Prenuptial agreements offer glimpse into secret lives of couples

In one dispute a man's fiancee handed him a prenup the day before the wedding.
In one dispute a man's fiancee handed him a prenup the day before the wedding.  Photo: Getty Images

 It is, perhaps, the ultimate romance killer. A man hands his future wife an agreement he wants her to sign, including terms about her weight and her not "leaving him for a younger man".

This is a real case that played out in the Family Court in Sydney last year.

So, too, is the Melbourne case involving a groom who told his love "the wedding was off" unless she signed a prenuptial agreement – three days before the big day.

Life's one big drama for Mariah Carey, pictured with her ex James Packer.
Life's one big drama for Mariah Carey, pictured with her ex James Packer.  Photo: Bloomberg

Then there is the Tasmanian dispute about a man whose fiancee handed him a prenup the day before the wedding. The cashed-up bride had won more than $400,000 in the lottery.

Court spats over prenuptial agreements, some of which are unenforceable, offer a fascinating glimpse into the private lives of couples.

While celebrity prenups – including James Packer and Mariah Carey's reported pre-split talks about $6 million annual payments and private jets – garner sensational headlines, lawyers say the agreements are also taking off in suburbia.

"If a regular mum and dad with a house, a couple of cars and some super had to have a fight in the Family Court, they're spending a considerable amount of time and money in court," says Jodylee Bartal, family law expert and special counsel at Lander & Rogers.

Bartal says the agreements allow couples to sidestep notoriously long waiting lists in the Family Court, as well as legal uncertainty about how their assets would be divided up by a judge.

"They don't have to be unromantic. Quite the contrary, they can actually be a way of avoiding conflict," Bartal says. "You can get yourself income protection insurance, trauma insurance ... why not relationship insurance?"

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They are "not cheap to draft because they are technical", she says, but they are far less costly than a court battle to divide up assets. "It's not something you download off the internet and fill out. It's not a will kit."

Binding financial agreements, including prenups, have been a part of the Australian legal landscape since late 2000, following changes to the Family Law Act.

The agreements, which set out how assets will be carved up in the event of a relationship breakdown, may also be signed by de facto couples and need not be signed at the beginning of a relationship.

They can be struck at any time during the relationship, or after it sours.

One of the best known cases in Australian law is the so-called "pole dancer case", in which a recently separated 51-year-old father of three met a woman 13 years his junior at an "adult entertainment venue".

He was worth $16.5 million. Her assets totalled just $10,000.

In a poetic judgment, Family Court judge Justice Robert Benjamin said their first "meeting was such that ... their stars aligned".

"They travelled overseas and soon commenced living together," he wrote. "Unhappily, after some years together that celestial alignment dissipated, as did the parties' marriage and their relationship."

The husband had agreed to pay his wife $3.25 million if their marriage broke down within four years. They split within two years of marriage and the husband tried, unsuccessfully, to back out of the deal.

The court ruled in 2011 that the agreement was valid and ordered him to pay up. The husband appealed unsuccessfully to the full Family Court, and the High Court rejected his application for special leave to appeal.

Sadly for lawyers and voyeurs, the background to most agreements is rather less sensational.

Peter Magee, head of Armstrong Legal's family law division, says he has seen "an increase in young Chinese or young Asian people seeking a prenup to protect assets that parents have given – usually property".

"That is a particular increasing trend," Magee says.

"As women are becoming more and more self-made, certainly there's an increasing proportion of women [looking for prenups]."

Magee says prenuptial agreements are "as individual as the clients".

"In some cases you have sunset clauses where the prenup doesn't apply after a certain number of years; in other cases you've got changing circumstances for having children," he says.

He occasionally comes across unusual provisions in agreements, including one clause imposing a "monetary fine if one party had been unfaithful". The fine was reduced "if they confessed within 48 hours".

"That's as weird as I've come across," he says.

"It's completely unenforceable. A court is not going to do anything about that [because it is] against public policy."

Magee says he has also seen prenups stating the couple were not going to have children and if the woman fell pregnant she had to have an abortion.

"It's not going to stand up [in court] and I'm not going to draft it," he says.

Bartal says so-called "lifestyle clauses" including provisions about weight gain "don't have any legal consequence here in Australia".

"The number of times you have sex with your partner in a week, weight gain, social appearances – all of these things are very popular in various circles in the US," Bartal says. "That sort of stuff, you can put in the agreement here [but] they're completely unenforceable under Australian law.

"Any sensible person would be saying, 'listen, sign whatever you want, but you're not going to get into trouble if you put on five kilograms'."

Under the Family Law Act, which governs all binding financial agreements between couples, the parties must each receive independent legal advice before signing the document.

"You can't have a financial agreement that is binding without both parties seeing a lawyer," Bartal says.

Bartal says "child bonus provisions", which made financial arrangements for children, were in a different category. "That's not a lifestyle clause; that's just making adequate provision for children."

Courts will strike down agreements where one of the parties was under duress or a range of other undesirable factors were at play, such as fraud or unconscionable conduct.

In a recent case, a woman argued an agreement she signed with her husband was not binding because she was subject to undue influence. She said he was abusive and threatening and she signed the agreement while suffering from postnatal depression.

The woman was successful in the Family Court but the decision was later overturned by the full court.

Bartal says so-called "ink on the wedding dress" cases – where one party tries to get the other to sign a prenup days before the wedding – "still happen" but they are a recipe for disaster.

"People are not always aware of how much work and planning goes into the agreements and what the technical requirements are [under the Family Law Act], particularly around disclosure," she says. 

"In that case I'll say, 'listen, we can't get it done on time. We can do an agreement; it will be after the wedding or you change the wedding date' ... That's not to say it can't be done and done right in those circumstances; it's just better to be in not so much of a screaming rush," she says.

"You don't want arguments about duress, undue influence, mistake."

In one case heard in Sydney, a man asked his future bride to drop in to a lawyer's office "en route to the wedding reception hall at Double Bay" to sign a prenup. It was three days before the wedding.

"Some situations tend to foster prudent judgments. Others do not," Supreme Court judge Justice Michael Slattery said in his judgment.

"The request for [the wife] ... to make the judgments involved in this not simple agreement, a mere three days before the wedding she keenly anticipated, was not in my view calculated to promote her prudent judgment."

Ben O'Sullivan, the principal of Sydney law firm O'Sullivan Legal, says: "Obviously if a bride is on the way to the church and is served with a [prenup] and told to go and sign it, the court's going to read that down and say that's duress."

But O'Sullivan says he is getting "more and more inquiries" about prenups and they are not only the province of the wealthy.

Courts were initially inclined to take a very technical view of the agreements and strike them down if they did not comply even in minor ways with the requirements of the Family Law Act. Amendments to the act have made this far less likely, and another tranche of proposed amendments is designed to give even greater certainty to lawyers and couples that the agreements will be upheld unless there are exceptional circumstances at play.

Bartal says the agreements are "a contract like any other contract".

"As a lawyer, if you know what you're doing, if you're competent with your drafting, if you don't succumb to pressure to produce a document that's not going to withstand the test of time ... they are a very useful tool for your clients," she says

Magee agrees: "In circumstances where you've got a lot of money to protect it's the best solution you've got – otherwise you've got no protection."