McKenzie v Storer

From Uni Study Guides
Jump to: navigation, search

Citation: McKenzie v Storer (2007) ACTSC 88.

This information can be found in the Textbook: Edgeworth et all, Sackville and Neave's Property Law Cases and Materials, 8th edition, Lexis Nexis, 2008, pp. 378-9 [4.112].

Contents

Background Facts

  • The Plaintiff wanted to buy a property called Kambah. She paid 50% of the price, and needed a loan for the second 50%.
  • A loan was only given to the Plaintiff on the condition that the Defendant would sign it as well.
  • Two-thirds of the loan was used to buy the property. The Registry listed the Plaintiff as owning 50% + 25% of the property, and the Defendant owning 25%.
  • The remaining amount of the loan was taken by the Defendant for personal purposes and to renovate another house (Queanbeyan) owned by the Plaintiff which she was preparing to sell.
  • They intended to pay off the loan with the proceeds of sale of Queanbeyan, and the Defendant would transfer her interest in the property to the Plaintiff once the loan was repaid.
  • When the Queanbeyan property was sold, the Plaintiff paid off only half the loan, retaining the balance for herself.
  • Naturally, this annoyed the Defendant. She moved out after living with the Plaintiff for 5 years. She claimed a 25% share in the property.

Argument

  • The Plaintiff sought transfer of the Defendant’s interest to her.
  • She claimed that the Defendant held her share of registered interest on trust.

Legal issues

Judgment

  • It is necessary to give effect to the common intentions of the parties.
  • In this case, it was the common intention of the parties that the defendant did not have a beneficial interest, but would transfer her interest in due course to the plaintiff.
    • In other words, the Defendant never intended to own some of the property – she did it as a favour because the Plaintiff needed someone else for the loan, and she was meant to transfer the interest back as soon as the loan was repaid.
  • The intention has been found on the basis of oral and written evidence, and it is actual. To refuse to give effect to this intention would be unconscionable (ie, the insistence of the Defendant that the title is hers despite the fact that was never either of their intention is unconscionable).
  • Unconscionability attracts the imposition of a constructive trust – therefore, the Defendant’s 25% share was held on trust for the plaintiff.
  • This was so even though the Plaintiff did not act kindly – it would still be more unconscionable for the Defendant not to return her share.

References

Personal tools
Namespaces

Variants
Actions
Navigation
Toolbox