The wife argued that whether or not the pre-nuptial satisfied the requirements of a binding financial agreement
The issue before the court in Pascot & Pascot was whether a prenuptial agreement made between a husband and wife constituted a binding financial agreement that satisfied the requirements of the Family Law Act. The agreement provided that a house purchased by the husband would be used as a family residence during the marriage but would become the sole property of the husband in the event of a divorce.
The wife did not earn an income but was responsible for the care and upbringing of their three children. The agreement did not provide for the payment of maintenance to the wife in the event of divorce, and it did not compensate her for the financial sacrifices she made. Those sacrifices allowed the husband to work and to improve his earning ability.
The case draws an important distinction between prenuptial agreements that bind the parties and financial agreements that bind the court. An agreement that specifies how a husband and wife will handle their finances during their marriage can be enforced like any other contract.
An agreement that requires a court to divide property in a specified way in the event of a divorce, however, will not override the court’s general authority to make a fair property settlement unless it meets the test of a binding financial agreement.
The wife argued that whether or not the pre-nuptial satisfied the requirements of a binding financial agreement, it was not an agreement at all because she was induced to sign it by the husband’s claim that he would not otherwise buy a house for the family.
In fact, he had already entered into a contract to purchase the house and was not in a position to back out of it. The husband’s misrepresentation that he would do so was intended to force his wife to sign the prenuptial. The court decided that the agreement was induced by misrepresentation and was therefore not binding on the parties.
A financial agreement is binding on the court only if both parties receive independent legal advice concerning the effect of the agreement. The wife’s lawyer incorrectly advised her that prenuptial agreements can never bind the court. The court decided that “legal advice” does not mean “correct legal advice.” The wife’s remedy for the incorrect advice she received from her lawyer is a lawsuit against the lawyer for negligence.
In this case, however, since the agreement was not binding on the parties, it was not binding on the court. That made it possible for the court to divide the property and to award maintenance in a way it deemed fair, notwithstanding the provisions of the prenuptial agreement.
Disclaimer : This article provides basic information only and is not a substitute for a professional or legal advice. It is prudent to obtain legal advice from a family lawyer.