Hypotheticals by Manny Wood Published in the Coffs Coast Advocate on 20 April 2019.
After moving into a retirement village, Joyce realises that she is not seeing enough of her family.
Joyce’s daughter, Leanne, has a substantial mortgage over her home that she owns with her husband, Trent. She talks to Joyce about the financial pressure of making the mortgage repayments.
Joyce and Leanne decide that it would be better for both of them if Joyce sells her interest in the retirement village and they buy a new property with a granny flat for Joyce.
Leanne and Trent sell their home and buy a new home in their joint names, that has suitable accommodation for Joyce. Joyce contributes $120,000 to the purchase.
Unfortunately, before they move into the new house, the relationship between Leanne and Trent deteriorates. Tent commences Family Law Court proceedings against Leanne.
Joyce moves into rental accommodation.
When Joyce asks Trent and Leanne to repay her $120,000 contribution, they refuse, claiming that the money was a gift.
Joyce commences action in the Supreme Court of New South Wales.
Trent and Leanne rely on the legal presumption that money advanced by a parent to a child is a gift.
Joyce’s lawyers argue that the presumption does not apply and that Joyce has a claim in “proprietary estoppel”. They claim that Joyce was encouraged by a representation made by Leanne and Trent that upon making her contribution towards the property, Joyce would be entitled to reside in the granny flat.
The court finds that Joyce relied on the representation to her “detriment” and that it was “unconscionable” for Leanne and Trent to resile from their promise.
The court ultimately orders Leanne and Trent to repay the $120,000 contribution to Joyce and they are also ordered to pay Joyce’s substantial legal costs.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
