Hypothetical by Manny Wood published in the Coffs Coast News Of The Area on 5 March 2021.
Jane is a divorcee, in her mid-seventies. She is very close to her daughter, Mel.
In 2010, Jane’s lease runs out, allowing her and Mel go on a six-month tour around Australia in her caravan. They made it from Sydney to Emerald Beach and immediately both fall in love with the area and Mel finds the perfect two-bedroom place over-looking the beach. Unfortunately, Mel cannot afford the deposit.
Jane has some savings and says to Mel “I’m getting on a bit and find it more difficult to be on my own. If you really like this place and would be happy to let me live with you, I can give you the balance of the deposit”.
Mel accepts her mother’s offer and Jane puts $75,000 towards the deposit of the property.
In early 2020, Jane and Mel have a falling-out resulting in Jane, who is now in her early eighties, moving out. Jane has almost no assets and asks that the $75,000 that she gave to Mel be paid back to help her relocate. Mel refuses, arguing that the $75,000 was a gift and did not need to be repaid.
The matter eventually goes to Court. After nearly two years of proceedings, the Court finds that in the circumstances, Jane could rely on a “proprietary estoppel”, entitling her to damages on the basis that it was unconscionable for Mel to resile from her promise to allow Jane to stay at the property.
If Jane and Mel had a formal Granny Flat Agreement drawn-up, clearly stating what would happen if Jane left the property, years of litigation could have been avoided.
Thank you to Jamie Visco for his assistance with this column. If YOU would like a particular issue addressed please email Manny at manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
