A Russian Bride's Binding Financial Agreement turns out not to be binding

The Facts around the Binding Financial Agreement

The husband is living on the north coast of New South Wales Australia.  He developed a relationship with a lady in Russia. He traveled to Russia, married her and brought her back to Australia as his wife.  The relationship was unstable.  The husband was the wife’s only sponsor and the relationship was the sole basis for the wife to be able to stay in Australia.

Upon return from Russia, the parties entered into a Binding Financial Agreement..  No copy was provided to the wife. The agreement was unfavourable to the wife and significantly varied entitlements that would otherwise be apportioned to her under the Australian Family Law Act.

After a turbulent 4 year marriage the wife separated from the Husband.

Action through Federal Magistrates Court

The Wife applied to the Federal Magistrates Court of Australia and sought to have the Financial Agreement signed by the Husband and herself set aside.  She maintained that the Financial Agreement was signed in circumstances in which she was under physical, mental and emotional pressures from the husband, notwithstanding that she had obtained independent legal advice prior to entering the agreement which had said there was almost no advantage to her to sign the agreement.

A copy of the Financial Agreement was not provided to the Wife but was kept in the “paperwork” at the house in which the Husband and Wife abided.

The Results / Decision

Federal Magistrate considered that the husband’s actions constituted duress and that this duress was such a level as to be unconscionable conduct and a basis, under the Family Law Act to set the agreement aside.

Furthermore there was a breach of section 90G(1)(e) noting that this section as a copy of the financial agreement had NOT been provided to the wife.

Having regard to the marked disparity of their financial positions and the fact that the wife was wholly successful in her application, the court ordered that the husband pay the applicant wife’s legal costs of $8,500 within 35 days of the judgment.

Comment from Mark Streeter - Sydney Family Law Lawyer

There were multiple grounds upon which this agreement was set aside. One of the basis was that the Wife had not been provided with a cop y of the Financial Agreement in contravention of section 90G(1)(e) Family Law Act 1975. This section was repealed effective 4 January 2010. Accordingly if this decision had been made after that date the failure to provide a copy to the Wife would not have been a ground for setting aside the agree ment and the repeal of this provision is intended to be retrospective.

This judgment confirms that the Court will ensure that the manner in which an agreement is signed and behaviours of the respective parties does not offend the general principles of “equity”. The Court will punish conduct which amounts to improper and inappropriate pressure from one party to the other and will consider this behaviour to constitute sufficient basis to set aside the agreement.

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Case reported as Moreno [2009] FMCAfam

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