The complexity of the legal issues that apply to family transactions concerning joint property, joint bank accounts, one family member exercising a powers of attorney to pay another’s expenses etc should not be underestimated.
Consider the case of Mavis Bassett and her daughter Roslyn de Boer who owned a home at Ashmore as joint tenants and resided there with Roslyn’s husband Konrad.
In early 2020, Mavis – aged 94 – moved to an aged care home in the same street as the Gold Coast residence.
Shortly after in July 2020, Roslyn was admitted to hospital with the final stages of cancer and died that month.
While in hospital, Roslyn signed paperwork to sever the joint tenancy so that on her imminent death, her half interest in the Ashmore property would pass to Konrad via her estate and not to Mavis as would otherwise have been the case.
The paperwork was given to a solicitor who was to inform Mavis of the severance on Roslyn’s behalf and to give her formal notice thereof.
The notification was sent by registered post to Mavis at the Ashmore address – rather than to the aged care home – and apparently signed for by Konrad.
Mavis never saw the copy intended for her, the original of which was lodged with the Titles Office for registration and resulted in Mavis and Roslyn’s ownership being converted to that of “tenants in common in equal shares”.
Before Konrad could effect a transmission of Roslyn’s half interest into his name as executor, Mavis lodged a caveat over the property, asserting a fraud had been committed.
Mavis argued that the sending of the notice of the severance to the Ashmore address when it was known she was residing elsewhere was an “artifice” designed to falsely convince the Titles Office that notice had been given and to conceal the severance from Mavis.
There was no evidence that Roslyn knew the notice had been misdirected or that she had any reason to conceal the severance from Mavis.
When the matter came before her honour Chief Justice Cate Holmes in the Supreme Court in Brisbane in November, she noted the court could only order the title to the property to be rectified in the event of a fraud.
She observed that the requisite notice serves only to notify the co-owner of the changed circumstances and does not afford any right to object.
Because Mavis could not have stopped Roslyn unilaterally severing the joint tenancy, there could be no fraud – in her view – regardless of any intention to conceal the matter.
The second part of Mavis’s lawsuit argued that “conflict” transactions – ie ones entered into by Roslyn while she held a Power of Attorney from Mavis – should be set aside.
The severance itself was not a “conflict” transaction – for which Roslyn should be made to account for any benefit received – as she had exercised her personal right as property owner as opposed to exercising her authority as Mavis’s attorney.
The conflict transaction argument was also relied on by Mavis to seek compensation for payments Roslyn made to herself out of Mavis’s accounts and from a family trust.
Her honour reviewed three “classes” of such payments, two of which were not capable of meeting the criteria of conflict transactions because they did not occur by way of Roslyn’s exercise of the power of attorney.
Neither could payments made by Roslyn to herself from a joint account meet such criteria if they were made under the authority of a joint account holder rather than as attorney, unless Mavis could prove the funds had been her sole property.
Mavis also contended some of the transactions should be reversed because that they were the result of undue influence.
The Chief Justice ruled this argument could succeed if Mavis was able to establish payments from the Suncorp joint account were of her own separate funds rather than true ‘joint’ funds, and was left as an avenue for Mavis to pursue if she decided to do so.
The case shows the complexities that can befall family members in even seemingly innocuous attorney transactions especially when it is a family member who is the attorney.
Getting sound legal advice in such circumstances is always prudent.