A High Court of Australia decision on the enforceability of two pre-nuptial agreements means they will be very difficult to enforce in Australia from now on, says Australian family lawyer Heather McKinnon.
In Thorne v Kennedy [2017] HCA 49, the High Court found that commercial principles of contract law have no place in regulating the financial matters of the parties of an intimate relationship, she says.
The case 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.
The High Court of Australia has held that both agreements were not enforceable.
Ms McKinnon, who is the Family Practice Group leader at law firm Slater and Gordon, says this is a "huge development" for family law in Australia which will make finding financial agreements for relationships very difficult to enforce.
“The High Court has recognised that there will almost never be a circumstance where two partners have equal bargaining power in a relationship," she says.
“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 says that until now, Australian courts had been treating binding financial agreements, or ‘pre-nups’, 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 says.
“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.”