Question
Lee Kim has come to you for advice. Lee's mother (Mrs Kim) owns a large home in Mosman, Sydney. Mrs Kim is elderly and needs
Lee Kim has come to you for advice.
Lee's mother (Mrs Kim) owns a large home in Mosman, Sydney. Mrs Kim is elderly
and needs assistance in maintaining this home. In 2018, Mrs Kim asked Lee to
come to live with her, to help maintain the house and grounds. Mrs Kim said to Lee
at the time: "Stay here and help me, and I will leave this house to you in my will."
Since then, Lee has been living in the home, and has made payments for weekly
cleaning and lawn maintenance. Lee has also paid the council and water rates, and
the power bills for the home.
Mrs Kim's own mother, Grannie Kim, passed away at the beginning of 2022.
Grannie Kim was a wealthy woman with many assets, including a home in Palm
Beach. Administration of Grannie Kim's estate is complex, and is not expected to be
completed until the beginning of 2023.
Lee has an older brother, Frank, who has recently commenced working as a real
estate agent, with a partner named Earnest. In January 2022, Frank brought
Earnest to visit his mother, Mrs Kim, at the Mosman home, when Lee was away on a
short vacation.
Frank said to Mrs Kim: "I don't know why you keep this big old house while you are
struggling without much income. It is not fair to Lee to have to stay here and pay
upkeep on the house for you. You should sell the house and downsize to a lovely
new apartment. It would free up a lot of money for you to live a more comfortable
life."
Mrs Kim said: "But this has been my home for more than 50 years. You kids were
born here."
Frank said: "Don't be silly mum. Earnest and I can sell this house for you for a great
price. Now is the time to sell. And since I am your son, we won't take any sales
commission."
Mrs Kim reluctantly agreed, and signed a contract permitting Frank and Earnest to
sell her home.
Two days later, Frank and Earnest returned with a contract for the sale of the
property for $5 million. Frank said, "Don't worry mum. We have negotiated a long
settlement date. The conveyance won't need to be completed until July. You won't
need to move out for months. But just think, in July you will be paid $5 million to
spend on a lovely new apartment."
Mrs Kim signed the contract without reading it, and with tears in her eyes.
2Lee discovered all of this when Lee returned home from a short vacation.
Lee said to her mother, "How can you have agreed to sell the house? You promised
to leave it to me in your will."
Mrs Kim said: "I am really sorry. To make it up to you, I will give you everything I
inherit from Grannie Kim's estate. You can have the Palm Beach house when
Grannie Kim's estate is settled."
Lee has done some research and has discovered that the purchaser named on the
sale contract is a company, Earnest Investments Pty Ltd, which is wholly owned by
Earnest. Lee has also sought another valuation of the house from an independent
real estate valuer, and has been advised that the home is worth between $7 million
and $8 million in the current real estate market.
What about the fact of this case?
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