Binding financial agreement losses unrecoverable
by Dirk Klicker
The recent decision of the New South Wales Court of Appeal in Thompson & Anor t/as Staunton and Thompson Lawyers v Schacht [2014] NSWCA 247 brings to an end the legal saga that began in 2002 with a incorrectly drafted binding financial agreement.
In essence the case concerned a binding financial agreement that was negligently drafted by the husband’s solicitors which resulted in the husband ultimately having to pay the wife an additional sum of money by way of property settlement.
In 2013, the Trial Judge found that the husband’s solicitors were negligent in preparing the binding financial agreement.
There was no dispute on the appeal that the binding financial agreement prepared by the husband’s solicitors in 2002 was invalid.
In the Court of Appeal, the solicitors had appealed from the award of damages only as the Trial Judge had awarded the husband about $800,000 in damages.
The husband’s solicitors were successful on the appeal and had the damages reduced by about $200,000.
That means that the husband’s solicitors still had to pay to the husband damages of about $600,000.
The end result being that the husband was still substantially out-of-pocket in relation to the damages incurred.
For solicitors the Judgement of the Trial Judge is a must read as an example of mistakes not to make in preparing a binding financial agreement. Of particular note is the failure as to formalities, the inadequately worded spousal maintenance clause and an attempt to amend the binding financial agreement in 2004 by deed.
You can read the Judgement by clicking on the following link Schact v Bruce Lockhard Thompson and Dennis Michael Staunton (trading as Staunton and Thompson Laywers) No. 3 [2013] NSWSC 316.
For solicitors the Judgement of the Court of Appeal is an example of the manner in which the Supreme Court will approach the assessment of damages.
The Judgement of the Court of Appeal can be read by clicking on the following link Thompson & Anor t/as Staunton and Thompson Lawyers v Schacht [2014] NSWCA 247.
For clients both of these decisions are an important reminder that you must obtain advice from an experienced family lawyer when you are preparing a binding financial agreement and that there are simply no short cuts to preparing a valid binding financial agreement because you will never recover all of your potential losses even though your family law solicitor may have been held to have made a mistake when drafting your binding financial agreement.
