Bahamas: The Protection Of Pre-Marital Assets - Pre-Nuptial Agreements In The Bahamas

Last Updated: 29 July 2015
Article by Nerissa A. Greene

It has long been a recognized law in The Bahamas that nuptials whether anti or post are not considered binding in the Supreme Court of the Commonwealth of The Bahamas.

The Bahamian legislation which governs the principles to be applied in matrimonial proceedings are set out under the Matrimonial Causes Act which mirrors the English Matrimonial legislation in the United Kingdom (UK). It is from our mother land (UK) which the notion that pre-nuptial anti-nuptial or post-nuptial agreement providing for future separation are contrary to public policy and should be swept away because "they undermine the concept of marriage as life long union". For years this has been the approach in The Supreme Court of The Bahamas should parties enter into agreements seeking the Courts decision on issues regarding the distribution of marital assets the agreement would not be considered under the present authorities held in the UK.

In a recent decision delivered on the 7th June 2011 Sir Michael Barnett Chief Justice of the Commonwealth of The Bahamas tested the notion dispelled by various Law Lords in the UK regarding the view that a pre-nuptial agreement is merely persuasive and not binding in considering the distribution of marital assets upon the breakdown of a marriage. This case cited as M v F became a landmark judgment first ever to be made and tested in The Bahamas.

The salient facts which the Chief Justice had to consider in the case of M v F are as follows:-

  • The parties to the marriage were American citizens and residents of the Commonwealth of The Bahamas.
  • The husband a wealthy and affluent businessman and the wife not as affluent cohabited together for a period of one (1) year before they married.
  • The wife asserted that prior to executing the pre-nuptial agreement she was several months pregnant with the husband's first child.
  • The husband held assets which were said to be protected under the pre-nuptial agreement.
  • The wife sought independent legal advice of two (2) attorneys prior to the execution of the pre-nuptial agreement.
  • The husband and wife entered into the pre-nuptial agreement two (2) days before the wedding.

In order for the Court to give weight to the Prenuptial Agreement the Court had to consider whether the pre-nuptial agreement should be accepted or whether it ought to be guided by it.

In matters regarding pre-nuptial and postnuptial agreements the Courts have an obligation to consider two major issues (i) should the agreement be upheld and (ii) if not what is the level of fair award(s).

It was accepted by the Court that the agreement entered into between husband and wife does not oust the jurisdiction of the Court. For years agreements between spouses were considered void for public policy reasons but this is no longer the case. In fact over the years prenuptial 'contracts' have become increasingly common among wealthy persons and much of these agreements have been accepted by Courts governing what should occur between parties when the marriage comes to an end. This is of course subject to the discretion of the Court and the application of a test to be exercised is one of fairness/manifest unfairness. Nonetheless the Courts have mandatory duty and/or discretion regarding the general approach to these agreements. A recent case decided in the UK by the House of Lords (in Granatino) further sets out the approach to be applied in matters regarding Prenuptial Agreements which was considered and applied by The Bahamian Courts and in particular by the Chief Justice in the case of M v F.

It was established that to give effect or determination to pre-nuptial agreements in Ancillary matters in respect to divorce proceedings the Court must be satisfied of the following:-

  1. whether the agreement was entered into freely and voluntarily by both parties with full appreciation of its implication and if it was;
  2. whether it would be unfair to give effect to the agreement.

In the case of M v. F the Chief Justice upheld the terms of the pre-nuptial agreement entered into between the husband and the wife on the basis that the parties (the wife that is) entered into the agreement freely and voluntarily. Similarly the parties must have fully appreciated the implications of the agreement. Based on the first criteria being in the affirmative it would therefore be unfair not to give effect to the agreement.

Had the Court not upheld the terms of the prenuptial agreement the wife would have succeeded in the Ancillary proceedings with approximately half of the husband's wealth which he acquired prior to the marriage when she herself made no direct or indirect contribution to those assets. Can this be considered fair under our present Matrimonial Causes Act! It is only fair for the parties to be bound by an agreement which they entered into at the time when love was blissful and perfect and both had full appreciation of the nature of their actions and having full understanding that what assets acquired prior to the marriage and are brought into the marriage will not be comingled with marital assets upon the dissolution of the marriage. What could be fairer than an agreement which promises a level playing field based upon fairness and a mutually agreed position upon the disposition for the welfare of offspring and the protection of assets.

Originally published September 2011.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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