A binding financial agreement can be set aside under Family Law Act 1975 (Cth) s 90K only if the applicant establishes one of the exhaustive statutory grounds; post-separation regret, changed financial circumstances, or a more favourable outcome available in contested property proceedings is not among them. The section is deliberately restrictive, reflecting the legislative policy of finality that underpins the BFA regime. Counsel who conflate the evidentiary demands of s 90K with the formal requirements of s 90G, or who build a set-aside application on facts that amount to a bad bargain rather than genuine unconscionable conduct, run a serious risk of costs exposure for their client on a threshold that the courts have shown little interest in lowering.
Family Law Act 1975 (Cth) s 90K(1) sets out an exhaustive list. The grounds most commonly pressed in post-separation disputes are fraud (including non-disclosure of a material matter), unconscionable conduct in the making of the agreement, circumstances arising after the agreement was made that render its performance impracticable, and a material change in circumstances relating to a child of the relationship that would cause hardship if the agreement stood.
The agreement may also be set aside where it is void, voidable, or unenforceable at general law, which brings in equitable doctrines independently of the express statutory grounds. That pathway matters where, for example, misrepresentation short of fraud is alleged, or where a party's legal incapacity is in issue.
The hardship ground under s 90K(1)(d) deserves specific attention because it is commonly misread. The ground requires both a material change in circumstances since the agreement was made, circumstances that must relate to the care, welfare and development of a child, and that the child or the party with caring responsibility will suffer hardship if the agreement is not set aside. Evidence of changed circumstances without the hardship component is not enough, and the reverse is equally true.
The High Court in Thorne v Kennedy [2017] HCA 49 is the controlling authority. The Court applied the equitable doctrine drawn from Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447. Relief requires that the applicant was under a special disadvantage that seriously affected their ability to make a judgement in their own best interests, and that the other party unconscientiously took advantage of that disability.
In Thorne v Kennedy [2017] HCA 49, the facts met both elements without much difficulty. The applicant was a foreign national who had emigrated in anticipation of the marriage, had no independent financial position in Australia, and was presented with an agreement days before the wedding with the express condition that there would be no marriage without her signature. The High Court found special disadvantage arising from her position of vulnerability and exploitation of that disadvantage by the respondent. Both pre-nuptial agreements were set aside.
The significance of Thorne v Kennedy for practitioners is not only the outcome but the doctrinal structure. The Court confirmed that special disadvantage must exist at the time of execution and must be of a kind that seriously impairs the party's capacity for independent judgement, not merely a circumstance that made the decision difficult or uncomfortable. A party who was advised, who understood the agreement, and who chose to sign in circumstances of emotional pressure that falls short of exploitation does not satisfy the test. Courts have consistently declined to treat the power imbalance inherent in many intimate relationships as, without more, constituting a special disadvantage.
The threshold for unconscionable conduct remains genuinely high, and practitioners should resist framing what is, on the facts, a disadvantageous bargain as unconscionable conduct simply because the client now regrets it. The application will fail and the client will bear the costs.
Note: Where the applicant also argues that the legal advice obtained before signing was inadequate, that argument may support the special disadvantage element of the unconscionable conduct ground rather than independently grounding relief. Advice given under artificial time pressure designed to prevent genuine reflection is different from advice that was simply brief; the former may strengthen the unconscionable conduct case, while the latter ordinarily will not. Practitioners should be alert to the fact that the current s 90G regime post-2000 differs materially from predecessor provisions, and care is required when assessing the relevance of earlier authority on advice adequacy to contemporary applications.
Section 90G operates as a threshold validity question, wholly separate from the set-aside regime: where an agreement does not comply with s 90G, it may not be binding at all, without any need to engage s 90K. Section 90G requires, among other things, that each party received independent legal advice from a legal practitioner about the effect of the agreement and its advantages and disadvantages before signing, and that a signed statement from each adviser was exchanged.
Section 90K presupposes an agreement that is otherwise binding and asks whether it should nonetheless be set aside. Practitioners should address s 90G first. Where the formal requirements have not been met, the argument is cleaner, the evidentiary burden is lower, and the costs risk of a failed s 90K application is avoided.
Where s 90G is satisfied but the quality of the advice is in issue, that argument shifts to s 90K territory. Evidence that a party's adviser gave perfunctory advice in conditions designed to prevent genuine reflection can go to the special disadvantage element of unconscionable conduct or, where pressure was more direct, to a duress argument under the void, voidable, or unenforceable pathway. The doctrines of duress and unconscionable conduct are related but distinct: duress requires illegitimate pressure, whereas unconscionable conduct focuses on exploitation of a pre-existing disadvantage. Pleading both grounds in the alternative provides coverage where the factual characterisation may cut either way.
The applicant bears the burden of establishing a s 90K ground on the balance of probabilities, and Briginshaw v Briginshaw [1938] HCA 34 caution applies where fraud or unconscionable conduct is alleged, given the gravity of those findings and the significance of their consequences.
Evidence capable of establishing special disadvantage and its exploitation at the time of execution is the core requirement in unconscionable conduct applications. Documentary evidence of the circumstances surrounding execution, correspondence demonstrating urgency or pressure, evidence of the respective financial positions of the parties, and evidence about how legal advice was given and received are all material. An application that rests primarily on the applicant's post-separation account of events, without corroboration, is unlikely to meet the standard.
Where the court sets aside an agreement under s 90K, the agreement ceases to bind the parties. The court's property settlement powers under Part VIII of the Family Law Act 1975 (Cth) are then enlivened in full: orders altering property interests, orders with respect to superannuation interests, and spousal maintenance orders become available as though no agreement had ever been made. The court approaches the matter as an ordinary contested property application, applying the contributions and future needs analysis under ss 79 and 75(2), or the equivalent provisions for de facto parties under ss 90SM and 90SF.
The line of authority on unconscionable conduct in BFA matters is factually sensitive and citation-specific. Thorne v Kennedy is frequently summarised in ways that overstate its reach, and the pre-amendment case law on legal advice adequacy requires care in citation given the legislative changes since 2000. Practitioners researching the current state of the s 90K authorities can verify the chain of reasoning in Habeas, results cited to paragraph level across 300,000+ Australian legal documents, before advising on prospects or filing an application.
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