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’ relationship; and
- 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 complaints
- the new BFA was more favourable to the wife than the old BFA
- 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!
This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or email us now.