A Binding Financial Agreement made after the breakdown of marriage (section 90K of the Family Law Act 1975) or de facto relationship (section 90UM of the
Family Law Act 1975) can deal with property and financial resources and maintenance.
Clients are required to disclose all assets and liabilities they have at the time of entering into the financial agreement. Both parties must seek
independent legal advice and have their lawyer sign a certificate of independent legal advice. In the event that there is material change to your circumstances
such as circumstances relating to the care, welfare and development of a child of your relationship, or that the agreement was obtained by fraud, the
Binding Financial Agreement may be set aside.
A recent case, F Firm & Ruane & Ors (2014) FLC 93-611 confirmed the Family Court’s jurisdiction to hear and determine a damages claim against a
firm of solicitors who prepared a defective Financial Agreement. This appeal concerned the availability of the Family Court’s jurisdiction to determine
a damages claim brought by the wife against her former solicitors and barrister as part of the property settlement proceedings. The suit had its foundation
in an earlier finding that a financial agreement was not binding because the husband’s certificate of independent legal advice signed by a lawyer from
the United Kingdom and not an ‘Australian Legal Practitioner’. The wife sought that her former solicitors pay her damages for an alleged breach of
their duty of care. An application was brought by the wife’s former solicitors and barrister seeking that the proceedings against them be dismissed
as being outside the Family Court’s jurisdiction. That application was dismissed which was the reason for the appeal in this case.
The Full Court distinguished from a previous decision in Noll & Noll & Anor wherein the dismissal of an application by the husband to sue the wife’s
former solicitors in litigation arising from a financial agreement was upheld and subsequently dismissed the appeal. Clients must also be aware that
once a Binding Financial Agreement is in force, you forego your right to have your property entitlements determined by a Court.