ANNUAL NORTH QUEENSLAND
LAW ASSOCIATION CONFERENCE
DELIVERED BY
THE HONOURABLE JUSTICE ROBERT
BENJAMIN
FAMILY COURT OF AUSTRALIA HOBART
ENTITLED
“FINANCIAL
AGREEMENTS”
AT THE
GRAND MERCURE HOTEL
MACKAY, QUEENSLAND 30-31 MAY 2008
SATURDAY 31 MAY 2008
April 2008 – ©
FINANCIAL AGREEMENTS
Robert Benjamin
INTRODUCTION
In December 2000 Part VIIIA of the Family Law Act 1975 (Cth) came into
effect via the Family Law Amendment Bill 2000 (Cth). This was a significant
change to the law and was designed to enable parties to enter into binding
financial agreements.
In the explanatory memorandum accompanying the first reading of the Family
Law Amendment Bill 1999 (Cth) (as it then was), the policy behind the
agreements was said to be:
Currently, under the Act people can make “pre-nuptial” and “postnuptial” settlements about their properties. In recent years the use of
these has been limited because they are not binding and the court is able
to exercise its discretion over property with which these settlements deal.
This was one of the major problems identified by the Joint Select
Committee and in a number of other reviews of the existing law about
family law property.
The Bill will make provision for financial agreements dealing with all or
any of the parties’ property to be made before or during marriage or on
marriage breakdown, setting out how such property is to be divided.
People will be encouraged, but not required, to make financial
agreements. For these agreements to be binding, each party will be
required to obtain independent financial advice as to the financial effect
of the agreement or independent legal advice as to legal effect of the
agreement before considering their agreement, or both. Because the
parties will have obtained prior advice, the court will only be able to set
aside an agreement in certain limited circumstances, for example if it
was obtained by fraud, duress or undue influence or where there was a
significant change in the circumstances that would make it unfair to give
effect to the agreement.
The further revised supplementary explanatory memorandum to the Family
Law Amendment Bill 2000 (Cth) goes on to say:
The grounds for setting aside [agreements] include all common law and
equitable grounds …
1
A court will also be able to set an agreement aside where there is a
material change in the circumstances relating to the care, welfare and
development of a child that would make it unfair to give effect to the
agreement.
The manner in which the agreements were given power was by inserting
s 71A into the Family Law Act 1975 (Cth) which provides:
This Part does not apply to certain matters covered by binding financial
agreements
(1)
This Part does not apply to:
(a)
financial matters to which a financial agreement that is
binding upon the parties to the agreement applies; or
(b)
financial resources to which a financial agreement that is
binding on the parties applies.
Thus, the effect of a financial agreement that is binding upon the parties is to
exclude the jurisdiction of a court exercising powers with regard to property
and spousal maintenance under Part VIII of the Act. This does not preclude a
court exercising jurisdiction under the Family Law Act 1975 (Cth) from
determining questions as to whether a financial agreement or determination
agreement is valid, enforceable or effective which may be done according to s
90KA.
In the second reading speech when the Bill came before the Senate, Senator
Patterson observed:
The aim of introducing binding financial agreements is to encourage
people to agree about how their matrimonial property should be
distributed in the event of, or following separation. Agreements will
allow people to have greater control and choice over their own affairs
in the event of marital breakdown. Financial agreements will be able to
deal with all or any of the parties’ property and financial resources and
also maintenance ….
People will be encouraged, but not required, to make financial
agreements. For these agreements to be binding, each party will be
required to obtain independent legal advice before concluding their
agreement. The provider of the advice will certify, on the agreement,
that the advice has been given. Requiring the parties to obtain
independent legal advice will mean that couples will be aware of the
implications of the agreements that they are entering and will not
unknowingly enter into an agreement that is not in their best interests.
2
Because parties will have obtained prior advice, the court will only be
able to set aside agreements in certain limited circumstances reflecting
the contractual nature of the agreement.
