The Forged Valuation and the Failed BFA: Why a Signed Financial Agreement Was Not Binding Without Real Legal Advice

In Sozu & Sozu [2026] FedCFamC2F 1392, the Court declared that a financial agreement signed after a marriage of more than 40 years was not a binding financial agreement under s 90G of the Family Law Act 1975. The agreement appeared valid on its face. It was signed by both parties, contained solicitor certificates of independent legal advice, had been partly performed, and was relied on by the husband as binding. But the Court found the wife had not received the legal advice required by the Act, and the husband’s conduct — including a fraudulently altered valuation and understated superannuation figure — weighed heavily against using the statutory “fallback” power to save the agreement.

The result was that the agreement did not oust the Court’s property-settlement jurisdiction. The parties will now proceed to a proper Part VIII property settlement hearing.

🧩 Facts and Issues

Facts:

The husband and wife had been in a relationship of more than 40 years. After separation, they entered into a financial agreement intended to divide their matrimonial property. The husband signed on 25 March 2024 and the wife signed on 27 March 2024. On its face, the agreement provided for an equal division of property and included solicitor statements certifying that each party had received independent legal advice.

The agreement was partly performed. Some real properties were transferred. However, the transfer of the wife’s Country C leasehold interest to the husband remained unresolved. Instead of proceeding with the transfer, the husband later had the wife sign a Power of Attorney allowing him to deal with the lease and receive the rental income. When the wife revoked the Power of Attorney in April 2025, the husband commenced proceedings seeking to enforce the financial agreement.

The wife opposed enforcement. She argued the agreement was not binding, or alternatively should be set aside. Her case was that she did not receive adequate legal advice before signing and that the husband engaged in fraud and misrepresentation concerning asset values.

A major factual issue was the value of the former matrimonial home at Suburb D. The husband obtained a desktop valuation of $1.5 million, but gave the wife a fraudulently altered version showing $2.1 million. The wife later discovered the husband had physically altered the valuation page by placing a typed $2.1 million figure over the real $1.5 million figure and scanning it until the alteration was not visible.

The wife ultimately agreed to use a value of $1.8 million, described by the husband as the midpoint between $1.5 million and $2.1 million. The Court found that the husband’s fraud and later understatement of his superannuation were significant circumstances weighing against the agreement being treated as binding.

Issues:

1. Was the financial agreement binding under s 90G(1)?
2. Did the wife receive the legal advice required by s 90G(1)(b)?
3. Could the agreement nevertheless be declared binding under the statutory “fallback” provision in s 90G(1A)?
4. What was the significance of the husband’s forged valuation?
5. Did part-performance and delay make it unjust and inequitable not to treat the agreement as binding?
6. Did the husband’s lack of “clean hands” defeat his attempt to enforce the agreement?
7. What happens now that the agreement is not binding?

⚖️ Applicable Law – Legislation, Regulations, Rules

Family Law Act 1975 (Cth)

Part VIII gives the Court jurisdiction to determine property-settlement disputes after marriage breakdown. The Court’s power is broad, but any property order must be just and equitable. The usual property-settlement methodology involves identifying and valuing assets and liabilities, considering whether it is just and equitable to make an order, assessing contributions, considering future factors, and then ensuring the proposed division is just and equitable.

Part VIIIA deals with financial agreements. A financial agreement may operate as a private contract, but a merely valid financial agreement is not the same as a binding financial agreement. A binding financial agreement has a much stronger effect because, subject to limited exceptions, it ousts the Court’s Part VIII jurisdiction.

Section 90G(1) provides that a financial agreement is binding only if strict requirements are met, including that before signing, each spouse party was provided with independent legal advice about:

1. the effect of the agreement on that party’s rights; and
2. the advantages and disadvantages, at the time the advice was provided, of making the agreement.

Section 90G(1A) provides a fallback pathway. Even if one or more of the advice/certificate requirements are not satisfied, the Court may declare the agreement binding if satisfied it would be unjust and inequitable if the agreement were not binding.

Section 90K allows a Court to set aside a financial agreement in specified circumstances, including fraud, impracticability, unconscionable conduct, or where the agreement is void, voidable or unenforceable. However, because the Court found the agreement was not binding, it did not need to determine the s 90K issues.

