Resulting trusts: what they are, how do they arise and their effect …
In December 2008, Jade Hill suffered serious injuries in a car accident. From the money received from the settlement of a personal injury claim, Jade purchased a property in Dubbo in April 2013 for $305,000. Prior to the purchase, Jade was in a de facto relationship with Jai Dunn and they had two children. Jade not only paid the full purchase price for the property but all of the expenses associated with the property. Because of pressure from Jai and his mother, the property was purchased in both names.
The relationship between Jade and Jai ended in August 2014 and Jai left to live with his mother. In early 2015 Jade decided to sell the property and move away from Dubbo. Jai refused to sign any documents to allow the sales the property to proceed.
In court proceedings that Jade commenced against Jai, His Honour, Justice James Henry of the Supreme Court of NSW found that Jai held the half share of the property on trust for Jade and must transfer it to her. The resulting trust arose because Jade paid for the purchase of the property and it was never her intention that Jai should be a joint owner.
There are some occasions when such a purchase results in the second party being a joint owner and not a trustee. The first is if the party in Jade’s position intends that the other party be a joint owner, the second is if there is a presumption of advancement. One example which would provide clarification on the latter can exist in a scenario where a husband purchases a property on behalf of himself and his wife, that is, there is a presumption that he intends that she be a joint owner of the property. Currently, the law does not recognize a presumption of advancement where a wife puts a property in the name of her husband or where a woman puts the property into the name of her de facto partner.
Justice James Henry ordered that Jai transfer his interest in the property to Jade and if he refused to cooperate the transfer could be signed by the Registrar of the court.
COVID-19 pandemic and frustration of contracts …
If an unforeseen event arises, a contract may be frustrated and then terminated provided the unforeseen event is not caused by either party. Commercial difficulties or impracticality will not frustrate a contract. The circumstances surrounding the contract must be examined and those circumstances must be radically different to those contemplated by the parties when they entered into the agreement.
In some circumstances, money paid under the contract before the frustration occurred can be recovered to avoid the unjust enrichment of the party that received the money. The Frustrated Contracts Act 1978 (NSW) governs some of the types of claims that can be made.
Nowadays, because of the COVID-19 pandemic, the circumstances in which many contracting parties find themselves could be radically different to those which were contemplated when the contract was entered in and many parties are examining the right to terminate agreements and attempt to recover monies paid.
Should any of our newsletter readers find themselves in this scenario they should contact Peter Jackson at pjackson@jacksonassoc.com.au or Costin Stan at cstan@jacksonassoc.com.au to discuss further.