A recent High Court decision, Thorne v Kennedy , has caused a flutter among Family Law Commentators. The Court determined the issue of unconscionable conduct and undue influence and duress in regards to the signing of a Binding Financial Agreement (BFA). Media tag lines such as “Death Knell of Pre Nuptial agreements in Australia” and “Shockwaves [sent] through the Legal Community” have only served to create confusion and alarm in past and potential Family Law clients.
Rest assured that if you have a Binding Financial Agreement (commonly know as pre-nuptial or post-nuptial agreements) prepared under the Family Law Act 1975 entered into by you, recognising the principals of the Act and common sense common law, you are still protected.
The reason the decision of the High Court in Thorne v Kennedy has raised so many eyebrows is because it is the first of its kind. Until now, Legal Practitioners weren’t sure how the Court would “interpret specific factual circumstances of a case” in a contested BFA Matter.
This case study highlights the fact that there is no requirement for Court approval of a BFA which means people can make agreements that are not necessarily “Fair” or “Just and Equitable” – however there are guidelines within the legislation that enables the Court to make determinations upon specific circumstances.
Most importantly, this case emphasises the fact that if you are considering or entering into a Financial Agreement you should contact a family lawyer to discuss your situation and get a full understanding of your rights and responsibilities.
In a nutshell, the facts of the case were;
Special factors in this case were that the Husband was in an exceptionally good financial position at all times and the wife was not. At the time she signed the BFA she had come to Australia with no assets, little English and no likely future prospects of employment.
The case that was run on behalf of the wife was that the BFA’s needed to be overturned by the Court because they were signed under duress, under undue influence and as a result of the husband’s unconscionable conduct.
Had the wife been a savvy, financial woman with excellent English and a village of support around her, she may not have been successful in her application.
In this case, there were six particular aspects that had to be taken into account and which, in combination led to the conclusion that the wife was under duress and undue influence at the time to signing.
(i) her lack of financial equality with Mr Kennedy;
(ii) her lack of permanent status in Australia at the time ( she was on a tourist visa);
(iii) her reliance on Mr Kennedy for all things;
(iv) her emotional connectedness to their relationship and the prospect of motherhood;
(v) her emotional preparation for marriage; and
(vi) the "publicness “of her upcoming marriage
Further, there was the conclusion that in these factual circumstances, it was unconscientious for Mr Kennedy to procure or accept her assent.
Thus the BFA’s in this case were overturned.