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Enforcing Financial Agreements under the Family Law Act

In the event that after the parties have entered into and signed a Financial Agreement, and one party is experiencing in difficulty in enforcing the provisions of the contract, that party may be able to enforce the Financial Agreement through the Court’s intervention.

The party must seek a Court Order pursuant to section 90KA of the Family Law Act. The Financial Agreement, like any other contract, must be valid, enforceable or effective. The question of whether a Financial Agreement is valid, enforceable or effective is to be determined by the Court according to the principles of law and equity that are applicable in determining validity, enforceability and effect of contracts and purported contracts, and in proceedings relating to such a Financial Agreement. It is noted that such an application to enforce a Financial Agreement may be met with a responding application from the other party to have the Financial Agreement set aside.

If a Financial Agreement is found to be enforceable, it can then be enforced as if it were an Order of the Court itself.

In the matter of Clemenceau and Clemenceau [2010] FamCA 512 at [2], the Family Court of Australia held that “section 90KA of the Family Law Act provides that whenever a Financial Agreement or termination agreement is in question, its validity, enforceability or effectiveness is to be determined by the Court according to the principles of law and equity that are applicable in determining the validity, enforceability or effectiveness of contracts or purported contracts. Section 90KA also provides that a Court can enforce parts of the agreement as if they were orders of the Court”.

Interestingly, in the matter of Kostres and Korstres [2009] FamCAFC 222, the Family Court of Australia held that a Financial Agreement remains enforceable even if one of the parties made a bad bargain. The Court held that “if the agreement is not susceptible to being set aside, the question arises as to whether the court should resist its enforcement because it would operate unconscionably against one party. If the agreement is valid and binding, it should operate according to its terms. Simply because one of the parties made a bad bargain does not mean that it would be unconscionable for the other party to enforce the agreement. The doctrine of unconscionability looks to the conscience of the party whose rights are sought to be affected”.

Disclaimer: This publication provides general information of an introductory nature and is not intended and should not be relied upon as a substitute for legal or other professional advice. While every care has been taken in the production of this publication, no legal responsibility or liability is accepted, warranted, or implied by the authors or our firm, and any liability is herby expressly disclaimed.

Ge Wu is the solicitor director of Legal Point Lawyers & Attorneys.  He has been admitted to practise law since 2005.  Throughout his practice, Ge Wu predominantly practises in the areas of Property Law, Immigration Law, Commercial Law, Civil Litigation and Family Law.

His experience covers all aspects of property law, commercial/retail lease, immigration law and civil litigation, while at the same time, he also has experience in family law, criminal law and other areas such as will-drafting and general advice.

He has frequently been instructed by corporate clients in pre-acquisition due diligence reports, structuring property development, land/shopping centre acquisitions, G.S.T. and stamp duty advice for buying/selling businesses, as well as share transfers and company re-structures.

Ge Wu has been appointed as Notary Public since 2011 and started to provide Notary Public service to clients from different cultural backgrounds.


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