The recent decision of Thorne & Kennedy  FCCA 484, involved a 67 year old multimillionaire property developer, who met, (his now former) 36 year old wife over the internet.
When they met, the wife lived overseas, had minimal English speaking skills, a previous divorce and no real assets.
They fell in love and were set to be married, but Mr Kennedy was absolute in his desire that his wealth was his, and he intended it to go to his children.
Accordingly, two “binding financial agreements’ were entered into by the parties; one before the wedding and one after the wedding. THE BFA agreements were focused towards protecting the wealth of Mr Kennedy, but also made some provision for the Wife. As obligated under the Family Law Act 1975, the Wife received legal advice on the agreements. That legal advice highlighted a range of matters, and recorded (importantly), that the Wife felt that she had no choice but to sign the agreement or the Husband would end the relationship/marriage.
The Court set aside both agreements, on the basis that Ms Thorne was under duress at the time of execution. In this respect, it was stated by the Honourable Judge Demack:
It is submitted on behalf of the Respondent through his Outline of Case, that to establish duress, there must be pressure the practical effect of which is compulsion or absence of choice.
The applicant knew that there would be no wedding if she didn’t sign the first agreement. The husband’s position about that was plain.
The husband did not negotiate on the terms of the agreement… The agreement, as it was, was to be signed or there would be no wedding.
The applicant wanted a wedding. She loved Mr Kennedy , and wanted a child with him. She had changed her life to be with Mr Kennedy .
That situation is something much more than inequality of financial position. Ms Thorne ’s powerlessness arises not only from her lack of financial equality, but also from her lack of permanent status in Australia at the time, her reliance on Mr Kennedy for all things, her emotional connectedness to their relationship and the prospect of motherhood, her emotional preparation for marriage, and the publicness of her upcoming marriage.
In all respects the second agreement was simply a continuation of the first – the marriage would be at an end before it was begun if it wasn’t signed.
The salutary lesson that may be taken from this decision, is that the wife’s evidence was supported by a comprehensive written legal advice on the circumstances surrounding the Binding Financial Agreements – which assisted the Court in its final decision.
It is an interesting case, and one that begs the question, would a different decision have been made if amendments to the Binding Financial Agreement had been made (even if done so unilaterally by the husband – cascading upwards in the Wife’s favour).
In any event, the wife received her legal costs and the property settlement battle continues.
We strongly recommend that if you are contemplating a Binding Financial Agreement, that you contact one of the experienced and professional family lawyers at Affinity Lawyers on the Gold Coast on 5563 8970 to discuss your rights, obligations and options in respect of the effects of such agreement.