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[2026] NSWSC 774
Supreme Court of NSW
2026-07-03
Richmond J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Cunningham by her tutor Cunningham v Peterson [2026] NSWSC 774
Hearing dates: 29 June 2026
Date of orders: 03 July 2026
Decision date: 03 July 2026
Jurisdiction: Equity
Before: Richmond J
Decision: (1) Declare that the Defendant holds her half share in the property situated at 8 Pear Street Gillieston Heights NSW 2321 (being Folio Identifier 426/1198424) on trust for the Plaintiff.
(2) Order that the Defendant repay $62,170.52 to the Plaintiff together with interest calculated from 7 March 2025 until the date of these orders in accordance with section 100 of the Civil Procedure Act 2005 (NSW) to be paid within 28 days of these orders;
(3) Direct the trustees for sale appointed pursuant to the orders made in these proceedings on 13 March 2026 (Orders) to pay the whole of the net proceeds of sale in accordance with Order 6(e)(ii) of the Orders, to the Plaintiff.
(4) Order that the Defendant is to pay the Plaintiff’s costs of the proceedings on the ordinary basis as agreed or assessed.
(5) Grant liberty to the parties to apply for such further or consequential orders as may be necessary to give effect to these orders.
Catchwords: EQUITY — Trusts and trustees — Constructive trusts — Family and domestic relationships — No question of principle
Legislation Cited: Civil Procedure Act 2005 (NSW)
Conveyancing Act 1919 (NSW)
Real Property Act 1900 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16
Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59
Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186; (2011) 248 FLR 384
Downie v Langham [2017] NSWSC 113
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
Green v Green (1989) 17 NSWLR 343
Hellenic Property Holdings Pty Ltd v Makaritis [2025] NSWCA 13; (2025) 21 BPR 45,233
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Joudo v Joudo (2024) 115 NSWLR 607; [2024] NSWCA 258
Makaritis v Makaritis (No 2) [2022] NSWSC 1690
McKinlay v Woods [2024] NSWCA 122
Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78
Russell v Scott (1936) 55 CLR 440
Satz v ACN 069 808 957 Pty Ltd [2010] NSWSC 365
Sui Mei Huen v Official Receiver [2008] FCAFC 117; (2008) 248 ALR 1
Taheri v Vitek (2014) 87 NSWLR 403 at 427; [2014] NSWCA 209
Take off Opportunities Pty Ltd atf The Clear Runway Trust v Susan Quinn Pty Ltd atf The Susan Amelia Quinn Trust [2025] NSWSC 231
West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431
Woods v McKinlay (No 2) [2021] NSWSC 1510
Texts Cited: N/A
Category: Principal judgment
Parties: June Margaret Cunningham by her tutor Dean Robert Cunningham (Plaintiff)
Kelly Therese Peterson (Defendant)
Representation: Counsel:
A Green (Plaintiff)
No appearance (Defendant)
Solicitors:
Direct2U Law & Conveyancing (Plaintiff)
No appearance (Defendant)
File Number(s): 2025/00490069
Publication restriction: Nil
These proceedings concern an unfortunate family dispute over a property at 8 Pear Street, Gillieston Heights (Gillieston Heights Property) acquired by the plaintiff, June Margaret Cunningham, and the defendant, Kelly Therese Peterson, in October 2024 as tenants in common in equal shares. The plaintiff is the mother of the defendant.
The plaintiff was born in June 1937 and is presently 89 years old. She has been legally blind for about 10 years. The proceedings are brought on her behalf by her tutor, Dean Robert Cunningham (Dean), who is her son and her attorney pursuant to an enduring power of attorney dated 12 March 2025. A consent to act as tutor was filed on 17 December 2025.
The defendant was personally served with the statement of claim on 21 January 2026. However she has not filed an appearance or a defence or otherwise played any active role in these proceedings.
