‘Pole dancer case’ could invalidate thousands of Pre-nups

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pre-nup-uncertaintyTHOUSANDS of prenuptial agreements may be ruled invalid if one man’s mission to extricate himself from a multimillion-dollar payment to the pole dancer he married succeeds.

Divorce lawyers are closely watching what is known in family law circles as ”the pole dancer case” for its potential to disrupt every relationship contract signed since 2004, amid claims the legislation surrounding prenuptial agreements is in ”disaster territory”.

The man, who was given the court pseudonym of Mr Wallace, is challenging his prenuptial agreement with Ms Stelzer on grounds including that the law governing such contracts is faulty.

The case has so alarmed the federal Attorney-General’s office that it has appointed senior counsel to intervene, joining Ms Stelzer’s barrister in arguing that the agreement is sound.

Mr Wallace became besotted with Ms Stelzer after meeting her at a Sydney club around the time he separated from his first wife, and they married seven years later in 2005.

They drafted a prenuptial agreement that said Mr Wallace would pay Ms Stelzer $3.25 million if their relationship broke down in the first four years, and within two years, it did.

But Mr Wallace, who has a net worth of more than $16 million, is now claiming that the agreement is invalid.

He claims Ms Stelzer, who owns just over $10,000 in assets, behaved fraudulently when she professed before their marriage that she loved him, wanted to have children with him and spend the rest of her life with him.

He also says his original solicitor never gave him proper advice on the pros and cons of entering a prenuptial agreement, and took just minutes to sign off his version, commenting only that it was a lot of money.

Mr Wallace’s current solicitor, Trevor Hall, said the weakness of the legislation meant no financial agreement signed between couples was safe. ”Every binding financial agreement ever entered into is at some risk of being set aside if years later a spouse wants to suggest that the advice they received was not proper advice,” Mr Hall said.

In 2004, the federal government introduced changes to the Family Law Act that required solicitors to certify they had taken certain steps to ensure their clients understood their agreements. But it gave way to a rash of litigation, with people attempting to avoid their obligations on the basis their lawyers had not followed those steps meticulously.

In 2010, the government relaxed the wording, but Mr Wallace claims the law still doesn’t ensure proper advice has been given, and the changes should not apply to his action retrospectively, as that is unconstitutional.

Judge Robert Benjamin upheld the validity of Mr Wallace’s prenuptial agreement in 2011, saying his case was coloured by criticism of Ms Stelzer, whose evidence he preferred.

”At many levels this criticism seemed to endeavour to demean her and their relationship, bearing in mind the wife’s initial occupation and the circumstances of their meeting,” Judge Benjamin said.

Mr Wallace appealed to the full bench of the Family Court.

The appeal has alarmed the federal Attorney-General for its potential to affect thousands of other such agreements if it stands on constitutional grounds or on the basis that the legislation is weak.

In December, former Olympic swimmer Grant Hackett launched legal action against his former solicitors, claiming they had botched his prenuptial agreement with his wife and mother of his two children, Candice Alley.

Divorce lawyer Duncan Holmes said more people were challenging their agreements on the basis of inadequate legal advice, and lawyers were concerned about their liability.

Senior counsel were demanding $8000 to $10,000 just to look at them, he said.

”The legislation is in disaster territory,” Mr Holmes said. ”Well-intentioned legislation is getting corrupted and lawyers are running scared.”

A family lawyer, Susan Pearson, said the agreements no longer offered enough protection to justify drafting them.

Part of the reason they were overturned came down to differing interpretations by judges, but other times what was drafted many years ago was no longer considered to be fair, she said.

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Categories: Binding Financial Agreement, Pre-Nuptial Agreement
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