HHG Legal Group's Family Law Special Counsel, Ben Majoe and Executive Chairman Simon Creek provide clarity in relation to current binding financial arrangements and the coronavirus pandemic.

While it appears that Australia may soon emerge from the COVID-19 pandemic, the "new normal" will likely see continued "social distancing" requirements in place at the workplace.

Invariably, there are questions asked about the practical impact of such "social distancing" requirements on the signing and witnessing of Binding Financial Agreements ("BFAs") and whether the enforceability of BFAs is compromised in any way.

We think we have the answer based on our detailed review of the relevant legislation. There are essentially three separate sets of legislation regarding the enforceability of a BFA depending on the parties' factual circumstances at the time. They are as follows:

  1. Section 90G of the Family Law Act 1975 (Cth) which applies to BFAs being made before marriage, during marriage and after a divorce order is made;
  2. Section 90UJ of the Family Law Act 1975 (Cth) which applies to BFAs for de facto couples in states and territories other than WA; and
  3. Section 205ZS of the Family Court Act (WA) 1997 which applies to BFAs for de facto couples in WA.

What are the different requirements in the respective legislation?

It is interesting that the legislation in all three jurisdictions does not require that a party's signature to a BFA be witnessed. The legislation universally simply requires the BFA to be signed by all parties and for legal advice to be provided before the BFA is signed. A comparison of the differences in the requirements under the 3 sets of legislation is summarised in the table below:

REQUIREMENT SEC 90G FAMILY

LAW ACT
SEC 90UJ FAMILY

LAW ACT
SEC 205ZS

FAMILY COURT

ACT (WA)
Agreement to be signed by all parties. Yes Yes Yes
Independent legal advice to be provided before Agreement is signed. Yes Yes Yes
Independent legal advice to cover effects of Agreement on rights of that party Yes Yes Yes
Advice to cover advantages and disadvantages of making the Agreement Yes Yes Yes
Signed statement by legal practitioner confirming advice provided to that party Yes Yes Yes (but refers to a certificate not a statement)
Legal practitioner's statement given to the other party. Yes Yes No. Not required.
Agreement must not have been terminated and set aside by the Court. Yes Yes Yes
Original Agreement to be given to one of the parties and copy to the other party. No No Yes
"Get out of jail card" where the Court can determine that it is just and equitable for the Agreement to be enforceable notwithstanding legal advice not provided, statement of legal advice not provided and copy of statement of legal advice not given to the other party. Yes Yes No

Do the social distancing requirements have a negative impact on the legislative requirements to ensure a Financial Agreement is enforceable?

In our view, any continued social distancing requirements should not have any impact on the enforceability of BFAs.

See table below:

Requirement Impacted by COVID-19 social distancing requirement? Comment
Agreement to be signed by all parties. No No social distancing barrier to parties signing the Agreement.
Independent legal advice to be provided before Agreement is signed. No No social distancing barrier as legal advice will continue to be provided in writing in advance of the Agreement being signed.
Independent legal advice to cover effects of Agreement on rights of that party. No
Advice to cover advantages and disadvantages of making the Agreement No
Signed statement by legal practitioner confirming advice provided to that party. No Statement of Legal Advice will continue to be annexed to the Agreement.
Legal practitioner's statement given to the other party. No Statement of Legal Advice will continue to be annexed to the Agreement.
Agreement must not have been terminated and set aside by the Court. No
Original Agreement to be given to one of the parties and copy to the other party. No Only a requirement for WA de facto Financial Agreements. Can be done by mail.
"Get out of jail card" where the Court can determine that it is just and equitable for the Agreement to be enforceable notwithstanding legal advice not provided, statement of legal advice not provided and copy of statement of legal advice not given to the other party. No

After a careful consideration of the requirement of the legislation for ensuring that a Financial Agreement is enforceable, it does not appear that the COVID-19 social distancing requirements require any practical changes to the signing process or that the BFA be witnessed.

Nevertheless, we still consider it good practice for the party's signature to the Agreement to be witnessed by a legal practitioner who was not involved in the drafting of the Agreement. Unfortunately, the practical reality is that this may not be possible with legal practitioners working from home.

A suggestion is to have a non-legal practitioner witness the signing and insert a paragraph under the witness signature line to state as follows: "The signing of this Agreement has not been witnessed by a legal practitioner due to the post-COVID-19 social distancing requirements in place at the time of signing."