On 6 October 2017, the plaintiff appointed the defendant as her attorney under an enduring power of attorney, and Dean as her substitute attorney (Power of Attorney).
On 29 August 2024, the plaintiff and the defendant entered into a contract to purchase the Gillieston Heights Property for a purchase price of $1,050,000, as tenants in common in equal shares (the Contract). The plaintiff paid the 2.5% deposit in the sum of $2,625 on 29 August 2024 from a bank account held in her sole name with Greater Bank.
The purchase resulted from a discussion between the plaintiff and the defendant in which they agreed that they would purchase a property together but as the defendant did not have sufficient funds to purchase a half share of the property the defendant would ‘pay her back’. The evidence of Dean is that the plaintiff’s instructions to him were that ‘the defendant was to pay for her share of the Gillieston Heights Property and that it was not a gift’.
At the time the Contract was entered into, the plaintiff was the sole registered proprietor of another property situated at 6 Stringy Bark Road, Hamlyn Terrace (Hamlyn Terrace Property). It was her intention to sell that property and apply the proceeds of sale towards the purchase price for the Gillieston Heights Property, and to that end she appointed an agent to sell the Hamlyn Terrace Property on 2 September 2024.
However, as the sale of the Hamlyn Terrace Property could not occur before completion of the Contract, the plaintiff and the defendant arranged for Westpac to provide two loans to fund the amount due on completion of the Contract: first, a bridging loan to the plaintiff secured by a mortgage to Westpac over the Hamlyn Terrace Property and second, a loan of $350,000 to the plaintiff and the defendant as joint borrowers to be secured by a mortgage to Westpac over the Gillieston Heights Property (Home Loan).
Completion of the Contract occurred on 10 October 2024. In addition to the contract price, further costs of the purchase including council and water rates, conveyancing fees, stamp duty and other costs were paid on completion. The total amount paid to purchase the Gillieston Heights Property, including those additional amounts was $1,094,996.63 (MFI-1).
On about 9 October 2024, the plaintiff and defendant opened a joint bank account with Westpac with account number ending ‘458’ (Westpac Joint Account). A direct debit was put in place so that monthly instalments of principal and interest on the Home Loan would be charged to this account and this occurred until the credit balance reduced (as a result of the withdrawal of $74,000 referred to below) to an amount insufficient to meet the monthly instalments due.
The defendant paid $5,000 into the Westpac Joint Account on 9 October 2024 and during the period from 9 October 2024 to 19 February 2024 she made 17 further deposits to that account in amounts of $500 or less. The total amount deposited by her to the account was $11,829.48.
There were surplus loan funds of $14,226.24 from the bridging loan provided by Westpac at completion of the Contract, to which the plaintiff was solely entitled, which were paid into the Westpac Joint Account on 10 October 2024.
Contracts for sale of the Hamlyn Terrace Property were exchanged on 3 December 2024 with the sale price being $950,000, and completion occurred on 24 February 2025. From the net proceeds of sale, the amount of $786,228.16 was paid to Westpac to discharge the bridging loan and the balance owing to Westpac under the Home Loan as at that date was $347,088.91 (reflecting repayments of principal including an amount of $2,124 paid from the Westpac Joint Account on 7 November 2024). A further amount of $65,946.36 from the net proceeds of sale of the Hamlyn Terrace Property, after repayment of the bridging loan, to which the plaintiff was solely entitled was paid into the Westpac Joint Account on 24 February 2025.
Regular payments of $531 per week in reduction of the amount owing on the Home Loan were made from the Westpac Joint Account during the period 18 November 2024 to 10 April 2025.
On 1 March 2025, Dean visited the plaintiff at the Gillieston Heights Property and as he was leaving, the plaintiff suffered a fall. Dean took her to Maitland Hospital where she was found to have suffered a minor fracture of her wrist. After leaving hospital she lived with Dean and his wife for a short time and later with her sister but it became apparent, unsurprisingly, that they were unable to give the plaintiff the degree of care that she required, and a place was found for her at a retirement village at Lisarow.
