Muschinski v Dodds

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Citation: Muschinski v Dodds (1985) 160 CLR 583.

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, p. 375 [4.109] (inside Baumgartner v Baumgartner).

Contents

Background Facts

  • The parties were a de-facto couple.
  • They decided to purchase a property to create an arts & crafts centre.
  • The woman contributed completely to the purchase price, and the man contributed absolutely nothing, but insisted he get full legal title and did (ie, 50-50 joint tenants).
  • Because he did not pay, the man made some improvements to the property. However, the pre-fabricated house never came through and they decided not to continue. All in all, the woman had contributed $25,000; and the man contributed $2,000 value.

Argument

  • The woman brought proceedings seeking an equitable injunction that the man held his 50% legal share on resulting trust for her.

Legal issues

Judgment

Deane J:

  • Circumstances surrounding the transaction hold that there is no room for the presumption of the resulting trust to stand. Clearly, each intended to hold the property in equal share, 50:50. The court can't impose a resulting trust contrary to intentions.
  • However, this is an unconscionable situation and it needs to be remedied. Still, there must be well-understood principles under which the court can find trusts; they cannot do so on a whim.
  • In order to remedy this, and whilst still keeping a principled approach, it is said that a constructive trust can be imposed when there is a 'joint endeavour' which fails due to the fault of neither party.
  • There is a 'joint endeavour' constructive trust here.

References

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