Consent orders versus Binding Financial Agreements (BFAs)

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Consent orders versus Binding Financial Agreements (BFAs).

Following the breakdown of a relationship there are alternatives to contested litigation if the parties wish to settle the dispute amicably. The most common of these are Binding Financial Agreements and Consent Orders.

Section 90C of the Family Law Act  1975 (FLA) allows for couples to enter into a Binding Financial Agreement (BFA) before marriage, during marriage or following divorce and deals with the division of property and financial resources, spousal maintenance and other ancillary matters after separation. A BFA is an entirely private contractual arrangement, allowing the parties to determine what they consider to be an equitable division of their assets, with no consideration by the court as to whether the agreement is just and equitable. For an agreement to be enforceable each party is required to receive independent legal advice, and failure to do so would render the agreement void and unenforceable. Termination of a BFA requires mutual consent of the parties or the establishment of one of the following circumstances set out by s90K of the FLA, though the list is not exhaustive:

    1. Fraud
    2. General laws grounds for refusing contract performance
    3. Change in circumstances

What is the difference between Consent Orders and Binding Financial Agreements (BFAs)?

Consent Orders are court enforced orders which can deal with property settlements as well as parenting matters, unlike BFAs which can only address property matters.  Furthermore when considering issues relating to parenting, consent orders are, in practice, more enforceable than the alternative (and non binding) parenting plans. When consent orders regarding the care arrangements of a child are filed the court must be satisfied that the orders are in the child’s best interests prior to granting the application.

The primary advantage of Consent Orders is certainty with respect to enforceability. In addition consent orders are often more economical, when entered into early in the process (potentially giving parties reduced legal and litigation fees). Though not strictly necessary, it is recommended that legal advice is sought before agreeing to consent orders (parties involved merely have to sign an affidavit stating that they are aware of their right to do so). It is strongly recommended that the party proposing the orders for consent should engage assistance with the drafting and this may place the other party at a disadvantage.  Furthermore the financial disclosure required in the filing of consent orders is less invasive as those required by court proceedings. However, there remains a duty for disclosure between the parties (not to the courts) to be full and frank.

Consent Orders are generally drafted on the basis of negotiations between the parties and their legal representatives. The court must still be satisfied that in the circumstances the orders are just and equitable as per s 79(2) of the FLA.

Though it depends on your individual circumstances, the enforceability, flexibility, utility, finality and all-encompassing nature of consent orders makes it the preferred option for addressing issues relating to settlement following relationship breakdowns.

Please note that as a general rule this firm does not prepare or advise on prenuptual agreements.

For more information on consent orders or BFAs, you should seek legal advice.  Please contact Step Solicitors on 1300 651 193.

The information on this page does not constitute legal advice and should not be relied upon in lieu of seeking professional advice on the specifics of your individual matter.

For advice on Family Law , please contact Step Solicitors on 1300 651 193.