The Family Law Act 1975 (Cth) (FLA) does not expressly provide an avenue for victims of family violence to rely upon the family violence as a ground to “escape” from the terms of a financial agreement.
Financial agreements made under the FLA are used to oust (or at least limit) the jurisdiction of the court to make maintenance and/or property settlement orders. Although these agreements can be entered into before, during or after the end of a de facto relationship or marriage, the agreements that are most frequently challenged are those that are entered into before or during a de facto relationship or marriage. Usually, a financial agreement gives greater protection to the party in the stronger financial position and restricts the rights of the party in the weaker financial position so that the weaker party’s maintenance and property settlement entitlements are less than they would have been if the financial agreement did not exist.
But if the party in the stronger financial position subjects the party in the weaker financial position to family violence during the relationship, is it reasonable for the weaker party to be able to seek maintenance and property settlement entitlements which are greater than those to which they are entitled under the financial agreement? This is a philosophical as well as a legal question. Should a victim of family violence have their rights constrained by an agreement which they entered into before they were aware that there would be family violence or before they were aware that the family violence would continue? Should the aggressor be able to rely upon the protection of the financial agreement when they subjected the other party to family violence?
Current case law suggests that parties are unlikely to be successful in arguing that family violence during the relationship can be relied on to “end” a financial agreement. However, case law is constantly developing and it does so in the context of societal values and norms, which themselves have evolved since Part VIIIA was inserted into the FLA in December 2000 to enable the making of financial agreements.
This paper assesses the state of the law, and proposes some questions to consider, including:
- Is family violence relevant under the current law to applications as to whether financial agreements should be held not to be binding or set aside?
- What potential avenues may be used by victims of family violence seeking to set aside financial agreements?
- How might family violence otherwise be relevant to whether financial agreements are valid, binding and enforceable?
Recent reforms to property and maintenance provisions in the FLA
The position is perhaps complicated by the recent codification of adjustments to property and maintenance entitlements for the effects of family violence. These amendments were contained in the Family Law Amendment Act 2024 (Cth) (FLAA 2024). The relevant provisions came into force on 10 June 2025 (the 2025 amendments). According to the Explanatory Memorandum of the Family Law Amendment Bill 2024, which became the FLAA 2024, over 80% of initiating applications filed in the Federal Circuit and Family Court of Australia (FCFCOA) contain allegations of family violence.
Under the case law that applied immediately prior to the 2025 amendments, adjustments for the effect of family violence were possible when property entitlements were determined under ss 79 or 90SM relying on the principle in Kennon & Kennon (1997) FLC 92-757, but the adjustments were usually modest. The 2025 amendments were designed to insert the Kennon principle as a factor in both the assessment of contributions and the assessment of current and future considerations (formerly called “future needs”). The effects of any family violence will be able to be considered in the determination of both maintenance and property entitlements.
Parliament’s intention was that:
- more parties will be aware of their rights to seek an adjustment for family violence as the case law was inaccessible to many parties, particularly self-represented litigants; and
- adjustments made for the effects of family violence will be greater than they are currently.
The Parliament’s hope is that the 2025 amendments will give rise to not only increased awareness of the possible relevance of family violence to property and maintenance entitlements, but that there will also be greater incentive for a victim of family violence to look for a way to access those entitlements. In the future, the disadvantage of a victim of family violence under a financial agreement may be even greater than it is under the current law as the entitlements they have given up may be greater.
The FLAA 2024 also exhibits Parliament’s clear intention that family violence be of more relevance to eligibility for maintenance and property entitlements than it has been in the past. As a result, the question of whether family violence can constitute grounds for ending a financial agreement – thus allowing the court to make maintenance or property settlement orders – has the potential to be more significant.
As the 2025 amendments have only recently come into force this paper will focus predominantly on the law in force immediately prior to the 2025 amendments, on the basis that, because the 2025 amendments do not contain explicit amendments to the financial agreement provisions, unless and until the court rules to the contrary, the pre June 2025 case law is the most current law to be applied when determining the effect of family violence when attempting to end a financial agreement. That said, practitioners should, when advising clients entering into and seeking to end financial agreements, take care to note the current uncertainty and ensure that they are up to date with the latest judgments, particularly those of the Full Court of the FCFCOA.
Brief overview of the 2025 amendments?
The effect of family violence is given importance as a factor in s 79(4) and (5). Family violence is defined in ss 4AB(1) and examples are given in s 4AB(2). The FLAA 2024 added an expansion of the examples of behaviour that might constitute economic or financial abuse of a family member in the new s 4AB(2A). The definition of family violence is in s 4AB of the FLA:
(1) For the purposes of this Act, family violence means violent, threatening or other behaviour by a person that coerces or controls a member of the person’s family (the family member ), or causes the family member to be fearful.
(2) Examples of behaviour that may constitute family violence include (but are not limited to):
(a) an assault; or
(b) a sexual assault or other sexually abusive behaviour; or
(c) stalking; or
(d) repeated derogatory taunts; or
(e) intentionally damaging or destroying property; or
(f) intentionally causing death or injury to an animal; or
(g) unreasonably denying the family member the financial autonomy that he or she would otherwise have had; or
(h) unreasonably withholding financial support needed to meet the reasonable living expenses of the family member, or his or her child, at a time when the family member is entirely or predominantly dependent on the person for financial support; or
(i) preventing the family member from making or keeping connections with his or her family, friends or culture; or
(j) unlawfully depriving the family member, or any member of the family member’s family, of his or her liberty.
The new s 4AB(2A) is:
(a) unreasonably denying the family member the financial autonomy that the family member would otherwise have had, such as by:
(i) forcibly controlling the family member’s money or assets, including superannuation; or
(ii) sabotaging the family member’s employment or income or potential employment or income; or
(iii) forcing the family member to take on a financial or legal liability, or status; or
(iv) forcibly or without the family member’s knowledge, accumulating debt in the family member’s name;
(b) unreasonably withholding financial support needed to meet the reasonable living expenses of the family member, or the family member’s child (including at a time when the family member is entirely or predominantly dependent on the person for financial support);
(c) coercing a family member (including by use of threats, physical abuse or emotional or psychological abuse):
(i) to give or seek money, assets or other items as dowry; or
(ii) to do or agree to things in connection with a practice of dowry;
(d) hiding or falsely denying things done or agreed to by the family member, including hiding or falsely denying the receipt of money, assets or other items, in connection with a practice of dowry.
