A father who loaned his daughter over $330,000 applied to the High Court for leave to bring an application to enforce the paying back of the loans. The father claimed that his daughter had signed loan agreements stating that she would repay the debt, and that she had threatened to reveal family secrets if he did not now forgive the debt.

The daughter argued that that the $330,000 was gifted to her as an early inheritance and as an acknowledgement of past mistreatment of her, and therefore she was not required to pay the money back.

The daughter further argued that she only signed the loan agreements with her father to protect the funds from a claim by her partner in the event that she and her partner separated.

The father initially applied to the Court for an order for summary judgment requiring the daughter to repay the debt, but this application was declined after the Court found that there was sufficient dispute around the facts of the case.

This led to the Court ruling that the daughter’s defence was not unsupportable, and that a full hearing was required to determine the outcome of the case.

The father then applied to the Court for summary judgment a second time with evidence of further loan agreements, and emails from the daughter which threatened to release family secrets if the loan was not forgiven. The Court decided that this was not a sufficient special circumstance to warrant the application, and rejected the second application.

This matter has been set down for a full trial early next year.

Loans or gifts from parents to children can be fraught with unforeseen consequences and complexities. It is wise to seek advice from a professional with experience in the area early on to avoid disputes between family members and relationship partners later on.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Jon Beck & Matthew Binnie