Sections 90B, 90C and 90D of the Family Law Act 1975 (Cth) provide that the
agreements can be entered into before marriage, during marriage or after
divorce. Interestingly there seems to be no legislative distinction between
agreements entered into after marriage but before failure of the marriage and
those which are entered into after marriage but after breakdown of the
relationship. There are consequences in terms of Superannuation, Stamp Duty
and Capital Gains Tax.
CHALLENGES TO FINANCIAL AGREEMENTS
Variation, discharge, termination and setting aside of binding financial
agreements
If an agreement is entered into, it can be varied or discharged by entering into a
termination agreement under s 90J or set aside by a court under s 90K(1).
Section 90K provides that an agreement may be set aside as follows:
(1)
A court may make an order setting aside a financial agreement
or a termination agreement if, and only if, the court is satisfied
that:
(a)
the agreement was obtained by fraud (including
non-disclosure of a material matter); or
(aa)
either party to the agreement entered into the agreement:
(i)
for the purpose, or for purposes that included the
purpose, of defrauding or defeating a creditor or
creditors of the party; or
(ii)
with reckless disregard of the interests of a creditor
or creditors of the party; or
(b)
the agreement is void, voidable or unenforceable; or
(c)
in the circumstances that have arisen since the agreement
was made it is impracticable for the agreement or a part
of the agreement to be carried out; or
(d)
since the making of the agreement, a material change in
circumstances has occurred (being circumstances relating
to the care, welfare and development of a child of the
3
marriage) and, as a result of the change, the child or, if
the applicant has caring responsibility for the child (as
defined in subsection (2), a party to the agreement will
suffer hardship if the court does not set the agreement
aside; or
(1A)
(e)
in respect of the making of a financial agreement - a party
to the agreement engaged in conduct that was, in all the
circumstances, unconscionable; or
(f)
a payment flag is operating under Part VIIIB on a
superannuation interest covered by the agreement and
there is no reasonable likelihood that the operation of the
flag will be terminated by a flag lifting agreement under
that Part; or
(g)
the agreement covers at least one superannuation interest
that is an unsplittable interest for the purposes of
Part VIIIB.
For the purposes of paragraph (1)(aa), creditor, in relation to a
party to the agreement, includes a person who could reasonably
have been foreseen by the party as being reasonably likely to
become a creditor of the party.
Setting aside a financial agreement pursuant to s 90K(1) assumes the
agreement is in fact binding. The first take in making or challenging such
agreements is to determine if it is binding.
Valid binding financial agreements
Another basis upon which a financial agreement may be attacked is its own
validity. A financial agreement will only be considered to be valid and binding
if the requirements of s 90G are fulfilled. This section provides:
(1)
A financial agreement is binding on the parties to the agreement
if, and only if:
(a)
the agreement is signed by both parties; and
(b)
the agreement contains, in relation to each party to the
agreement, a statement to the effect that the party to whom
the statement relates has been provided, before the
agreement was signed by him or her, as certified in an
4
annexure to the agreement, with independent legal advice
from a legal practitioner as to the following matters:
(i)
(ii)
the effect of the agreement on the rights of that
party;
the advantages and disadvantages, at the time that
the advice was provided, to the party of making the
agreement; and
(c)
the annexure to the agreement contains a certificate
signed by the person providing the independent legal
advice stating that the advice was provided; and
(d)
the agreement has not been terminated and has not been
set aside by a court; and
(e)
after the agreement is signed, the original agreement is
given to one of the parties and a copy is given to the other.
Note: For the manner in which the contents of a financial agreement
may be proved, see section 48 of the Evidence Act 1995 [(Cth)].
(2)
A court may make such orders for the enforcement of a financial
agreement that is binding on the parties to the agreement as it
thinks necessary.
In Australian Securities and Investments Commission and Rich & Anor (2003)
FLC 93-171 O’Ryan J said in relation to these s 90G requirements:
[64]
Section 90G sets out the requirements that must be met for a
financial agreement to be binding upon the parties. All the
requirements must be satisfied for the agreement to be binding.