The relevant contribution considerations to be taken into account when making an order under s 79(1) are set out in s 79(4) which provides:
For the purposes of subparagraph 3(b)(i), the court is to take into account the following considerations, so far as they are relevant…
(ca) the effect of any family violence, to which one party has subjected or exposed the other party, on the ability of a party to a marriage to make the kinds of contributions referred to in paragraphs (a), (b) and (c).
Section 79(5) states:
For the purposes of subparagraph (3)(b)(ii), the court is to take into account the following considerations, so far as they are relevant:
(a) the effect of any family violence, to which one party to the marriage has subjected or exposed the other party, on the current and future circumstances of the other party, including on any of the matters mentioned elsewhere in this subsection…
According to the Explanatory Memorandum to the FLAA 2024, the objectives of the amendments to the property provisions of the FLA included (pages 4-6):
These amendments will make the family law system safer and simpler for separating couples to navigate, and ensure the property and financial aspects of relationship breakdown are resolved safely and fairly …
The effective operation of Parts VIII and VIIIAB of the Family Law Act is critical to ensuring the economic consequences of relationship breakdown are resolved safely and on just and equitable terms. However, common law principles developed by the courts guide much of the exercise of discretion under Parts VIII and VIIIAB of the Family Law Act, including the process for determining a property settlement. This means that aspects of the law are unclear to users on the face of the legislation, and familiarity with relevant case law would be necessary to understand the decision-making principles a court will apply. This barrier to accessibility is particularly problematic given the high proportion of people involved in family law matters who may be self-represented litigants and/or people experiencing multiple risk factors (such as family violence, child abuse and mental health issues).
This Bill will therefore amend Parts VIII and VIIIAB of the Family Law Act to codify aspects of the common law, and will provide greater clarity on the face of the law to support users, including vulnerable users, of the Family Law Act. This includes amendments setting out the approach a court is to take when resolving property matters. These provisions may serve as a useful guide for resolving property disputes outside of the family law courts. …
This Bill will amend Parts VIII and VIIIAB of the Family Law Act to clearly signal that the family law courts will consider the economic effects of family violence in property and spousal maintenance proceedings under the Family Law Act. These amendments send a strong message to the community that property settlement outcomes should recognise the effect of family violence on individuals, and on the wealth and welfare of the family, where this is relevant. The amendments make clear to the family law courts, and parties negotiating outside of court, that the economic consequences of family violence can be considered when resolving the property and financial aspects of relationship breakdown.
Grounds for ending a financial agreement
There are only limited grounds upon which a financial agreement can “end”. None of these expressly refer to family violence. They are:
- The agreement is found by a court not to be binding under s 90G(1) or s 90UJ(1), and is not “saved” under ss 90G(1A) or 90UJ(1A).
- The agreement is set aside under one of the grounds in ss 90K(1) or 90UM(1).
- The agreement is unable to be enforced under ss 90KA or 90UN.
- The agreement is terminated by an agreement in writing between the parties under ss 90J or 90UL.
Potential grounds relevant to family violence
Family violence may potentially be relevant to the following grounds for ending a financial agreement:
- Inadequate advice – ss 90G(1)(b) or 90UJ(1)(b);
- Not unjust and inequitable for the agreement not to be binding – ss 90G(1A) or 90UJ(1A);
- Fraud – ss 90K(1)(a) or 90UM(1)(a);
- Void, voidable or unenforceable – ss 90K(1)(b) or 90UM(1)(e);
- Hardship relating to a child – ss 90K(1)(d) or 90UM(1)(g);
- Enforceability – ss 90KA(1) or 90UN(1).
Family violence occurring prior to/concurrent to the signing of the agreement
In circumstances where family violence has occurred prior to or around the time of the signing of the agreement, it may be relatively easy to “end” the agreement. Family violence may be relevant to a claim of duress, unconscionability or undue influence under s 90K(1)(b) or (e) and s 90UM(1)(e) and (h). The latter two concepts were considered by the High Court of Australia in Thorne v Kennedy (2017) FLC 93-807.
It is beyond the scope of this paper to consider in detail the setting aside of financial agreements for conduct which arose prior to, or at around the time of, the signing of the agreement, and there have been few cases which have considered it. The relationship of “coercion and control” and “economic and financial abuse” to the vitiating factors of duress, unconscionability or undue influence does not appear to have been considered by the FCFCOA in relation to financial agreements.
However, family violence at around the time that a financial agreement was entered into has been considered in several cases including:
- Saintclaire & Saintclaire [2013] FamCA 491 and Saintclaire & Saintclaire (2015) FLC 93-684
Justices Strickland, Murphy & Kent upheld an appeal against a finding that the agreement be set aside for undue influence and unconscionable conduct. The parties had a volatile relationship which included 2 incidents of physical violence. The wife’s depression resolved around 11 months before the agreement was executed.
- Scott & Scott (No 3) [2019] FamCA 936
The parties married in 2005 and the financial agreement was executed by the wife in December 2010. In relation to the wife’s claims of duress and unconscionable conduct, Justice Austin found (at [72]) that “the husband was physically violent towards the wife during the incident in Melbourne at the beginning of their relationship and that, during the later incident in 2010, he was physically aggressive and frightening, though not physically abusive to the wife.” However, Austin J held that the wife had not established the necessary causal connection between the past family violence and the alleged duress and unconscionable conduct.
