Care must be taken when making a Binding Financial Agreement

‘A recent Family Court decision[1] demonstrates the importance of receiving accurate advice from a solicitor when entering into a binding Financial Agreement, also called a prenup or prenuptial agreement.

The Full Court of the Family Court has recently overturned a trial judge’s decision to rectify a binding financial agreement entered into between a husband and wife in July 2009. The trial judge had found that there was a marked lack of care or otherwise of knowledge and understanding by the parties’ solicitors in drawing the agreement.

Nine months later the wife applied to the Family Court to have the agreement set aside and that the Court make property orders under the Family Law Act (FLA). The wife alleged that there were errors contained in the agreement and in the Certificates which are annexed to the agreement, which included:

That the agreement was expressed to be in accordance with the wrong section (S90C FLA)
Both parties were incorrectly identified in the Certificate
The solicitor for the wife had signed the agreement the certificate 2 days before the wife signed

One judge of the Full Court dissented , stating that it would be unjust and inequitable for the agreement not to be binding…’