Relationship
property agreements signed ‘in contemplation of marriage’ require couples to
have a clear and present intention to marry, the High Court ruled in a landmark
case. Living together in a de facto relationship with a vague
prospect of marriage in the future is unlikely to suffice, leaving any ‘contemplation’
agreement unenforceable on subsequent marriage.
The Property
(Relationships) Act which was grafted onto its predecessor, the Matrimonial
Property Act, allows couples by mutual agreement to contract out of an
equal-shares property regime. It allows
agreements ‘in contemplation of marriage’ but does not define what this means. The High Court was asked to rule on the
status of a relationship property agreement signed eight years before marriage
and fourteen years before the couple separated.
At stake was over one million dollars in bank accounts and term deposits
held in the husband’s name. Their
anonymity was preserved in the court judgment.
The court was told it
was a second marriage for the husband.
He worked in professional practice on his own account. A relationship property agreement was drafted
and signed after 18 months of a de facto relationship. Both husband and wife took legal advice. The document was intended to apply if the two
married, with references made to any ‘subsequent’ or ‘future’ marriage. Justice Brewer ruled the agreement could not
be viewed as ‘being in contemplation of marriage’ because when signing they had
no immediate intention to marry and had made no plans to marry. It was not valid as a ‘contracting-out’
agreement.
Nevertheless the
agreement was binding, Justice Brewer ruled.
It did not comply with current Property (Relationship) Act requirements,
but was enforceable under special provisions in the Act as a contract signed by
a de facto couple prior to August
2001. One million dollars held in bank
accounts remained the husband’s separate property.
M v.
H – High Court (29.09.17)
17.128