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It Was An Unconditional Gift With No Undue Influence

March 2021

The Supreme Court would not grant leave for a further appeal by H from a Court of Appeal decision. 

In the case, N owned a home from her previous marriage. H had assured N that he would not make a claim against the home. N accepted that assurance but the assurance was not legally binding. H & N separated after 12 years of marriage, with their having lived in the home throughout that time.

Following the separation, H claimed a half interest in the home.  Following lengthy negotiations, N borrowed $305,000 from her parents and paid it to H so that she could retain ownership of the home. A week after payment was made, H & Nmet again. H wanted to reconcile. He transferred $250,000 of the funds he received to N’s bank account. The attempt at reconciliation ultimately failed. One year later N informed H that she had met another man. H now demanded the return of the $250,000.

The Court of Appeal upheld the High Court’s finding that the payment of $250,000 was a gift (“it was made gratuitously…in the context of a loving relationship, albeit one that had broken down”) and not a bargain relating to the intended reconciliation. The Court further found that there was no undue influence by N over H’s actions. The Court held that H’s decision may have been “foolish” but the most that could have been said of N’s influence was that her acknowledgement that the payment “would go a way to restoring the balance between them and to preparing the way for her to agree to engage positively with [H] with a view to a possible reconciliation”.

What this case highlights is that each of them should have had formal written agreements. N should have had a Contracting Out Agreement at the beginning of their relationship and not relied on an “assurance” from H. In turn, Hshould have had a written agreement setting out the terms and conditional relating to the intended payment by H to N.