The retirement village requires a payment of a refundable accommodation deposit (RAD) in the amount of $695,000. Pending payment of the RAD the plaintiff is liable for a daily accommodation payment to the retirement village of $103.20 per day. The only significant asset of the plaintiff is her interest in the Gillieston Heights Property which needs to be sold in order to fund the payment of the RAD.
The plaintiff did not return to the Gillieston Heights Property after 1 March 2025, and from that time until around March or April 2026 the defendant remained in sole occupation. She did not pay any rent or occupation fee to the plaintiff.
On 7 March 2025, the sum of $74,000 was withdrawn from the Westpac Joint Account without the knowledge or approval of the plaintiff, which reduced the balance of the account to $1,618.83. No subsequent deposits have been made to the account and since 11 March 2026 it has had a nil balance (Ex C). The Court infers that this withdrawal was made by the defendant as she was the only other signatory to the account at that time.
On 12 March 2025, the plaintiff signed a revocation of the Power of Attorney and appointed Dean as her attorney (and his wife, Debra, as substitute attorney) under a new enduring power of attorney signed on that day. Notice of the revocation of the Power of Attorney was served on the defendant on 24 March 2025.
By letters sent by the solicitor for the plaintiff to the defendant in April and June 2025, the defendant was notified of the need to sell the Gillieston Heights Property in order to pay the RAD and her co-operation was sought in the sale process. She was informed that, absent a reply, proceedings would be brought for an order under s 66G of the Conveyancing Act 1919 (NSW) for the appointment of trustees for sale. No substantive response was received to that correspondence.
These proceedings were commenced by statement of claim filed on 17 December 2025.
By the statement of claim, the plaintiff sought an order pursuant to section 66G for trustees for sale to be appointed and ancillary orders, together with the following final relief:
- A declaration that the defendant holds the legal and beneficial interest in a half share of the Property upon a resulting trust or alternatively upon constructive trust, for the plaintiff.
- An order that equitable compensation be paid to the plaintiff by the defendant to the value of the plaintiff's contributions to the Property and the funds paid by the plaintiff in discharge of the Mortgage in excess of the defendant's beneficial and legal entitlement to the Property as so determined by the Court.
- A declaration that the defendant, as attorney under an enduring power of attorney dated 6 October 2017, breached her fiduciary duties owed to the plaintiff.
- A declaration that the defendant holds any funds transferred or paid from any account in the sole name of the plaintiff or the name of the plaintiff and the defendant into the name of an account in the name of the defendant on trust for the plaintiff.
- Such further or other orders as the Court sees fit.
- Costs
In relation to prayer 10, the statement of claim alleges at paragraph 47 that on 7 March 2025 the sum of $74,000 was withdrawn from the Westpac Joint Account by the defendant without the knowledge or consent of the plaintiff and in breach of the defendant’s fiduciary duty to the plaintiff as her attorney. By paragraphs 52 to 54 of the statement of claim it is contended that the defendant holds those funds as a bare trustee for the plaintiff and is liable to account to the plaintiff for those funds or alternatively, is liable to pay equitable compensation for the loss caused by the plaintiff or to account to the plaintiff for any benefit she obtained from those funds.
On 27 February 2025, the solicitor for the plaintiff sent an email to the defendant informing her that the matter had been stood over for a directions hearing on 13 March 2026 and that if she did not appear on that occasion the matter ‘will likely be listed for hearing to be dealt with in your absence’.
On 13 March 2026, Pike J made orders appointing Anthony John Ryan and John Gerard Ryan, Solicitors with Ryan & Ryan Lawyers, jointly as trustees for sale of the Gillieston Heights Property (Trustees). The relevant orders made by Pike J were:
- Order pursuant to s 66G of the Conveyancing Act 1919 (NSW) that Mr Anthony John Ryan, Solicitor Director of Ryan & Ryan Lawyers, and Mr John Gerard Ryan, Consultant Solicitor of Ryan & Ryan Lawyers, (Trustees) be appointed jointly as trustees for the sale of the property situated at 8 Pear Street Gillieston Heights NSW 2321 (being Folio Identifier 426/1198424) (Property).
