In Chaudhary v Chaudhary [2017] NSWCA 222, Mr Vincent Chaudhary advanced $1,200,356.42 to his son Adrian Chaudhary who was recently married to his wife Justine. The advance was purportedly for the purchase of a property for the newly married couple. Following the breakdown of the marriage between Adrian and Justine, Mr Chaudhary demanded that Adrian repaid the loan in full. In its decision the Court considered whether the advance constituted a loan or gift from father to son.

The court held that the deposit was initially a gift that was conditional upon the purchase of a property, particularly due to the fact that the deposit was payable to the agent. However, the Court ruled that this gift later changed to a loan due to a subsequent agreement between Adrian and Vincent. In relation to stamp duty, incidental costs and the outstanding purchase price Mr Chaudhary had explicitly made it known that these were loans and that if the marriage broke down Adrian would have to repay the loan. This agreement was included as a clause in the mortgage. Ultimately, the Court order Adrian to re-pay his father the $1,200,000 plus interest.  Read full case here.

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