Legal Updates
Significant case law, legislative changes, and LPLC guidance relevant to Bank of Mum & Dad loan arrangements. Reviewed and updated every three months.
How this feed is maintained
Every three months, this site is automatically reviewed for significant new decisions from the Federal Circuit and Family Court of Australia, the Supreme Court of Victoria, and the High Court of Australia that affect Bank of Mum & Dad loan arrangements. New LPLC guidance, ATO rulings, and legislative amendments are also monitored. Only updates of medium or high significance are published. The next scheduled review is 8 August 2026.
Han & Han — Court Disregards $4.66M Parent Loan as Unenforced
Han & Han [2026] FedCFamC1A 54 — Federal Circuit and Family Court of Australia (Division 1 Appellate)
The Full Court affirmed that a documented, caveat-secured parent loan of $4.66 million was disregarded in property settlement proceedings because it had never been actively enforced. Mere documentation and security registration are insufficient — the loan must be treated as a genuine commercial debt throughout its life.
LPLC Issues Updated Guidance: Enforcing Loans Matters
The LPLC published updated practice guidance emphasising that practitioners must act for one side only in BOMD transactions, provide written advice on enforcement obligations, and supply the LPLC client brochure at first engagement.
Nelson v Nelson — Presumption of Advancement Confirmed
Nelson v Nelson (1995) 184 CLR 538 — High Court of Australia
The High Court confirmed that the presumption of advancement remains part of Australian law. When a parent transfers money to a child, the law presumes a gift unless there is clear contemporaneous evidence of an intention to lend.
Composite Buyers v Soong — Charging Clause Creates Caveatable Interest
Composite Buyers Ltd v Soong [1995] 2 VR 149 — Supreme Court of Victoria
The Supreme Court of Victoria confirmed that a charging clause in a loan agreement creates an equitable interest in land sufficient to support a caveat under s 89 of the Transfer of Land Act 1958 (Vic).