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OLN Nominated for Six Awards in the ALB Hong Kong Law Awards 2020

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Oldham, Li & Nie is pleased to be shortlisted as finalist in the following six categories:

Firm of the Year categories:-

  • Civil Litigation Law Firm of the Year 
  • Intellectual Property Law Firm of the Year
  • Labour and Employment Law Firm of the Year
  • Restructuring and Insolvency Law Firm of the Year

Congratulations to the teams! 

For more information, please visit the link here: https://www.legalbusinessonline.com/law-awards/alb-hong-kong-law-awards-2020?utm_source=ALB+ALL+-+Events&utm_campaign=aa8ef9ecfe-EMAIL_CAMPAIGN_2020_01_24_03_11_COPY_01&utm_medium=email&utm_term=0_c7f887c850-aa8ef9ecfe-55528184#edit-group-finalists

Collective Guilt?

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An article in the South China Morning Post (published in their This Week In Asia supplement on 19 September 2020) caught more than just my attention recently. In 2016, a 12-month baby was killed in Suining City located in China’s south-western Sichuan province while out with her mother being pushed in a pushchair. She was hit by a palm-sized metal ball – the kind used for hand exercises – dropped from a nearby apartment building. It killed her.

An investigation resulted, but failed to find the culprit. Unsurprisingly, no one would admit responsibility. Nevertheless, the family sued every household in the apartment building from which the metal ball could have been dropped or fallen from. The case eventually came to trial in the Chuanshan local district court which ruled that all households in the eight-story apartment building shared culpability and ordered them to pay damages jointly. 

Under Article 87 of the Liability Law, the presumption of guilt applied to disputes over liability arising from unidentified thrown or falling objects. The court found that unless the owner of the apartments in the building could prove that they were not at fault, they were presumed to be liable. 

Although only one person could have committed the offence, the judge said the law should protect the weak and should balance the interests of all parties, and this way achieve the purpose of compensating the victims and serve as a warning to the public. Each apartment owner in the building was fined 3,000 Yuan – a small price to pay for the actual culprit who faced a fine of hundreds of thousands of Yuan and up to a year in prison. Small wonder the other innocent apartment owners felt aggrieved.

The case received widespread publicity and comment from many Chinese Internet users. Whilst no one would deny that the family of the baby deserved compensation, it was felt to be patently unfair for innocent people to be held responsible and punished. Many blamed the police for failing to do their job properly – did they fingerprint the metal ball, did they search every apartment to look for the matching metal ball (they usually come in pairs), did they target the elderly who are believed to be particularly fond of using these type of balls as muscle relaxants, calm nerves, improve sleep and lower blood pressure? It was called second-rate justice by some and a cop-out by others.

To those in the West, the idea of punishing innocent people simply to ensure that the guilty are not immune from punishment, is an anathema. It brings to mind the kind of reprisals taken by the Nazis during the Second World War who would think nothing of executing an entire village just to ensure that the actual perpetrators of the murder of a German soldier did not get away scot free.  

But is it really so wrong and can it really be said to compare with heinous Nazi tactics? It is in the public interest that those who perpetrate crimes be held responsible for them. It is in the public interest that victims of crime should receive compensation. Perhaps judgment such as this will make building managers improve safety measures and exercise greater caution. 

After all, what is so wrong with a presumption of guilt in these circumstances. How many of those who were innocent attempted to prove their innocence? There must have been many occupiers who were out of their apartments or away at the time. There must have been many who had alibis and witnesses who could have testified to their never having owned or used such exercise balls, or never having seen such exercise balls in their apartment.

And from a legal perspective, presumptions of wrongdoing are often adopted in Hong Kong. The offence of misfeasance in public office is almost always proved against government civil servants simply by showing that they have too much money in their bank accounts than they could possibly have earned – the inference or presumption being that they have received bribes. In the United Kingdom, in any proceedings relating to the proceeds of crime, there is a presumption against the offender that the money or property in question is tainted unless the contrary is proved by the offender. 

These presumptions are for the public good. They benefit us all who suffer wrongdoing, whether as a society as a whole or as an individual. They benefit not just the parents of a 12-month-old baby whose lives will never be the same again, but us all.   

