MANNY WOOD: This week's legal hypothetical.
MANNY WOOD: This week's legal hypothetical. file

Binding agreements and break-ups

MAXWELL, aged 85 and Tina, aged 40, met in 2003.

They maintained communication via email until 2010, when Tina and her son moved in with Maxwell.

In 2014, Maxwell and Tina sign a binding financial agreement, with the effect that if their relationship breaks down, they each receive 50% of Maxwell's substantial assets.

Six months later, Tina moved out of the house, alleging family violence at the hands of Maxwell.

Tina commences action in the Family Court of Australia seeking enforcement of the binding financial agreement. By this stage, Maxwell has been diagnosed with Alzheimer's disease.

His daughter as "case guardian” opposes Tina's application on the basis that the binding financial agreement should be set aside and further that the parties were never in a defacto relationship.

The court hears Maxwell had put in place a reverse mortgage and Tina had withdrawn substantial amounts without his consent.

These funds were placed in Tina's son's account and, according to her version, used to meet the parties' general living expenses.

The bank accounts indicate, however, that these funds were the subject of large lump sum withdrawals.

The court also hears that the parties slept in separate bedrooms and was not willing to make a finding that an ongoing sexual relationship existed.

Tina conceded she had no relationship with Maxwell's family and that they rarely socialised outside of their home.

The court also hears that Maxwell executed three wills with three different solicitors over the period of 14 days, each will increasing Tina's provision.

Ultimately, the court dismissed Tina's application, stating that Maxwell lacked the mental capacity to enter into the binding financial agreement and further that a defacto relationship never existed.

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