above L v F judgment, the court may, on the basis of a decision on the validity of a matrimonial property agreement, limit the extent of disclosure of property by either party, thereby dispensing with the need for full disclosure of property and thus saving the time and cost of litigation.
Court’s discretion under section 7(1) of the Matrimonial Proceedings and Property Ordinance not affected
Whilst the court may determine the validity of a matrimonial property agreement as an antecedent issue in divorce proceedings, this does not affect the court’s power under section 7(1) of the Matrimonial Proceedings and Property Ordinance to dispose of property in accordance with the principle of equity, taking into account various factors. In practice, where a matrimonial property agreement is valid, the matrimonial property agreement will be established as one of the most important, but not the only, factor to be considered by the court.
For more information on Hong Kong divorce procedures, Hong Kong divorce child custody, Hong Kong divorce maintenance and property division, Hong Kong prenuptial property agreements, Hong Kong marriages registration and other related legal issues, please refer to our Hong Kong Matrimonial and Family Law Services page.
(Bob Yan, principal solicitor of Yan Lawyers, solicitors. Email: [email protected], Tel: +852 31881995, +86 15018939249, WhatsApp: +852 5103 9249)