If a party to a financial agreement challenges the validity of the agreement in the court at a later date, the court can declare the agreement to be invalid, and set it aside.
An agreement can only be “set aside” in certain circumstances, and these are listed in the Family Law Act at section 90K (for married couples) and section 90UM (for de facto couples). A court may only make an order setting aside a financial agreement if it is found that:-
- the agreement was obtained by fraud, including non-disclosure of a material matter (where one party hides important information);
- the agreement was entered into for the purpose of defrauding a creditor, or with reckless disregard for the interests of a creditor;
- the agreement was entered into for the purpose of defrauding another person who is a party to a de facto relationship with a spouse partner;
- the agreement is void, voidable or unenforceable;
- circumstances have arisen since the agreement was made that make it impracticable for the agreement to be carried out (for example, the house burned down and the house was an integral part of the agreement);
- since the making of the agreement, a material change in circumstances has occurred relating to the care, welfare or development of a child of the relationship, and as a result of the change, the child, or the applicant (if the applicant has caring responsibility for the child), will suffer hardship if the court does not set the agreement aside;
- a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable;
- a payment flag is operating on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement;
- the agreement covers at least one superannuation interest that is an unsplittable interest.
It ‘s not easy to have an agreement set aside and a party must have a valid reason in order for the court to make an order to set an agreement aside.