“I just need someone to witness this document….”, “We are all agreed and amicable, I don’t need proper advice I just need it witnessed”…..
These are all common statements from prospective clients when enquiring about the process of execution of a Binding Financial Agreement. A Binding Financial Agreement is a private agreement between the parties to a relationship as to how their assets, liabilities and maintenance requirements are to be dealt with if they should separate or after they have separated.
As it is document that abolishes the jurisdiction of the Family Law Act to determine a parties property settlement and maintenance entitlements, it is mandatory that each party receive legal advice on these two general areas:-
1. The nature of the Agreement on their rights; and
2. The advantages and disadvantages to the party, at that time, of signing the Agreement.
Whilst these two general topic areas may seem simple enough, if the lawyer that you are consulting with does not have an appropriate legal of experience in Family Law, they cannot possibly be able to give the appropriate level of advice that is required, to ensure that a Binding Financial Agreement is binding on the parties.
If appropriate advice is not given, it can leave parties open to a challenge to the validity and enforceability of a Binding Financial Agreement and if the agreement is set aside, the parties are then thrust back to the beginning of their negotiations in relation to property settlement and spousal maintenance. And as for the lawyer, the appropriateness of their legal advice can come into question.
Recently in Brisbane a Binding Financial Agreement was set aside after the Applicant Wife asserted that she suffered from duress at the time of executing not one, but two Binding Financial Agreements (one made during a de facto relationship and one made after marriage). After three years of marriage the parties separated and the Wife sought to set aside the Agreements. Whilst she was successful at first, the Full Court of the Family Court allowed the Appeal of the Husband (via his Estate as he had subsequently passed away) and upheld the validity and enforceability of the two Agreements. Addressing the assertion that the Wife suffered from duress at the time of entering into both Agreements the Full Court commented that the fact that the Husband “required” an Agreement as a pre-requisite to a relationship and marriage was not of itself enough to establish duress. The Court held that the Agreements were negotiated by the parties, with the Wife, via her Solicitor requesting changes in the drafting process of both documents.
However, key in the finding that the wife did not suffer from duress was the legal advice that she received. On both occasions the Wife was told not to sign the Agreement as it was contrary to her interests. Notwithstanding that advice, she proceeded to sign them.
Whilst in this particular matter (Kennedy & Thorne  FamCAFC 189) it was the Husband relying upon the advice of the Wife’s Solicitor to assert that the documents were enforceable, it highlights just how important experienced and knowledgeable advice on a Binding Financial Agreement is, for all concerned.
The Family Law team at Marino Law are highly experienced in the drafting of and advising about, Binding Financial Agreements. To ensure that your rights are protected, contact us without delay.