Prenuptial agreements are no longer just for celebrities. They are mainstream, a conversational mainstay of podcasts and group chats. But when a relationship ends, do these agreements actually protect your client? For a couple who've signed a financial agreement, whether before marriage or relationship, during a relationship, or on the way out, enforceability can mean the difference between financial security and a brutal property battle. Here to help us unpack financial agreements, with a review of recent cases, is Kathryn Kearley, College of Law lecturer, family law specialist, and our regular Family Law contributor.
“Recent cases tested the boundaries of what constitutes a financial agreement that is binding under the Family Law Act,” Kathryn explains. “While the statutory requirements seem straightforward (independent legal advice, proper certificates, voluntary consent), the reality is far more nuanced. Courts wield discretionary powers to save technically deficient agreements, while also being able to set aside a financial agreement tainted by fraud or unconscionable conduct.”
Wallace v Stelzer and Anor [2013] FamCAFC 199
“One of the earlier cases is often referred to as the ‘pole dancer case’, for reasons that will become immediately apparent,” Kathryn says.
Following the breakdown of his first marriage, Mr Wallace (51) met and married Ms Stelzer (38), whom he met at a Sydney nightclub. Before the marriage, Mr Wallace instructed his lawyer to draft a financial agreement, including a provision for Mr Wallace to pay Ms Stelzer a significant sum should their relationship fail within its first four years. Both parties received independent advice before signing the agreement.
In 2007, less than two years later, the couple separated. Mr Wallace then initiated proceedings claiming that the financial agreement was not binding. The Family Court ruled the agreement binding at first instance, which Mr Wallace appealed.
“The appeal largely concerned amendments made to the Federal Justice System Amendment (Efficiency Measures) Act (No.1) 2009 (Act) that amended the Family Law Act,” Kathryn says. “Section 90G of the Family Law Act was amended in response to an influx of financial agreements being ruled invalid due to the strict requirements of Section 90G.”
In essence, Section 90G was relaxed, allowing a court to uphold an agreement that did not strictly comply with the technicalities of the legislation. While these amendments were introduced in 2009, four years after the financial agreement was made, the court ruled that they could apply retrospectively.
Mr Wallace challenged the constitutional validity of the amendments applying retrospectively, claiming that retrospective application breached the separation of powers by interfering with the independence of a Federal Court.
“The court rejected this, stating that these retrospective amendments did not compromise the Judiciary’s capacity to function as a Federal Court,” Kathryn says.
Mr Wallace also claimed his lawyers failed to give him adequate legal advice as per the requirements of s90G(1)(b), emphasising the pros and cons of signing the financial agreement. This, too, was rejected.
Finally, Mr Wallace argued he was induced into the financial agreement by Mr Stelzer’s fraud or unconscionable conduct. He claimed Ms Stelzer behaved fraudulently by making “false promises of love and desire for children”.
“However, the Court was not persuaded he was so induced, as Mr Wallace sought to enter into a financial agreement because of his last divorce; he was not induced by fraud or unconscionable conduct,” Kathryn says.
Dragomirov & Dragomirov (2024)
In this more recent case, the wife signed a financial agreement following a relationship breakdown. In it, she agreed to receive assets constituting less than 50% of the parties' shared assets. This was challenged on the basis that her lawyer had not advised her of her likely entitlements to a property settlement under Section 79 of the Family Law Act.
“In this case, both parties attended a meeting on 19 May 2020 with their respective lawyers,” Kathryn says.
“This was the first time the wife met her lawyer, but she did so without the influence or presence of her husband or his lawyer. During their meeting, the wife read a letter of advice her lawyer prepared. Her lawyer asked if the wife had any questions, to which she said no. Her lawyer advised the pros and cons of going to court as an alternative to entering the financial agreement, but omitted advice around her likely entitlements to a property settlement under Section 79 of the Family Law Act. Having acknowledged reading the letter of advice, she signed the letter and said she wished to enter into the financial agreement.”
Under cross-examination, the wife’s lawyer said her discussion included “future economic situations”, but it was not tailored advice.
Both parties signed the financial agreement on 19 May 2020. Each party’s lawyer signed a certificate, included in the agreement, pursuant to Section 90G of the Family Law Act. The certificates stated that each lawyer had provided the required advice to their client about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time the advice was provided, of making the agreement.
