personalised legal services
News & Articles

Pre-nups (Part II)

If you’ve read our previous article on pre-nups (here), be advised that Spring time is well and truly over for Financial Agreements.
The High Court of Australia (HCA) recently handed down a case that has wide reaching implications for all persons who have entered into a financial agreement.  We summarise the case briefly below:

  • The 67-year old Australian established male (Husband) millionaire was a divorcee with three children
  • Met the 34-year old female (Wife) who was from overseas without any wealth
  • Before getting married, he said that he would not proceed with the marriage unless she signed the pre-nup (Financial Agreement –FA). The Wife signed the FA notwithstanding receiving independent legal advice
  • The FA limited the wife’s finances to $50,000 in the event of a marriage breakdown
  • Three years later the pair divorced and the wife sued notwithstanding the FA
  • The wife was successful in her appeal in the HCA and could be entitled to an amount in excess of $1M dollars.

The Court held almost unanimously that there was unconscionable conduct and/or duress. Given the power imbalance and difference between the parties, there was an irreconcilable differences between the bargaining positions of both parties. Essentially, the Family Court is bound by the law governing Equity which must consider a fair outcome to the parties, whereas  FA are too dependent on contract law where considerations of the laws of Equity are not required, and that the parties only need to consent to the agreement.

What does this mean for you?

Well if you are about to get married, you might want to think long and hard about whether the FA is worth the effort. While it will take some time to understand the full ripple effect of this decision, we envision that unless both parties enter into the marriage on a fairly equal footing in terms of education, assets, career, etc, any disparity  resulting in a possible imbalance of bargaining power may open up the FA to a challenge later on.

Conversely, if you are currently in a turbulent marriage, and have signed a pre-nup that was not to your favour at the time of marriage, notwithstanding the existence of the pre-nup, you may have a case in challenging the validity of the terms, particularly if it is heavily skewed in your partner’s favour.

This doesn’t change any suggestions as per our previous article regarding how to protect your assets (prior to entering into a marriage) regarding to safeguarding your pre-marital assets from being melded into the family asset distribution pool.

The above article is not legal advice and is not specific. It is general information and we advise that you seek legal assistance from a lawyer to choose what is right for your personal circumstance. If you would like to talk to a lawyer about any of the contents in this article, please feel free to contact us at for call us on 03 5367 3100 to make an appointment.


Related Post/News

We offer personalised legal services across a wide range of areas of practice

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin pellentesque vulputate metus, quis iaculis enim posuere finibus. Sed augue sapien, porttitor et enim eget, mollis lacinia nisl. Duis gravida in justo vel commodo. Maecenas euismod sapien eget justo placerat posuere nec ut arcu. Interdum et malesuada fames ac ante ipsum primis in faucibus.


Send Us A Message Today!

Share the love #Contact Lawyers