The Facts

Engagement between people of vastly different personal circumstances

A case that went all the way to the High Court revolved around the question of whether a binding financial agreement (prenup) was signed under duress.

A couple became acquainted on the internet via a website for potential brides. He was a wealthy property developer, an older man who had previously been married and who had three adult children from his first marriage. His family was in Australia, as were his assets, which were worth between $18-$24 million.

She was an Eastern European woman who was much younger than him, had been married and divorced, had no children and wanted to have children of her own. She had no assets, spoke little English and her family lived overseas. She had no connections or community in Australia.

The couple met overseas in person shortly after making contact via the website. He took her on an extended European holiday and met her family. Seven months after they met, the couple moved to Australia with the intention of getting married.

Man asks woman to sign prenup

Ten days prior to the wedding, the man asked the woman to sign a prenup and arranged for her to see a lawyer.

The woman's lawyer advised her not to sign the agreement, stating in writing that it had been drafted solely to protect the man's interests and in no way considered hers. Despite this advice, she signed the agreement four days before the wedding.

Not long after the couple married, the wife also signed a postnuptial agreement, which confirmed the terms of the prenup she had signed before the wedding.

Wife seeks declaration that financial agreements were not binding

Four years after marrying, the couple separated.

Under the terms of the financial agreement, the wife was to receive a penthouse apartment as well as some money and a vehicle in the event of the couple's separation.

However, the penthouse apartment did not eventuate, due to a problem with the property development encountered by the husband.

The wife commenced legal proceedings, seeking a declaration that the financial agreements were not binding. The husband contended that the financial agreements were binding. To complicate matters more, the husband passed away during the proceedings.

It was up to the court to decide whether the financial agreements should be set aside.

CASE A

The case for the husband and his estate

CASE B

The case for the wife

From very early in our relationship, I told my ex-wife that I regarded my wealth as my own, that on my death it would pass to my children and that if we were to marry, she would need to sign an agreement to this effect.
There was nothing unlawful about me asking my wife-to-be to sign a prenup.
I insisted that she receive independent legal advice from an accredited specialist in family law before signing the prenup.
The advice she received was that the agreement was plainly against her interests and that she should not sign it, so she knew exactly what the position was and chose to sign the prenup of her own free will.
In my opinion, I made adequate provision for my wife in the financial agreements in the event of our relationship breaking down.
The financial agreements are valid and should be allowed to stand.

I was given little time to consider the prenup presented to me and no opportunity to negotiate its terms. I was told that if I did not sign it, the wedding would not go ahead and our relationship would be over.
I wanted to remain in Australia and I had long desired to have children – I saw this relationship as my only real chance to achieve these things.
Indeed, if the relationship had ended then, I would have been left with no job, no visa, no home, no income and no community in Australia. This meant I was extremely vulnerable and entirely reliant on my fiancé.
To compound this, by the time the agreement was presented to me, my family had been flown to Australia. My fiancé's ultimatum was not accompanied by any offer to help my family return home, so they too had become entirely reliant on my fiancé.
In these circumstances my state of mind was affected so severely that I was incapable of making a judgment in my own best interests.
My ex-husband's behaviour amounts to undue influence and unconscionable conduct, so the prenup should be set aside and I should be entitled to the rights I would otherwise have under Australian law.

So, which case won?

Cast your judgment below to find out

Ashleigh Flanagan

Binding financial agreements

Stacks Law Firm

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.

"I signed that prenup under extreme duress, so it should be set aside." Which case won?

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