Globalaw Webinar Series: Can Hong Kong continue to be the financial hub of Asia?

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Key takeaways:

  • Hong Kong has a significant role to play in China’s Greater Bay Area master plan
  • Hong Kong’s demonstrated ability to bounce back from adversity should not be underestimated
  • the demonstrations in Hong Kong point to discontent with issues such as housing, youth unemployment and weak local leadership, issues that were not necessarily related to China
  • in the short term, investors and emigrants may be hedging their investments but will not make an immediate move out of Hong Kong
  • global geopolitical developments will be a bigger determinant with respect to long term prospects in Hong Kong as the US-Sino trade war has shifted global views
  • the National Security Law’s outcomes are still to be determined 
  • Hong Kong’s role as a financial hub of Asia remains secure as long as corporate governance, rule of law, free flow of capital are not eroded

Moderator and host: 
Mr Gordon Oldham, Senior Partner, Oldham Li & Nie*

Panelists:
Ms Connie Bolland – Founder and Chief Economist at Economic Research Analysis
Mr Peter Churchouse – Global economic and real estate expert, INED
Mr James Hartshorn, Asia Director for Bartra Capital Property Group
Professor Simon Shen – Associate Programme Director MGPE Programme, The Chinese University of Hong Kong

Topics discussed:
-the updated social, economic, political environment
-Hong Kong’s role in the Sino-US Trade War
-Hong Kong’s competitiveness as a global financial centre vis-a-vis competitors – Shanghai, Shenzhen, Tokyo and Singapore

Mr Oldham began the webinar by stating that while death and taxes have all been certainties, we now live with a third certainty, that of change, which has been accelerated by technology, climate change, and particularly in Hong Kong, demonstrations and the US-Sino trade war. Clients want to know what the future holds for Hong Kong.

Mr Oldham: 
Are Hong Kong, Shanghai, Shenzhen all part of a bigger, master plan? Should Hong Kong be getting closer to Shanghai and Shenzhen in order for all of us to grow bigger and brighter?

Mr Churchouse:
Certain aspects of private wealth may migrate but Hong Kong as a capital raising venue will only be enhanced with the expansion of the Greater Bay area. One should never underestimate the ability of China to deliver on its big policy initiatives such as the Special Economic Zone of Shenzhen. One should not underestimate the ability of Hong Kong to bounce back and move forward to the next phase. Forty years ago, Hong Kong had about 1 million workers in manufacturing; today only 200,000-300,000 work in manufacturing. Hong Kong has persevered through many cycles but can only grow if its rule of law, legal system, corporate governance and free flow of capital are not massively compromised. Certainly a triumvirate of stock exchanges very much like NYSE/Nasdaq/CME could emerge out of the Greater Bay area. PRC raisers of capital highly value Hong Kong’s free currency flows.

Ms Bolland:
Historically Hong Kong has done well, evolving from a manufacturing to a financial hub. However, the Global Financial Centres Index published by the China Development Institute has now ranked Hong Kong in 6th place after New York, London, Tokyo, Shanghai and Singapore and so we cannot say that Shanghai does not loom as a competitor. What we do enjoy in Hong Kong are trading and depth of capital from China and the rest of the world, good business development and human capital. While competition from Shanghai and Shenzhen does exist (especially with Shenzhen as a technology centre), Hong Kong is able to leverage tech companies coming to Hong Kong to be listed on its stock exchange. Singapore is very important to rising companies from Indonesia and Vietnam, and so is Tokyo which lists Japanese companies which are investing across the region. But yes, looking at Asia Pacific as a whole, Hong Kong is still a powerhouse and in a good position as part of a bigger pie story.

Mr Oldham: 
What is your view of the role of the Hong Kong Stock Exchange as part of this growing force in the Greater Bay region? Is there the possibility of a crisis of confidence that Hong Kong will no longer be independent?

Professor Shen:
As a native, I am pessimistic. China used the Singapore model (which worked when originally applied) as its blueprint but its responses have been harsher than anticipated by the rest of the world. People expected symbolic sanctions coming from the US but now a 2nd or even 3rd round of sanctions will be coming which will affect the Hong Kong economy and affiliated banks.