- Ismael & Ismael [2021] FCCA 1581
Judge Beckhouse rejected the relevance of family violence which occurred after the agreement was executed, saying (at [179]):
The physical, sexual, financial and psychological violence endured by the Wife from at least late 2014 are corroborated by her medical records. These allegations were not the subject of cross-examination. Nor were they disputed by the Husband. And they did not need to be. Because in determining whether the financial agreement should be set aside I am required to focus on the circumstances leading up to, and at the time of entering into the agreement. And notwithstanding the family violence that took place after that, the considerations I am required to apply under the law do not extend to the later family violence unless it is indicative of the control that the husband may have had over her. But no evidence was led of this nature.
The last two sentences are interesting, seemingly suggesting that later physical, sexual, financial and psychological violence may have been relevant if there was also evidence of coercive control prior to the agreement being executed.
- Ozar & Khatib [2022] FedCFamC2F 382
The agreement was held to be voidable and set aside because of undue influence, common law unconscionability and statutory unconscionability. Duress was also a possibility because of threats to kill and other violence inflicted upon the wife, but this ground was not relied upon. The wife was held to be the victim of undue influence in the sense of being pressured to a point where she felt she had to sign.
Family violence occurring prior to/concurrent to the signing of the agreement is discussed further in the context of public policy arguments later in this paper.
Advice requirement – sections 90G(1)(b) and 90UJ(1)(b)
One of the technical requirements for an agreement to be binding is that each party must receive under ss 90G(1)(b) or 90UJ(1)(b):
“independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement …”
Does this requirement include advice about family violence?
There has been significant case law considering the advice which must be given to meet the requirements. Must it be adequate? Must it be correct? Must it cover the party’s rights and entitlements under s 79 of the FLA? If not, what other rights must the legal advice cover?
In Wallace & Stelzer (2013) FLC 93-566 (at [103]) the Full Court of the Family Court did not place any restrictions on the content of the advice:
Although there appeared to be some suggestion in the husband’s case before us that in a case such as the present the court is required to consider the accuracy of the legal advice provided, we did not understand that issue to be ultimately pressed. But in any event we note that in the recent Full Court decision of Logan & Logan [(2013) FLC 93-555], and relying on Hoult [(2013) FLC 93-546], it was held that the only enquiry necessary is as to whether advice was given, and not as to the content of that advice.
The view taken by Aldridge J in Abrum & Abrum [2013] FamCA 897 (at [38]) was that the advice needs to relate to the legislative rights being given up:
Nonetheless, when s 90G(1)(b) speaks of ‘rights’ it must be speaking of the entitlement to bring a case under s 79 and the factors that weigh in favour of that person’s case under ss 79(4) and 75(2) otherwise it would have limited meaning.
Many single judges have adopted the approach taken by Justice Aldridge (e.g. Kaimal & Kaimal [2020] FamCA 971; Yun & Qiao [2023] FedCFamC1F 396) although it has not been a consistent approach (e.g. Logan & Logan (2013) FLC 93-555; Hoult & Hoult (2013) FLC 93-546; Wallace & Stelzer (2013) FLC 93-566) The Full Court of the Family Court in Beroni & Corelli (2021) FLC 94-004 (of which Aldridge J was a member) considered the advice requirement had not been met as only a very rudimentary explanation of the agreement was given to the wife in English and “that proper and sufficient advice was [n]either given or understood.” However, the Full Court did not expressly adopt Aldridge J’s formulation as to “rights” in Abrum.
The advice requirement may extend to matters beyond the FLA. In Kun & Gang [2023] FedCFamC1F 389, Altobelli J found that the advice requirement was not met because the husband’s question about the fairness of the agreement was not answered. The concept of “fairness” is not in the FLA, however this was advice that the husband expressly sought but did not receive.
If 90G(1)(b) requires advice to be given as to a party’s rights under the FLA, are the rights of victims of family violence the type of rights about which legal practitioners should be giving advice? Given the level of family violence in the community and in cases before the FCFCOA, the Kennon principle which was first articulated in 1997, and recently inserted into s 79(4) and (5) amd 90SM(4) and (5), serious consideration should be given by legal practitioners as to whether advice should be given on the rights of family violence victims whose entitlements are governed by Pt VIII or Div 2 of Pt VIIIAB FLA rather than a financial agreement, and the prospects of being able to “escape” from the financial agreement in the event of family violence.
It is possible, although by no means certain, that the consequences of not giving this advice may in the future lead to a court holding that the advice was inadequate and the technical requirements of s 90G(1) were not met. A potentially greater risk for legal practitioners, however, is that given the prevalence of family violence in the community and in matters before the FCFCOA, it is reasonably foreseeable that there may be family violence in the relationship, and a legal practitioner could be found to have been negligent not to have given that advice.
In Suess & Suess [2024] FedCFamC1F 175 there were issues with the legal advice given to the wife. Access to the file of the wife’s solicitor was limited because the wife’s solicitor was unable to recall the password for the electronic file. Formal written advice as to the advantages and disadvantages was not given but Justice Berman was satisfied that (at [150]):
there had there had been robust discussion between the wife and her solicitor as to matters of valuation.
He concluded that the advice given “did not fall below a basement threshold” (at [149]-[150]):
A prudent way forward would have been for Ms B to advise the wife that unless there had been an appropriate inquiry as to the valuation of the property available for division between the parties, then she would decline to be further involved. Again, there is no communication to that affect or even to ask the wife to be cautious as to the resolution of the matter either orally and most certainly not in writing.
I do however find that the involvement of Ms B and the advice given to the wife did not fall below a basement threshold such that I should find that her advice was so lacking in integrity that it should be considered as no advice at all. Even though Ms B conceded that her advice and assistance rendered to the wife was not as would be expected of a legal practitioner holding him or herself out as having either the requisite skill in the area of property settlement or being able to satisfy the requirements of s 90G of the Act, I consider that the requirements of s 90G of the Act have been satisfied.
In Dragomirov & Dragomirov (2024) FLC 94-216 Justice Campton, sitting as the Appeal Court of the FCFCOA, upheld the approach taken by Justice Aldridge in Abrum & Abrum [2013] FamCA 897 to the interpretation of the advice requirement in s 90G(1).