📌 Precedents Relied On

Key authorities included:

• Senior v Anderson — the requirements of s 90G(1) are mandatory. If not complied with, the only route to a binding agreement is s 90G(1A).
• Abrum & Abrum — legal advice for a binding financial agreement requires advice about the party’s rights; without instructions about the facts relevant to Part VIII rights, that advice cannot properly be given.
• Dragomirov & Dragomirov — s 90G(1A) gives the Court a broad discretion; the agreement need not be just and equitable in the same way as a s 79 order, but the nature and extent of non-compliance with s 90G(1) is important.
• Hoult & Hoult — where there is a complete absence of legal advice, it is improper to give significant weight to preservation of the bargain.
• Gould v Vaggelas — where a party enters a contract after a material misrepresentation, the Court may infer that the misrepresentation induced the contract; it need only be a material factor, not the sole cause.
• Stanford & Stanford — the just and equitable requirement in property settlement involves a discretionary assessment responsive to the facts of the individual case.

🧠 Analysis

Issue

Should the Court declare the parties’ financial agreement binding where it contained solicitor certificates and had been partly performed, but the wife did not receive meaningful advice about her property rights and the husband had used a forged valuation in the negotiations?

Rule

A financial agreement is not binding merely because it is signed, witnessed, labelled as binding, or accompanied by solicitor certificates.

To be binding under s 90G(1), the parties must actually receive the required independent legal advice. That advice must address the effect of the agreement on the party’s rights and the advantages and disadvantages of entering the agreement at the time.

If the agreement fails s 90G(1), the Court may still declare it binding under s 90G(1A), but only if satisfied it would be unjust and inequitable if the agreement were not binding. That discretion is broad, but the nature and extent of the defective advice remains important.

Application

1. The agreement looked binding on its face — but that was not enough

The agreement contained the usual formal features. It was signed by both parties. It recited that each had received independent legal advice. It included solicitor statements. It identified assets and provided for an apparently equal division.

But those formal features did not answer the critical question:

Was the wife actually advised about her rights and about the advantages and disadvantages of giving them up?

The Court found she was not.

2. The wife’s solicitor had not taken the instructions needed to advise her properly

The Court found that the wife’s solicitor, Mr B, had never taken instructions from the wife about the matters a Court would consider in determining whether a property settlement was just and equitable. He did not advise her about the usual Part VIII property-settlement process. He did not advise her about disclosure obligations. He did not advise her about the benefit of valuation evidence. He did not take instructions about contributions or future factors.

That was fatal to s 90G(1).

Without understanding the wife’s potential Part VIII claim, Mr B could not advise her about the “effect” of the agreement on her rights, because he had not identified what those rights might be.

The husband ultimately abandoned the argument that s 90G(1) had been satisfied after Mr B’s oral evidence.

The practical point is blunt:

A certificate of advice is not a substitute for actual advice.

3. The husband’s forged valuation was central

The husband obtained a proper valuation of the Suburb D property at $1.5 million. He was unhappy with that figure because, at that value, he would have had to pay the wife about $300,000 to achieve the agreed 50/50 division.

He then gave the wife a fraudulently altered version showing the value as $2.1 million, telling her it was a proper valuation and that she was “definitely winning on this deal.”

When the wife discovered the fraud, the husband admitted what he had done but maintained that $1.5 million was too low. He then proposed $1.8 million as the “midpoint” between the genuine $1.5 million figure and the forged $2.1 million figure. The wife, hurt and wanting to keep the property and finalise matters, agreed.

This mattered because the husband’s fraud did not simply disappear once discovered. It had already shifted the negotiation range. The false $2.1 million figure was used as an anchor to move the agreed value to $1.8 million.

4. The husband’s superannuation figure was also understated

The parties negotiated on the basis that the husband’s superannuation was about $100,000, and adopted a notional figure of $64,000 to reflect the wife’s earlier withdrawal of her own superannuation.

Later disclosure showed the husband’s superannuation was higher. The Court accepted the wife’s evidence that the husband gave her the $100,000 figure and that she accepted it. The Court found the true balance was most likely in the range of $135,000 to $145,000 at the time of negotiations.

This was not the main reason the agreement failed, but it reinforced the overall picture: the financial information underpinning the agreement was not reliable.

