Article by Manny Wood published in the Coffs Coast News Of The Area on 5 July 2024.
Ruth, aged 85, transfers a piece of real estate to her son’s wife and another property to his daughter.
Ruth tells the solicitor that “they have always done everything they can to look after me and in return I want to give them the properties”.
The price was recorded as one dollar and substantial stamp duty was paid on the market value of the properties.
Ruth is diagnosed with Alzheimer’s disease one year later.
When Ruth passes-away four years later, her other son, Gary discovers the transfers of Ruth’s real estate.
Gary claims that at the time of the transfers, his mother did not have sufficient mental capacity and that she was the victim of unconscionable conduct and undue influence.
The matter proceeds to a two-week hearing.
The Court hears “lay” evidence from family and friends and the solicitor involved, as well as expert medical evidence.
It is revealed that Ruth never saw her solicitor alone and was not the subject of a capacity assessment at the time of the transfers.
Ruth’s GP states that she was always “chaperoned” when she attended his clinic and during the course of the relatively brief visits, she appeared “emotionally frail”.
However, medical experts retrospectively assessing Ruth’s capacity, conclude that she was only suffering from mild to moderate impairment at the time the transfers were made.
After a deliberation of six months, judgment is handed down.
The Court ultimately rules that there was insufficient evidence to find that Ruth lacked the requisite mental capacity to transfer the real estate.
However, the Court finds that at the time of the transfers, Ruth was “very vulnerable” and could have been easily influenced.
In the absence of evidence that the transfers were of Ruth’s “own free will” and were “fair, just and reasonable”, it is ruled that the transfers were in fact the product of unconscionable conduct and undue influence on the basis of a presumption of an “unconscientious exploitation of a known special disadvantage”.
Email Manny Wood, Principal Solicitor and Accredited Specialist in Wills and Estates at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487. This column is only accurate at today’s date and is not legal advice.
