Legal Hypothetical: Sham marriage and unconscionable dealings claim


Sham marriage and unconscionable dealings claim

DAVID and his first wife migrated to Sydney with their children in the 1970s.

David is poorly educated and has a very limited grasp of the English language.

When David’s first wife passes-away in 2012, Penny moves into his home.

One year later, David and Penny are married and a short time later, David transfers the matrimonial home into their joint names.

David also appoints Penny as his Power of Attorney.

In 2015, David and Penny separate and the house is transferred into Penny’s name, pursuant to a Binding Financial Agreement in anticipation of their divorce.

Penny soon sells the property for $1 million.

When David passes away, his children become aware of the dealings in relation to David’s home.

The children commence action against Penny, claiming that the marriage was a sham and that David did not have the capacity to understand the nature of the Binding Financial Agreement nor any of the transactions regarding the property.

The children also commence action against the family law practitioner and the conveyancer that were involved in the transactions.

After reviewing the medical evidence, the Court finds that at the time of his marriage to Penny, David was elderly and suffering from cognitive impairment.

The marriage is declared void.

The Court also concludes that David did not have the capacity to enter into any of the transactions regarding his home.

The Court rules that the transactions are “unconscionable dealings” and that Penny holds the proceeds of sale on trust, to be repaid to David’s estate. She is also ordered to pay court costs.

The children settle their claims against the family lawyer and the conveyancer for considerable sums.

If YOU would like a particular issue addressed, please email Manny at [email protected] or call him on (02) 6648 7487.


By Manny WOOD, Solicitor

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