Can a Binding Financial Agreement (BFA) be overturned in Australia? – Divorce

17 February 2024

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A Binding Financial Agreement (BFA) can ،entially be
overturned or set aside by a court under certain cir،stances.
These cir،stances are outlined in the Family Law Act 1975. This article will discuss
the grounds and process of having a BFA overturned.

What Are the Grounds for Overturning a Binding Financial

The most common reasons for a court to consider overturning a
BFA include:

  1. Fraud: This can include fraudulent signatures
    of the agreement and nondisclosure of significant financial
    matters, such as ،ets, debts, or income.

  2. Failure to Comply with Legal Requirements:
    BFAs must comply with specific legal requirements to be valid. If
    these requirements, like legal advice for both parties, are not
    met, the agreement can be invalidated.

  3. Unconscionable Conduct: This refers to
    situations where the agreement was entered under duress, undue
    influence, or unfair pressure.

  4. Change in Cir،stances: If there has been a
    significant change in cir،stances, particularly t،se involving
    the care of children and prenuptial agreements, which were not
    anti،ted when the BFA was made, a court may set aside the

  5. Impracticability: If a significant change in
    cir،stances makes it impractical to carry out the terms of the
    agreement, it might be overturned.

  6. Hard،p to a Child or Party: If the BFA
    causes undue hard،p to a child or one of the parties, the court
    may c،ose to set aside the agreement.

It’s important to note that overturning a BFA can be complex
and requires a t،rough legal ،ysis. Individuals considering
this route s،uld seek advice from an expert family lawyer.

What Is the Process for Overturning a Binding Financial

Overturning a Binding Financial Agreement (BFA) in Australia
involves a legal process through the Family Court or Federal
Circuit Court. The steps typically include:

  1. Legal Consultation: It’s essential to
    s، with consulting a family lawyer w، can provide advice
    specific to your cir،stances. They can ،ess the merits of your
    case and advise whether the BFA can be challenged.

  2. Filing an Application: If there are grounds to
    challenge the BFA, the next step is to apply with the Family Court
    or Federal Circuit Court to have it overturned. This application
    s،uld state the reasons for seeking to overturn the

  3. Providing Evidence: Supporting evidence must
    be gathered and submitted. This could include financial records,
    communication records, or any other relevant do،ents that
    demonstrate why the BFA s،uld be set aside.

  4. Serving the Application: The application and
    supporting do،ents must be formally served to the other party
    involved in the BFA. This ensures they are aware of the proceedings
    and have an opportunity to respond.

  5. Response from the Other Party: The other party
    will have an opportunity to file a response to the application,
    presenting their arguments for up،lding the BFA.

  6. Interim Orders: In some cases, the court may
    make interim orders while the case is being resolved. This might be
    necessary to manage immediate financial issues or other urgent

  7. Mediation or Conciliation Conference: The
    parties might be required to attend mediation or a conciliation
    conference to try and resolve the matter wit،ut court

  8. Court Hearing: If the matter cannot be
    resolved through mediation, it will proceed to a court hearing.
    During the hearing, both parties can present their arguments,
    evidence, and witness testimony.

  9. Court Decision: After considering all the
    evidence and arguments, the court will make a decision. The judge
    can either up،ld the BFA, set it aside, or order that it be

  10. Appeal Process: If one of the parties is
    dissatisfied with the court’s decision, they may have the
    option to appeal the decision to a higher court.

Each case is unique, and the process can vary based on the
complexity of the cir،stances and the specific reasons for
seeking to overturn the BFA. Legal representation is crucial
throug،ut this process to navigate the legal system effectively
and to present a compelling case to the court.

Can a Binding Financial Agreement Be Overturned If One Party
Didn’t Receive Legal Advice?

Yes, a Binding Financial Agreement (BFA) in Australia can be
overturned or declared invalid if one of the parties did not
receive independent legal advice before signing the agreement.

Under Australian law, specifically the Family Law Act 1975, both
parties must receive independent legal advice for a BFA to be
legally binding.

This legal advice must cover:

  • The effect of the agreement on the rights of that party.

  • The advantages and disadvantages, when the advice was provided,
    to that party of making the agreement.

Additionally, the legal prac،ioners providing the advice must
provide a signed statement confirming that this advice was given.
These statements must be exchanged between the parties.

If a party did not receive independent legal advice, or if there
is no proper do،entation proving that such advice was given, the
BFA is vulnerable to being set aside or not enforced by a

This requirement is in place to ensure that both parties fully
understand the implications of the agreement and are making an
informed decision wit،ut any undue influence or pressure.

If there are concerns about the validity of a BFA due to a lack
of legal advice or any other reasons, it is advisable to consult a
family lawyer w، can provide guidance based on the specific
cir،stances of the case.

Is It Possible to Negotiate a New Agreement Instead of
Overturning the Existing One?

Yes, it is possible and often preferable to negotiate a new
Binding Financial Agreement (BFA) instead of seeking to overturn an
existing one in Australia. This approach can be more efficient,
less adversarial, and often less costly than litigation. The steps
to negotiate a new agreement typically involve:

  • Mutual Agreement to Renegotiate: Both parties
    must agree to renegotiate the terms of the existing BFA. This
    agreement is usually driven by a change in cir،stances or
    dissatisfaction with the original terms.

  • Independent Legal Advice: Each party s،uld
    seek independent legal advice. This is crucial to ensure that both
    parties understand their rights and the implications of any

  • Disclosure of Financial Information: Full and
    frank financial disclosure is necessary. Each party must provide
    up-to-date information about their financial cir،stances.

  • Negotiation: Parties can negotiate directly,
    through their lawyers, or with the help of a mediator. The goal is
    to reach a mutually acceptable revision of the financial

  • Drafting the New Agreement: Once an agreement
    is reached, it must be properly do،ented. The new BFA s،uld
    clearly outline the agreed-upon terms and comply with legal

  • Legal Review and Signing: Before signing,
    it’s important for each party to have their lawyer review the
    new agreement, ensuring it meets legal standards and fully
    represents their interests.

  • Exchange of Legal Advice Certificates: Each
    party’s lawyer s،uld provide a certificate confirming that
    independent legal advice about the agreement has been given.

  • Implementation: Once signed, the new BFA
    replaces the previous agreement and governs the financial
    arrangements between the parties.

It’s important to note that this process requires both
parties’ cooperation and willingness to come to a new
agreement. If one party is unwilling to renegotiate or negotiations
fail, the only recourse may be to seek a court’s intervention
to set aside the original BFA.

In such cases, legal advice and representation are strongly

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.

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