Tom Zreika
A binding financial agreement does not become vulnerable merely because its terms later appear unfair or produce a poor financial outcome.
Under s 90K(1)(d) of the Family Law Act 1975 (Cth), the Court may set aside a financial agreement where, since making the agreement, a material change in circumstances relating to the care, welfare and development of a child has occurred and, as a result, a party or child will suffer hardship if the agreement is not set aside.
The authorities, including Hoult & Hoult and Fewster & Drake, identify a demanding threshold. The applicant must establish a material change in circumstances, a sufficient connection between the change and the care, welfare or development of a child, resulting hardship, and hardship if the agreement remains operative.
A material change must be substantial, significant and relevant. Ordinary consequences of separation will not necessarily satisfy the test. The birth of a child may qualify where the evidence demonstrates a significant financial or caregiving consequence.
Chaffin & Chaffin provides an example where hardship arose after a parent assumed responsibility for three children, including a child with special needs.
Even where the statutory requirements are established, setting aside the agreement is discretionary.
Sterling Takeaway
The practical lesson is important. Financial agreements should address foreseeable changes involving future children, primary caregiving responsibilities, reduced earning capacity and maintenance needs.
Every matter is different
If your circumstances have changed since signing a financial agreement, particularly following the birth of a child or a significant change in caregiving responsibilities, seek family law advice before assuming the agreement determines your position. Early advice may help identify your rights, available options and the evidence required before a dispute develops.