Which case won?

The case for the mother 
  • I provided $147,000 to my daughter and son-in-law to buy the Casula property. I made a clear statement to the bank that the money I was providing was for the sole purpose of purchasing that property. 
  • I contributed $18,314 towards the renovation of the property, which added to the capital value of the property. 
  • I sold my home to obtain the $147,000 and then gave the money to my daughter and son-in-law. As I had nowhere else to live, I obviously intended to stay with my daughter and son-in-law. 
  • I provided my daughter and son-in-law with support in caring for their three children. 
  • If I hadn’t provided the $147,000, the Casula property would most likely not have been purchased.
  • How could I find a new residence at my age and in my financial situation? I thought they agreed for me to stay forever. 
The case for the daughter and son-in-law
  • My mother gifted us $147,000 that we could spend on anything we wanted, it wasn’t just for the purpose of buying the house.
  • We spent $45,715 or more on renovations to the house. My mother only contributed $18,314, which fixed minor faults in the house but did not add to the capital value of the property. 
  • My mother did not pay any outgoings during the three years she resided in our home. She paid no rent and she did not pay for expenses like rates or utilities.
  • We were living in separate areas of the home, so it was like two separate households.
  • The money my mother paid was not solely to me. Some money was also paid to my sister. 
  • My husband and I never intended my mother to live with us forever. We thought it would be her long-term residence, but not a forever home. 

So, which case won?

Cast your judgment below to find out
Case A Case B

Case A won. You were right!

How people voted
case a75%
case b25%

Expert commentary on the court's decision

Hugh McAulay
Hugh McAulayManaging Director
“This case demonstrates how critical it is to make your intentions clear when forming agreements. Where possible, put all terms in writing to safeguard your intentions in case a dispute should arise.” 
Court of Appeal rules in favour of mother 

In Flourentzou v Spink [2019] NSWCA 315, the Court of Appeal upheld the initial decision and orders, finding that the payment of $147,000 by the mother, Rickie Spink, was a qualified and conditional gift. 

The court also found that Mrs Spink’s payment of $18,314 did contribute to the capital value of the property.  

The court dismissed the appeal and determined that the daughter and her husband, Dianne and Mario Flourentzou, were to pay Mrs Spink $165,314 in damages. This award represented the $147,000 and the $18,314 she had paid towards the property and renovations. 

What is an absolute or unconditional gift?

The definition of an absolute gift is found in the case law; Luke v Waite [1905] HCA 5. It is a gift from a donor to a donee, where the donor does not have any ties to what the donee does with the funds.  

Dianne and Mario Flourentzou argued that the $147,000 from Mrs Spink was an absolute gift and that they were invited to spend it on whatever they saw fit, including going away on holidays or buying lottery tickets.  

However, instead of doing this they used the money on the purchase of property.

What is a qualified or conditional gift?

A conditional gift is set out in the case law; Lawrence v Branch [2002] WASCA 292. It is a gift where the donor provides a gift for a specific subject matter that the donee will perform.  

The court found that Mrs Spink had intended the funds to be used for the purchase of the Casula property and that she had provided the money as a qualified or conditional gift for the purchase of the property.  

The court also noted that Mrs Spink benefited from the property purchase.  

What was the mother’s intention?

The court considered evidence from Mrs Spink’s bank transaction in determining her intention.  

On 29 October 2012, Mrs Spink had made a statutory declaration and given it to the bank. It contained the following statement: 

I will be providing sixty thousand dollars $60,000 – to Marios [sic] & Dianne Flourentzou. This is to help with the purchase of the property at [address] Casula 2170. This amount will be supplied before settlement. 

Did the renovation funds add to the capital value of the property?

Dianne and Mario Flourentzou argued that they contributed at least $45,715 or more to the renovation of the house, and that Mrs Spink’s contribution of $18,314 could not have added significantly to the capital value.  

The Flourentzous also claimed that the $18,314 which went towards the renovations merely fixed what was broken, for example an electrical switchboard, without actually improving or adding to the value of the house.   

However, the court found that the value of property was increased through such repairs, even if only to a small degree.  

Lawyers for Mrs Spink drew on the case of Baumgartner v Baumgartner (1987) 164 CLR 137, arguing that it did not matter which specific aspects of the house were improved by Mrs Spink’s money, but that her funds did contribute to the improvements, regardless of their specific allocation.  

The court agreed with this point of view. 

Put your intentions in writing from the outset

When entering into agreements with family it is essential to make all intentions clear. A means of doing this is to put all intentions in writing from the outset of proceedings.  

If unlawful dealings arise, written intentions are useful to refer to in preventing litigation. If you can prove your intentions, this reduces ambiguity and means there is no need for the courts to construe the terms of the agreement.  

Legal action can be avoided if the necessary precautions are taken from the outset.  

Family members, money and shared property

When transferring money to family members, clearly state in writing the purpose of the monetary transfer.  

If family members reside in a shared property, ensure that the terms of this arrangement are clearly set out. An agreement for payment of rent, utilities and outgoings is imperative.  

Finally, a timeline of how long family members will share a residence is necessary to ensure unlawful eviction does not take place. 

NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information. Information related to coronavirus can be outdated very quickly.

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