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18 July 2023

How clarity of documentation will be your salvation

In this video, CGW family law partner Justine Woods talks about how both clarity of documentation and intention could very likely be your salvation in your family law matter.

Video transcript

Hello, hello, everyone. I’m Justine Woods. I’m the family law partner here at Cooper Grace Ward.

Case of Davis and Peterson

Now, today’s topic and I know that I do rave on about it, is that clarity of documentation, clarity of intention is going to be, very likely, your salvation. Now, why I say that yet again is a recent case of Davis and Peterson was decided just this year in 2023. And it’s an interesting, but so common factual scenario where male and female de facto, parents of one fell into trouble with their mortgage, significant financial difficulties, and their son with his partner agreed to refinance the mortgage debt. They had no proper documentation whatsoever. Not any meetings, not recorded, not really legal advice that it was possible to see from the case about that. And so, when the male and female de facto separated, eventually they then had a dispute about whether that property that they had refinanced and had transferred into their sole name was theirs and part of their de facto pool of assets, or whether it belonged to the parents who were joined as parties. So, what had happened and again, this required appeal, which means that if you don’t have clarity right from the beginning in your arrangements, documented in a legally binding fashion, you might potentially have one or two or even three arguments about it. I’ve got a matter where I didn’t act for the client originally. An order was made against her. We successfully appealed that. We successfully ultimately got final orders. The other side has now appealed that. It’s two and a half years later, the misery is unbelievable.

Facts of the case

So, if returning to the facts of this case, the de facto couple had only refinanced the mortgage which was about $ 670,000 and it came into their joint names. But there were valuations contemporaneously obtained at the time that said the properties were really worth more like $ 870,000. Now, as is not uncommon and I say this with fondness and affection, most people are terrible witnesses. I myself could hardly remember what happened ten years ago. People are going to be asked difficult historical questions, even if they’re not particularly controversial. And the controversial questions are often very confronting. So, there were negative inferences drawn against the parents and against the male de facto, whose evidence possibly didn’t coincide perfectly. And they’d also failed to get any third-party evidence to substantiate what they said, and the negative inference was drawn against them about that. Well, which really means, well, you could have gotten that evidence, but you failed to do so. So, there’s probably an issue there is essentially what a negative inference made in that context.

Cases need to be properly documented

At the first hearing, the trial judge found that the property belonged to the de facto couple and that there was nothing held on trust for the parents. The transfer had taken place. On appeal, that was reversed and they found that there had been no purchase. That the female de facto who was saying, no, it’s all ours, it’s in our name. She admitted on the stand that she didn’t ever ask about what the purchase price was. She just agreed to the refinancing and that they hadn’t bought the properties, they’d effectively taken over the debt. There’d also been a flow of rent to the parents, etc. So, there was more evidence than not that the parents had been temporarily assisted by the male de facto and his partner during a time of financial difficulty, but that ultimately the properties were to be transferred back to them when they had managed their other financial affairs. So, you can see, had that been documented right from the very beginning, all of that could have been avoided. So, that’s really the central… now, I could speak about ten cases every single day with vastly different factual circumstances, vastly different outcomes. And really at the heart of them is it’s too late afterwards if you’ve done any type of transaction like that, even if it’s just between spouses, it needs to be properly documented, clearly understood, because otherwise you are potentially embroiled in a very long, very stressful, very expensive dispute that at all times you could have avoided. Maybe not the divorce or the separation, but otherwise you could’ve avoided it by clear documentation.

So, if you’d like to talk about that or any other issue with us here at Cooper Grace Ward, you’re so welcome to contact us. Thank you.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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