Eighteen months after Black, the Government has moved to brighten the landscape for practitioners and loosen some of the chains imposed by that Decision. The changes are contained in the Federal Justice System Amendment (Efficiency Measures) Act (No.1) 2009, and became effective on 4 January, 2010.
Since 27 December, 2000, binding Financial Agreements (or, “BFA’s”) have been available to parties wishing to achieve finality in their financial arrangements before, during and after marriage. Part of the attraction was that a BFA did not require any form of judicial scrutiny in order to be binding. But the Full Court in Black & Black (2008) FLC 93-357 stipulated that for a financial agreement to be binding, there had to be strict compliance with the procedural requirements contained in Section 90G Family Law Act 1975 (“the Act”). The decision had many Lawyers rushing to their deed safe, and had the potential to make BFA’s less user-friendly and more costly. But, in the words of Mr Robert McClelland MP, the amendments “will restore confidence in the binding nature and enforceability of financial and termination agreements under the Family Law Act”.1
The most significant changes for BFA’s entered into after 3 January, 2010, are as follows:
- It is still necessary for that advice to be given to a party before he or she signs. Further, that party must be given a signed statement stating that such advice was given. However, the signed statement can be given to the party at any time after the agreement is signed, and even before.
- For the financial agreement to be binding, a copy of the signed statement needs to be given to the other spouse party or to their legal practitioner.
- It is no longer necessary for the original of a BFA to be given to one of the parties after it has been signed and a copy to be given to the other party.
- By new section 90G(1)(b) of the Act, a Court now has the power to make an Order declaring that a BFA is binding on the parties, even if one or more of the procedural requirements are not satisfied. However, such a declaration can only be made if the agreement is signed by all of the parties, it has not been terminated and the Court is satisfied that it would be “unjust and inequitable” if the agreement were not binding. Further, the Court is not allowed to take into account any changes in circumstances, after the agreement is made.
What is particularly striking about the legislation is that the changes are retrospective and apply to all financial and termination agreements entered into since BFA’s were introduced (provided that they have not already been set aside by a Court). However, if a financial agreement was made between 27 December, 2000, and 14 January, 2004, practitioners would still be well advised to go to their deed safe, to check that, before signing the Agreement, clients were given advice about the list of matters that are set out in the “Notes” section at the end of the Act. This is because the redeeming Section 90G(1)(b) does not apply to pre-14 January, 2004 BFA’s.
The amendments certainly brighten the outlook for practitioners following Black’s decision, particularly when they are asked to draft a pre-nuptial BFA. But, care should still be taken to ensure that the remaining requirements of Section 90G are fully complied with.
1 McClelland, R, Second Reading Speech, House of Representatives, 5 February, 2009.
