Separation Agreements - Binding or Not?

26 Jul 2017

When a marriage comes to an end, some couples decide to go through the Divorce process. When this happens, to record the terms of their financial agreement, that couple has the option of a joint application to the Family Court for a court order encapsulating the terms of their agreement.
However, if a couple decide for whatever reason that they do not wish to divorce (or perhaps not divorce until some point in the future) the only real option they have to record the terms of their financial agreement is to enter into a Separation Agreement. The trouble is that the existence of a Separation Agreement does not actually prevent one party or the other making an application to the Family Court for financial provision in subsequent divorce proceedings.
So, if an application is made to the court, is a Separation Agreement Binding or Not? As with many aspects of the law, this is not a simple question. What can be said is that if a court is asked to adjudicate upon a Separation Agreement and whether the parties should be bound by its terms, the court will look for certain “key ingredients”. For example, did each party provide to the other full and frank disclosure of all and any relevant financial information? Was either party put under any undue pressure to enter into the agreement? Allied with this, did each party take full and proper legal advice before entering into the agreement? Is the agreement fair and just in all the circumstances of the case or does it unfairly prejudice one of the parties?
If the court is satisfied that a Separation Agreement has been entered into properly with all the key ingredients, then there is a good chance that the court will uphold an agreement and will dismiss a subsequent claim.
Of course, if the reverse applies, the Family Court could decide to go behind the terms of an agreement.
It can be seen that there is a lot to think about when deciding whether to enter into a Separation Agreement and if so, what steps should be taken and advice given to ensure for the benefit of both parties that an agreement is going to “stand up” if challenged. The Family Law Department at Grainger Appleyard specialises in this and all other aspects financial provision. If you have any question, call us or, even better, why not take advantage of our free initial appointment scheme.