Balodis & Balodis

In the matter of *Balodis & Balodis*, Gill J of the Family Court of Australia considered a dispute between the applicant wife and the respondent husband concerning the enforceability of financial agreements made between them. The parties had initially entered into a financial agreement which they later concluded was not binding due to a lack of requisite legal advice. Subsequently, they executed a second financial agreement and an associated "side agreement" on 6 September 2018. The wife sought to enforce both the second financial agreement and the side agreement, alleging the husband had not complied with the latter regarding the sale of a property.

The central legal issues before the court were whether the second financial agreement was binding, and whether the associated side agreement was also binding and enforceable. The court was required to determine if the side agreement constituted a collateral contract, if the wife was estopped from refusing compliance, or if the side agreement was voidable due to misrepresentation or vitiated by unconscionable conduct. The court also considered the parties' intention regarding the binding nature of the side agreement, particularly in light of the fact that legal advice was not obtained in relation to it.

Gill J reasoned that while the second financial agreement, executed with the benefit of legal advice, was binding upon the parties, the side agreement was not. The court found no evidence of a relevant special disadvantage on the part of the wife that was exploited by the husband, nor did the circumstances indicate an intention for the parties to be bound by the side agreement, especially given the absence of legal advice concerning it. Consequently, the court declared the second financial agreement to be binding.

The court ordered that the second financial agreement, titled “Section 90C Financial Agreement” and executed on 6 September 2018, was binding on the parties. The wife was ordered to forthwith obtain the discharge of any extant orders preventing the implementation of this binding agreement. The wife's application and the husband's response were otherwise dismissed. The court also provided a mechanism for any party seeking costs to file an application within 28 days of the judgment.