Binding Financial Agreement: What happens if there is an error in the agreement and certificate?

Case Note: Balzia & Covich (2009) FamCA 1357

A Binding Financial Agreement (BFA) was made pursuant to s 90B “Financial agreements before marriage” of the Family Law Act 1975.

The parties entered into the agreement after they were married. As such, the BFA ought to have been made pursuant to s 90C “Financial agreements during marriage”.

The two sections do not involve the same concept.

A solicitor is required to provide a party with a signed certificate which states that he or she provided that party with independent legal advice in relation to the agreement. The advice to be given in each situation must reflect the actuality of the situation at the time the advice is given.

In this case, the Judge held that:

The difference between the advice certified to have been given and the factual situation in existence at the time the agreement was signed meant that I cannot be satisfied that the advice given meets the requirements that the legal practitioner for each of the parties had explained the advantages and disadvantages at the time that the advice was provided to either party entering into the agreement. The 90B certificates can only clearly be understood and interpreted to mean that the advice that was given was incorrect. I am not able to rectify the certificates by changing the reference to the section within the certificates. To make such a change is no mere formality.

As such, the BFA entered into between the parties was not binding and was set aside.

Lesson

The independent legal advice given to a party to a BFA must reflect the actuality of the situation at the time of the advice.  If not, the BFA can be set aside.

You can find out more about Binding Financial Agreements here.

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