These requirements are justified because the effect of a valid
agreement is to oust the jurisdiction of the [c]ourt. However,
there is no requirement of registration in the [c]ourt or approval
by the [c]ourt of a financial agreement. Further, I am of the view
that the requirements of s 90G are not stringent. All that is
required is that the agreement be signed by both parties, include
a statement addressing the matters in s 90G(1)(b) and attach a
certificate from a legal practitioner.
Essentially s 90G(1) imposes the following requirements necessary for a
binding financial agreement. The agreement must:

Be in writing and signed by both parties;
5

Contain a statement in accordance with s 90G(1)(b) that each of
the parties has received independent legal advice from a legal
practitioner as to the effect of the agreement, the rights of that
party and the advantages and disadvantages at that time that the
advice was provided to the party making the agreement;

Have annexed to it a certificate signed by the legal practitioner
stating that the advice was provided;

Not have been terminated or set aside by the court; and

After being signed, the original agreement is given to one of the
parties and a copy given to another.
This form of certificate and these requirements are very similar to those
provided under the Property (Relationships) Act 1984 (NSW) which has
operated with regard to de facto relationships in New South Wales from 1984
onwards. What is remarkable is that there has been little or no litigation in
relation to those de facto agreements in New South Wales over that period
which is now well in excess of twenty years.
Interpretive approaches
There seems to be two approaches with regard to interpretation of s 90G of the
Family Law Act 1975 (Cth). In J & J [2006] FamCA 442 (unreported)
Collier J dealt with a financial agreement. When that case came before his
Honour it was asserted that the agreement had two deficiencies, namely that it
did not contain a statement to the effect that the party to whom the statement
related had been provided with the requisite independent legal advice, and the
certificate contained incorrect wording. His Honour said:
[20]
Something approaching full compliance, or something that if
looked at in a less than strict light, might come close to
compliance, is not enough.
Justice Collier was of the view that s 90G should be strictly interpreted and any
failure to comply with that section deprived the agreement of being binding
upon the parties. His Honour said:
[19]
To my mind, the words that appear in s 90G(1) “if and only if”
are words of real significance. They have a meaning. They
import a requirement for a level of compliance, if the agreement
is to be binding, that is clearly a standard or level above or
beyond what might be described as substantial compliance…
6
Compliance must therefore be full compliance satisfying the
statutory requirements.
I took a somewhat different approach in Black & Black [2006] FamCA 972. In
that case the parties entered into a financial agreement during the course of
their marriage in circumstances where the husband had a belief that the wife
was going to succeed in a personal injury claim where she would receive about
$200,000, half of which would fall to him under the agreement. This was a
short marriage with a small pool of assets of approximately $300,000. Most of
these assets came from the husband’s contributions. The wife’s claim was
settled for $40,000 and not the $200,000 which the husband had foreseen. The
husband had been advised by his solicitor not to enter into the agreement and
not to count on a significant settlement.
The husband sought to have the agreement set aside under s 90G relying
essentially on two propositions. The first was that there was a change in the
terms of the agreement after the certificate was given. What had happened was
that once the agreement had been completed and signed by the husband and a
certificate given by his solicitor, the wife’s solicitor wanted a change to a
clause of the agreement. This was done. The husband went to see his solicitor
and while his solicitor explained the change to him, did not issue a new
certificate.
The second basis was that the certificate needed to be annexed to the agreement
and there needed to be included in the body of the agreement a statement in
accordance with s 90G(1)(b).