- Order that the Property be vested in the Trustees subject to any encumbrances affecting the entirety of the Property but free from any encumbrances affecting any undivided share or shares therein to be held by the Trustees upon statutory trust for sale under Division 6 of Part IV of the Conveyancing Act 1919 (NSW).
- Order the Defendant deliver up vacant possession of the Property to the Trustees within 42 days of orders being made or otherwise at such time as directed by the Trustees or ordered by the Court.
- Reserve to the Trustees liberty to apply on short notice for any orders or directions which may be required to obtain vacant possession of the Property, including the issue of a writ of possession.
- Order that the Trustees are authorised to:
a. Do all things necessary to sell the Property, including engaging a real estate agent, marketing the Property for sale, arranging for inspections, and entering into a contract for sale at a price considered fair and reasonable by the Trustees in their absolute discretion;
b. Undertake all reasonable repairs to the Property to prepare it for sale;
c. Sign all documents necessary to effect the sale and transfer of title of the Property;
d. Charge all usual and proper charges at the usual hourly rates charged by the legal practice in which they are engaged and on the usual terms as to payment of that practice for their work as trustees for the sale of the Property; and
e. Retain the services of any other legal practitioner, accountant or other professional adviser where they consider it necessary to do so and to charge the costs incurred in having those services provided.
- Order that upon completion of the sale of the Property in accordance with Order 2, the Plaintiff is to distribute the proceeds of sale in the following order of priority:
a. Council rates, Water rates, Vendor's Duty, Land Tax and any other statutory duties or charges if any;
b. The real estate agent's commission and charges;
c. The amounts owing to any person having a secured interest;
d. Any other fees, charges, expenses or disbursements of or incidental to the sale of the Property, including all charges of the Trustees charged in accordance with Order 5 above;
e. To hold the balance remaining after payment of 6(a)- (d) inclusive above and pay the balance of the proceeds of sale as to:
i. One half share to the plaintiff
ii. One half share to be paid into Court subject to further order of the Court.
As the defendant did not appear before Pike J on that occasion, his Honour stayed the orders for 21 days to allow the defendant to appear before the Court on the next occasion it was listed, being 1 May 2026.
On 23 March 2026, the solicitor for the plaintiff sent an email to the defendant with a copy of the orders made by Pike J on 13 March 2026 (having also sent a letter to her at the Gillieston Heights Property by registered post on 16 March 2026). The email was received by the defendant although she did not reply to it.
On 1 May 2026, the proceedings were set down for final hearing on 29 June 2026 in order for the final relief in the statement of claim (being the claims set out at [22] above) to be determined. As the defendant did not appear on that occasion either, the Court requested the plaintiff take steps to notify the defendant of the hearing date.
After various unsuccessful attempts to make contact with the defendant, described in Ms Farr’s affidavit of 23 June 2026, the solicitor for the plaintiff sent an email to the defendant on 19 June 2026 attaching the orders made by Pike J on 1 May 2026 and drawing attention to the fact that the proceedings were listed for final hearing on 29 June 2026. The email was received by the defendant, but no response has been forthcoming.
To date, the defendant has not filed an appearance or a defence in these proceedings. At the commencement of the hearing before me on 29 June 2026, there was no appearance for the defendant including after the matter was called outside court. No explanation for her non-attendance has been provided to the Court. I am satisfied that she has been served with all relevant documents and been afforded ample opportunity to attend the hearing and be heard.
Rule 29.7 of the Uniform Civil Procedure Rules 2005 (NSW) provides that if any party to a proceeding is absent, the Court may proceed with the trial generally or so far as concerns any claim for relief in the proceedings or may adjourn the trial. In all the circumstances, I considered it was appropriate to proceed with the hearing.
