Marino Law | Gold Coast Law Firm

Joinder of Solicitor to Federal Circuit Court proceedings sounds clear warning bell to Family Lawyers who advise on Binding Financial Agreements

Binding Financial Agreement

On 6 June 2018, Her Honour Judge Cassidy in the Federal Circuit Court of Australia granted permission to join a Solicitor to proceedings before her regarding the validity of a Binding Financial Agreement.

Whilst at first instance, this may not seem significant, it is in fact a very clear warning to Family Lawyers.

The warning is that if you do not give proper advice on a Binding Financial Agreement, you may well be involved in proceedings before the Federal Circuit Court pursuant to the Competition and Consumer Act 2010 (Cth) for damages, interest and costs.

The matter of Bolden & Woodruff [2018] FCCA 1439 is an ongoing matter before the court regarding the Wife’s application to set aside a Binding Financial Agreement.

She asserts that she was not provided with advice on the agreement or advice on the advantages and disadvantages of the agreement and as a consequence that it was not binding upon her.

The Husband sought the joinder of her Solicitor to the proceedings on the basis that he relied upon the certificate signed by her solicitor (to the effect that he provided her with the required legal advice which would result in the agreement being prima facie binding) and intends to make a claim for damages against him if the Binding Financial Agreement is set aside because of the failure to provide the advice.

The factual context of the matter is that, on 11 February 2015:-

  • The Wife attended the Husband’s Solicitor and was given a copy of the agreement;
  • The Wife was told to return it after signing the agreement at an appointment with a Solicitor that had been made for her at a building directly across the road from the Husband’s Solicitor;
  • The Wife was not told why the appointment had been made;
  • The Wife was not told to obtain independent legal advice on the drafting of the agreement or the actual agreement (neither by the Husband nor the Husband’s Solicitor);
  • The Wife was not told by the Solicitor that she attended upon that the appointment was for the purpose of obtaining independent legal advice on the agreement;
  • The Wife attended upon Mr Tran for approximately 20 mins during which time she gave him the draft agreement and was asked if she would like him (Mr Tran) to read the agreement. The Wife advised him that she wanted him to witness her signature on the document and then signed same;
  • Mr Tran then executed the certificate contained within the agreement, pursuant to s90UG of the Family Law Act (which is to certify that certain specific legal advice had been given);
  • Mr Tran did not advise the Wife about:-
    • The nature and terms of the agreement;
    • The legal implications upon her of signing the agreement;
    • The effect of the agreement on her rights;
    • The consequences and effect of the agreement on the property interests of she and the Husband;
    • The advantages and disadvantages of the agreement; or
    • The effect of the certificate that he was signing.
  • The Wife then returned the agreement to the Husband’s Solicitor.

Her Honour held that the Federal Circuit Court, in the context of an application to set aside a BFA has jurisdiction to hear “all” claims between the parties, including those which are pursuant to the Competition and Consumer Act.

Her Honour held:-

I consider that the claim for misleading and deceptive conduct with respect to the way Mr Tran carried out his professional duties and “the advice” given to the Applicant is in substance based on the same facts and circumstances as the claim to set aside the BFA because of the failure of the wife’s solicitor to provide her with the required advice.  The commonality of factual circumstances exists, giving rise to the wife’s claim against the husband and the husband’s claim against the wife’s solicitors.

We are often asked to “just sign off” on a Binding Financial Agreement, in order to expedite matters and limit legal costs.  Whilst we understand the reasons for these requests being made, they do not obviate our obligations pursuant to the Family Law Act to provide our client’s with clear and specific advice about the nature of the agreement and the effect of the agreement on the rights of our client, as well as the advantages and disadvantages to our client of signing the agreement.

At Marino Law we do not cut corners when it comes to the provision of this advice. In order to ensure that the agreement is binding, Marino Law’s family law team have a strict practice when it comes to this kind of advice as follows:

  1. We meet with you to discuss the agreement, its terms and your understanding of it;
  2. We discuss with you the background and history of your relationship including:-
    1. Your financial and non-financial contributions to the assets of the relationship;
    2. The arrangements for your children if any;
    3. Your income and earning capacity; and
    4. Any health issues or concerns you may have.
  3. We advise you upon any amendments to the terms of the document which are required to take into account the factual instructions you have given us and the requirements of the Family Law Act in relation to a Binding Financial Agreement and if instructed to do so we will request those amendments be made by the other parties solicitor;
  4. Upon the terms of the agreement being finalised we will provide you with a detailed letter of advice, such that there is a written and permanent record of the advice that you have received from us before you sign the Binding Financial Agreement;
  5. We ask that you sign an acknowledgement of having received the advice and waiving any rights to request further information or disclosure from the other party (if relevant); and
  6. We then meet with you in person to discuss the letter of advice and the agreement prior to signing same and returning it to the other party’s solicitor.

Adopting this practice will provide you with as much certainty and security as is possible that the agreement will be longstanding.

If you require advice in relation to a Binding Financial Agreement prior to signing same, or have concerns about the status of your current Binding Financial Agreement, contact Marino Law on 07 5526 0157 for an appointment with a member of our Family Law team.

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