Prenuptial agreements, known as "binding financial agreements," first became enforceable in Australia in 2000 with the enactment of the Family Law Amendment Act 2000. Part VIIIA of the Family Law Act sets forth particular provisions concerning the oversight to be given to such agreements by family law solicitors. For a binding financial agreement to be binding it must be in writing signed by both parties; be given (the original) to one party with a copy given to the other; specify the extent of any spousal maintenance provided; and state that both parties have received specified independent legal advice and annex a certificate of an independent lawyer to that effect.
An agreement will not be binding if it was obtained by fraud, was made under duress, by mistake, by virtue of undue influence, if it is impracticable for all or part of the agreement to be carried out, if there has been a material change in the care of a child leading to hardship, if a party engaged in unconscionable conduct when making the agreement, such as where one spouse is at a disadvantage and the agreement runs contrary to good conscience.
In the landmark case of Thorne v Kennedy, [2017] HCA 49, two financial agreements were set aside on the grounds of unconscionable conduct and undue influence. That case was applied in two cases in 2019. In Chaffin v Chaffin [2019] FamCA 260, the court set aside the prenuptial agreement while in Delrio v Jindra [2019] FCCA 1186 the court enforced it. In both cases the weaker parties were represented by independent counsel, each of whom recommended that their client should not sign the agreement. In Chaffin, the court determined that the weaker party was subject to a special disadvantage which seriously affected her ability to make a judgment as to her own best interests of which the other party took advantage. In Delrio, there was no such special disadvantage.
Serious issues arise as to whether a marital agreement entered into outside Australia that does not conform in every respect to the provisions of the Australian Family Law Act will be enforceable in Australia. This can create momentously important issues when spouses who are parties to a non-Australian prenuptial or post-nuptial agreement relocate to Australia or if one spouse is of Australian nationality or there exists another basis for the Family Court of Australia to have jurisdiction over a potential divorce case.
Our office has worked on many U.S. – Australia prenuptial agreements, always collaborating with local counsel in all jurisdictions as appropriate.
Disclaimer: We are admitted to practice only in New York but work as appropriate with lawyers throughout all U.S. states and throughout the world.