The legal advice given to the wife was set out in a letter of advice which explained that the “intended effect of the Agreement is to disregard the five-step process set out above and to divide your property and financial resources as provided for in the Agreement. Justice Campton quoted extensively from Justice Aldridge in Abrum & Abrum (as did the primary judge) and then said (at [55]-[57]):
It is an incontrovertible fact that Ms Wojda did not discuss the contributions of the husband and the wife to the marriage or any of the factors in s 75(2) of the Act… Adopting the principles identified in Abrum, this was a requisite integer in the circumstances of this case of the advice prescribed by s 90G(1)(b). The wife did not receive advice as to what she was giving up on entering the agreement other than an unknown or undefined right. She did not receive advice, even in imprecise terms, as to what she might achieve by way of her entitlements or rights relying on s 79 of the Act at the time of entering the agreement to enable its comparison with what she would achieve by way of the provisions of the proposed financial agreement.
The absence of this advice did not allow the wife to consider or weigh “what would be [her] rights but for entering the agreement and those advantages and disadvantages after having entered the agreement. No doubt each would have its advantages and disadvantages, and they need to be compared” (Abrum at [45]).
The proper conclusion to be drawn from these incontrovertible facts lead to only one outcome in the Fox v Percy sense, being that necessary advice prescribed by s 90G(1)(b) of the Act was not given (Logan; Hoult (2013)). The shortcomings of Ms Wojda as to making specific enquiries as to the contributions of the husband and the wife to the marriage or any of the factors in s 75(2) went to whether the requisite advice was given, as opposed to the “quality and accuracy” of the advice. This makes it apparent that the primary judge’s determination as to the wife not discharging the onus of proof as to the provision of advice to fulfill the requirements of s 90G(1)(b), by application of the principles identified in Abrum, is in error and cannot stand.
The wife’s appeal was dismissed as Campton J held that the primary judge was well within the bounds of the statutory discretion under s 90G(1A) to find that the agreement was binding notwithstanding a failure to receive legal advice as prescribed by s 90G(1)(b).
“Saving” an agreement – sections 90G(1A) and 90UJ(1A)
If there has been a failure to meet one of the technical requirements of ss 90G(1) or 90UJ(1) (specifically (b), (c) or (ca)), a party may argue that the agreement should be “saved” under ss 90G(1A) or 90UJ(1A) as it is “unjust and inequitable” for the agreement to be held not to be binding.
One of the requirements of s 90G(1A) is set out in s 90G(1A)(c):
a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made).
Can family violence be relevant to the court’s consideration of what is “unjust and inequitable”? It is clear that there is a distinction between this phrase and “just and equitable” in s 79(2). Parliament chose to use a different wording and the case law has not equated the provisions.
Section 90G(1A)(c) does not set out the matters a court should consider. Further, the meaning of the words in brackets has not received much judicial attention. It is possible that changes in circumstances (such as if the family violence only commenced after the agreement was entered into) will amount to a change in circumstances which should be ignored for the purpose of assessing whether s 90G(1A) can be relied upon to “save” an agreement which does not meet the requirements of s 90G(1). Justice Murphy in Hoult & Hoult [2012] FamCA 367 (at [57]) considered the enquiry to be wide-ranging and listed possibly relevant matters, but did not list any which arose after the agreement was entered into. He did, however, include:
Whether the terms of the bargain itself offend ordinary notions of fairness or plainly fall markedly outside any reasonable broad assessment of the s 79 discretion.
Justice Murphy’s approach and particularly the consideration of the fairness of the bargain was rejected by the Full Court of the Family Court in Hoult & Hoult (2013) FLC 93-546. Strickland and Ainslie-Wallace JJ (at [307]) stated the range of factors that they considered were appropriate to consider when exercising the discretion (being factors relied upon by the trial Judge with one deletion):
- The terms of the section, the nature of a financial agreement as a creature of the FLA, and the place of Pt VIIIA within the overall scheme of the FLA;
- The nature and extent of the non-compliance with the requirements of s 90G(1); and
- The facts and circumstances surrounding the making of the agreement including, in particular, if one of the parties has complied with all of the mandatory requirements necessary to render the agreement binding.
It is possible that Hoult is no longer good law following Thorne v Kennedy (2017) FLC 93-807. In Thorne v Kennedy, the High Court of Australia in the context of an application to set aside financial agreements for undue influence or unconscionable conduct under s 90K(1) agreed with the primary judge that whether the agreement was unfair and unreasonable (terms not used in the section or the FLA at all) were relevant to the consideration of whether the agreements were vitiated. However, the wording of s 90G(1A) may exclude a consideration of family violence if there had been none prior to the agreement being entered into, unless it is accepted that family violence is so prevalent that the prospect of it occurring must be relevant to whether the agreement was fair in the first place.
In Guan & Shen [2024] FedCFamC2F 117, Judge Street held that a financial agreement was not binding under s 90UJ(1)(b). Although he also set it aside on grounds under s 90UM(1), he considered whether the agreement could be “saved” under s 90UJ(1A).
There were various matters which Judge Street found to be relevant as to whether it was unjust and inequitable for the agreement to be held not to be binding. One factor was that before the agreement was entered into “the father misrepresented his willingness to engage in the care of the children” and the mother expected positive change. The father was held to have induced the mother to enter into the agreement in part by refusing to do any housework or parenting and refusing to communicate with the mother unless the mother entered into the agreement.
Judge Street concluded (at [110]):
Given the current sole parenting circumstances of the mother and failure to assist by the father the 50:50 split does offend ordinary notions of fairness and falls outside the reasonably broad range of assessment under s 90SM.
Judge Street was satisfied that it was appropriate to make a declaration under s 90UJ(1B) that there was no binding financial agreement.
If the father had promised an end to family violence (rather than to assist with housework and parenting), it is not difficult to contemplate the outcome being the same, and if there are compliance issues with ss 90G(1) or 90UJ(1) the agreement may not be able to be saved.
