Financial agreements – agreement ‘came into effect’ pursuant to s90UI upon separation, not when it was signed

In Salvage & Fosse [2020] FamCAFC 144 (12 June 2020) Tree J at first instance made an interim spousal maintenance order of $516.05 per week in favour of the respondent, notwithstanding that a Part VIIIAB financial agreement precluded the claim.

The respondent sought that the agreement be set aside for unconscionable conduct or undue influence, arguing that a maintenance order could be made by virtue of s90UI of the Act.

Ryan & Aldridge JJ said ([43]):

“…Section 90UI(2) examines the circumstances of the applicant…‘when the agreement came into effect’ and if at that time the applicant…is unable to support themselves in the manner described in that subsection, the exclusion…clause is rendered inoperative. This subsection requires that the…party’s circumstances are to be examined ‘taking into account the terms and effect of the agreement’. Reference to s90UI(3) makes it clear that where the…agreement provides that the property or financial resources of a de facto spouse are to continue in the ownership of that party, that property or…resource is to be taken into account in determining the circumstances of the party. If the applicant’s circumstances were to be considered when the agreement was signed rather than on the breakdown of the relationship, this provision is otiose. The work it does is to ensure that the applicant’s circumstances include property and financial resources which the applicant already has (and will retain) are taken into account as well as any property or…resource that the applicant is to receive at the breakdown of the relationship. This lends strong support for the proposition that s90UI is to be considered at the breakdown of the de facto relationship. Any disquiet is dispelled by asking how could the fact that when a party signs an agreement, which means that at some distant time the party will receive property, mean that at that earlier point in time, the party is unable to support himself or herself without an income tested pension etc.? …[I]t could not.”

Watts J in separate reasons ([145]) also held that the agreement came into effect at separation.

Robert Glade-Wright is the founder and senior editor of The Family Law Book, a one-volume loose-leaf and online family law service (thefamilylawbook.com.au). He is assisted by Queensland lawyer Craig Nicol, who is a QLS Accredited Specialist (family law).

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