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High Court judgment could spell the end of ‘prenups’ in Australia, warns leading family lawyer

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The case of Thorne v Kennedy involved a 67-year-old Australian property developer and a 36-year-old Eastern European woman who met online.

The woman moved to Australia seven months after they met to get married, but four days before their wedding the man presented her with one binding financial agreement to be signed before the wedding and another to be signed 30 days after.

Slater and Gordon Family Lawyer Heather McKinnon said the High Court held both agreements were not enforceable.

“This is a huge development for family law in Australia and will make binding financial agreements for relationship, or ‘pre-nups’ very difficult to enforce,” Ms McKinnon said.

“The High Court has recognised that there will almost never be a circumstance where two partners have equal bargaining power in a relationship. “Essentially, the Court has said that commercial principles of contract law have no place regulating the financial matters of the parties of an intimate relationship.”

Ms McKinnon said up until now, the courts had been treating binding financial agreements, or ‘prenups’, like commercial contracts.

“In this case, a solicitor actually advised the woman that it was the worst agreement they had ever seen, because it was drawn solely to protect her husband-to-be’s interests,” Ms McKinnon said.

“But she was completely reliant on him, financially and otherwise, and he told her that if she didn’t sign the wedding would not go ahead.

“The High Court held this to be unconscionable conduct and specifically said independent certificates of advice from lawyers do not cancel out this behaviour.”

Ms McKinnon said anyone with an existing binding financial agreement should be immediately reviewing its effectiveness.

“In light of this judgment, people with existing binding financial agreements should really be looking over the document with a lawyer,” Ms McKinnon said

“This applies to people who have entered into the agreements thinking it has given them protection, as well as those who might be in middle of litigation or starting property proceedings involving these agreements.”

The full judgment is available here: http://www.hcourt.gov.au/cases/case_b14-2017 

Media contact: Amelia Birnie 0428 994 937