Here, the Full Court acknowledged that the advice the wife received was not adequate under Section 90G(1)(b), but still declared the agreement binding under Section 90G(1A), finding it would be unjust and inequitable to do otherwise.
“What this decision shows is that courts are willing to exercise their discretionary power to uphold an agreement where non-compliance is minimal and both parties intended to be bound,” Kathryn says. “It clarified that tailored, independent legal advice remains critical, but its absence is not an automatic bar to enforceability if substantial justice supports the agreement.”
Daily & Daily (No 3) (2024)
In another recent case, a financial agreement was set aside for uncertainty, rendering it void. The husband launched a negligence claim against his former solicitor, and damages were awarded.
“What this case highlights is the need for financial agreements to be clear and certain, as with any contract, so a lawyer can avoid a claim in negligence,” Kathryn says.
What meets the requirements of ‘Independent Legal Advice’?
In the case of Connery & Sims [2025] FedCFamC1A 34, a de facto wife was also a solicitor, and thus drafted her own financial agreement. She satisfied the requirement that she receive independent legal advice by consulting a lawyer from her firm.
The primary judge ruled that a former client is owed a fiduciary duty, which was overturned on appeal. The appellate Court held that independence does not require scrutiny of the quality of advice, only that the advice is received separately.
As stated by the Court:
“[61] … [T]he primary judge purported to assess the quality of the advice … It is well-settled that it is not the role of the Court to retrospectively assess the quality of the legal advice provided.”
The case of Chetri & Thapa [2024] FedCFamC2F 1611 also turned on the issue of independent legal advice. Here, the wife successfully argued that the financial agreement was not binding because she did not receive independent legal advice under Section 90G(1)(b).
“What further complicated the issue was the fact that the husband was found to have forged signatures, including a retired barrister’s, on a past divorce document,” Kathryn says.
As the judgment states:
“The financial agreement in this matter was neither fair nor legally enforceable. The wife was denied meaningful independent legal advice, and the husband’s forgery of court documents cast serious doubt on his credibility. The Court determined it would be both unjust and inequitable to uphold the agreement, and flagged potential criminal repercussions for the husband’s conduct.”
The issue of independent legal advice was considered again in the case of Harris & Cameron [2024] FedCFamC2F 1033.
“Despite finding potential deficiencies, the court ruled that it would be unjust or inequitable under Section 90UJ(1A) not to treat the agreement as binding,” Kathryn says. “The decision reaffirmed that proper independent legal advice is a mandatory precondition unless inequity strongly supports discretion to cure non-compliance.”
In the case of Suess & Suess [2024] FedCFamC1F 175, a wife sought to set aside a financial agreement, arguing the advice was so incompetent as to not qualify as legal advice under Section 90G(1)(b).” The Court disagreed, finding that the advice given to the wife did not fall below a base threshold such that the Court should find that her advice was so lacking in integrity that it should be considered as no advice at all.
What are the takeaways from these cases?
So what's the takeaway for practitioners? The Court will work hard to save a financial agreement that substantially ticks the boxes, but won't hesitate to bin them when there's fraud or unconscionable conduct in the mix.
"The discretionary powers under Sections 90G(1A) and 90UJ(1A) have fundamentally changed the game," Kathryn explains. "Technical compliance matters, but it's no longer everything. The Court looks at the bigger picture: did both parties genuinely understand what they were signing?"
"A financial agreement in family law can be challenging to enforce because the agreement must satisfy strict requirements under the Family Law Act. If these requirements aren't met, the agreement can be set aside by the court."
That makes the front-end work critical. Key actions include assessing whether a financial agreement is appropriate for the client's circumstances. For example, an older couple who both have grown children and separate assets may find a financial agreement is a sensible option.
"The process requires financial disclosure from both parties," Kathryn continues. "While a lawyer for each party needs to provide independent legal advice and sign the certificate under Section 90G, a lawyer can decline to sign off on a financial agreement if the lawyer has concerns. A prudent lawyer should also advise a client not to proceed with an agreement in certain circumstances, such as when the wedding is imminent, there's a significant age difference between parties, or where one party (particularly a woman) may have children in the future."
For practitioners, this means your certificate on the financial agreement under Section 90G is important, but your written contemporaneous file note and a quality detailed letter of advice about the financial agreement might be what actually protects the financial agreement (and you) if the financial agreement is challenged down the track.
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