Co-ownership (NSW)

In Fallon v Madden (SC 2010/332163) B and M co-habited in property that was in M’s name. After several years of co-habitation they married. M died and B claimed that he had an interest under a resulting trust on the basis that he had provided all of the purchase price. The Supreme Court of New South Wales found that he had supplied 50.5% of the purchase price. Since the purchase preceded the marriage, the presumption of advancement did not apply. Thus, B was entitled to a 50.5% beneficial interest under a resulting trust. The co-ownership was as tenants in common (reflecting section 26 of the Conveyancing Act).

After M’s death (when the presumption ceased to apply) B made some repayments in respect of a loan which M had guaranteed (with the guarantee being secured by a mortgage over the property) and paid off M’s outstanding tax liability. He was entitled to recover these sums from M’s estate (which would otherwise have been liable). He paid for work at the property but was not entitled to compensation since the work did not increase the value of the property. He was entitled to compensation for the council rates that he had paid but not for water rates (a consumable). On the other hand, he had occupied the property. His claims to compensation relied on equity’s help. If he decided to press them (he had an option) then he must pay an occupation fee on the basis that he who seeks equity must do equity.

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