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Invalid pre-nup raises business ownership concerns

Staff reporter
09 November 2017 1 minute readShare

A recent court judgment has likely weakened the effectiveness of pre-nuptial agreements, putting asset-ownership – including a business – at risk should the relationship break down.

According to Slater and Gordon family lawyer Heather McKinnon, the uncertainty has transpired following a High Court judgment handed down this week involving a 67-year-old Australian property developer and a 36-year-old woman from eastern Europe.

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


Handing down its verdict, the High Court declared that neither agreement was 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,” said Ms McKinnon.


“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 suggested that the reverse had been held true until now, with pre-nups treated by courts 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,” she 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.”

In light of the judgment, Ms McKinnon urged anyone with existing agreements in place to have them rechecked by a lawyer.

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


Invalid pre-nup raises business ownership concerns
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