We have previously canvassed the importance of having a Financial Agreement drafted correctly to ensure that it complies with the requirements of the Family Law Act 1975 and is thus binding on the parties. However, in light of the 2014 case of Parker v Parker, we thought it prudent to highlight that the timing for entering into a Financial Agreement can also be very important.
A Financial Agreement entered into prior to marriage, commonly referred to as a ‘pre-nuptial agreement’, is becoming more common as more parties are getting married later in life, and are often entering into the marriage with very different financial circumstances, assets and liabilities.
However, depending on when the Financial Agreement was entered into, the timing of the execution of the document can be problematic and can allow the document to be set aside, regardless of whether the other substantive requirements under the Family Law Act 1975 are complied with.
For example, in the case of Parker v Parker, the wife-to-be was presented with a financial agreement by her fiancé just three days prior to the wedding and was told that if she did not sign the agreement the wedding would be called off. The wife-to-be felt that she had no choice but to sign the agreement, and did so just two days prior to their wedding.
The parties subsequently separated and the wife brought an action in the Court to have the agreement set aside. The Court considered the circumstances in this particular matter, in particular, whether the husband’s conduct was unconscionable, or amounted to duress or undue influence. Further, in order to be successful, the wife had to show the Court that she suffered a ‘special disadvantage’ which was known to the husband.
The wife was ultimately successful in her action to have the agreement set aside, despite the fact that the agreement had been entered into in accordance with section 90B of the Family Law Act 1975 (and complied with its formal requirements), as Judge Phipps held that she had signed the agreement as a result of duress and undue influence.
This case highlights the importance of obtaining professional and experienced legal advice in respect of financial agreements, particularly in circumstances where the parties are planning on getting married in the near future.
Our experienced and professional Gold Coast Lawyers can provide you with legal advice in relation to entering into financial agreements, and can assist with drafting agreements before marriage, during marriage or after separation. Please contact one of our friendly solicitors today on 5563 8970 to arrange a consultation.