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Documenting a Settlement

Documenting a Settlement or Agreement

Documenting a parenting agreement

Parenting agreements can be formally documented in two broad ways.

• The first is in a parenting plan. This is essentially a written agreement between the parties, which is signed and dated. It is not enforceable by the Court, but is something the Court will take into account if there is a subsequent break down in the agreement.

• The second is by consent orders. This is where parties ask the Court to make agreed orders regarding the arrangements for their children. Consent orders are enforceable as if the matter had progressed to trial, and the court had made orders about the children.

Documenting a property settlement

Broadly speaking, there are two options to document a property settlement, namely:

• By an application for consent orders (often referred to as a “Form 11” or “consent orders”); or

• Using a binding financial agreement (“a BFA”).

Consent Orders

Consent orders are a document which records the agreement between the parties and is submitted to the Court to have orders made in its terms by consent.  Once the consent orders are made, they largely have the same effect as if they had been made by the Court following a trial.

Consent orders can either be entered into before proceedings are commenced, using a Form 11, or after proceedings have been ongoing.  The Court will need evidence before it to enable it to assess the factors mentioned under the heading “the Court’s approach to property settlement” above, and determine that the agreement is just and equitable.

The major advantage of consent orders is that they are typically simpler and less expensive than a BFA.

The major disadvantages of consent orders are that they require the Court to sanction the fairness of the agreement, and create a document that could potentially be accessed by government departments, such as the ATO, at a later time.

Binding Financial Agreements (BFAs)

A BFA is a document which records the agreement between parties in relation to their property settlement and/or spousal maintenance.  To be binding, certain criteria must be satisfied.  For example, both parties must have had independent legal advice.  Unlike consent orders, a BFA can be entered into before (pre-nup), during or after a relationship has ended.  

The major advantage of using a BFA as a settlement instrument is that the agreement does not have to be sanctioned by the Court.  This means parties can be more creative about their settlement in the hope of creating options for mutual gain.  This attribute however lends itself to abuse by financially stronger parties, and this is a major reason why independent legal advice is required.

The major disadvantage of using a BFA as a settlement document is the cost.  Because of the requirements of the legislation, there is much more ‘red tape’, including each party having independent legal advice.