Can a Binding Financial Agreement (BFA) be Set Aside?

A BFA is an agreement between de facto, soon to be married or already married couples, which is made either before, during or after their relationship. BFAs can also be made by de facto couple of the same sex. It states how your assets, financial resources and liabilities will be divided if your relationship breaks down.

BFAs can be set aside by the Family Court if they are not carefully drafted and properly executed.

One of the most common reason BFAs are set aside is because the Agreement was obtained by fraud or duress (for example, requiring someone to sign the BFA shortly before the parties’ wedding under threat of not going through with the wedding).

Case Study
Thorne v Kennedy [2017] HCA 49

This High Court case has demonstrated that if a binding financial agreement is entered into in circumstances of unconscionable conduct, the agreement will not be upheld.

Thorne v Kennedy involved a binding financial agreement between a wealthy Australian property developer and his ex-wife.

The couple met online in 2006 on a website for potential brides. At the time, the Wife was 36 years old, living in the Middle East with no substantial assets. The Husband was 67 years old and had assets in the vicinity of $18 million to $24 million.

The Wife moved to Australia. Then, ten days before their wedding the Husband took the Wife to a solicitor to obtain advice about the terms of a binding financial agreement which was purported to be entered into between them. The lawyer told the Wife it was the worst agreement they had ever seen and advised her not to sign it.

The Husband told the Wife that if she did not sign the agreement then the wedding would not go ahead. Therefore, despite the lawyer’s ‘advice, the Wife signed the agreement and the wedding continued.

The couple separated in 2011 and the Wife was provided with what the High Court described as a ‘piteously small’ lump sum payment based on the terms of the binding financial agreement. After lengthy legal proceedings, the High Court ruled that the Husband had taken advantage of his ex-wife’s vulnerability to obtain an agreement which was ‘entirely inappropriate and wholly inadequate.’

The agreement was entered into as a result of undue influence, illegitimate pressure, and unconscionable conduct. As a result, the binding financial agreement was not enforceable and was subsequently set-aside.

If you are going through a separation and want to sort out your finances and parenting arrangement, Straits Lawyers are now offering online services in both English and Chinese.

Simply purchase our online services via this link: https://straits-lawyers.square.site/product/binding-financial-agreement-consultation-bfa-/5?cs=true
Alternatively, you can email us at info@straitslawyers.com or call at 08 8410 9069 to find out more.

Straits Lawyers engaging with our community.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.