Financial Agreements and full and frank disclosure of material matters
Take these facts: a second marriage for the husband who was 67 years of age and a younger wife of 36 who he initially met on a dating site. The husband had 3 children from an earlier marriage and was at pains to ensure that their interests be protected in the future. The wife was not born in Australia and lived overseas when the parties met.
In the 2016 case of Kennedy & Thorne the parties entered into a financial agreement prior to the marriage and then entered into a second agreement following the marriage.
The parties separated and proceedings in the family courts followed. The wife sought to rely on various grounds in her application one of which was the fact that the husband should have made full and frank disclosure to her of his financial circumstances as relevant to matters. In any application to court for an adjustment of property and orders for property settlement each of the parties is required to make full and frank disclosure.
The Full Court of the Family Court determined that the parties cannot rely on the requirement of full and frank disclosure in preparation of financial agreements. This is not incorporated into the relevant sections of the Family Law Act relating to financial agreements. No such obligations exist. The only possibility to rely on any such issues is to assert that the agreement should be set aside under section 90K(1)(a) Family Law Act if the agreement was obtained by fraud including non disclosure of a material fact.
A fine line with a clear distinction so take care if you wish to rely on a financial agreement and the non disclosure of relevant material.