Grounds for setting aside a financial agreement – sections 90K(1) and 90UM(1)
Setting aside a financial agreement under FLA is a two-step process. First, a ground must be established under ss 90K(1) or 90UM(1). Then, the court has the discretion as to whether or not to set the agreement aside, so even if the ground is established the agreement may not be set aside.
Some of the grounds relate to the circumstances at the time the agreement was entered into, and others relate to circumstances which arose later.
It is important to recognise the distinction between fraud and fraudulent misrepresentation given that they constitute two different grounds for setting aside a financial agreement. A fraudulent misrepresentation for the purposes of ss 90K(1)(b) or 90UM(1)(e) is an express statement made by a person who knows it to be false. Fraud, for the purposes of ss 90K(1)(a) and 90UM(1)(a), is broader. It includes fraudulent conduct (as well as statements) such as, as explicitly said by the FLA, non-disclosure of a material matter. Sections 90K(1)(a) and 90UM(1)(a) are not limited to conduct which is done knowingly – a party’s conduct may also amount to fraud if the false representation is made without belief in the truth or recklessly. Whilst a statement that constitutes a fraudulent misrepresentation for the purposes of ss 90K(1)(b) or 90UM(1)(e) may also constitute fraud for the purposes of ss 90K(1)(a) or 90UM(1)(a), it is not the case that all instances of fraud will also be fraudulent misrepresentations.
Sections 90K(1)(a) and 90UM(1)(a)
A financial agreement may be set aside if the “agreement was obtained by fraud (including non-disclosure of a material matter)”. In Green & Kwiatek (1982) FLC 91-259 the Full Court of the Family Court adopted the classic common law definition of Lord Herschell LC in Derry v Peek (1889) 14 AC 337 (at p 374) when considering it in the context of the setting aside of a s 87 maintenance agreement (predecessor to financial agreements under Pt VIIA). Lord Herschell said:
First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowing alleged that which is false obviously has no such honest belief. Thirdly if fraud be proved the motive of the person guilty of it is immaterial. It matter not that there was no intention to cheat or injure the person to whom that statement was made.
Does fraud extend beyond financial fraud to matters relating to family violence? The above definition indicates that it is extensive. The fraud usually considered in relation to financial agreements is financial fraud, and most often, related to non-disclosure. However, fraud can perhaps be found to arise from:
- Non-disclosure of a history of family violence – conduct, intervention orders, criminal offences
- Promises not to commit family violence without an intention to keep those promises
- A view that family violence is acceptable conduct
Of course, there might be evidentiary problems.
Guan & Shen [2024] FedCFamC2F 117 is again relevant here. The parties were in a de facto relationship for 16 years and had two children together. They entered into a financial agreement about 4 years prior to the end of the relationship. The mother asserted that the father had used direct and indirect methods to force her into entering into the agreement. These included refusing to complete any housework, parenting or to work in paid employment until she entered into the agreement. She also gave evidence that the father slapped the eldest child leaving bruises on the child, and “she had concerns for the safety of herself and her children.”
Judge Street held that the father’s conduct and threats were unconscionable as they overwhelmed the mother to the point where she expressly said at the time of signing that she had no choice. The agreement was set aside under s 90UM(1)(h) for unconscionability and found not to be binding under s 90UJ(1A).
The mother did not rely upon fraud under s 90UJ(1)(a) fraud or that there was a fraudulent misrepresentation and the agreement should be set aside under s 90UM(1)(e), but in retrospect they were possible arguments. Fraud and fraudulent misrepresentation are discussed further in relation to ss 90K(1)(b) and 90UM(1)(e) below.
Void, voidable or unenforceable – ss 90K(1)(b) or 90UM(1)(e)
A financial agreement may be set aside because “the agreement is void, voidable or unenforceable”. Many contractual and equitable principles arise under this section.
Misrepresentation
A misrepresentation can be innocent (which may not give the right to rescind the contract, but only the right to claim damages), negligent or fraudulent.
Does a commitment to enter a relationship or marry imply certain standards of behaviour and commitment? These may arise from society’s accepted standards of behaviour or in a particular relationship they could be expressly stated or implied. As to societal standards, expert evidence could be given. For example, research by John Gottman of the Gottman Institute demonstrated:
people have high expectations for how they’re treated. They expect to be treated with kindness, love, affection, and respect. They do not tolerate emotional or physical abuse. They expect their partner to be loyal (https://www.gottman.com/blog/truth-expectations-relationships/)
If a party doesn’t meet these standards of behaviour, then perhaps the agreement could be held to be void, voidable or unenforceable due to fraudulent misrepresentation?
Derry v Peek (1889) 14 App Cas 337 establishes that a high standard of proof is required for a fraudulent misrepresentation and an express statement made by a person knowing it to be false, or that the person should have known, and thus amount to negligent misrepresentation. These matters may be difficult to establish particularly if there had been no family violence prior to the representation being made or the agreement being entered into. In addition, many financial agreements include clauses excluding reliance upon collateral agreements or promises.
Misleading silence (of, for example a, history of committing family violence) may not be enough unless supported by a specific statutory provision (e.g. s 18 Australian Consumer Law and Sch 2 Competition and Consumer Act 2010 (Cth)).
Mere puffery is distinguished from false misrepresentations. “I will be the best husband in the world” may not be sufficient (REA Group Limited v Fairfax Media Limited [2017] FCA 91). The statement cannot be an obvious exaggeration, but a statement like “I will not hit you again” seems to be sufficiently similar to the statements in Guan & Shen to perhaps amount to a fraudulent misrepresentation if it is breached.
Hardship in relation to a child – sections 90K(1)(d) and 90UM(1)(g)
An agreement can be set aside under ss 90K(1)(d) or 90UM(1)(g) if:
… since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child … a party to the agreement will suffer hardship if the court does not set the agreement aside…
The hardship relied on under this section usually involves financial hardship arising from the separation, but it is possible that family violence could cause the hardship. In Guan & Shen [2024] FedCFamC2F 117 the mother had entered into the agreement in part to secure help from the father with housework and parenting. As a result of the father’s failure to meet these commitments, the mother was held to have suffered hardship and would suffer hardship if the agreement was not set aside. This was held to have been a material change in circumstances within s 90UM(1)(g).
