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Just over two years ago, Jane bought a rundown coffee shop business and the premises at which the business was carried on. Soon after buying the business and premises, she had the shop refitted. This was done by her husband Edward, who runs a redecorating business. The cost of refitting the shop was $40,000. Jane did not pay this amount to Edward despite the fact that the original term orally agreed between them was that Jane would pay the full amount to Edward within a year. It was also orally agreed at the time that no interest would be payable on the debt. The coffee shop business has proved very successful. Six months ago, the shop next door to Jane’s was put on the market for sale. Jane saw this as a great opportunity to expand her business. She spoke to her bank manager about obtaining a loan to finance the purchase and redecoration of the adjoining shop. The bank manager was concerned that Jane had not yet paid her outstanding debt to Edward. Furthermore, if Jane did pay this debt, it seemed that she would not have quite enough capital to meet the bank’s lending rules. Jane explained this situation to Edward. She said she was very keen to buy the shop but she could only do so if he would accept $10,000 in full and final settlement of the outstanding debt. Edward agreed to this and they wrote their agreement on a sheet of paper and both signed it. Edward’s reason for agreeing to this arrangement was partly because he wanted to help his wife and partly because he assumed that she would hire him to redecorate the new shop. Jane produced the signed written agreement to her bank and, because of it, was able to get a bank loan and go ahead with the purchase of the shop next door. Jane then arranged for the shop to be redecorated but she did not engage Edward to do this. Instead, she hired Max who operates a decorating business across the road from Jane’s coffee shop business. Jane has paid Max $25,000 for redecorating the shop. Jane has since spent a lot of time socially with Max and has now declared her wish to end her marriage to Edward and start a new relationship with Max. Edward is outraged at Jane’s declaration and his first response has been to sue her for the $30,000 that he claims is outstanding from his refitting the coffee shop.Advise both parties about their legal position in respect to this dispute between Edward and Jane.
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