People enter into informal agreements without advice.

The recent case of Neve v Kent [2020] VCC 22 shows, it is important to properly set out the agreement even if you trust the other party. This can help to ensure all parties are clear as to what has been agreed.

In this case,

  1. Mr. Neve knew Mr. Kent for many years.
  2. Mr. Neve received a redundancy payment and divorce settlement.
  3. Mr. Neve asked Mr. Kent for advice.
  4. Mr. Kent drew up an Agreement and mortgage, he claimed that mortgages would protect Mr. Neve’s interests.
  5. Neve subsequently advanced three sums of money to Kent as follows:
    1. (a) $25,000 on or around 23 October 2009;
    2. (b) $60,520.45 on or around 9 March 2010;
    3. (c) $215,005.40 on 7 April 2010.
  6. Mr. Kent said the money was not paid to him. He claimed the money was to third parties (not related to Mr. Kent) and therefore he was not liable to repay the sums.

The Court found that Mr. Kent personally owed the money.

Although the Court ultimately found in favour of Mr. Neve, he had to pay very significant legal fees.

So, do not pay money unless you have a proper document to prove the agreement.  See a lawyer first and save significant costs down the track if a dispute arises. 

And never sign any document prepared by the other party without taking independent legal advice.



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