Could family violence lead to a finding of a material change in circumstances within the section? The hardship could be the impact on the child of family violence and the ability of the victim to care for the child, both financially and emotionally. There is no express limitation in the section that the “hardship” must be financial.
Undue influence, duress and unconscionable conduct – ss 90K(1)(b) and (e) and 90UM(1)(e) and (h)
If family violence occurs at around the time at which the agreement is entered into, it may be a ground on which the agreement could be set aside for undue influence, duress or unconscionable conduct. These grounds cannot be used if the conduct occurred after the agreement was entered into.
Although undue influence, duress and unconscionable conduct have similar characteristics, they are three distinct grounds for setting aside an agreement. In Thorne v Kennedy (2017) FLC 93-807 the High Court addressed undue influence and unconscionable conduct in detail. The plurality held that undue influence requires one party to have been deprived of their free agency. In other words, one party has “such influence over the mind of the other that the act of the other is not a free act”. This deprivation may, but does not have to be, the result of excessive pressure. What is ultimately required is that the influence of one party has caused the other to substantially subordinate their will to that of the first party.
The High Court accepted that unconscionable conduct can be determined according to equitable principles of unconscionability. The innocent party must have a special disadvantage which seriously affects their ability to make a judgement to their own best interest, the other party must have unconscientiously taken advantage of that special disadvantage and the other party must have known, or ought to have known of that special disadvantage.
Duress requires illegitimate pressure which forces a person to act in a certain way, usually for the benefit of the person applying the pressure. The High Court did not address duress in depth in Thorne v Kennedy, given that the appellant wife succeeded in making out the grounds of unconscionability and undue influence. However, the High Court did confirm that duress, contrary to undue influence, does not require that the pressure be such that the party acting under duress has no free agency. This distinction may be of assistance for victims of family violence. Is it possible to argue that it assists people who choose to sign financial agreements in order to look after themselves, their children etc? Whilst a number of financial agreements were set aside on the grounds of duress prior to Thorne v Kennedy, it seems that many of these cases would now be set aside on the ground of undue influence. It should be kept in mind that it is unclear whether the concept of legal act duress exists in Australia and the High Court in Thorne v Kennedy did not clarify whether duress could be made out if the act of the pressured party was legal.
The parties in Parke & Parke [2015] FCCA 1692 were in a de facto relationship for 25 years. After a period of separation they reconciled and then married. The relationship broke down 12 years later.
Prior to their marriage in 2001, the parties entered into a financial agreement. The agreement included a Recital (“D” below) and a term of the agreement (“8” below) explicitly pertaining to family violence:
- Mr Parke and Ms Parke intend for their marriage to be permanent but nevertheless wish to define their financial rights and responsibilities during the marriage and if a breakdown of marriage occurs and they separate. During the marriage each intends to respect the other as to their ability and habits. Mr Parke is not a night person, Ms Parke is and that is understood. Mr Parke seeks love, happiness and respect, Ms Parke seeks an end to physical, emotional and financial abuse and for Mr Parke and Ms Parke to consider relationship counselling should minor difficulties arise….
- Both parties agree that they will not engage in any physical, emotional or financial abuse of the other and that they will each participate in relationship counselling and mediation in the event of there being any difficulties in the relationship.
The husband filed an Initiating Application seeking a final order declaring that the agreement was legally binding. The wife sought that the agreement be set aside, relying on a number of grounds including fraud, inducement, unconscionable conduct, undue influence and breach.
For the ground of unconscionable conduct under s 90K(1)(b) and (e), the wife, amongst other things, relied on the history of family violence between the parties prior to entering into the second relationship including (at [125]):
(a) Slapping her across the face.
(b) Pushing her against the wall.
(c) Grabbing her by the throat.
(d) Tipping a carton of milk over her head.
(e) Calling her derogatory names such as ‘fat’ and ‘useless’.
(f) Unreasonably denying her financial autonomy.
The wife was found to have been subjected to “serious and controlling financial abuse” whereby she had to account for all outgoings and repay monies to the husband. An example which arose during their de facto relationship was a note from the husband which stated:
The telephone call cost $12.62. Add the 62c to the other money I owe you. I haven’t forgotten. The Balance owing monies $200.62. Ms Parke.
Referring to well-established case law (e.g. Commercial Bank of Australia Limited v Amadio [1983] HCA 14; Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81) on the principles of unconscionable conduct, Judge Howard considered whether the respondent was at a “special disadvantage” when dealing with the applicant at the time of the transaction. Howard J asked (at [132]) whether:
…illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect[ed the respondent’s] ability to conserve (her) own interests and did the applicant take advantage of the opportunity thus placed into his hands?
Judge Howard considered the allegations of physical and verbal family violence perpetrated by the husband. He accepted the wife’s evidence that the husband had subjected her to years of repeated derogatory taunts and physical violence and concluded (at [137]) that the wife was subjected to “what I would describe as serious and controlling financial abuse at the hands of the applicant.” He also noted that prior to the two year period between the end of the facto relationship and the approach by the applicant requesting a reconciliation, the respondent was in a vulnerable position.
Judge Howard considered that the facts of the case took the matter well beyond the mere situation in which the parties separated and then entered into a financial agreement in contemplation of reconciliation and marriage. He described the wife’s position when entering into the financial agreement as (at [144]):
at the time of entering the financial agreement the respondent was 53 years old, with no qualification, had no job, no access to any financial resources other than some minimal savings, had lived for two and half years with no financial security and very little income and had been, over a long period of time, a victim of significant domestic violence at the hands of the applicant. She had already cashed in what she thought was her only superannuation (approximately $11,000). It is also crucial to note that the person who held the immediate key to the respondent’s financial security for the future was the same person (namely the applicant) who had perpetrated over a very long period of time the physical, emotional and financial abuse against the respondent.
Howard J described the husband as having “cunningly exploited the respondent’s financial vulnerability and financial insecurity” (at [145]).
