Financial Agreements can be set aside

Gregory & Gregory is a case decided in January this year in Brisbane.  The lesson to be learned from the case is that where parties enter into a financial agreement under the Family Law Act which determines how their property should be dealt with in the future in the event of the end of the relationship, its existence and terms need to be carefully considered during the relationship and after it ends.

In essence the agreement was set aside on the basis that the agreement could not be carried out because it was “impracticable” to do so (Section 90K(1)(c) Family Law Act).  This arose because the wife had dealt with the “separate property” of the husband (i.e. property which was defined in the agreement to remain his in the event of separation) and that her "separate property" was to remain hers.  The wife’s use of money which was from the separate property of the husband (a significant superannuation payment she intercepted and put to her own use) meant that the husband (or his estate as he died after proceedings were commenced) could not be repaid unless the agreement was set aside as the wife was entitled to retain her real estate as it was “separate property” under the financial agreement.  The Judge also commented that the agreement could also have been set aside given the unconscionable actions of the wife in taking the husband's superannuation monies.

Financial agreements (including prenuptial agreements) are valuable tools in protecting property from claims following the breakdown of relationships, particularly in second relationships.  Significant care needs to be taken when drafting the documents but this case also shows how important it is not to forget that the agreement exists and that the parties to the agreement need to understand their own actions may lead the to the agreement being set aside upon grounds found in Section 90K of the Family Law Act.

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Australian reports "Family Courts reach Crisis Point"

Child welfare at risk as family courts reach ‘crisis point’

This is the headline in the Australian today (12 May 2014).   The article starts with the following:  "Desperate barristers took the extraordinary step of writing to Federal Circuit Court Chief Judge John Pascoe last month about the backlog of cases at Parramatta in western Sydney, when they learned a respected judge was to be moved to Melbourne. Senior solicitors and barristers say urgent matters involving child abuse and domestic violence are regularly being delayed for up to three months for interim hearings at Parramatta, and it is taking about 18 months to get final hearing dates."

Fears are expressed by family lawyers that these delays could lead to family violence or death.

There would not be a family lawyer who would not agree with all of the statements made in the article.  The situation in the southern Federal Circuit Courts is worse than the Queensland registry but it too is under stress and in some cases is not addressing nor determining cases involving children in a timely manner.  It is not that the Judges do not address the matters before them as best they can, it is a systemic failure of the system itself.  The Family Law Act and Courts were established in 1975.  Society has changed dramatically since then and whilst here have been constant changes to the Act and the methods utilised by the Courts, they have not been changes that have kept up with the demands and needs of those who access the Family Courts system.

It may be time that the Family Law Act and the family courts are reviewed and a system addressing issues in a more timely manner is implemented.  There are sometimes long delays between parties appearing in court and that time is not utilised to educate and investigate in appropriate time frames.  Of course any answer will involve additional funding which is unlikely in the current economic climate.