Question: ben bor is a wealthy businessman who decided to celebrate...
Ben Bor is a wealthy businessman who decided to celebrate his own 70th birthday by distributing some of his wealth to various relatives and friends before taking off to sail around the world. Before he left, he gave the following letter and accompanying documents to his daughter, Dianne.
I have enjoyed my wealth selfishly for long enough. I now want to give some of it away, and I want you to help me.
Enclosed here is a signed memorandum of transfer for my house in Vaucluse. My solicitor, Sandy, holds the certificate of title. Tell him to give it to you, so that you can register yourself as legal owner. It is a 10 bedroom house. I would like you to use it to provide accommodation to such of my friends and relatives as need accommodation from time to time.
I also own a small apartment in Milsons Point. I paid for it, but it is registered in my son Johns name. John knows that I put it in his name only so that I wouldn’t have to pay land tax on it. He has lived in it rent free for years, and is now wealthy enough to buy his own place. I hereby give my interest in this apartment to you.
I have also already instructed my broker, Sam, to transfer to you all of my share portfolio. According to Sam, the portfolio is presently worth about $500,000. I want you to hold the portfolio on trust for my granddaughter Leah. Do not sell any of the shares now, because the market is depressed. But when it picks up in a few years’ time, and the shares are again worth at least $1 million, sell the portfolio and distribute the proceeds to Leah.
[and it was signed ‘Ben Bor’]
Ben also posted copies of this letter to Sandy, John, Sam and Leah. Dianne has come to you for advice.
First, Sandy has refused to give her the certificate of title to the Vaucluse house because he is concerned that Ben might change his mind when he gets back from his trip around the world. Dianne wants to know if she can require Sandy to provide it to her so that she can take ownership of the house, and if so, whether she can ignore Ben’s wishes about using it as a boarding house for his friends and relatives. Dianne has plans to turn the house into a home for herself.
Secondly, John has refused to transfer the Milsons Point apartment to her. He acknowledges that Ben paid for it, and registered it in John’s name to avoid land
tax, but says that he, John, has been living in the apartment for six years now, and, as Ben’s only son, he should be entitled to keep it.
Thirdly, Dianne has already received the share portfolio, and decided to sell a parcel of the shares for $100,000 because she needed money immediately, and believed she could pay the trust back later since she would be holding the portfolio for a number of years. She used this $100,000 to buy herself a new car (at a price of $90,000), to pay off a credit card debt of $9,000, and to buy a $1000 ticket in a real estate lottery. The ticket won a prize of a waterfront apartment in Terrigal on the Central Coast in NSW. Leah has discovered all of this and has threatened to bring legal proceedings against Dianne. Dianne wants to know whether she has done anything wrong, and if so, what remedy Leah would be able to seek against her.
You are representing Dianne, provide advice to Dianne dealing with:
1. Dianne’s rights and responsibilities in respect of the Vaucluse house;
2. Whether Dianne can require John to transfer the Milsons Point apartment to her;
3. What action if any Leah may bring against Dianne in respect of her management of the share portfolio.
Include all case law and legal reasoning for advice