5. Part-performance helped the husband, but did not save the agreement

The husband argued that both parties had acted for more than a year as though the agreement was binding. Some property transfers had occurred. Stamp duty exemptions had been claimed. The husband argued that it would be unfair to let the wife resile from the deal after part-performance.

The Court accepted there had been part-performance and delay, and accepted the husband would suffer some detriment if the agreement was not binding.

But that was not enough.

The real property transfers were largely reversible or could be accounted for in the later Part VIII proceedings. The parties were not out of pocket for stamp duty because exemptions had been granted. The wife’s later borrowings against Suburb D could be considered in the property case. The husband had also received rental income from investment properties.

So while part-performance mattered, it did not outweigh the seriousness of the defective advice and the husband’s dishonest conduct.

6. Dragomirov did not save the husband

The husband relied heavily on the idea that a financial agreement may still be declared binding under s 90G(1A), even where formal advice requirements are not met.

The Court considered Dragomirov, where a financial agreement had been saved despite defects in advice. But the Court distinguished it. In Dragomirov, the wife had received at least some written advice explaining the five-step property-settlement process, and therefore knew the process she was replacing with the bargain she struck.

Here, the wife received no such basic advice. She was not advised about the Part VIII process, disclosure, valuations, contributions or future factors.

That difference mattered. The wife was not simply taking a commercial risk with full appreciation of the legal framework. She was signing away the Court’s property jurisdiction without meaningful advice about what she was giving up.

7. “Clean hands” mattered

The Court accepted the wife’s submission that the husband did not come to Court with “clean hands.”

That was a major feature of the s 90G(1A) discretion. The husband was not merely asking the Court to preserve a bargain. He was asking the Court to preserve a bargain reached in the shadow of his own dishonest conduct and the wife’s inadequate legal advice.

The Court was not persuaded that it would be unjust and inequitable if the agreement were not binding.

The sharp point is:

Equity does not rush to save a bargain for the party whose dishonesty helped shape it.

8. The agreement being “unfair” was not the technical test — but the process mattered

The Court recognised that financial agreements do not have to be just and equitable in the same way that Court property orders must be. Parties can make a bad bargain. They can use rough asset values. They can choose not to obtain formal valuations.

But that freedom assumes the statutory safeguards are operating. The legal advice requirement exists because a binding financial agreement can exclude the Court’s Part VIII jurisdiction.

Here, the safeguard failed. The wife was not properly advised. The husband had also distorted a key valuation and understated superannuation. In those circumstances, the Court was not prepared to use s 90G(1A) to make the agreement binding.

Conclusion

The Court declared that the financial agreement was not binding under s 90G.

The agreement failed under s 90G(1) because the wife had not received the required legal advice. Her solicitor had not taken the necessary instructions or advised her about the property-settlement rights she was giving up.

The agreement was not saved under s 90G(1A) because, in all the circumstances — including the husband’s forged valuation, understated superannuation, lack of meaningful legal advice to the wife, and the limits of the part-performance detriment — the Court was not persuaded it would be unjust and inequitable if the agreement were not binding.

Costs were reserved, and the substantive Part VIII property proceedings will now continue.

🧠 Take-Home Lesson

This case is a strong warning about binding financial agreements.

A BFA is not made binding by labels, signatures, certificates or the parties’ desire to avoid Court. If the agreement is intended to remove the Court’s jurisdiction, the legal advice safeguard must be real.

The solicitor must do more than read through the agreement. The solicitor must be able to advise the client about:

• what their property rights may be under Part VIII;
• what they may receive if the Court determined the matter;
• what rights they are giving up;
• the effect of the agreement;
• the advantages and disadvantages of signing;
• the importance of disclosure and valuations;
• the risk of relying on agreed or informal asset values.

The sharp FLAST lesson is:

A signed certificate of advice is not enough if the advice was never actually given.

The second lesson is about dishonesty. A party who uses fraud or misinformation to shape the bargain may struggle to persuade the Court that it would be unjust and inequitable not to enforce that bargain.

The third lesson is practical:

If a financial agreement is meant to bind, do the work properly: full disclosure, proper valuations, proper advice, proper records, and genuine independent decision-making.

Otherwise, the agreement may not prevent the very litigation it was supposed to avoid.