Money How advice at the hairdresser's to a millionaire's ex might have changed prenups in Australia forever

00:55  14 november  2017
00:55  14 november  2017 Source:   ABC News

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When a soon-to-be divorcee complained to her hairdresser that her husband, a millionaire , was to leave her with a meagre sum, a voice piped up and said I know where you can get a lawyer.

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A landmark High Court ruling may make prenuptial agreements difficult to enforce.© ABC News A landmark High Court ruling may make prenuptial agreements difficult to enforce. When an Eastern European woman complained to her hairdresser that her estranged husband, an Australian millionaire, was leaving her with a meagre sum, a voice piped up from a neighbouring chair — "I know where you can get a lawyer".

That conversation led to a landmark ruling in the High Court this week known as Thorne v Kennedy.

Family law experts across Australia say the ruling could make prenuptial agreements, known as prenups, difficult to enforce into the future for everyone.

Ms Thorne, a pseudonym to protect the 36-year-old's identity, was represented by Peter Carmont from Somerville Laundry Lomax, a firm in the northern New South Wales town of Lismore.

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Mr Carmont said Ms Thorne sought him out on the advice of a stranger in a hairdressing salon.

Family law expert Peter Carmont from Somerville Laundry Lomax in the northern New South Wales town of Lismore. Mr Carmont recently represented a woman in a landmark case involving prenuptial agreements.© ABC North Coast: Alice Moldovan Family law expert Peter Carmont from Somerville Laundry Lomax in the northern New South Wales town of Lismore. Mr Carmont recently represented a woman in a landmark case involving prenuptial agreements. Internet meeting results in marriage

About four years earlier a photo of Ms Thorne appeared online.

A 67-year-old Australian property developer known as Mr Kennedy, also a pseudonym, saw the photo and travelled to Eastern Europe to propose marriage.

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"She came to Australia and the marriage was all arranged. Over 100 guests were invited. Then four days before the event he [Mr Kennedy] came to her and said she would have to sign a piece of paper. But he never told her what would be on the paper," Mr Carmont said.

"When she looked at the document she found it was very restrictive.

"So she signed it."

The contract stated that after three years of marriage, either party could terminate the relationship and Mr Kennedy would give Ms Thorne $50,000.

Mr Carmont said Mr Kennedy was worth between $18 million and $25 million.

"They married and were getting on quite well, and then one day he came to her and said 'here's a notice of termination … you've got to get out,'" Mr Carmont said.

That is when Ms Thorne approached Mr Carmont for legal advice, off the back of the recommendation at the hairdresser's, and he took her on as a client.

'We got a brick wall'

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"My background before private practice was Legal Aid and I've lost none of the bad habits of Legal Aid in trying to look after people who have been downtrodden," Mr Carmont said.

"I'm an accredited mediator so I'm committed to dispute resolution. So I tried to negotiate with solicitors for the husband and we got a brick wall.

"There was only one thing to do and that was to preserve her rights. We had to file an application with the court."

The matter went to the Federal Circuit Court and, in the meantime, Mr Kennedy died.

The judge found the agreements were not valid and could not be enforced.

Ms Thorne had won.

So Mr Kennedy's lawyers took the decision to the Family Court where it was overturned.

Prenup precedent set

Mr Carmont was shocked and vowed to persist.

"We thought 'that's awful, we'll go to the High Court'. So off we went to the High Court," he said.

Mr Carmont said the decision would set a new precedent for further court cases involving prenuptial agreements.

"It doesn't change the law, but it tells the courts and practitioners how you should interpret this part of the law," he said.

"What the court said is that the lawyer has to look at the agreement and say 'is it obviously unfair' and you have to look at the surrounding circumstances — such as our case where a wedding arranged with 100 guests that may have been cancelled with four days' notice.

"The High Court thought that was very significant."

Family lawyers across Australia have weighed in on the outcome this week, with some saying it will make prenuptial agreements difficult to enforce.

"The High Court has recognised that there will almost never be a circumstance where two partners have equal bargaining power in a relationship," said family lawyer Heather McKinnon from law firm Slater and Gordon.

Mr Carmont said the outcome was one of the most satisfying he had ever experienced.

"This is the biggest moment in my legal career. This is a momentous decision," he said.

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