Financial markets and investors may no longer trust Hong Kong as being separate from China; they may turn to Tokyo but only in 4-5 years’ time, but certainly not overnight. Elections and global politics are long term issues but in the short term people may start to hedge. Right now it does appear that rules are diminishing. Since asset managers have choices, they may now be hedging and choosing other jurisdictions like Tokyo.

Mr Oldham:
The demonstrations in Hong Kong were frightening and violent, as well as upsetting for those living here. What were the reasons for the demonstrations?

Professor Shen:
The Pan Democrats have brought this situation upon themselves. But the government has failed to address livelihood/lifestyle conditions in Hong Kong. Housing affordability – one of the worst in the world – is one of the key issues. From 2009 there has been a 280% rise in housing while wages and salaries have not followed suit. Real incomes have actually gone down when adjusted for inflation. Education costs are high, healthcare is an issue as well. The population of Hong Kong has a right to expect basic economic and social living conditions.

Ms Bolland:
Agree, the demonstrations were propelled by the political choice of Chief Executive and not by the people’s choice, as laid down in the Basic Law. The Pan Democrats are to blame while at the same time, the government was not willing to introduce reform. Government mismanagement also failed to bring the parties together to engage in meaningful dialogue.

People are living in cage homes because of housing prices but add youth unemployment as a significant problem. While there is 6% unemployment for the general population, there is currently over 10% unemployment for youth; these are well educated people with aspirations to join society. The big failure has been the government sitting on its hands for decades while loads of immigrants have arrived. Two million people have been added to the population since 1997. Hence, people are unhappy. Tourism may be a reason for the economy bouncing back from the 2003 SARS crisis but the result has been people being squeezed out of shopping malls just to buy daily necessities. All this discontent burst as a result of far greater malaise in society.

Mr Oldham:
In 40 years here, there has never been a more inept, uncreative, unimaginative government. One of the most beautiful waterfronts in the world has become a mass of roads, highways and traffic. The Chief Executive has admitted she is but an administrator. One hopes that the government can do something. What are your thoughts on this?

Professor Shen:
The demonstrations were a result of the basic issues that Mr Churchouse just discussed. We all share concerns about the government. People expect “one country, two systems” but a slightly different version has evolved in Hong Kong as the central government has become increasingly confident. I remember clearly when the Olympics were held in Beijing in 2008, Hong Kongers were proud to be identified as Chinese. A significant difference in opinion has now emerged in Hong Kong. In fact tensions were not originally as significant but the government did nothing and gradually demonstrations came from the middle class and from students, not people living in cage homes. These are highly educated people (including those who graduated from universities abroad) who are not directly affected by the housing crisis. Housing is a serious issue but the demonstrations mixed everyone in society together. I would venture to say that even blue ribbon supporters (Ed note: pro police) are not happy about the national security law (“NSL”).

Mr Oldham:
The NSL has not been interpreted yet so it is still early in the day. By and large our government was given the opportunity from 1997 and it tried half heartedly or “fool hardily” but has achieved nothing so China took action to enact the law. Doesn’t every country have concerns about terrorism and seccession? 

Professor Shen:
Colonial security laws existed in the past and today other countries also have their national security laws. The main issue is the NSL was imposed by Beijing after Hong Kong failed to enact such a law for 23 years, post 1997. The outcome has been beyond the expectations of even pro government supporters here. Colleagues anywhere in the world, whether in the US or UK, now have to take appropriate precautions. The wording in the NSL is also an issue – what we can and cannot do has not been crystallized. Random individual behaviours can be prosecuted because the scope of tolerance or when we cross the red line – has not been revealed in the law. Hopefully in 1-2 years’ time, we will know.

Mr Oldham:
People want certainty and vote with their feet. In the run-up to 1997, Hong Kongers went to Vancouver but 99% eventually came back. The only result was that the price of Vancouver housing skyrocketed. Will there be a difference this time?

