Right by your side** - Key rules for when a prenup will fail

Previous View posts have looked at various cases where a binding financial agreement (BFA) has been held to be ineffective.

The case of Hoult v Hoult (2013) 276 FLR 412 arguably provides the best summary of the key rules in this regard.

In considering whether the wife could avoid the terms of a BFA due to not having received independent advice the court confirmed -

1. the parties need only have received independent legal advice on the document before the BFA will be assumed to be valid - the utility or content of the legal advice and indeed whether it was even understood are not relevant issues in determining whether the test is met;
2. the certificate of advice issued by each lawyer will generally be sufficient evidence that advice has been given, unless the resisting party can show evidence that creates doubt about the conclusion that would otherwise be drawn from the certificate.
3. if a party can show that there is a legitimate issue as to whether independent advice has been given then the onus of proving that the advice was in fact given is effectively 'reversed' and it is the task of the party wanting to have the BFA upheld who must satisfy the court. This is because the legislation provides that a BFA is binding 'if, and only, if' the listed requirements are all proved.
4. therefore the party to a relationship wanting to rely on a BFA must establish the existence of all required matters.

Similarly, in the case of Warrick and Mia [2018] FamCA 426, a provision which stated 'the assets and personal effect (sic) which are held in both parties’ names acquired after the marriage shall be property of both parties and should be divided between the parties on a contribution basis' was held to be so unclear that it was unenforceable; making the entire agreement also void.

This was because the phrase was an operative term and it was impossible based on the way the document was drafted to determine if 'contribution' related to non-financial as well as financial aspects.

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** For the trainspotters, the title of today's post is riffed from the Eurythmics song ‘Right by your side’.

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