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We had farming land which was shared between us and a brother.

When we decided to divide...
We had farming land which was shared between us and a brother. When we decided to divide the land, we had 500ac more and neither party wanted it surveyed to split it. A Verbal agreement was said for the other brother to use half of a block of land to compensate for us having more. We have recently sold the land now the brother has given us an account for 1998 verbal agreement for the half he has been using.

We were told by an accountant that because we have let him use it that could possibly be enough for him to win a case if we refused to pay him. He has never paid any council rates, not that we have sent him the acccounts to pay over the years. We are in a estranged relationship with him.
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Answered in 12 minutes by:
5/19/2013
Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 45,109
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
Verified
Good Afternoon,

Thank you for your question. To Introduce myself I am a sydney based Solicitor and will do my best to provide you with relevant information to assist you.

I would like to assist but I am confused by your question.

Is your brother seeking compensation because you were using 500 acres more than in him?

How his calculated this compensation?

Can you please explain what the verbal agreement was and how he was benefiting from that verbal agreement?

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Customer reply replied 4 years ago
There were three blocks of land, one was his home block, another our home block which had 500ac more than his, the third was is our names. It was decided he could use half of the third block (500ac) to compensate for us having more on the home block.

The verbal agreement was simply that he could have use of the 500ac. There was no date set or any discussion on if/when we sold the block.

He is calculating his compensation by value ie @ $155/ac. At the time the land was only valued at $100.

Good Afternoon,

The 3rd block was solely in your name is XXXXX XXXXX brothers?

Can I also assume that you each purchased your own blocks are you paid more for the 500 acres extra that you have on your block?

And he was making a profit at other half a block that he was using (assuming it was only in your name)?

You were paying the expenses on their half a block it was using or did you expect him to pay that?
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Customer reply replied 4 years ago
The third block was solely in our name.

All three blocks were paid for by both parties originally as it they farmed as one family entity. In 1998 we decided to farm by ourselves, that is when we ended up with more land than the brother.

He made a profit from the land as he cropped it regularly and ran sheep on it.

We paid the rates, probably should have sent him invoices when the accounts came it, but didnt for some reason.
Good Afternoon,

One final question. You say that the 3 bots are paid for by both parties originally. Are you saying that you all contributed equally to the purchase of the 3 blocks?
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Customer reply replied 4 years ago
Originally yes, under a different company and worked together.
Good Afternoon,

You have an issue because even though they are in different names, your brother can claim that he has paid equally for all 3 lots as you did, and that you allowing him to use the 500 acres, is no compensation.

At worst he can actually claim that you are holding in trust the 3rd block and the additional 500 acres you are in partly for him a sea has contributed to the purchase.

If the contributions towards the purchase of all 3 were made equally by both of you through various companies you have a problem.

I would suggest that some form of deed of release be entered into, and this will have to be drafted by solicitor say that this does not happen again and that he finalises any possible claim that he may decide to rise at a later stage.

Because you have each contributed equally to the purchase of all 3, constructive trust argument can be raised by him and he can see a greater contribution.

You should speak to the solicitor that acted on the purchase of the lots to get some information from him as to what the arrangement was on the contract and then you will need to get independent legal advice on how to protect yourself against any future claims from your brother.

Before you pay the $1998 that he is seeking you should get this sorted out and a deed of release drafted and signed by all so that there is no possible claim in the future.

The following link provides information about constructive trusts so as you can understand them a little bit better.

http://www.mondaq.com/australia/x/70192/Family+Law/Constructive+Trusts+And+Property+Disputes

I would suggest you get more detailed advice from a solicitor and not pay anything as per the accountants instructions.

I hope this is of assistance. If I have missed anything, or you have any further questions please let me know before leaving any feedback.

If I have assisted please do not forget to leave me with positive feedback.

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Customer reply replied 4 years ago
This has totally confused me really!

So you are saying even though the land is in our name, and we have had a verbal agreement that he has the use of half of it, now that we have sold the block, he can now send us an account for whatever price he comes up with ($155/ac = $77500 - don't know where you got just $1998 from?) to pay him for the 500ac he no longer has the use for?

How can we have a deed of release now that we have already sold to another party?

Good Afternoon,

From your question I is shame that is still owned all the land.

I was finding it hard to believe that he had any rights to the $1998 and that is why I asked the questions I did to try and understand the ownership and why he would possibly be working on that kind of figure.

