Financial Agreement vs. Application for Consent Orders

Where an agreement for property settlement has been reached (whether by negotiation or mediation) then that agreement should be formalised in accordance with the Family Law Act 1975 so that any claims (present and future) for property settlement are finalised.  This can be achieved by either an Application for Consent Orders to have a consent Court Order made by the Court or by a Financial Agreement made under the Family Law Act.  As to which of these methods is more appropriate, it is necessary to give consideration to the particular circumstances and the settlement agreement.  

If the settlement agreement is to be formalised by the Application for Consent Orders then it is necessary to firstly consider whether the agreement is “just and equitable”.  To be “just and equitable” the distribution of property must be that a Judicial Officer of the Court would consider the settlement to be just and equitable under the Family Law Act (that is, the appropriate and fair property settlement based upon the evidence provided).  Where the settlement agreement is one that a Judicial Officer of the Court would consider to be “just and equitable” then the Application for Consent Orders can be used for the making of the consent Court Orders.

If the settlement agreement is not one that a Judicial Officer of the Court would consider to be “just and equitable” under the Family Law Act then the Judicial Officer of the Court cannot approve the Application for Consent Orders, so in this case a Financial Agreement should be used.  The Financial Agreement can be used whether or not the settlement agreement is “just and equitable” because the Financial Agreement is private and is not considered by a Judicial Officer of the Court. For the Financial Agreement to be binding so that a Court cannot in the future make court orders under the Family Law Act 1975 contrary to the terms of the Financial Agreement the specific requirements set out in the Family Law Act must be complied with when making the Financial Agreement.  

Each party must obtain specific independent legal advice and each party must have their family lawyer verify that the legal advice has been given before signing the Financial Agreement. If all of the requirements under the Family Law Act are not complied with for the making of Financial Agreement then it may not be binding, valid or enforceable.