I have borne in mind that (a) the plaintiff must prove her claim so far as the burden of proof lies upon her and if she proves her claim she is entitled to the relief claimed and such other relief as is consistent therewith: Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186; (2011) 248 FLR 384 at [11]; and (b) while the absent defendant is not entitled to some especially favourable treatment, the plaintiff in seeking final relief in the absence of the defendant is expected to conduct the hearing with honesty, frankness and without conduct apt to mislead the Court in relation to any material matter: Satz v ACN 069 808 957 Pty Ltd [2010] NSWSC 365 at [68]; Take off Opportunities Pty Ltd atf The Clear Runway Trust v Susan Quinn Pty Ltd atf The Susan Amelia Quinn Trust [2025] NSWSC 231 at [18].
Further, in so far as that relief includes the making of a declaration concerning property rights, the Court has jurisdiction to make the orders sought notwithstanding that there is no proper contradictor to the claim: Rance v Dempsey [2024] NSWSC 1423 at [31]-[35].
The primary relief sought by the plaintiff in the statement of claim is a declaration that the defendant holds all or part of her legal and beneficial interest on a resulting trust, and in the alternative, upon a constructive trust, for the plaintiff. In oral submissions Ms Green, counsel for the plaintiff, put the primary claim to be for a constructive trust over the defendant’s interest in the Gillieston Heights Property under a joint endeavour constructive trust. The only other substantive relief sought at the hearing was an order for the return of the $74,000 withdrawn from the Westpac Joint Account on 7 March 2025.
Ms Green accepted that the plaintiff bears the onus of proving that the beneficial entitlements to the Gillieston Heights Property differ from the legal entitlements recorded on the Land Titles Register maintained under the Real Property Act 1900 (NSW), and submitted that the issue to be determined is whether by virtue of the plaintiff having paid the whole of the deposit and the majority of the purchase price from the proceeds of sale of the Hamlyn Terrace Property, it would be unconscionable for the defendant to retain the whole of her half share as a tenant in common in the Gillieston Heights Property.
There is no allegation that the defendant acquired title to her half interest in the Gillieston Heights Property by conduct constituting ‘fraud’ (moral turpitude) within the meaning of section 42(1) of the Real Property Act 1900 so as to impeach the indefeasibility of title she otherwise acquired upon registration as a proprietor of the land: Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22.
In Baumgartner v Baumgartner (1987) 164 CLR 137 at 147-148; [1987] HCA 59 the majority (Mason CJ, Wilson and Deane JJ) accepted that there is a general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them, reflected in the following observations of Deane J in Muschinski v Dodds (1985) 160 CLR 583 at 620; [1985] HCA 78:
“…the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do. cf. Atwood v Maude (1868) LR 3 Ch App 369 at pp 374-375 and per Jessel MR, Lyon v Tweddell (1881) 17 Ch D 529 at p 531.”
Such a constructive trust arises by operation of law, regardless of actual or presumed intention of the parties: Muschinski v Dodds at 613-14 per Deane J.
In determining whether it would be unconscionable for the legal owner to assert or retain the benefit of the relevant property, the Court is guided by equitable principles, not by any idiosyncratic, unstructured or untutored concepts of unconscionability: West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431 at [52]. The unconscionability of a refusal to recognise an equitable interest can arise not merely from events occurring at the time of acquisition but from subsequent events: Green v Green (1989) 17 NSWLR 343 at 353, 355 per Gleeson CJ; Sui Mei Huen v Official Receiver [2008] FCAFC 117; (2008) 248 ALR 1 at [70]-[81] per Ryan, Moore and Tamberlin JJ.