I considered the decision of J & J (above) and I said:
[110] The intention of Part VIIIA is to enable ordinary people to enter
into financial agreements which will deal with property and
spousal maintenance and avoid the necessity of court
proceedings. The agreement can be made before marriage and
after marriage, whilst the relationship subsists or they can be
made following the breakdown of marriage. The explanatory
memorandum observes that it is the legislative intent to
encourage the use of financial agreements under this Part of the
Act. To enable such agreements to be binding the legislation
requires that each of the parties to the agreement must have
independent advice. If courts require strict interpretation of the
legislation this will have the effect of making such agreements
less available to the broader community. It would positively
discourage the use of financial agreements and would limit the
pool of legal practitioners who are equipped and willing to draft
and/or advise in relation to such agreements. Such strict and
inevitably narrow construction would add to the cost of such
7
agreements and may put the costs to prepare and advise them on
them outside the financial means of the general community. That
is not the legislative intent. The legislation does intend that legal
advice should be available Australia wide through the broad
church of legal practitioners, whether specialist or not, whether
in major capital cities, or in suburbs or in the regions. Courts
should not make legal practitioners and the parties cross all of
the “T’s” and dot all of the “I’s” to enter into and give effect to
financial agreements. The form should not defeat the substance.
The Act does not create a regime of strict compliance and there is
a requirement on courts to give purpose to the legislation.
Accordingly, I will not be adopting a strict interpretive approach
in terms of both the construction of the legislation and
construction of the terms of the agreement. I will adopt the
objective approach.
The underlying jurisprudential conflict is whether the strict approach suggested
by Collier J ought to be adopted or whether the objective approach ought to be
adopted. Both arguments have significant weight. Justice Collier’s view is that
Part VIIIA takes away the jurisdiction of a court and therefore the rights of
citizens to apply to the court for property orders, and as such should be strictly
interpreted.
In Black & Black (above) I considered the High Court decision of Toll (FGCT)
Pty Ltd v Alphapharm Pty Ltd and Others (2004) 219 CLR 165 which
considered the approach regarding contracting parties. In a joint judgment,
Gleeson C J, Gummow, Hayne, Callinan and Hayden JJ stated:
[42]
Consistent with this objective approach to the determination of
the rights and liabilities of contracting parties is the significance
which the law attaches to the signature (or execution) of a
contractual document. In Parker v South Eastern Railway
Company 1877 2 CPD 416 at 421, Mellish LJ drew a significant
distinction as follows:
In an ordinary case, where an action is brought on a
written agreement which is signed by the defendant, the
agreement is proved by proving his signature, and, in the
absence of fraud, it is wholly immaterial that he has not
read the agreement and does not know its contents. The
parties may, however, reduce their agreement into writing,
so that the writing constitutes the sole evidence of the
agreement, without signing it; but in that case there must
be evidence independently of the agreement itself to prove
that the defendant has assented to it.
8
[43]
More recently, in words that are apposite to the present case, in
Wilton v Farnworth (1948) 76 CLR 646 at 649 Latham CJ said:
In the absence of fraud or some other of the special
circumstances of the character mentioned, a man cannot
escape the consequences of signing a document by saying,
and proving, that he did not understand it. Unless he was
prepared to take the chance of being bound by the terms of
the document, whatever they might be, it was for him to
protect himself by abstaining from signing the document
until he understood it and was satisfied with it. Any
weakening of these principles would make chaos of everyday business transactions.
[44]
In Oceanic Sun Line Special Shipping Company Inc v Fay (1988)
165 CLR 197 at 228, Brennan J said:
If a passenger signs and thereby binds himself to the terms
of a contract of carriage containing a clause exempting
the carrier from liability for loss arising out of the
carriage, it is immaterial that the passenger did not
trouble to discover the contents of the contract.
[45]
It should not be overlooked that to sign a document known and
intended to affect legal relations is an act which itself ordinarily
conveys a representation to a reasonable reader of the document.
The representation is that the person who signs either has read
and approved the contents of the document or is willing to take
the chance of being bound by those contents, as Latham CJ put it,
whatever they might be. That representation is even stronger
where the signature appears below a perfectly legible written
request to read the document before signing it.
I went on to say:
[95]
The agreements to which parties to a marriage or relationship
enter into should be subject to the same principles of law and
equity that govern ordinary contracts. Agreements under
Part VIIIA already have a protective provision, that being 90G.
The solicitors who give advice to such agreement need to be
aware that the general law applies so that they are able to give
advice that the Act requires.
