Bovaird v Frost [2009] NSWSC 337

New South Wales Supreme Court

CITATION : Bovaird v Frost [2009] NSWSC 337

HEARING DATE(S) : 2-5 February 2009

JUDGMENT DATE : 30 April 2009

JURISDICTION : Equity Division Expedition List

JUDGMENT OF : Brereton J

DECISION : There was a sufficiently certain agreement that Max at least fund Monica's retirement accommodation and associated expenses, and provide Leon an interest free unsecured loan of $880,000 for a term of 10 years to fund the redevelopment of Monica's home. The parties intended to create binding legal relations. AFM was not and did not become a party to the contract. For breach of the accommodation term, Monica is entitled to damages against Max's estate in the sum of $541,268. For breach of the redevelopment loan term, Monica is entitled to damages against Max's estate in the sum of $590,379. Leon is entitled to nominal damages only for breach of the redevelopment loan term. There should be judgment for AFM on all claims against it. Monica was at least partly dependent upon Max and is an eligible person in category (d). Dependency as at the date of Max's death, and arrangement of her affairs on the basis of Max's promise, constitute factors warranting the making of her application. Max had an obligation to make provision for her aged care accommodation for the rest of her life. Adequate provision for Monica's proper maintenance involved provision of the ongoing costs of her aged care accommodation. Had the matter fallen for consideration only under the Family Provision Act, provision of a legacy of $235,000 and an indexed annuity of $6,250 per month would have been ordered.

CATCHWORDS : CONTRACT – where arrangement made between elderly woman (Monica), her son (Leon) and her brother (Max) to fund Monica's retirement accommodation and associated expenses, and to provide to Leon an interest free unsecured loan of $880,000 for a term of 10 years to fund the redevelopment of Monica's property – where Monica moves to retirement village in reliance on arrangements – where Max referred to ability to draw on his company AFM to meet his obligations - where Max's estate after his death does not provide agreed support or loan – whether arrangement sufficiently certain to be contractual – whether parties intended to create binding and enforceable legal relations - defences of unconscionability, undue influence and under Contracts Review Act not pressed – whether AFM was or became a party to the contract. - DAMAGES – Breach of contract – Assessment of damages for breach of promise to fund Monica's retirement accommodation and associated expenses for life – relevant discount factor - Assessment of damages to provide to Leon an interest free unsecured loan to fund the redevelopment of Monica's property – whether Monica and/or Leon entitled to damages – damages for failure to provide a loan – whether alternate loan available – onus of proof - FAMILY PROVISION – eligibility – dependency – where claimant has substantial assets and could fund own retirement accommodation – dependency in fact – circumstances warranting – actual dependency at date of death – relevance of deceased's promise of support – adequacy of provision – where claimant is elderly with ongoing periodic needs - whether provision should be by lump sum or annuity