Is my Prenuptial / Financial Agreement binding following the decision of Orwin v Rickards [2019] VSC 375?
The decision of Orwin v Rickards [2019] VSC 375 is important as it may impact on existing financial agreements in relation to the exclusion of post-separation property and financial resources pursuant to those agreements.
The Decision
On 7 June 2019 Justice Osborn of the Supreme Court of Victoria delivered judgment in the matter of Orwin v Rickards. The decision is subject to an appeal pending before the Court of Appeal.
The decision involved a claim by a party, Ms Orwin, to a defective financial agreement, against her former solicitor, Mr Rickards. Ms Orwin’s claim sought that Mr Rickards pay her damages arising from the payment she was required to make to her former de facto partner, Mr Sarah, in property settlement proceedings before the Federal Circuit Court of more than $500,000.
Ms Orwin argued that if Mr Rickards had properly drafted the financial agreement it would not have been possible for Mr Sarah to pursue a claim for a property settlement with her and she would not have been required to pay him the sum of more than $500,000.
Justice Osborn was satisfied that Mr Rickards did not properly draft the financial agreement to a standard consistent with his duty to Ms Orwin. However, as Ms Orwin had not filed her claim within the period of time required by the Limitation of Actions Act 1958 (Vic), her claim against Mr Rickards must fail.
Importantly, His Honour determined that the Agreement could not have excluded, from Mr Sarah’s claim for a property settlement, an inheritance which Ms Orwin was aware she would receive from her mother’s Estate.
What does the decision mean for my financial agreement?
Justice Osborn’s reasoning in relation to the wording of Section 90UC of the Family Law Act 1975 (Cth), relating to de facto cohabitation agreements, applies equally to the wording of sections 90UB (pre-de facto cohabitation agreements), 90B (pre-nuptial agreements), and 90C (post-nuptial agreements).
This means that, depending on the wording of a financial agreement which has been executed by parties, it may be more vulnerable to a challenge to set it aside or an application to the Family Law Courts seeking that post-separation assets be divided between the parties to the agreement pursuant to the Family Law Act 1975 (Cth), rather than as set out in the financial agreement.
The team at Coote family Lawyers is recognised as being one of the best divorce and family law specialists in Melbourne. If you have a financial agreement which you are concerned will be impacted by this decision please contact us on 03 9804 0035.
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