In a recent case of Saintclaire & Saintclaire
(2015) FamCAFC 245, the Full Court of the Family Court of Australia
("the Full Court") found that a Binding Financial
Agreement ("BFA") is binding on the parties even though
the Trial Judge in that case had found that the BFA should be set
aside. The Trial Judge had found that the wife was unduly
influenced and that this was unconscionable – the facts
related to this finding were that:
the wife suffered from post-natal depression;
she had credit card debts of over $100,000 (which the husband
paid on execution of the BFA);
there were incidents of violence in the parties'
the wife underwent a significant surgical procedure
approximately four weeks before the BFA was signed.
The Full Court overturned the Trial Judge's decision and
found that the BFA was binding because there was insufficient
evidence to show that the wife had in fact been unduly influenced
by the husband into signing the Agreement. For example, while the
wife may have suffered from post-natal depression this in fact had
resolved some 11 months before the signing of the BFA.
Other relevant considerations included that:
the parties had negotiated the terms of the BFA for
approximately seven months;
the wife was represented by a legal practitioner for the whole
of the approximately seven months of negotiations
the BFA replaced an earlier BFA over which the wife had made no
the new BFA was more favourable to the wife than the old
the wife was a financial professional of considerable
experience and at the time that she signed the BFA, she had a
strongly held belief that she will be able to rebuild her career
back to her initial income before she had children of some $300,000
per annum, and
the husband instructed his lawyers to defer consideration of
the BFA as the parties marriage approached.
As can be seen from above, the preparation, negotiations and
circumstances leading up to the making of a BFA is just as
important as the actual terms of the BFA.
As lawyers advising our clients when they enter into a BFA, not
only is it our job to ensure that our client understands the terms
of the BFA, it is also our job to ensure to the extent possible
that the BFA would not later be set aside due to the specific
circumstances of the parties, such as an impending wedding.
It is our job ultimately to ensure that our client is in a
position where they are able to make the decision to enter into a
BFA freely and without undue pressure, fully informed of the
advantages and disadvantages of entering into the BFA including
their rights without the BFA, and ultimately, where our clients
wishes to have a BFA, that the BFA is not easily set aside by the
Court. In other words, that it will actually be binding!
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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