A Binding Financial Agreement (‘BFA’) can be used by parties to reflect their agreement in respect of the division of property and assets in the event of a future separation. There are strict requirements laid out in the Family Law Act 1975 (‘FLA’) which must be met for the BFA to comply with the Act and be binding on the parties.
Significantly, each party will need to obtain their own independent legal advice as to the BFA, including, amongst other things, the effect of the agreement on that particular party’s interest and personal circumstances. In the case of Hoult, both the husband and the wife each appealed from the first instance decision of the trial judge in relation to their BFA and whether it was binding on the parties.
The appeal by the husband centred around whether the trial judge’s decision that the BFA was not binding on the parties as a result of an incomplete legal advice certificate provided by the wife’s legal representative as is required by s90G(b) of the FLA was correct, and the wife’s appeal related to whether the trial judge was correct in overriding the failure under s90G(b) of the FLA to determine that it would be “unjust and inequitable if the agreement were not binding on the spouse parties to the agreement“.
On 26 July 2013, the Full Court, comprised of Justices Thackray, Strickland and Ainslie-Wallace found that both appeals had merit, and the trial judge’s previous declarations were set aside and the case was set down for re-hearing.
This case highlights the importance of engaging a solicitor who has significant experience in drafting Binding Financial Agreements to ensure that the intention of the parties in the event of a future separation is fully documented and binding on the parties in the unfortunate event of separation.
Having a BFA prepared correctly from the outset can significantly reduce the risk of having to pay extensive legal costs to attempt to enforce a BFA which contains a technical breach of the FLA.
If you require advice in relation to the preparation of a Binding Financial Agreement, or assistance in relation to adhering to an existing Binding Financial Agreement after separation, please contact one of our friendly and experienced Gold Coast Lawyers on (07) 5563 8970.