The Family Law Act provides for parties to a marriage or de facto relationship to enter into a binding legal agreement (sometimes referred to as a ‘pre-nuptial agreement’) about the financial arrangements should their marriage or de facto relationship break down.
You can make a financial agreement before, during or after a marriage or de facto relationship. These agreements can cover financial settlements, financial maintenance and any incidental issues.
The agreement needs to be signed by both parties, and a certificate of legal advice must be provided that the party concerned has obtained independent legal advice. The Binding Financial Agreement is not legally enforceable until a lawyer explains the agreement.
A recent case, Adame [2014] FCCA 42 (16 January 2014) considered whether a wife’s application to set aside a financial agreement would be upheld given a number of factors:
Firstly, the wife claimed she had entered the agreement under duress, secondly that the husband did not disclose all of his assets to her when the agreement was made and lastly that the legal advice she had obtained did not adhere to the requirements of s90G.
Judge Jarrett found that the financial agreement between the parties was voidable because of Mr Adame’s fraudulent misrepresentations as to his property interests in California, the illegitimate pressure that Mr Adame brought to bear upon her to sign the financial agreement in the form of repeated requests to sign the document as well as expressions of displeasure and anger towards her for not wishing to sign the agreement.
In order to secure relief in equity, Ms Adame had to establish that the pressure bought to bear was in all circumstances illegitimate (consisting of unlawful threats or amounting to unconscionable conduct).
In respect to whether the legal advice she received complied with the requirements of section 90G, it was found that the signed statement by a legal practitioner as required by section 90G (1)(c) must be the same practitioner who gave the advice for the purposes of s 90G(1)(b) – the provision of independent legal advice from a legal practitioner about the effect of the agreement.
A binding financial agreement can be a very useful and valuable tool, however it must be entered into with complete knowledge as to its limitations.