In terms of the purposive approach, I set out the following:
[106] The preferred purposive approach was noted by Dawson J in the
High Court case of Mills v Meeking (1990) 169 CLR 214 at 235,
regarding the Victorian Interpretation legislation:
9
[T]he literal rule of construction, whatever the
qualifications with which it is expressed must give way to
a statutory injunction to prefer a construction which
would promote the purpose of an Act to that which would
not… The requirement that a court look to the purpose or
object of the Act is thus more than an instruction to adopt
the traditional mischief or purpose rule in preference to
the literal rule of construction… The approach required
by s 35 [Interpretation of Legislation Act 1984 (Vic)]
needs no ambiguity or inconsistency; it allows a court to
consider the purposes of an Act in determining whether
there is more than one possible construction. Reference to
the purposes may reveal that the draftsman has
inadvertently overlooked something which he would have
dealt with had his attention been drawn to it and if it is
possible as a matter of construction to repair the defect,
then this must be done. However, if the literal meaning of
a provision is to be modified by reference to the purposes
of the Act, the modification must be precisely identifiable
as that which is necessary to effectuate those purposes and
it must be consistent with the wording otherwise adopted
by the draftsman. Section 35 requires a court to construe
an Act, not to rewrite it, in the light of its purposes.
[107] Pearce and Geddes [(p 26, para 2.9)] suggest that Dawson J’s
comments in Mills v Meeking (above) indicate that the
interpretation legislation provisions have displaced both the
literal and purposive common law approaches outlined above
and that “[i]t is therefore unhelpful to treat those approaches as
representing anything more than stages in the development of the
principle of interpretation that have current statutory force”.
[108] The High Court stated in Kelly v The Queen (2004) 218 CLR 216
at [98] (citations omitted):
Purposive construction
Purposive construction is the modern approach to
statutory construction. Legislative enactments should be
construed so as to give effect to their purpose even if on
occasions this may require a “strained construction"” to
be placed on the legislation. The literal meaning of the
legislative text is the beginning, not the end, of the search
for the intention of the legislature. As Learned Hand J
famously pointed out:
Of course it is true that the words used, even in
their literal sense, are the primary, and ordinarily
the most reliable, source of interpreting the
10
meaning of any writing: be it a statute, a contract,
or anything else. But it is one of the surest indexes
of a mature and developed jurisprudence not to
make a fortress out of the dictionary; but to
remember that statutes always have some purpose
or object to accomplish, whose sympathetic and
imaginative discovery is the surest guide to their
meaning.
[109] The High Court in Adams v Lambert (2006) 225 ALR 396 stated
in relation to bankruptcy law as follows:
[34]
That view of legislative purpose is persuasive. The effect
of the majority view in Lewis(2000) 109 FCR 33 is to
attribute to the legislation an overwhelming preference for
form over substance. That should not be done.
An appeal of Black & Black (supra) was heard before the Full Court,
comprising of Faulks DCJ, Kay and Penny JJ, on the 24 January 2008. The
husband appealed on numerous grounds but the matter turned only on one issue
which required an interpretation of s90G of the Family Law Act 1975 (Cth)
(“the Act”) and the provisions of the agreement itself. 1 The husband argued
that the trial judge had erred in rejecting the proposition that the statutory
requirements should be strictly interpreted. The husband contented that the Act:
“(a) required his solicitor at the time he signed the final amended
version of the financial agreement on or about 6 September 2002
to re-certify in accordance with s 90G(1)(c), which the solicitor
failed to do despite making notes about the changes; and
(b) required the agreement to be in accordance with the wording then
used in s 90G(1)(b).”2
The Full Court said at paragraph 40:
“The Act permits parties to make an agreement which provides an
amicable resolution to their financial matters in the event of separation.
