Financial Agreements and Violence

In a previous article on this site I wrote that it was perhaps time for the court to reconsider the way it looked at the financial consequences of family violence on marriage break up. In this article I want to look at the question of family violence from a different point of view.

As is now well known, couples can enter into a contract before (prenup), during or after their relationships. These agreements detail how they will deal with their property, superannuation and spouse maintenance if the relationships break down.

The family law changes that introduced them were intended to give parties the freedom to reach their own agreements, provided formalities were complied with and independent advice given to each of them. There were two things going on.  The first of these was the notion that people should be free to organise their financial affairs as they saw fit.  The second thing that was perhaps in the mind of the government of the day was that the court system would be cheaper to run, with fewer cases. 

The result was actually a flurry of litigation concerning those very financial agreements but the courts saw only the failures, not those where relationships broke down and people stuck with their agreements without challenging them.

There were many challenges, some on very technical grounds and the government amended the Family Law Act to make the agreements easier to enforce, or more "stickable".  Now the government is proposing to do so again, to make matters simpler and the agreements more difficult to overturn.

An objection has come from some women's groups and I find that objection, or the way in which it is framed, curious on two separate grounds.

The first concern is that women in violent relationships will be pushed into these agreements by bullying and violent men.  As an advocacy group says, many victims are fearful about the consequences if they don't comply with their partner's requests even though there is a requirement for independent legal advice.

The problem I have with that is that the law provides already that agreements can be set aside in the case of duress or even undue influence.  If that remedy already exists, as it does, the real problem may be empowering a victim to make use of it but the law has limits on what it can do, and it cannot be used to cure all the ills of human relationships.  The best it can do is provide appropriate remedies and, through the legal aid system such as it is, the ability of even the financially disadvantaged to make use of those remedies.

However, a more radical proposal from the advocacy group is that an agreement otherwise properly entered into, between two consenting adults, fully informed and without bullying or repression, should be torn up if there is family violence afterwards.  I presume that the advocacy group in question would not wish to set aside a financial agreement if it was actually to the advantage of the victim but only if it was to the disadvantage of the victim.

The proposal from the Women's Legal Service Queensland is that an agreement could be set aside where there is family violence and serious injustice.

One of the arguments judges have used to avoid making changes to the law, such as giving greater weight to family violence in property settlement, is that it would "open the floodgates".  If you think about that for a moment, it seems to imply that there is indeed a major problem, because what sits behind floodgates is a flood of dammed up demand.  If that is the case, why should the law not be changed to meet it?

But the issue of serious injustice is a lot more complicated than it seems, and its advocates have contemplated.  The current state of the law is that if the parties comply with the formalities and get independent advice and make full disclosure to each other, they will be held to a bad bargain (that is, an unjust one) just like anybody else in a contract.  The law as it stands protects injustice by reference to the manner in which the agreement was made, but not in the way in which it deals with outcomes.  I can read this proposal to mean only that if the agreement works out unfairly, and there is family violence, then it should be torn up.  The link therefore betwseen family violence and an unfair outcome is entirely unclear to me becasue the outcome is set by the agreement.  No doubt the proponents of this idea have other views.

Contact PE Family Law to discuss binding financial agreements and financial settlements.