Mr Hartshorn:
Yes there’s certainly been a spike in immigration to other countries but only a small percentage of people are actually moving. For example, we found that only 20 out of 300 people with immigrant visas actually moved. People see emigration as a safety mechanism, a backup plan. There have been three major emigration spikes in modern history – post Tiananmen Square, pre handover in 1997 and now. At the peak in May 2020, it was discovered there were 41,000 online searches for the word “immigration”. We have had 50 clients from Hong Kong immigrating to Ireland and Ireland would be one of the lesser known destinations (with Canada being the most well known). People are taking a “wait and see” attitude regarding the final UK policy regarding British National Overseas (“BNO”) passports – will people be allowed to live in the UK for 6 months or longer? How many will actually go ahead – all this is uncertain.

Mr Oldham:
The majority of listeners today are lawyers and their clients with transactions or funds in Hong Kong – should they be worried? 

Ms Bolland:
In a recent study by the American Chamber of Commerce, 77% of 180 companies surveyed were concerned about the NSL because of its amigiuity. Therefore concerns are there although not many people will leave immediately. Of those surveyed, 53% have contingency plans while for the long term, 66% hold pessimistic views.

Professor Shen:
There has been a lot of talk about people leaving Hong Kong but white collar salary levels are high here and it is hard to leave. Many workers prefer to send their wives and children to second homes abroad while they stay in Hong Kong to work – this pattern will continue. Some investments will be made overseas but workers will stay in Hong Kong for at least two to three years without feeling the need to move immediately. The Chinese government will try to engage international investors to invest in Hong Kong. In my view, we are close to a “one country, one system” model so in the short term, Beijing will try to engage Chinese companies to come to Hong Kong to get listed, thus providing American investment bankers here with jobs. The major uncertainty is really the global geopolitical situation. Will decoupling be a reality? How will decoupling transpire? Sino-US relations have passed the point of no return; in the previous decade, Chinese firms invested heavily in the US. We must observe global politics for longer term trends.

Mr Oldham:
As if the demonstrations, COVID-19 and the NSL were not enough, we now have the Sino-US trade war to contend with because we are no longer recognised as separate from China. What is Hong Kong’s role in all this?

Mr Churchouse:
It has been interesting to watch. Yes, it all started with the US and Donald Trump but the Europeans are all joining the battle against China. China’s unfair trade practices and not behaving in line with WTO expectations are legendary. Trump has brought focus on this to the fore and the entire world has now got behind the Americans. The European Council came out this week with a scathing paper attacking China trade policies – this has nothing to do with the US. Whether or not China is going to act, Hong Kong is caught in the middle as a victim, even though Hong Kong operates as a free trade center. Whoever gets in or refuses to get out of the White House – we shall see how this affects US-China relations.

Mr Oldham:
Isn’t it a rather simplistic view if you believe you can’t do anything in Hong Kong as Big Brother is always telling you what to do? Beijing could well say, Hong Kong has its 3 bowls of rice already. Don’t blame us as we have never interfered in Hong Kong matters, not even during the most violent demonstrations in Hong Kong. We should do something here in Hong Kong to give people hope and a bright future.

Mr Churchouse:
It would be great to see Hong Kong leaders demonstrate some leadership. The NSL came about because China said, you children can’t organize your own playground so you need an adult to fix things. Perhaps they had a good point.

Professor Shen:
The importance of Hong Kong to China has been underestimated, not necessarily in GDP but rather, there is still no substitute for Hong Kong as a foreign exchange intermediary. This is still irreplaceable. Hong Kong can still play a significant role if we have better government. Hong Kong and its people overseas are wealthy and connected and are able to build a second economy to sustain the economy of Hong Kong. Hong Kong’s long term prospects are still there. 

Ms Bolland:
Hong Kong must ensure capital markets remain free and open with a firmly entrenched rule of law. These are two distinguishing features along with corporate governance which will stop Hong Kong’s role from eroding. During the 1967 riots in Hong Kong, I was a little girl seeing machine guns on rooftops.  After the riots, Governor Maclehose completely reformed Hong Kong’s infrastructure and healthcare system to improve people’s livelihoods. The Cross Harbour Tunnel was a direct product of that era. Have we got anything to offer right how – leaders need to think and to lead with innovative ideas.