Ultimately, this background of family violence, and in particular the financial abuse perpetrated by the husband against the wife which resulted in her financial vulnerability and insecurity at the time of entering into the agreement (including concealing her interest in a superannuation fund) – something which the husband knowingly exploited – led Howard J to conclude that the husband had engaged in unconscionable conduct at the time the agreement was entered into. Not only was the wife at a special disadvantage that the husband was aware of, but he had created that special disadvantage.
Although neither party raised the ground of undue influence, Howard J considered whether the transaction was voidable or should be set aside on this ground. He concluded that the facts established this, but because the applicant had not been heard on the issue of undue influence, he concluded that it would be wrong to make such a finding.
Finally, Howard J examined whether there had been any breaches of essential terms of the contract. Despite finding that the wife would not have entered into the agreement without assurance of strict performance with clause 8, he held that the agreement could not be rescinded for breach of that clause as (at [210]):
In relation to clause 8 I accept the evidence given by the respondent in relation to the family violence and domestic violence issues. Given that the respondent remained married to the applicant notwithstanding the applicant’s breach of clause 8 of the agreement – I am of the view that it is too late for the respondent to seek to rescind the contract on that basis after the end of the marriage. I consider that the respondent has waived her right to rescind on that basis.
That was 2015.
In a different factual matrix, or perhaps the same one but in the current social and legislative circumstances, and a better understanding by the courts as to family violence and why victims remain in violent relationships, a judge might hold that it was not possible to waive a right to rescind a financial agreement for breach of a clause not to commit family violence.
The agreement was set aside under s 90K(1)(b), (c) and (e) for matters unrelated to the family violence.
Should legal practitioners be recommending to clients to have these types of clauses in agreements? What if the other party refuses to agree to include one?
Enforceability – ss 90KA(1) and 90UN(1)
There is a degree of overlap between s 90KA(1) and 90UN(1) and ss 90G(1)(b) and 90UM(1)(e) as both deal with enforceability of contacts. The first part of s 90KA(1) reads:
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts …
Some principles which are relevant here include estoppel, breach of an implied term and public policy. These are discussed in further detail below:
- Estoppel. A contract may be unenforceable due to the operation of estoppel. A party may argue that, when entering into the agreement, the party who was subjected to family violence relied to their detriment on the representation by the perpetrator that they would not be subjected to violence after entering the financial agreement. As a result the agreement is unenforceable. This may also be a ground under ss 90K(1)(b) or 90UM(1)(e) or relied on under ss 90KA(1) or 90UN(1)
In Sidhu v Van Dyke [2014] HCA 19 the High Court of Australia considered the principles of estoppel. The appellant and the respondent had a sexual relationship, during which the appellant told the respondent that, upon subdivision of the land, he would make sure the Oaks Cottage was put into her name. He continued to reiterate his promise and later made a second promise that the land on which Oaks Cottage sat would also be transferred to the respondent. The respondent, relying upon these promises, did not seek a property settlement from her husband, contributed to the upkeep and improvement of Oaks Cottage and another property and maintained only part time employment.
After the breakdown of the relationship, in part due to the applicant’s failure to transfer the cottage and land to the respondent, the respondent argued estoppel and that she had detrimentally relied on the applicant’s promise to transfer the cottage and land to her.
Her claim failed in the Supreme Court of New South Wales, succeeded in the Court of Appeal and succeeded in the High Court of Australia.
The High Court plurality referred to Gould v Vaggelas (1984) 157 CLR 215; [1984] HCA 68 where Wilson J, with whom Gibbs and Dawson JJ agreed, said (at [58]):
If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation.
The High Court plurality referred to Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 where (at [65]) Gleeson CJ, McHugh, Gummow and Callinan JJ approved the statement of McPherson J in Riches v Hogben [1985] 2 Qd R 292 at 301 (at [66]) that:
It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise.
In rejecting the proposition that the respondent had not suffered detrimental reliance, the plurality held (at [76]) that:
… the question [was] whether the respondent would have committed to, and remained in, the relationship with the appellant, with all that that entailed in terms of the effect upon the material well-being of herself and her son, had she not been given the assurances made by the appellant…. the promises in question were a vital aspect of the security which the appellant plainly understood was of concern to her.
The plurality concluded (at [85]):
While it is true to say that “the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct”, where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party’s detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise. [footnotes removed]
Thus, the principles of estoppel and the element of reliance as explored in Sidhu v Van Dyke could potentially also be applied to establish that there was fraudulent misrepresentation surrounding the nature of the relationship and therefore, the circumstances of the agreement which might mean the agreement was voidable under ss 90K(1)(b) or 90UM(1)(e) for a fraudulent misrepresentation (or liable to be set aside under ss 90K(1)(a) or 90UM(1)(a) for fraud).
8. Breach of an express or implied term.
This argument may also arise under ss 90K(1)(b) or 90UM(1)(e) or ss 90KA(a) or 90UN(1)(a). An express term not to commit family violence was considered in Parke (above) The pre-requisites for an implied term are, on one analysis of the test:
- It must be reasonable and equitable.
- It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it.
- It must be so obvious that “it goes without saying”.
- It must be capable of clear expression.
- It must not contradict any express term of the contract.
This summary is from [40] of the Privy Council’s judgment in BP Refinery (Western Port) Pty Ltd v the Shire of Hastings [1977] UKPCHCA 1; (1994) 180 CLR 266.
Whilst the application of this test has not been applied to financial agreements so as to imply a term that there will not be family violence, the concept has been applied to financial agreements in other circumstances.
In Bryson & Bryson [2012] FMCAfam 197, the wife had made substantial contributions but if she insisted on a final settlement, the house might have had to be sold. In return for transferring her interest in the house to the husband she received a licence to live in the house as long as she wanted to do so, rent-free. If she out-lived the husband she would inherit the property. Brewster FM (as he then was), held that the BP Refinery conditions were satisfied. He implied a term into the agreement that the husband not encumber the property. The husband breached this implied term and was unable to rectify the breach. Brewster FM was prepared to set the agreement aside under s 90UM(1)(e) as being voidable or under s 90UM(1)(f) as circumstances had arisen making it impracticable to carry out.