In McKinlay v Woods [2024] NSWCA 122 at [82] Leeming JA explained the manner in which the question of unconscionability is to be approached as follows:
When determining whether an assertion of legal title is unconscionable, regard is had to the entirety of the parties’ conduct, including for example payments servicing or reducing a mortgage debt taken out in order to acquire the property. That is because whether there is an unconscionable assertion of legal right falls to be assessed at the time of the hearing, rather than at the time the jointly owned asset is acquired. That more expansive approach is not confined merely to the quantification of calculating payments made in furtherance of the joint endeavour (such as interest and outgoings and repayments of principal). In Green v Green (1989) 17 NSWLR 343 , Gleeson CJ observed that while a number of judgments referred to intention or conduct “on acquisition” of the property, “in a given case the relevant events leading to the finding of an interest in the claimant may occur after acquisition, and beneficial interests may change in the course of the relationship between the parties”: at 355–356.
In Makaritis v Makaritis (No 2) [2022] NSWSC 1690 (affirmed on appeal under Hellenic Property Holdings Pty Ltd v Makaritis [2025] NSWCA 13; (2025) 21 BPR 45,233), Parker J said at [164] that for there to be a joint endeavour, there needs to be some sort of understanding between the parties, but the scope of that understanding can change from time to time. The understanding does not have to have the sort of precision required for a contract. If it did, the contract would cover the field and there would be no need for the failed joint endeavour doctrine; the whole point of the doctrine is that it covers a situation which the parties have not addressed, namely the failure of the endeavour which would leave one party with an unexpected windfall.
In Joudo v Joudo (2024) 115 NSWLR 607; [2024] NSWCA 258, the Court held at [47] (Bell CJ, Gleeson JA and Stern JA agreeing) that an argument that a constructive trust can only be imposed where the parties have not adverted to what will happen to a property the subject of a joint endeavour if the basis of the arrangement is removed had no basis in any authority and would impose an unattractive fetter on an equitable remedy the flexibility of which is central to its operation.
The doctrine operates in a restitutive way: Makaritis (No 2) at [169]. When the contingency not foreseen by the parties occurs, equity intervenes, but it does so by retrospective adjustment of the parties’ rights so as to achieve a just outcome having regard to the parties’ omission to deal with that contingency at the time that the property was acquired: Woods v McKinlay (No 2) [2021] NSWSC 1510 at [260] (quoted with apparent approval on appeal: McKinlay v Woods at [60]).
It is accepted that there are three requirements which the plaintiff must establish to make out a claim for a ‘joint endeavour’ constructive trust.
First, it is necessary that the plaintiff has made financial and/or non-financial contributions to a joint endeavour involving the acquisition of an asset in the course of, or for the purposes of, that joint endeavour: McKinlay v Woods at [84], [89]. This requires identifying the nature and scope of the joint endeavour, including an asset acquired for the purposes of the joint endeavour, and the nature of the parties’ respective contributions to it.
Here the joint endeavour was:
(a) the acquisition of the Gillieston Heights Property by the plaintiff and the defendant on the basis that it would be used as a home for both of them; (b) the financing of most of the purchase price through two loans from Westpac: first, a bridging loan to the plaintiff on the security of her interest in the Hamlyn Terrace Property with that loan to be repaid when the Hamlyn Terrace Property was sold; and second, a joint borrowing of $350,000 from Westpac on the security of the Gillieston Heights Property (being the Home Loan); and (c) the defendant agreeing to pay to the plaintiff 50% of the overall cost of the purchase (including principal and interest on the joint borrowing from Westpac) and other holding costs (such as rates and insurance).
There is no evidence to suggest that any consideration was given to how the legal title would be held if the joint endeavour failed.
The plaintiff’s contributions to the joint endeavour comprised the payment of the deposit under the Contract of $2,625, the amount of $786,228.16 paid to Westpac out of the net proceeds of sale of the Hamlyn Terrace Property to discharge the bridging loan, and the two deposits made by her to the Westpac Joint Account to service the Home Loan of $350,000 (being $14,226.24 on 10 October 2024 and $65,946.36 on 24 February 2025). The total amount of these contributions is $869,025.76.
