Often we think of lawyers only when things have escalated beyond our control, are faced with serious legal ramifications, significant financial consequences or a combination of the above. You can’t help but find this a little ironic considering one of the primary reasons people don’t ask for lawyers’ help sooner is to keep their costs low. The truth of the matter is sometimes a small fee early in the piece will save significant time and money later on.
Such was the case for Ms K*…
Ms K came to our firm with a Binding Financial Agreement (BFA) she had drafted herself just over 18 months ago with her then (now ex) boyfriend. During the course of her relationship, Ms K loaned her boyfriend approximately $50,000.00 for the purposes of “home improvements” on a property, which she thought, was going to be their shared place of residence. The relationship had irrevocably broken down and she was seeking repayment of the loan.
A few (cringe-worthy) key details:
1. There was no secured interest for the loan.
2. The property had always remained in the boyfriend’s name.
3. The had lived together intermittently during the 18-month relationship.
It gets worse.
The BFA was not compliant with the relevant (or any) provisions of the Family Law Act 1975 (although she had neatly italicized it as such on the title page). It did however form a written agreement between two parties.
Unfortunately, when we began to itemize the monies loaned “for the purposes of home improvements” we discovered the money was loaned in portions and for alternate purposes; e.g., fast food, children’s party supplies and a personal training course valued at $10,000.00!
Whilst we were able to resolve the matter and recover some of the monies advanced, legal fees were obviously incurred to negotiate the settlement. Ms K was happy with our fees and service provided, but couldn’t help but laugh as she turned to me and said, “Funny thing is, I didn’t go to a lawyer in the first place to avoid legal fees”.
What’s ‘funnier’ is that had Ms K consulted a professional at the outset of her ‘agreement’ and had a proper BFA drafted, she would have been able to recover more, if not all of her loan, and for arguably lower legal fees.
Moral of the story:
Save yourself time, money, headache and heartache and find a solicitor.
*name redacted to protect privacy
This content was originally created for the Queensland Law Society on their blog, Law Talk