In recent years, there have been a number of high-profile cases in which financial agreements have been set aside for failing to comply with the technical requirements of the Family Law Act. One case that has received recent media attention is that of former Olympic swimming champion Grant Hackett, who is pursuing legal action against two law firms as a result of the Family Court setting aside his financial agreement.
What is a financial agreement?
A financial agreement, sometimes known as a pre-nuptial agreement, sets out the way some or all of a couple’s assets will be divided in the event that their relationship breaks down. It can also deal with spousal maintenance.
In accordance with the Family Law Act, parties may enter into an agreement before, during or after a marriage or de facto relationship.
In a number of cases, the Family Court has made it clear that strict technical compliance with the requirements of the Family Law Act is necessary to avoid a financial agreement being set aside. The reason for this is that because an agreement effectively ousts the Court’s jurisdiction to make an order for property adjustment, the Court insists on full compliance with the substantive and technical requirements of the Act.
What happened in Hackett’s case?
Hackett married pop-star Candice Alley in April 2007 and the pair separated in May 2012.
After their separation, reports in the media indicated that Hackett and Alley had signed a ‘faulty’ financial agreement one month before their wedding. While the news reports are silent on exactly what the defect was in the agreement, it was reported that it did not comply with legislative requirements. Alley succeeded in having the agreement set aside.
As a result, Hackett has apparently instigated a claim against his lawyers in which he alleges the lawyers neglected to or failed to perform their services with due care because they did not ensure the agreement was ’effective, operative and enforceable’.
What does it mean for you?
Financial agreements must be approached very carefully to reduce the risk of an agreement being set aside by the Family Law Court. It is imperative for parties who wish to enter into an agreement to obtain advice from a lawyer well-versed in the requirements of the Family Law Act, as well as strategic negotiation and respect for the personalities and the relationship involved.