Setting aside Australian financial agreements is a complex legal process, often occurring during emotionally fraught times of divorce and separation.
When a couple decides to formalise their property settlement with a Binding Financial Agreement (BFA), they do so hoping for a clean and final break. This legal document is designed to provide certainty, but what happens when a party claims their legal advice was so incompetent it should be considered “no advice at all”? And what if they also claim they were pressured into signing the agreement? This case sheds light on the challenges.
This fascinating case, Suess & Suess, heard in the Federal Circuit and Family Court of Australia (FCFCOA), serves as a powerful cautionary tale for anyone considering a BFA. It highlights the critical importance of robust legal advice, full financial disclosure, and the very high bar a court sets for successfully setting aside Australian financial agreements.
This blog post will unpack the complex legal arguments, the court’s surprising findings, and the invaluable lessons learned for individuals navigating property settlement in Australia.
The case revolves around a long-married couple who separated after nearly three decades together. During their separation, they entered into a Binding Financial Agreement in December 2019. This BFA was intended to finalise their financial affairs and property division.
The wife, however, later sought to have the agreement set aside. Her primary arguments rested on two pillars, both central to the discussion of setting aside Australian financial agreements:
The wife’s first claim was that the legal advice provided to her was so incompetent and lacking in integrity that it failed to meet the strict requirements of Section 90G(1)(b) of the Family Law Act 1975 (Cth). This section mandates that a party to a BFA must receive independent legal advice about the effect of the agreement on their rights, as well as the advantages and disadvantages of entering into it.
The wife contended that her solicitor either didn’t have all the necessary information to provide proper advice, or that the advice was so poor it amounted to no advice at all.
The wife’s alternative argument was that if the agreement was found to be legally binding, it should still be set aside under Section 90K(1)(e) of the Act. This section deals with circumstances where the agreement was obtained by fraud or where there has been unconscionable conduct.
She alleged that her husband failed to make a full and frank disclosure of the matrimonial asset pool. She further claimed that she was coerced into signing the agreement, fearing that her refusal would place the family business—and her children’s financial futures—at risk.
The husband, in contrast, maintained that the agreement should be declared binding, pointing out that the wife was legally represented throughout the process, had the same access to financial information as he did, and that her own solicitor had even drafted the agreement.
To fully understand the court’s decision regarding setting aside Australian financial agreements, it is essential to first grasp the legal framework governing these agreements in Australia.
A Binding Financial Agreement is not just a simple contract. It is a powerful legal tool that operates outside the usual powers of the Family Court to make property settlement orders. This is why the Act imposes strict conditions for an agreement to be considered binding.
This is the most critical requirement for a BFA’s validity. Each party must have received independent legal advice from a legal practitioner covering:
The effect of the agreement on their rights.
The advantages and disadvantages of making the agreement at the time the advice was provided.
The legal practitioner must then provide a signed statement confirming this advice was given. The court’s role is not just to see if a signature is present, but to determine if the essence of the advice was genuinely provided.
Even if an agreement is technically binding under Section 90G, a court can set it aside if certain circumstances apply. One of the most common grounds for setting aside Australian financial agreements is under Section 90K(1)(e), which allows a court to set aside an agreement if it finds that:
“a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable.”
This is a high standard. It requires more than just unfairness; it demands evidence of behaviour that is so harsh or oppressive that it goes against the conscience of the court. This often involves one party taking advantage of another’s “special disadvantage,” such as a lack of education, language barriers, or emotional vulnerability.
This section gives the court its broad power to make property settlement orders, taking into account each party’s contributions and future needs. When an application to set aside a BFA is successful, the court can then proceed to make a new, just, and equitable order under Section 79.
The judge in Suess & Suess delivered a clear and compelling judgment that ultimately favoured the husband and upheld the agreement. The court’s findings are instructive and provide crucial insights into how BFAs are viewed, particularly concerning attempts at setting aside Australian financial agreements.
The court acknowledged that the wife’s solicitor had “conceded that her advice and assistance… was not as would be expected of a legal practitioner” in this area. However, the judge ruled that the advice did not fall “below a basement threshold such that should be considered as no advice at all.” The judge found that even though the advice was not of the highest standard, the requirements of Section 90G were satisfied because the advice still provided the wife with the option to take a more rigorous approach. This finding is a powerful reminder that while the quality of advice is important, a court will not necessarily set aside a BFA just because a party feels their solicitor could have done more. The bar for “no advice” is incredibly high.
This is where the court placed significant emphasis on the wife’s own actions and opportunities. The judge found that the wife had been given the opportunity to obtain her own valuation of the family business but “chose not to do so.” The court noted that she was likely content with the overall settlement amount and had a desire to ensure her adult children could remain involved in the business.
Crucially, the judge found no evidence that the husband had misrepresented the value of the business or that he had engaged in unconscionable conduct. The evidence did not support a finding that the wife was in a “position of special disadvantage.” This underscores a key legal principle: a court will not step in to protect a party who, despite having opportunities to protect their own interests, chose not to do so. A party cannot simply claim they were uninformed if they had the means and opportunity to become informed.
The Suess & Suess case is a landmark reminder of the fundamental principles of Australian family law. It is a resounding affirmation that a Binding Financial Agreement, when executed correctly, is a robust and difficult-to-challenge document. Successfully setting aside Australian financial agreements requires meeting a very high legal threshold.
The most important lessons from this case are:
The Quality of Your Legal Advice Matters Immensely: While the court in this instance did not set aside the BFA, it came very close. A competent and experienced family law solicitor is not a mere formality. They are your best defence, ensuring you receive a clear-eyed assessment of your legal position, the value of all assets, and the full implications of the agreement.
Full Financial Disclosure is Non-Negotiable: If you are the party with a greater financial knowledge, you have an obligation to provide a full and frank disclosure of all assets and liabilities.
You Must Act on Your Opportunities: If a party is given the opportunity to seek valuations, obtain financial records, or ask questions, they must take it. The court will not excuse a failure to act. The onus is on each party to act in their own best interest and to conduct their own due diligence.
Unconscionable Conduct is a High Bar: The court requires strong evidence to prove that a party was taken advantage of to such an extent that it would be unconscionable to uphold the agreement. Simply being dissatisfied with the outcome is not enough.
This content is for informational purposes only and does not constitute legal advice. The information is based on the published judgment in Suess & Suess [2024] FedCFamC1F 175 and should not be relied upon as a substitute for professional legal advice. The Family Law Act 1975 (Cth) and its interpretation can change over time. Anyone considering a Binding Financial Agreement or a property settlement must seek advice from a qualified family law practitioner in their specific jurisdiction within Australia, especially when considering setting aside Australian financial agreements.
Understanding your legal rights and obligations is paramount. Do not rush into a BFA without a clear understanding of what you are signing. Engaging with an experienced family law solicitor is the most crucial step you can take to protect your financial future.
If you have questions about your property settlement or require advice on a Binding Financial Agreement, seeking professional guidance is essential to ensure your rights are protected and your agreement is a final and fair resolution.