Mr Hartshorn:
In the past there has been talk of Shanghai replacing Hong Kong – this won’t happen. Hong Kong enjoys the rule of law and a free press. As it stands, there will not be any removal or change in capital controls. Hong Kong is not going anywhere in terms of its enviable financial position.

Mr Oldham:
We have rapidly run out of time for this webinar. We shall see plans of the North as they are unveiled to us. They have pragmatic, patient plans – look at pollution, for example. Beijing is now undergoing the biggest cleanup of its air. I recall an old adage that states, the quickest way to bankruptcy court is to listen to the advice of experts. Hence the purpose of this webinar was not to give answers but to give listeners some deeper background to make commercial decisions. Thank you to all the panelists today.

*Oldham, Li & Nie is a Hong Kong-based law firm of 40 lawyers with offices in Shanghai. It is a  founding member of Globalaw, a leading global network created in 1994 for providing personalized legal services and comprising 110 firms in 85 different jurisdictions.

An update on the status and enforceability of prenuptial agreements in Hong Kong

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This is the third in a series of articles where we examine recent trends in Family Law issues which have a broad impact on the community. The initial article discussed recent developments in divorce law and procedure in England and Wales regarding “no fault” divorce. We then looked at litigation funding and maintenance payments for children of unmarried parents. Here, we examine the enforceability of prenuptial agreements in Hong Kong. 

It is now ten years since the leading case in England and Wales (Radmacher v Granatino [2010] UKSC42) changed the way in which courts had historically treated prenuptial agreements. Four years later the courts in Hong Kong adopted the principles set out in Radmacher as law in a case which went to the Court of Final Appeal (SPH v SPA [2014] HKFLR 386). In the absence of any further legislative development, these two cases are still important landmark decisions. Lawyers in our team are often asked whether prenuptial agreements are binding in Hong Kong and unfortunately this is not a question which can produce a simple Yes or No response. The quick answer is that a clearly drafted prenuptial agreement will be considered by a court in Hong Kong in the context of all the surrounding facts of the case; however, the court has ultimate discretion on matters regarding financial provision in divorce and will not simply “rubber stamp” a prenuptial agreement if it believes that doing so would result in an outcome it perceives as unfair or which leaves one party in “a predicament of need”. We will look in more detail below at the current law, and what steps can be taken by a couple considering entering into a prenuptial agreement to ensure the best chance of it being upheld.

A point to note at the outset is that common law jurisdictions such as Hong Kong and UK take a very different approach on this issue to many civil law jurisdictions which have well established marital property regimes and where the community at large often has a significantly deeper acceptance and understanding of a prenuptial agreement. A court in Hong Kong would likely uphold an agreement entered into in a marital property regime jurisdiction where the parties could show that they understood the full implications of the agreement. This is especially so if an agreement is signed in a country where it is commonplace practice and drafted simply and clearly – even if no legal advice is taken at the time by either party. This is clearly seen in the Radmacher decision as set out below.

BACKGROUND

Before Radmacher, prenuptial agreements were generally not enforced on the public policy grounds that they “undermine the concept of marriage as a lifelong union”.        

Radmacher involved a wealthy German heiress, Katrin Radmacher, and her French investment banker turned academic researcher husband Nicholas Granatino. They had entered into a German law governed prenuptial agreement which the husband subsequently sought to have set aside. The Supreme Court held that on the facts of the case it was fair to require the parties to adhere to the agreement they had made based on, among other points, the husband’s relative financial sophistication notwithstanding that the husband did not have separate legal advice and the agreement was drafted by a German notary who was accustomed to acting for the Radmacher family. The judgment also provided detail on how the court should consider “fairness” both from the perspective of procedural fairness (eg was the less wealthy party coerced into signing without independent advice in rushed circumstances?) and substantive fairness (eg would the less wealthy party be left in a “predicament of real need” if the agreement were strictly enforced?). Radmacher is so important because for the first time the courts determined that, although a prenuptial agreement is not automatically binding on a husband and wife, it may be upheld if it can be shown that it was “freely entered into” and “with a full appreciation of its implications”.