So, can it be argued that a provision not to commit family violence was a term which should be implied into a financial agreement? Does it go without saying the parties enter into a financial agreement expecting that there would be no family violence? Would a party who later became a victim of family violence have signed the agreement if they knew that there would be – or might be – family violence?
The position is perhaps more stark in relation to s 90B agreements (entered into before marriage). If that party was told that there would be family violence would they have proceeded with the marriage?
9. Public policy
Certain contracts are illegal or void at common law on public policy grounds. Much of the case law in this area is old and would not be followed today. For example, courts in the past often refused to enforce contracts between de facto partners as public policy encouraged legal marriages. Justice Stable in Andrews v Parker [1973] Qd R 93 said (at p 104):
Surely, what is immoral must be judged by the current standards of morality of the community. What was apparently regarded with pious horror when the cases were decided would, I observe, today hardly draw a raised eyebrow or a gentle ‘tut-tut’… George Bernard Shaw’s Eliza Doolittle (circa 1912) thought the suggestion that she have a bath in private with her clothes off was indecent, so she hung a towel over the bathroom mirror.
An aspect of public policy which may be relevant here is that a party who enters into a contract with the aim of committing an illegal act such as a serious crime or tort cannot enforce the contract (Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410; Yaroomba Beach Development Co v Coeur de Lion Investments (1989) 18 NSWLR 398).
An obvious hurdle which the victim of family violence must overcome is that the other party must have intended to commit acts of family violence at the time they entered into the agreement. This will usually be too high a bar. Proving this may, however, be easier if there was a history of family violence and evidence of the family violence (such as an intervention order made after a contested hearing or a criminal conviction for assault of a former partner).
Perhaps, surprisingly, family violence which occurred leading up to execution of the financial agreement has not featured in many of the applications to set aside financial agreements. Some family violence may not meet the tests for undue influence, duress or unconscionable conduct, including that the conduct must have occurred prior to the agreement being signed by the person subject to the conduct.
Also not dealt with in the case law to date is the public policy argument that a party who commits family violence (whether or not it meets the requirements for undue influence, duress or unconscionable conduct) should not be able to rely upon a financial agreement in their favour. Perhaps it makes no difference as to whether the conduct arose before the agreement was signed or after?
The concepts of financial abuse and coercion and control, in particular, have not been explored in the context of financial agreements. The FLAA 2024 did not change the definition of family violence but expanded the short list of examples of economic and financial abuse in s 4AB(2)(g) and (h).
The additional emphasis on family violence in the FLAA 2024 may assist public policy arguments that a victim of family violence may be able to successfully defend the enforcement of a financial agreement.
Another interesting question is whether in some circumstances the insistence on having a financial agreement, or the terms of a financial agreement, may in itself amount to financial or economic abuse or coercion and control. Is a really bad financial agreement an indicia, not just of undue influence and unconscionable conduct as in Thorne v Kennedy, but also of coercion and control? If so, what does the court do with this?
Drafting and advising on financial agreements
A financial agreement usually includes a clause setting out the possible changes in circumstances the parties have considered, such as bankruptcy, ill-health and loss of employment. The purpose of this type of clause is to flag that the parties have considered the possibility of the listed changes in circumstances and limit the ability for the agreement to be set aside by reason of these changes.
Should the possibility of family violence be included in this type of clause? Family violence is all too frequent and a court might in the future find that its onset or continuation amounts to a change in circumstance. One party may, however, be reluctant to agree to including such a clause because it will make it more difficult to set the agreement aside. However, if the clause is included, will it be enforceable given the public interest in preventing family violence and assisting victims of family violence?
What about a clause that neither party will commit family violence as in Parke? Is this a lifestyle clause? Is it enforceable?
Is it a matter that can be covered in a financial agreement? Section 90B(1)(a), for example, requires that an agreement deal with at least one of the matters listed in s 90B(2):
(a) how, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and before divorce, is to be dealt with;
(b) the maintenance of either of the spouse parties:
(i) during the marriage; or
(ii) after divorce; or
(iii) both during the marriage and after divorce.
In addition, the agreement can, but need not, also deal with the matters listed in s 90B(3):
(a) matters incidental or ancillary to those mentioned in subsection (2); and
(b) other matters.
Sections 90C(2) and 90D(2) are similarly worded in relation to agreements entered into during a marriage after a divorce. Whilst there is no case law to support this proposition, “other matters” may cover lifestyle clauses and other clauses which cannot be orders of the court under the FLA. There is no similar provision to s 90B(3)(b) in ss 90UB, 90UC or 90UD for agreements governing de facto relationships, so such a clause in a financial agreement may be unenforceable under the current law in relation to de facto relationships.
The question may, however, since the commencement of the FLAA 2024, as to whether family violence being expressly referred to in the property and maintenance provisions of the FLA makes such a clause relevant to the matters listed in ss 90B(2), 90C(2), 90D(2), 90UB(2), 90UC(2) and 90UD(2).
Conclusion
Community standards about family violence – including its prevalence and unacceptability in Australian society – seem likely to be relevant to judicial assessments of the questions raised at the start of this paper. The Government and the Federal Parliament has sent a strong message about family violence’s relevance to property and maintenance proceedings in the FLAA 2024. The FLAA 2024 is part of the broader agenda of State and Federal Governments, going back several years, of combating family violence, supporting survivors, and making it clear that family violence is not acceptable in the community. Courts may be influenced by this policy direction and changed societal values and norms as to what is acceptable behaviour when assessing future applications which challenge financial agreements.
Legal practitioners should therefore be cautious and advise their clients accordingly.
© 2025 Copyright – Jacqueline Campbell of Forte Family Lawyers and Wolters Kluwer/CCH. This paper uses some material written for publication in Wolters Kluwer/CCH Australian Family Law and Practice. The material is used with the kind permission of Wolters Kluwer/CCH.