The Situation - Prenup found not to be binding

A financial, or prenuptial agreement, had been entered into by a couple. The agreement did not expressly state that both parties had received independent legal advice. As it is a requirement of Financial Agreements that independent legal and financial advice been received the agreement was found to be not binding.

The changes to protect Prenuptial Agreements

Effective 4 January 2010, the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (No. 122, 2009) - Schedule 5 amended the Family Law Act 1975 (Cth) and significantly modified section 90G. Section 90G(1)(b) and (c) were repealed and new sections inserted. The effect of the change is to overcome the strict interpretation of the previous version of the legislation as interpreted by the Full Court of the Family Court in the above case of Black v Black [2008] FamCAFC 7.

These recent changes are designed to overcome this decision.

Comment from Mark Streeter - Sydney Family Law Lawyer

The amended legislation will enable legal practitioners to provide signed statements that they gave independent legal advice either before or after the spouse party signed the financial agreement, and provide copies of the statements to be provided either to the other party or to the legal practitioner of the other party.

The changes also provides the Court with the discretion to declare a Financial and Termination agreement to be binding, notwithstanding that it fails to meet the procedural requirements in relation to the making of the agreement providing the Court is satisfied that it would be unjust in all the circumstances if the agreement did not bind the parties.

The impact of the legislation is retrospective and covers all Financial Agreements entered into from 27 January 2000.