In recent years, the key cases in England and Wales have generally followed the Radmacher approach whilst providing more guidance and detail on issues such as how a court would treat agreements entered into under marital property regimes (eg Z v Z [2012] 1 FLR 1100, which we touch on below), the relative importance of legal advice given (or not given) at the time the agreement was created, and the degree by, and circumstances which, cause the courts to consider the less wealthy party’s “needs” and ultimately what is fair.  Z v Z is an interesting example of a French prenuptial agreement which arose in divorce proceedings in London. After cohabiting for five years, the couple entered into a “separation de biens” marriage contract which on its face excluded the concept of sharing of any property – from before or during the marriage – between the couple. All the formalities of the contract were entered into correctly, the contract was not at all unusual in the context of the families and the wife understood the nature of the contract when she entered into it. The husband sought to rely on the agreement, asserting that a 50:50 split (the likely ratio to be awarded in an English court not taking the prenuptial agreement into account) was inappropriate, and that he argued that his wife’s needs would be well met if she were to take a 35% share of the marital asset pool, which was approximately GBP15,000,000 (HKD150,000,000) and all generated during the marriage by equal contribution. The wife asked for a 50% share based on her equal contribution to the 14 year long marriage and five year prior cohabitation. The Judge determined that, based on the legal principles outlined in Radmacher and the overall facts of the case, it would be fair to depart from equality to reflect the agreement, and awarded the wife 40% of the pool.

Finally, a very recent case in England, S V H [2020] EWFC B16, serves as a cautionary note and a useful reminder of the potholes which can arise. This case involved a couple each entering into their second marriage, and signing a prenuptial agreement prepared by a foreign notary five days prior to the wedding outside the UK. Neither party took independent legal advice, nor did they make any financial disclosure to each other. After the marriage broke down, the wealthier and younger  wife sought to rely on the agreement whilst the husband argued that it should not be upheld on the grounds that it would drastically limit the amount of support he would receive. The judge (HHJ Booth), exasperated by each parties’ conduct in the case, concluded “In my judgment there is no value in the prenuptial agreement. There was no formal process of disclosure, there was no advice given to either party, other than by the notary who prepared the document and at five days before the ceremony”. As a result, the judge disregarded the agreement and awarded the husband both an income award and a property on trust (to revert to the wife on his death).   

HONG KONG CASE LAW

SPH, the leading case in Hong Kong, involved a divorce between two German nationals who had signed a prenuptial agreement in Germany before marrying in Hong Kong the following year. The couple disputed whether the divorce should take place in Germany or Hong Kong, and the husband applied to the Court of Final Appeal to seek to persuade the court in Hong Kong that Germany was a more appropriate forum, but he was unsuccessful. The Court of Final Appeal used the opportunity to review the applicable law relating to prenuptial agreements and it subsequently adopted Radmacher as good law in Hong Kong.

In the five years since SPH there have been few cases dealing with prenuptial agreements which have been adjudicated by the courts so the law in Hong Kong has not developed very far from Radmacher. One recent case (LCYP v JEK [2019] HKCFI 1588) is however helpful. LCYP concerned a divorce between a US born husband and a Hong Kong born wife who were married in New Jersey, USA, having previously entered into a prenuptial agreement governed by New Jersey law. In the course of the over 20 year marriage, the couple had become very affluent from a somewhat modest starting point. The issue which concerned the court related to ancillary relief (i.e. financial provision for the wife), and in particular the weight which the court should allow for an unvitiated prenuptial agreement. In this context, an “unvitiated agreement” describes an agreement which is clear and straightforward, and not flawed in any way. HH Chan J confirmed that SPH was still the guiding case, and he also quoted extensively from Radmacher to review how the court should consider concepts such as “need”, “fairness”, “autonomy” and “future circumstances”. Based on the legal principles outlined in both Radmacher and SPH on the one hand, and the facts of this particular case on the other, the Judge commented “I do not believe that the law requires the court to quantify the amount of weight to be attached to an unvitiated prenuptial agreement. In this case, it would not be right to attach no weight to [it]. On the other hand, it would be wrong to place great weight on it because it would be unfair to do so”. He further added “The couple were young at the time of entering the [prenuptial agreement]. The circumstances had changed in a way which they did not anticipate. In particular, the financial landscape at the time of breakdown of marriage was vastly different. The advancement of the family’s standard of living had much to do with the sacrifice of the wife. She is now left in a much disadvantaged position having given up the opportunity to develop her career for the sake of the family. It is simply wrong for her to be held to the terms of the [agreement] whilst the husband got to keep the fruit of her sacrifice”.   HH Chan J’s decision provided the wife with considerably greater financial provision than the prenuptial agreement contemplated.   

