Hypothetical by Manny Wood Published in the Coffs Coast Advocate on 7 December 2019.
Tom, aged 80, sells his home for $4 million. Tom’s wife passed-away several years ago and his son, Stephen has been managing Tom’s financial affairs.
When Tom’s daughter, Elizabeth discovers that the proceeds of sale were subject to the repayment of a $2 million “reverse mortgage” she becomes concerned about her brother’s conduct.
Elizabeth then discovers that Stephen has used $1.5 million dollars from the proceeds of sale to purchase a property in his sole name.
When Tom passes away, Stephen puts his property on the market and Elizabeth files a statement of claim in the Supreme Court of New South Wales, alleging that Stephen has engaged in undue influence and unconscionable conduct, seeking orders that the $1.5 million be accounted for.
When Tom’s subpoenaed bank statements are examined, Elizabeth identifies over $1 million worth of payments that she says have been misappropriated by Stephen which she says partly explain the size of the reverse mortgage.
Stephen’s property is sold and as settlement approaches, Elizabeth makes an urgent application to the Court, seeking an injunction preventing the disbursement of the proceeds of sale to Stephen.
At the “interlocutory” proceedings, Stephen says that monies he received were partly gifts and partly repayments of loans that he had made to Tom. He says that he will be in a position to adduce evidence in support of his claim at the final hearing.
The Court rules that Elizabeth has an arguable case and makes orders that the bulk of the proceeds of sale are retained in a protective trust account.
Stephen says that without a house and without an income, he requires funds to meet his living expenses and the Court allows him $5,500 per month to meet these costs pending the outcome of the final hearing.
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.