In providing a regime for parties to do so the Act removes the
jurisdiction of the court to determine the division of those matters
covered by the agreement as the court would otherwise be called upon
to do so in the event of a disagreement. Care must be taken in
interpreting any provision of the Act that has the effect of ousting the
jurisdiction of the court. The amendments to the legislation that
introduced a regime whereby parties could agree to the ouster of the
1
2
Black & Black [2008] FamCAFA 7 at page 2.
Ibid at page 5.
11
court’s power to make property adjustment orders reversed a long held
principle that such agreements were contrary to public policy “.
The Full Court went onto say at paragraph 42:
“The underlying philosophy that had guided the courts in enunciating that
principle was seen to place too many restrictions on the right of parties
to arrange their affairs as they saw fit. The compromise reached by the
legislature was to permit the parties to oust the court’s jurisdiction to
make adjustive orders but only if certain stringent requirements were
met.”
The agreement entered into by the parties did not specifically refer to the
requirements, although the certificate did.3 Their Honours said that although
“recital R and clause 29 of the agreement dealt predominately with advice in
relation to the legal implications of the agreement and each party’s rights and
obligations”4, the statements did not meet the requirements of s 90G(1)(b).
The Full Court adopted a strict approach, in giving effect to the agreement, as
taken by Collier in J and J (above) and said that
“we are of the view that strict compliance with the statutory
requirements is necessary to oust the court’s jurisdiction to make
adjustive orders under s 79”.5
The Court (Faulks DCJ, Kay and Penny JJ) found “the agreement itself was
flawed and did not meet the statutory requirements”.6 The Full Court did not
think it was necessary to determine whether or not the certificate prepared by
the husband’s solicitor’s pre dated the amendments to the agreement because it
did not satisfy the statutory requirements and was therefore not binding upon
the parties.
The appeal by the husband was successful, the effect of which was to set aside
the financial agreement.
ADVICE TO PRACTITIONERS
In light of this decision precedents for financial agreement should be checked
to ensure strict compliance with the legislation. Also practitioners will need to
take great care when; advising their clients, drafting and finalising agreements.
There are some important factors which should be kept in mind when drafting a
financial agreement:
3
Ibid at paragraph 44.
Ibid at paragraph 45.
5
Ibid.
6
Ibid at paragraph 46.
4
12
1
When you are asked to draft the agreement ensure that your
precedents are up to date and that you have kept up to date with all
new developments in this area. Check the latest version of the Act to
ensure that all of s90G has been complied with.
2
When you are asked to draft the agreement ensure:
(a) that you do not see the client in the presence of the other party
and;
(b) that the other party is properly and independently represented.
Avoid referring them to someone you know. It may be wiser to
refer to the Law Society or a list of Accredited Specialists.
3
When someone comes in a few weeks in advance of the wedding –
send them away, by that time it is too late or alternatively warn them
of the risks (in writing) and see the client after the happy day.
4
You should seek independent expert advice from an accountant, tax
and stamp duty advice where appropriate, and ensure that this advice
is kept on the file.
5
Draft a decent letter of advice, well in advance, making sure that:
(a) your client is informed of his/her obligation to make full and
frank disclosure as well as the matters referred to in s90G–
otherwise the whole exercise is wasted.
(b) you have set out the basis of setting aside agreements and;
(c) your advice given for the certificate.
(d) your advice refers to the latest version of the agreement,
including any amendments you may have made.
(e) if your advice has been covered in more than one letter provide a
final letter of advice and refer to the previous letters and annex
copies of those letters to the copy of the final letter of advice.
7
6
Have your client sign a copy of your advice and keep it on your file.
7
Make sure the agreement contains a statement about the advice given
and refers to the matters listed in s90G. Do not just rely on the s90G
certificate. Justin Dowd and Alexandra Harland in their article
“Bound by Strict Compliance” An examination of recent Family
Court decisions on binding financial agreements recommend that
“for abundant caution, repeat the wording of the s90G certificate”.7
Law Society Journal (2008) 46 at page 63.
13
8
8
Include a recital in the agreement which provides a warranty by each
party and solicitor that the advice was given and the certificate
signed before the agreement was signed.
