Case Note: PRENUPTIAL AGREEMENTS AND FOREIGN MATRIMONIAL AGREEMENTS: TQ V TR1

• Author: Debbie ONG Siew Ling LLB (Hons) (National University of Singapore), LLM (Cambridge); Associate Professor, Faculty of Law, National University of Singapore
• Date: 01 December 2007
• Published date: 01 December 2007

The recent case of TQ v TR recognized a foreign prenuptial agreement and gave effect to it. This note discusses the conflict of law rules applicable to the determination of the validity of a foreign prenuptial contract. It further examines the considerations the court should take into account when deciding whether to give effect to a prenuptial agreement between spouses.

I. Introduction

1 Today, many agreements made between spouses in the throes of divorce are routinely recognized and enforced as consent orders. Postnuptial agreements made in contemplation of divorce have been recognised and enforced by the courts.2 Sections 49 and 50 of the Women’s Charter3 exemplify the unique approach taken with respect to family disputes. Section 50 provides that the Family Court is to give consideration to the possibility of a harmonious resolution of the matter and may refer the parties for mediation. Since such settlement through mediation is powerfully encouraged in family proceedings, the law must correspondingly respect the parties’ autonomy to make postnuptial agreements in contemplation of divorce. While these postnuptial agreements are encouraged, the law has not necessarily taken the same approach with respect to prenuptial agreements. The courts in England were previously reluctant to enforce prenuptial agreements which sought to provide for matters upon divorce. It was thought that such agreements which attempted to oust the jurisdiction of the court over matters in which the state was very much interested was contrary to public policy.4 Prenuptial agreements which contemplate divorce even before the marriage begins may be perceived as undermining the institution of

marriage. However, more recent cases in England have given recognition to prenuptial agreements.5 The recent local High Court decision of TQ v TR6 is interesting because it upheld and gave effect to a prenuptial agreement made 16 years earlier.

II. TQ v TR

2 In line with England’s modern developments, the High Court decision of TQ v TR7 has recognized that a prenuptial agreement is valid and effective. In this case, the wife was a Swedish national and the husband a Dutch national. The parties met in London in 1988 and were married in 1991 in the Netherlands. Just a few weeks before the marriage, they executed a prenuptial agreement before a notary public in the Netherlands. The agreement provided that there was to be no community of marital property and each was to keep his or her own assets in the event of a divorce.

3 The parties lived in London after the marriage until 1997 when the family moved to Singapore. A divorce decree nisi was granted in 2005. The parties had three children, whose custody, care and control was contested. The court ordered joint custody and awarded care and control of the children to the wife and access to the husband. The court further ordered that the husband pays $1200 a month as maintenance to each of the children and a lump sum maintenance of $150,000 to the wife.

4 On the issue of division of matrimonial assets, the court considered that:

The main issue is whether the prenuptial agreement should be enforced. If that agreement is enforced, the petitioner will receive nothing by way of a division of the matrimonial assets. The prenuptial agreement was executed under Dutch law and the preliminary question I need to determine is the place of domicile of the parties. The law of the domicile, a concept that may be growing outdated, determines the issue of matrimonial assets.

5 The court then proceeded to determine the parties’ domicile and held:

I am thus of the view that the petitioner’s domicile is not that of the Netherlands. That being so, I may still consider whether this court ought to give effect to the prenuptial agreement as a document between the parties that ought to be enforced irrespective of where their domicile might be.

6 It then set out the provisions in s 112 of the Women’s Charter and held that:

This court is entitled therefore to take into account the prenuptial agreement and give effect to it if the circumstances permit. In this case, the parties entered into the agreement voluntarily, as mature adults, and in the presence of a notary public who had explained the content and effect of it to the petitioner. And since the maintenance of the petitioner and the children has been provided as ordered above, I am of the view that the prenuptial agreement should be upheld and take effect accordingly. There will be no order for the division of assets.

7 Thus, the court upheld the prenuptial agreement and made no order for the division of matrimonial assets. From what little the court had described of the prenuptial agreement, the effect of this seems to be that each party had no claim on the other’s assets, and each kept whatever had been acquired in their names at the time of divorce. If the prenuptial agreement only provided for the manner of holding of property during marriage and not in the event of a divorce, then it should not have any relevance or effect on the court's powers to divide the assets at all. It is assumed in this note, in reliance on the court's interpretation in its judgment, that the prenuptial agreement had indeed provided for the event of divorce.

III. Choice of law governing matrimonial property agreements

8 The court held that:

The prenuptial agreement was executed under Dutch law and the preliminary question I need to determine is the place of domicile of the parties. The law of the domicile, a concept that may be growing outdated, determines the issue of matrimonial assets.

9 This part of the judgment is difficult to follow. It may suggest one of the following. First, that a matrimonial property agreement is governed by the law of the parties’ domicile, rather than the “proper law of the contract”. Alternatively, the court may have assumed the agreement to be valid and then held the view that whether such a valid agreement ought to be enforced depends on the law of the parties’ domicile.

A. The law of the parties’ domicile

10 Private International Law gives parties much autonomy to choose the law governing their contract. This is the case even for matrimonial property contracts.8 The first task of the court faced with a contract should have been to determine whether it is valid in accordance with the rules of conflict of laws. The law which governs a foreign contract is the “proper law” of the contract, which is “the system of law by reference to which the contract was made, that is the law chosen by the parties or that with which the transaction had its closest and most real connection”.9 The proper law governs the contract’s validity, interpretation, effect and discharge.10 If the parties had expressly selected a choice of law, that choice is given effect. In the absence of an express choice, the second stage is for the court to infer an implied choice of the parties by ascertaining the intentions of the parties from the language, terms and nature of the contract. Only where such an implied choice is absent will the court proceed to the third stage of examining objective connections, where the proper law is determined by ascertaining the system of law with which the transaction had the closest and most real connection.11 In the present case, it may be that there was no express or implied choice of law and thus, domicile becomes relevant as an objective connection...