Background
Ashleigh Foster received a $100,000 inheritance from her great-grandmother. After Tracey Foster proposed pooling family inheritances to buy a home where Ashleigh could live, Ashleigh’s funds were placed in an account held by Tracey’s son Marrick and later applied toward the $425,000 purchase price of a Denham Court property. Tracey became the sole registered proprietor. Because Tracey had previously returned $5,000 to Ashleigh, the Court found that Ashleigh contributed $95,000, or 22.35% of the purchase price.
A house was later built on the property, and Ashleigh moved into it in about May 2020. Following a breakdown in the family relationship, Tracey excluded Ashleigh from the property in November 2020. Ashleigh commenced proceedings seeking a declaration of her ownership interest and the appointment of trustees for sale under s 66G of the Conveyancing Act 1919 (NSW). Questions concerning occupation rent and allowances for improvements had been reserved for later determination.
The Court’s Holding
Kunc J held that Ashleigh has a 22.35% beneficial interest in the property. Tracey, as the registered proprietor, holds that 22.35% interest on trust for Ashleigh under a purchase-price resulting trust. The parties’ conversations and circumstances showed that Ashleigh’s inheritance was neither a gift nor a loan, but the evidence was equivocal as to whether the parties actually intended an ownership interest or merely a right for Ashleigh to reside at the property. The resulting-trust presumption therefore applied, and Tracey failed to rebut it.
Alternatively, if the evidence were sufficient to establish the parties’ actual agreement, the Court held that it created an express trust for the same 22.35% interest because the parties intended Ashleigh to retain something of substance for her contribution even if she left the property. The Court did not determine how Tracey holds the remaining interest, as Marrick and Bradley did not assert beneficial claims. Although trustees for sale would ordinarily be appointed, the Court first allowed the parties an opportunity to agree on a buyout or a sale process that could avoid that expense.
Key Takeaways
- A person who supplies part of a property’s purchase price may acquire a proportionate beneficial interest even though another person alone holds registered title.
- Informal family assurances and surrounding circumstances may establish that contributed funds were not intended as a gift or loan; where actual intentions remain equivocal, the purchase-price resulting-trust presumption may decide the issue.
- Ashleigh’s $95,000 contribution to the $425,000 purchase price gave her a 22.35% beneficial interest, subject to later resolution of occupation rent and improvement allowances.
Why It Matters
The decision illustrates how Australian courts analyze undocumented family arrangements used to acquire property. The inquiry is objective, and an uncommunicated subjective denial of any intention to confer ownership will not rebut a trust arising from the parties’ words, conduct and financial contributions.
It also shows that recognition of a beneficial interest does not necessarily resolve the parties’ final financial position. Occupation charges, improvement allowances, mortgage liabilities and the mechanism for a buyout or sale may require agreement or further adjudication.