Walking under ladders

My sister Sue’s husband Adam is a knockabout sort of bloke. A carpenter by trade, mostly doing heritage-style renovations around Sydney’s north shore and inner west. Great husband and father, likes a few beers and the occasional joint. Loves nothing better than a good chin-wag, as they say. In fact, Adam is the best yarnspinner I’ve ever known, with the notable exception of Suzy Kruhse.

Adam’s mum Jools lived at Ballina on the NSW north coast. Hippie country, and Jools was your classic ageing hippie. A few years ago Jools was diagnosed with lung cancer. Hardly a surprise, really. She smoked like a steelworks chimney. Her sister Trish gave her a rather substantial cash gift to buy a small house to make her last couple of years comfortable. But Jools spent most of the next 18 months or so in Sydney having medical treatment, and staying with Sue and Adam and their 2 kids. Eventually there was nothing more the doctors could do, and Jools went back to Ballina to die. It was home, and Adam’s 2 sisters lived there as well. Unfortunately, both of them are case studies in the effects of long-term marijuana abuse. Neither has ever held down a job for more than a few weeks, and neither bothered to lift a finger to help Jools in her dying days. Adam closed down his renovation business, went up to Ballina and nursed his mother through her final few months of life.

As soon as she died and Adam returned to the family in Sydney, his 2 sisters moved into Jools’ house like a shot. Jools had made Adam the executor, his siblings both being complete wastes of space. This is where it gets ugly. Jools’ sister Trish claimed her gift to Jools had just been a loan, and demanded that the house be signed over to her. It was effectively the only asset in Jools’ estate. Adam’s sisters refused to agree, and refused to move out of the house. Trish commenced proceedings in the NSW Supreme Court. Adam got counsel’s advice that the case was a 50/50 proposition. Trish offered to settle on the basis that she’d claim no costs or interest if Adam just signed over the house to her. Adam’s sisters told him they’d sue him for breach of trust if he agreed to settle with Trish on that or any other basis!

Adam asked the Public Trustee to accept appointment as executor in his place. He refused. Adam applied to the Supreme Court to renounce his appointment as executor. His application was dismissed. Adam formally announced that he would no longer contest Trish’s legal proceedings and would not continue retaining and paying lawyers. As executor he was entitled to be indemnified out of the trust estate, but if Trish won that right would be valueless.

Adam told his sisters that they’d have to find their own lawyer if they wanted to continue fighting the case. One of them did, although God knows how she paid him. Unfortunately he doesn’t seem to have been a very good lawyer, because the Supreme Court handed down its decision a few months ago and Trish won. She’s only seeking costs and interest against Adam up to the date he ceased fighting the case, but this plus the costs he himself had incurred up to that date comes to over $50,000. Moreover, his lawyers wanted another $10,000 to argue against Trish’s costs application. The decision on costs is currently reserved.

Adam and Sue recently thought seriously about doing a “Bondie” and staging a divorce to transfer Adam’s interest in the matrimonial home to Sue without incurring huge stamp duty, and then declaring himself bankrupt. I didn’t think it was necessarily a bad idea in the desperate circumstances, but they eventually decided against it.

Not surprisingly, Adam hasn’t been feeling too well lately. Last week he was rushed to hospital and put straight in intensive care at Royal North Shore. Turns out he’s got an extremely virulent multiple antibiotic-resistant streptococcal infection. It’s now infected his lungs and heart and Adam is fighting for his life. What is there to say?

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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Gianna
2022 years ago

Gee, sorry to hear that, Ken. Not much one can say except hope he gets well soon.

woodsy
woodsy
2022 years ago

When the sewer overflows it certainly does so in big lumps eh? Just confirms for me again, the law is an ass and the only winners in family disputes are the lawyers.

Oh what problems we cause when we don’t document financial transactions, especially between family members. I hope that my kids treat me a bit better – in fact I’ll shoot off an email now, just to keep in touch.

Carita
2022 years ago

First thing we were taught in property law, contract law and legal process: Never make an exemption for family members when you’re entering into a financial arrangement. ALWAYS get it in writing!! There are always grey areas though – you would have thought that giving someone money to make them more comfortable when they die was a gift, not a loan, but there you go.

Ken, on what basis did the court award Trish the case? Did the size of the ‘loan’ go to a finding that it was that and not a gift?

By the way, all the best to Adam and your sister.

Geoff Honnor
Geoff Honnor
2022 years ago

He sounds like a salt of the earth guy in a world that’s surprisingly short of same. And I bet he never does get the hang of the family legal thingo…….salt of the earth guys never do.

Ken Parish
Ken Parish
2022 years ago

Carita,

if you (and possibly others) are interested in the decision and reasoning, the case is Drakeford v Bromhead [2003] NSWSC 296 (15 April 2003). As you’ll see, the decision turned on a presumption of resulting trust, which the donee’s family (effectively Adam’s sister) was unable to rebut.