What Happens If a BFA Is Challenged in Court?

BFAs are "binding", but that doesn't mean they're bulletproof. Australian courts will enforce them… unless there's a good legal reason not to. Here's how courts approach BFAs, and the grounds on which they can be set aside.

The General Rule: Courts Respect BFAs (Section 71A)

Section 71A of the Family Law Act provides that a BFA "is binding on the parties to the agreement." This means:

• The court cannot make property orders under s. 79 if a valid BFA exists
• The BFA overrides the court's usual jurisdiction
• Courts start from the presumption that parties who signed a BFA with legal advice knew what they were doing

In practice: If your BFA ticks all the boxes (legal advice, disclosure, no duress), courts will almost always enforce it, even if the outcome seems unfair in hindsight.

When Can a BFA Be Set Aside? (Section 90K)

Section 90K sets out specific circumstances where a court can set aside a BFA:

1. Fraud (s. 90K(1)(a))

If one party obtained the BFA through fraud (lying about assets, forging signatures, or misrepresenting material facts) the court can void it.

Example: Husband claims he has no assets, then wife discovers he owns three investment properties in a trust. That's fraud. BFA is set aside.

2. Duress or Undue Influence (s. 90K(1)(a))

If one party signed the BFA because of pressure, threats, or coercion, the court can set it aside.

Examples of duress:

• "Sign this or I'm leaving you"
• "Sign this or you can't see the kids"
• Presenting the BFA on the wedding day with no time to review

Example of undue influence:

• Elderly party pressured by adult children
• Party with limited English proficiency not given proper translation

3. Failure to Disclose (s. 90K(1)(b))

If one party failed to make full disclosure of their financial circumstances, the BFA can be set aside.

What counts as non-disclosure:

• Hiding assets (property, bank accounts, super, business interests)
• Undervaluing assets (e.g., claiming business is worth $100k when it's worth $500k)
• Concealing debts or liabilities

Pro tip: Courts take non-disclosure seriously. Even innocent mistakes can void a BFA.

4. Failure to Understand (s. 90K(1)(c))

If one party didn't understand the nature and effect of the BFA (despite receiving legal advice), it can be set aside.

When this applies:

• Party has a disability or mental health issue affecting comprehension
• Party speaks limited English and legal advice was inadequate
• Lawyer failed to properly explain the BFA

Note: This is rare. Courts assume that if you got independent legal advice, you understood what you were signing.

5. Change in Circumstances: Hardship (s. 90K(1)(e))

This is the big exception. Even if your BFA was validly executed, a court can set it aside if:

• Circumstances relating to the care, welfare, and development of a child have changed since the agreement was made, and
• As a result, one party or a child will suffer hardship if the BFA is not set aside

Examples:

• A child develops a serious disability requiring one parent to stop working
• One party becomes seriously ill and cannot support themselves
• One party loses their job and has no assets or income

Important limitation: Hardship must be related to children. Financial hardship alone (e.g., "I made a bad deal") won't cut it.

6. Procedural Defects (s. 90K(1)(d))

If the BFA doesn't meet formal requirements under s. 90G (legal advice certificates, written document, etc.), it's not valid.

Common defects:

• No legal advice certificate signed by lawyer
• Same lawyer advised both parties
• BFA not in writing or not properly signed

Result: The BFA is void from the start.

What Courts Consider When Enforcing a BFA

Even if there's no s. 90K ground to set aside the BFA, courts still assess:

1. Was the Agreement Voluntary?

Did both parties enter into it freely, or was there pressure, time constraints, or inequality of bargaining power?

2. Was There Full Disclosure?

Did both parties exchange complete financial statements? Were all assets and liabilities disclosed?

3. Was the Advice Adequate?

Did each party's lawyer properly explain the legal effect, advantages, disadvantages, and alternatives?

4. Is the Outcome Unconscionable?

Does the BFA leave one party destitute or unable to support themselves? If yes, courts may intervene under unconscionable conduct principles.

Case Law: How Courts Apply Section 90K

Thorne v Kennedy [2017] HCA 49

Facts: Ukrainian woman signed a BFA 4 days before her wedding to wealthy Australian. She received legal advice but felt pressured. BFA gave her almost nothing.

Outcome: High Court set aside the BFA for undue influence and unconscionable conduct. The rushed timing, power imbalance, and unfair terms made it unconscionable to enforce.

Lesson: Even with legal advice, courts will intervene if one party was pressured or the outcome is grossly unfair.

Kennon v Spry [2008] HCA 56

Facts: Husband concealed significant assets in trusts. BFA was based on incomplete disclosure.

Outcome: BFA set aside for non-disclosure.

Lesson: Full disclosure is non-negotiable.

What Happens If a BFA Is Set Aside?

If a court sets aside your BFA, it's as if the BFA never existed. The court then proceeds with standard s. 79 property division:

1. Identify the property pool
2. Assess contributions
3. Evaluate future needs
4. Determine what's just and equitable

All the time and money spent on the BFA? Wasted.

The Bottom Line

BFAs are binding, if you do them right. Courts will respect properly executed BFAs with full disclosure, independent advice, and no duress.

But if you cut corners, hide assets, or pressure your partner, expect a judge to tear up your BFA and start from scratch.

Get it right, or don't bother.