KEY PRACTICAL POINTS 

As set out above and in Radmacher, the requirements for enforcement of an agreement prepared in a marital property regime jurisdiction are significantly different for an agreement prepared in common law regimes such as UK, USA and Hong Kong. What are the key takeaways from the case law which would demonstrate to a Hong Kong court that a prenuptial agreement entered into in UK, USA or Hong Kong is both procedurally and substantively fair, and hence more likely to be upheld?

  • The enforcing party must show that any agreement has been entered into freely with both parties fully understanding what they were each signing 
  • The agreement should be entered into at least 28 days before the wedding, and there can be no evidence of duress or undue influence
  • Both parties should make full disclosure to one another of all material financial information
  • Both parties should seek independent legal advice (note that this is not a “must” in situations where it may not be customary to do so, e.g. certain civil law jurisdictions where an agreement may be prepared by a notary acting for both parties)
  • The agreement should be fair, meaning that it does not leave the less wealthy party in a “predicament of real need”
  • Both parties should be clear that they intend the agreement to be binding irrespective of where they may divorce (i.e. it could happen in a jurisdiction governed by a law very different to the governing law of the agreement) and when they may divorce (i.e. do the provisions have equal effect on a 5 year and a 50 year marriage or is there a “sunset” clause providing for the agreement to terminate at a certain date)
  • There can be no upward limits on the amount of financial provision for the children – this matter remains firmly in the court’s jurisdiction  

OUR  EXPERIENCE

We regularly advise international and Hong Kong based clients on issues arising from prenuptial agreements. Stephen Peaker, the Head of the Family Law Department, acted for the wife in SPH, the leading case in Hong Kong, at the Court of First Instance ([2012] HKFLR @52-69), and is currently acting on a case representing a client seeking to set aside a financial consent order for failure to disclose a new relationship which induced him not to rely on a prenuptial agreement from a marital property regime jurisdiction (GM-SA v DMP-J [2017] HKFLR @ 513-). This case is markedly different from LCYP (which featured an agreement prepared in New Jersey, USA and which would therefore need to satisfy the items flagged above in Key Practical Points), and is rather the same type of agreement, and follows the same legal principles, as Radmacher.   

CONCLUSION

This is a subject which needs to be approached with care. There is clear case law precedent available to guide the courts on legal principles but facts nevertheless play an important role. If the supporting fact pattern is generally in line with the points outlined in Radmacher on the issue of the application of the prenuptial agreement in a marital property regime jurisdiction or in “Key Practical Points’ above, as the case may be, then the court will in all likelihood uphold an unvitiated prenuptial agreement.    

September 2020
Stephen Peaker, Partner and Head of Family Law
Michael Openshaw, Consultant
Family Law Department
Oldham, Li & Nie

This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.

OLN ranked among Asialaw’s Leading Lawyers 2021

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Asialaw has announced their Leading Lawyers 2021 and we are pleased to announce that OLN has been ranked once again.

Congratulations to the following Partners for being ranked!

  • Gordon Oldham – Senior Statesman (Dispute Resolution)
  • Richard Healy – Distinguished Practitioner (Dispute Resolution)
  • Vera Sung – Distinguished Practitioner (Intellectual property)
  • Tracy Yip – Distinguished Practitioner (Corporate and M&A)
  • Anna Chan – Notable Practitioner (Dispute Resolution)

About Asialaw Leading Lawyers

Asialaw Leading Lawyers identifies outstanding private practice legal professionals – divided into market-leading, leading and rising stars in the same 18 practice areas and 24 jurisdictions listed above. Asialaw consults buyers of legal services, as well as lawyers in private practice who have deep knowledge of the markets. Please see here for more details about Asialaw Leading Lawyers.

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