I'm not saying he has a right to charge you the money. What I'm saying is from what you have described your issue is greater than the $1998 because he can claim that the half that he was using belong to him anyway because he paid for it even though it is not in his name.

So that I'm certain that the information I've given you is correct can you answer yes or no to the following questions.

Did you each pay equally towards the purchase of all 3 blocks of land?

He received one block of land in his name where he lived on, and he received 2 blocks of land in your name?

Block of land you live on is 500 acres larger than his block of land?

To compensate him for this discrepancy, he was allowed to use half of the 3rd lot (in your name) for his benefit?
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Customer reply replied 4 years ago
Yes to all.

Another question tho, when the block was originally purchased in 1975 the land was only worth around $15 an acre, and now the brother is claiming $155. What figure would be pay him on if we were going to?
Good Afternoon,

Because your answer was yes to all of my questions as I mentioned earlier your brother has the ability to bring an action against you for compensation because he paid for half of the land that was sold under the doctrine of constructive trust.

Any claim that he would make would be based on the current value per acre today not what it was when you purchased it.

I dont know how he calculated the $1998, but there is a claim that is able to be filed against you.

Even though the land has been sold you have received the funds and he can claim against a share of those.

If you still have any of the land he can make a claim against that as well.

You have the same rights against his land.

Under the doctrine if he was to make a claim his claim would be against the additional 500 acres you are in plus the 3rd lot of land and for each of you dictate what you currently have.

To the doctor would only apply to the extra 500 acres you have and the 3rd lot.

looking at the verbal agreement where he is allowed to use half of the 3rd lot for his own benefit, under the doctrine he owns that half share and he is not getting any benefit from it.

Can you see where I'm coming from?

The issue for you at the moment is to try and avoid any possible future claim on the funds that you received from the sale of plus any land that you still currently hold from the initial purchase.

The doctrine of constructive trust says you are holding half share in the extra 500 acres and the 3rd lot in your name on behalf of your brother, because he paid 50% of its purchase price.

I'm not saying he has raised the doctrine, but I cannot see why he would be asking for money unless he has been made aware of this and is seeking some form of compensation.

You understand what I'm saying?
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Customer reply replied 4 years ago
I think so. He has possibly sought legal advice to come up with the figure and actually send us an invoice. He would have worked it out for himself as well as he and his wife are very greedy people in the general sense of the word in anything they do in life.

So, the botXXXXX XXXXXne is, if we refused to pay the account and he took us to court, he would win?
Customer reply replied 4 years ago
We seem to have lost contact so am not sure if you received last reply.

I think so. He has possibly sought legal advice to come up with the figure and actually send us an invoice. He would have worked it out for himself as well as he and his wife are very greedy people in the general sense of the word in anything they do in life.

So, the botXXXXX XXXXXne is, if we refused to pay the account and he took us to court, he would win? Are we able to still charge him for his share of the rates for all the years from 1998?
Customer reply replied 4 years ago
Relist: Incomplete answer.
My apology for the delay I had lost internet access.

If he takes the matter to court and raises the issue of constructive trust the court would find in his favour and make an order for you to pay.

If you decide to pay him, do not just pay. You need to get a document singed that he accepts the money and agrees that he will not make any further claim. This is what we call a deed of release.

A Solicitor would have to draft it so that it can be used if he does decide to go to court.

His calculation per acre it is it correct?
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Customer reply replied 4 years ago
He is calculating at "todays" price of $155 per ac equalling around the $77000 mark. (The 1998 you were quoting was the date of changeover!)

Can we send him an invoice for the rates he hasn't paid (not that we asked him to) for the past 15 years or is it all too late? It would only calculate at around $3500.
Good Morning

My suggestion would be to deal with this as delicately as possible and try and get out of this without having to go to court and paying large sums of money.

You can ask him to pay the rates but if that was not part of the agreement he can argue against paying it.

It is a matter of reaching an agreement where you pay a minimum amount and he acknowledges that any claim he may have is waived when this payment is made.

You will need a Solicitor to look at this in more details but you should work on minimising your losses.

It is not a simple matter but one where you have to work at getting it resolved without causing legal action to commence.

I hope this is of assistance. If I have missed anything, or you have any further questions please let me know before leaving any feedback.

If I have assisted please do not forget to leave me with positive feedback.

Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 45,109
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
Verified
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Satisfied Customers: 45,109
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Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)

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