Prenuptial Agreements in Australia

Legal Requirements for a Binding Financial Agreement

For a financial agreement to be considered binding under Australian law, the following criteria must be met:

• It must be in writing and signed by both parties.

• The original agreement must be provided to one party, and a copy to the other.

• It must specify the extent of any spousal maintenance arrangements.

Each party must receive independent legal advice regarding:

• The impact of the agreement on their legal rights.

• The advantages and disadvantages of entering the agreement at that time.

• A certificate from each party’s legal advisor confirming that such advice was given must be attached.

Circumstances That Invalidate an Agreement

An agreement may be deemed invalid if:

• It was obtained by fraud or mistake.

• It was made under duress or undue influence.

• It is impracticable to enforce all or part of the agreement.

• There has been a significant change in a child’s care, leading to hardship.

One party engaged in unconscionable conduct, particularly when one spouse was at a clear disadvantage, and the agreement violates principles of fairness.

Key Legal Precedents: Thorne v Kennedy and Subsequent Cases

In the landmark Thorne v Kennedy [2017] HCA 49, two agreements were voided due to unconscionable conduct and undue influence. This precedent was applied in later cases:

Chaffin v Chaffin [2019] FamCA 260 – The court invalidated the agreement, citing the wife’s special disadvantage and the husband’s exploitation of it.

Delrio v Jindra [2019] FCCA 1186 – The court upheld the agreement, finding no such disadvantage.

In both cases, the weaker party had independent legal counsel who advised against signing.

Requirement for Meaningful Legal Advice

Recent rulings emphasize that legal advice must be real and meaningful. This means:

• Lawyers must assess the client’s current rights under the Family Law Act.

• This includes identifying the parties’ current property and their financial and non-financial contributions.

• Advice must compare the party’s position with and without the agreement, weighing advantages and disadvantages accordingly.

This approach was reaffirmed in Chetri & Thapa [2024] FedCFamC2F 1611.

Recognition of Foreign Marital Agreements

Serious legal issues may arise when a marital agreement executed outside Australia fails to meet the strict requirements of Australian law. This can be especially relevant when:

• A couple relocates to Australia.

• One spouse is an Australian citizen.

The Australian Family Court has jurisdiction over the matter

It is generally assumed that Australian courts will not enforce a foreign prenuptial or postnuptial agreement unless it fully complies with the Family Law Act, even if it is valid in the country where it was signed. However, a foreign jurisdiction clause or choice of law clause may influence an Australian court to defer the case to a foreign tribunal.