Legal Hypothetical – Vulnerable persons allege unconscionable conduct


Vulnerable persons allege unconscionable conduct

ROBERT and Helen decide to move closer to their daughter, Diane.

They had a falling out with their other daughter, Mary, several years ago.

Robert and Helen wish to disinherit Mary and Diane tells them that if they purchase their new property in Diane’s name, it will be protected against a possible claim by Mary.

She also says that it will make things easier in terms of the administration of their estates.

Robert and Helen sell their home and purchase their new property in Diane’s name.

Robert is diagnosed with dementia prior to settlement.

Shortly after Robert and Helen move into their new home, they realize that the property is not suitable due to issues with access and the internal stairs.

They talk to Diane about selling the property and relocating.

An argument ensues and Diane says, “I’m not selling. The house is mine. You gave it to me.”

After obtaining legal advice, Robert and Helen commence action in the Supreme Court of New South Wales, seeking orders that the property be transferred into their names for the purposes of sale.

They allege that Diane engaged in unconscionable conduct and plead a “resulting trust” on the basis that they paid the whole of the purchase price.

Diane defends the claim, asserting that the house was gifted to her.

The Court places little weight in Robert’s evidence, due to his mental capacity and notes that there is a “presumption of advancement” to the effect that transactions such as these are deemed to be gifts if there is insufficient evidence to the contrary.

Ultimately, the Court finds that there is insufficient evidence to establish a contrary intention.

However, the Court finds that the gift was to only take effect after Robert and Helen’s death and that they retain a life interest in the property, entitling them to rent-out the property and relocate.

If YOU would like a particular issue addressed, please email me at [email protected] or call me on (02) 66 487 487.


By Manny WOOD, Solicitor

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