On 8 November, 2017 the High Court has handed down a much awaited decision in respect of the matter of Thorne v Kennedy (https://eresources.hcourt.gov.au/downloadPdf/2017/HCA/49).
The High Court Appeal arose in the following circumstances:-
- The Federal Circuit Court at first instance set aside a Binding Financial Agreement entered into after a marriage between a wealthy Husband and significantly less financial Wife. This Agreement was a mirror of the agreement entered into by the parties days prior to their wedding;
- Mr Kennedy appealed and the Full Court of the Family Court set the decision aside, finding that the Agreement was valid and binding. This was notwithstanding the advice to Ms Thorne that she should not sign what was called “the worst agreement she had seen” by Ms Thorne’s Solicitor; and
- The Wife sought and obtained leave to Appeal to the High Court, the decision of the Full Court of the Family Court upholding the validity of the Binding Financial Agreement.
The High Court upheld the Wife’s Appeal and reinstated the decision of the Judge at first instance and consequently held that the Binding Financial Agreement was invalid.
By way of summary of the factual circumstances the High Court noted that:-
- The parties met over the internet in 2006 when Ms Thorne was living in the Middle East. She was 36 with no substantial assets. Mr Kennedy was a 67 year old property developer worth between $18mill and $25mill. He had three adult children.
- Ms Thorne and Mr Kennedy met when he travelled to her home. He told her at that point that if he liked her he would marry her but that she “will have to sign paper. My money is for my children”.
- In February, 2007 Ms Thorne moved to Mr Kennedy’s Australian home with the intention of getting married.
- The wedding was set for 30 September, 2007.
- Around 19 September, 2007 Mr Kennedy told Ms Thorne they were going to see solicitors about the signing of an agreement.
- Mr Kennedy told Ms Thorne that if she did not sign it the wedding would not go ahead.
- On 20 September, 2007 Mr Kennedy took Ms Thorne to an experienced Family Lawyer, who was and remains an Accredited Family Law Specialist. During this appointment Ms Thorne became aware of the contents of the agreement for the first time. Needless to say they were not to her benefit.
- By this time, Ms Thorne’s parents and sister had travelled to Australia for the wedding, guests had been invited, the dress had been made and reception arranged.
- On 26 September, 2007 Ms Thorne signed the agreement despite being told by her Solicitor that it was “the worst agreement that she had ever seen”, that it was entirely inappropriate and that she should not sign it.
- On 5 November, 2007 an identical agreement was signed after the parties married. Ms Thorne was again told not to sign the Agreement.
- The parties separated on 16 June, 2011 and pursuant to the Agreement Ms Thorne was entitled to nothing.
The High Court by a majority agreed that setting aside on the basis of duress, undue influence and unconscionable conduct was appropriate and supported the primary judge’s decision that Ms Thorne was powerless to make any decision other than to sign the agreement. Ms Thorne, had she refused would “have nothing. No job, no visa, no home, no place, no community”.
The High Court found that the Husband “created the urgency with which the pre-nuptial agreement was required to be signed and the haste surrounding the post-nuptial agreement and the advice upon it” and that “he took advantage of Ms Thorne’s vulnerability” to obtain the agreement.
The interesting factor in this matter for both Family Lawyers and client’s alike is that the primary judge and then the High Court ruled in favour of the party who intentionally signed a document, knowing full well that it was against their interests to do so and against clear and expert legal advice that to sign the document was contrary to their interests.
Whilst a party can always control their own outcome by way of a Binding Financial Agreement, even if contrary to legal advice, given this judgment it is even more imperative for expert legal advice to be obtained prior to the preparation of, during the preparation of and prior to signing a Binding Financial Agreement.
Marino Law’s Family Law Team is headed by an Accredited Specialist in Family Law and we are available to assist in reviewing your current Financial Agreement, the preparation of and advice upon Binding Financial Agreements. Contact us on 55260157 to ensure your rights are protected.
