An excellent result was achieved for our client recently who was the Applicant in proceedings to set aside a Binding Financial Agreement. The Reasons for Judgment have been published under the pseudonym Kaimal & Kaimal [2020] FamCA 971 and read here.
Binding financial agreements are written documents which list out assets in a relationship and assigns them accordingly between the parties’ post-separation. They are a useful tool both pre-and-post-separation to ensure that parties have legally enforceable rights over shared assets.
For a financial agreement to be enforceable, s 90G(1)(b) of the Family Law Act requires that each party to the agreement seek independent legal advice. However, non-compliance with this requirement can be overlooked if the court feels that it would be unjust and inequitable if the agreement were held to be non-binding.
The Norton Law Group acted for the applicant in proceedings related to this legislation. The issues the court had to resolve were surrounding whether a Financial Agreement made between the parties was binding, and if it were, whether it could be set aside. The agreement concerned the transfer of a property owned by the husband to his wife and daughter.
An agreement was drafted, and the wife attended a solicitor’s office to sign. However, rather than providing her with advice concerning the contents of the document, it was revealed that in this instance, the solicitor’s role was merely to read the executed document aloud to her before she signed. This was held not to be sufficient independent legal advice for the purposes of s 90G(b) of the Family Law Act. Despite the court having the power to overlook this, they chose not to exercise their discretion as the agreement contained numerous factual errors. Chief Justice Alstergren provided “it would be unjust and inequitable if I were to declare that the Financial Agreement was binding on the parties”.
After declaring that the agreement was not binding on the parties, the court went on to clarify that even if it had been binding, it could nevertheless be set aside on grounds on uncertainty under s 90K of the Family Law Act. The numerous errors contained in the document regarding the parties’ net asset positions amounted to material factual errors which rendered the agreement unenforceable.
It is important to remember that a signature is not always automatically binding. Even in instances where it is, there may be avenues to set aside binding documents depending on the circumstances. If you would like to find out more, contact one of our Family Law specialists.
