In the recent case of Loh v Loh-Gronager the court considered the impact of the husband and wife taking steps that contradicted the intentions set out in their pre-nuptial agreement.
In this case, the agreement stipulated that the money that the parties paid into their joint bank account was to be considered joint property, irrespective of the actual contributions made to the account by either party. However, the agreement also stipulated that the account was to be used to cover general household expenses and bills and day to day living expenses. Other money and assets were to be regarded as owned exclusively by the person who purchased them (their separate property), and the other party was to make no claim on these.
The parties began using the joint account for general convenience and so, on separation, a dispute arose around who owned some valuable furniture, which had been purchased from the joint account in the wife’s sole name, with money that the wife had put into the account for this purpose.
The court ultimately considered that, as the intention behind the agreement for this joint account was to discharge household bills and living expenses, once the account came to be used for other purposes, the parties cannot have intended that every purchase made from the joint account would be deemed to be joint property. Accordingly, the chattels purchased in the wife’s name, with the wife’s money from the joint account, were her separate property.
Although the outcome in this case upheld the original intentions set out the prenuptial agreement, this was not without protracted and expensive litigation. It is therefore crucial to comply with the terms of a prenuptial agreement to avoid the risk of it not being upheld, or the costs of a dispute regarding it.
Article contributor, Olivia Hammond, Paralegal