9
Finish all negotiations and have the final form of the document
agreed before you give your s90K(1)(b) advice, which should be in
writing.
10
It would be prudent to have your client and the other party both
agree that the agreement is finalised. Do not make last minute
handwritten amendments at the meeting you have arranged for
everyone to sign the agreement. Incorporate the changes into the one
document and have everyone sign it. If you do not the risk is the
agreement may be set aside on the basis it was altered after the
advice was given.
11
Agree on a date for signing the agreement with your client and
arrange a meeting with the other solicitor and your respective clients.
12
The solicitors should sign the certificates first. It would be prudent
to record the date as well as the time the certificates were signed.
13
If in doubt do not sign the certificate.
14
Then have both client’s sign the original agreement and record the
date and time the document was signed. Ensure the certificates are
attached. Make sure it is the right certificate – not the early form.
Justin Dowd and Alexandra Harland in their article (supra) say
despite the fact that the current certificate has been in operation since
January 2004, “somewhat surprisingly it is not unusual to see the
wrong certificates attached to the agreement”.8
15
Make copies of the agreement and mark the original agreement as
the ‘the original’ and the others as ‘the copy’ as there can only be
one original (s90g (1)(e)). Hand the original to your client and the
copy to the other party. Also ensure that you hand a copy of the
agreement to the other party’s solicitor and have them acknowledge
on your copy that they have received same.
16
Better still, have a meeting. Both solicitors each sign their respective
certificates on one original agreement. Then and only then have
each party sign the agreement have each signature witnessed and
then date the agreement. Copy the original give a copy to one party
Ibid.
14
and the original to the other.
agreement and diarised by you.
Have this process noted in the
17
Get the whole file with your copy of the agreement (remember your
client has the original) all relevant correspondence and put it in a
safe place – marked “not to be lost or destroyed”. It is important
that you keep your file indefinitely rather than for just the period
required by statute. A claim for professional negligence may be
made against you in the future.
18
Finally if a client comes to you and says “we have agreed on what
we want, I just want you to witness this” (as some have done
already), DON’T !9
CONCLUSION
The difficulty caused by the differing approaches adopted by myself and
Collier J in the different financial agreement cases was the subject of a paper
prepared by Martin Bartfeld QC10. In that paper Mr Bartfeld rightly observed
the practical reality for legal practitioners advising on financial agreements. He
said:
“Interesting as this debate may be, these two cases demonstrates some
very important principles:
9
1.
It is necessary for the Act to be complied with no matter
which case correctly states the laws. Your client won’t
thank you if he or she has to go to court to argue about the
validity of the agreement, even if they win on a technicality.
It is not hard to comply with the statutes. The words can
be copied and incorporated into the precedent, good
precedents for the agreement are contained in the CCH
Family Law Service;
2.
Office precedents must be kept up to date;
3.
An agreement can be avoided by the person who is
responsible for the error rendering it non-binding. Usual
legal principles that a tortfeasor cannot benefit from his
own negligence seems not to apply in circumstances where
a party (or their solicitor) is responsible for the error
which deprives the agreement of statutory validity. For
example, if the certificate was signed by a clerk rather
Olyvia Nikou SC “Essential Elements of Binding Financial Agreements” (2001) CLF at page 12.
“Financial Agreements Evolution and Change” May 2007.
10
15
than a legal practitioner, the agreement would not be
binding, even if that meant that the guilty party was to
benefit form the error. Therefore every practitioner must
be as vigilant about the other side’s compliance and their
own; and
4.
The consequence of an agreement failing because of
incorrect drafting will have professional negligence
consequences
with
the
attendant
cost
and
11
embarrassment.”
I can only agree with the common sense approach adopted by
Mr Bartfeld in his paper in that regard and say the difficulties faced by Mr
Bartfeld in respect of the two differing approaches has now been resolved by
the Full Court decision of Black and Black.
It is sometimes said that a process looks easy, but as is always the case the
devil is in the detail.
11
Ibid at pages 11-12.
16