Binding Financial Agreement: Where there was no de facto relationship

Teh v Muir [2017] FamCA 138

This case concerned a Binding Financial Agreement entered into pursuant to section 90UC “Financial agreements during de facto relationship”.

An agreement under this section can only be considered a Binding Financial Agreement under this section if the parties were in a de facto relationship at the time of signing the Agreement.

A person is considered to be in a de facto relationship with another person if they have a relationship as a couple living together on a genuine domestic basis. Circumstances that may be relevant include:

  • The duration of the relationship;
  • The nature and extent of their common residence;
  • Whether a sexual relationship exists;
  • The degree of financial dependence or interdependence; and
  • The degree of mutual commitment to a shared life.

In this case, there was evidence that: the parties lived under the same roof in separate bedrooms; there was no ongoing sexual relationship; any financial support was not born of interdependence, but by the deception of Ms Teh; and there was no evidence of a commitment to a shared life. Ms Teh did not socialise with Mr Muir’s family or friends or join him for any special occasion.

The Court decided on the basis of the evidence before it that a de facto relationship did not exist between the parties. Therefore, the Agreement was not binding and was set aside.

Lesson

In order for a Binding Financial Agreement entered into during a de facto relationship to be binding, the parties have to be in a de facto relationship.

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