Henley v Bone [2019] NSWSC 254

Following on from Nguyen v Nguyen, the Court had to revisit a situation between two family members where there was no agreement in writing as to who the beneficial owner of a property was or if there was more than one beneficial owner, their relevant shares in the property.

In this case, the mother Anita Henley paid the 10% deposit on the purchase of a Ballina property in 2011 on exchange of contracts and then paid the balance of the purchase price of $525,000 on completion. However, the contract for sale was in the name of her son, Gregory Henley, exclusively and accordingly Gregory went on to become the registered owner of the property on completion.

Gregory did not contribute anything to the purchase price and in fact, he received the benefit of the first home buyer’s grant and stamp duty concession.

Gregory passed away in 2017. The mother sought a declaration that Gregory held the Ballina property on a resulting trust for her as she contributed the whole of the purchase price and that it was not an asset of Gregory’s estate. The only two children of Gregory defended the proceedings.

Normally, where a person contributes the whole of the purchase price in the name of a second person, a presumption arises that the first person did not intend the second person to take a beneficial interest in the property and a resulting trust will arise in favour of the first person, that is, the person who contributed the whole of the purchase price. This presumption can be rebutted.

The Court found that there was no resulting trust in favour of the mother.

The mother’s evidence was inconsistent – she gave evidence that Gregory was buying the property on her behalf and thought she was recorded as the owner and then further contrary evidence was given that Gregory had to act quickly to secure the property so he put it in his name only.

Gregory lived in the property for 6 months following completion in order to satisfy the first home buyer grant conditions and then vacated the property. The mother then moved into the property after this time. This meant that the mother was more likely than not to have been aware of the conditions of the first home buyers grant and stamp duty concession.

As all negotiations on the property were undertaken by Gregory and the mother had no contact whatsoever with the agent or conveyancer that acted on the purchase, the Court held that for all intents and purposes the property was Gregory’s property. This was then subject to a personal obligation to permit his mother to treat the property as her own and to reside in the property until her death.

The case highlights how imperative it is that the intention of the parties is documented prior to entering a property transaction otherwise there may be unintended consequences if the matter proceeds to Court.

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Nguyen v Nguyen [2019] NSWSC 131