Financial Agreements: whether an agreement should be set aside

Precision under the provisions of the Family Law Act is required.

Section 90K(1)(d) Family Law Act was considered in the case of Fewster & Drake in 2016.  This section allows a financial agreement to be set aside if, since the agreement was made, there has been a material change in circumstances relating to the care, welfare and development of a child to the marriage and, as a result, there may be hardship experienced to a party to the marriage.

This case found that the agreement made no provision for the recognition of the wife’s contribution as parent and homemaker.  She had the primary responsibility for parenting.  The birth of the second child was a material change in circumstances.  The agreement had given her no recompense for her increased role as mother of a second child therefore creating a hardship for her.

Be wary as the Full Court of the Family Court was satisfied as to the hardship argument but emphasised that the hardship must originate from the change in circumstances.  The court must find hardship and not merely unfairness.  This can only be achieved by comparing the before and after.  There must be evidence available to demonstrate a comparison of all the relevant circumstances.

The agreement was not set aside as the wife had failed to demonstrate the hardship.  She had not provided the comparison as to her financial circumstances under the agreement versus if the agreement were to be set aside.