The defendant’s contributions to the joint endeavour comprised the amounts deposited by her to the Westpac Joint Account (used to service the Home Loan) totalling $11,829.48 comprising $5,000 deposited on 9 October 2024 and further deposits made by her to that account from that date to 19 February 2025 in varying amounts totalling $6,829.48.
However, while these are the absolute amounts contributed, when taking into account mortgage instalments the focus is on payments of principal rather than interest because the concern is the proportion in which parties have contributed to the acquisition of the beneficial interest in the property: McKinlay v Woods at [85]. As explained below, the only reduction in the principal amount of the Home Loan has been $3,290.38 (which was borne by the plaintiff and the defendant equally). Hence the contributions of the plaintiff to the acquisition of the beneficial interest in the Gillieston Heights Property is $790,498.35 (being $2,625 plus $786,228.16 plus $1,645.19) compared to the defendant’s contribution of only $1,645.19.
The evidence does not suggest that there is any other form of non-financial ‘contribution’ which should be taken into account.
Second, it is necessary that the joint endeavour has failed in circumstances where blame for the failure cannot be attributed to the plaintiff: Hellenic Property Holdings at [93].
The joint endeavour in the present case has failed because the plaintiff, due to her advanced age and inability to care for herself, has moved into a retirement village and needs to realise her interest in the Gillieston Heights Property in order to pay the RAD for that retirement village, and the cost of her care there. It is clear that no blame can be attributed to the plaintiff for the failure.
Third, it is necessary for the plaintiff to establish that it would be unconscionable for the defendant to assert or retain the entire benefit of her legal title to the relevant property, in this case her half interest in the Gillieston Heights Property as tenant-in-common with the plaintiff: McKinlay v Woods at [82].
In my view, it would be unconscionable for the defendant to retain her undivided half interest in the Gillieston Heights Property given the disparity in the financial contributions made by each of them to the joint endeavour. The financial contribution by the defendant can be regarded as minimal given its amount and that she derived a benefit from living in the property without paying rent from around 10 October 2024 until she left the property in April 2026.
The question arises as to the appropriate relief. It is often the case that the appropriate relief is the declaration of a constructive trust of the property to the effect that the parties hold their respective legal interests as tenants-in-common upon trust (after payment of any joint debts incurred in respect of the acquisition or improvement of the property) to repay their respective contributions and then to distribute the surplus (if any) to them both in equal shares: Muschinsk**i v Dodds at 623-4; McKinlay v Woods at [86]-[92].
However, equity will depart from equal treatment in appropriate circumstances to avoid an assertion of legal entitlement which would be unconscionable: McKinlay v Woods at [88], [133]. In my view, this is a case where there should be a departure from equal treatment, for the following reasons.
First, there is unlikely to be any surplus. Based on the estimate made by the trustees for sale referred to earlier, the sale price of the Gillieston Heights Property will be at most $1,150,000. From this amount there will need to be deducted the agent’s commission and marketing expenses and the legal costs on the conveyancing transaction. Based on the evidence of the other sale transactions, these amounts will be in the range of $22,000 to $27,000. There will then need to be deducted the outstanding amount owing to Westpac which will be at least $347,108 (Ex B), and the expenses of the trustees for sale. On the basis of these estimates, the net proceeds of sale will not exceed the plaintiff’s contributions of $790,498.35.
Secondly, the plaintiff’s contribution to the acquisition of the beneficial interest in the Gillieston Heights Property greatly exceeds the small contribution of the defendant.
Thirdly, by withdrawing the amount of $74,000 from the Westpac Joint Account on 7 March 2025, the defendant has effectively withdrawn all her previous contributions to the joint endeavour.
For these reasons, the appropriate order is that the defendant holds her half interest in the Gillieston Heights Property on trust for the plaintiff.
The Westpac Joint Account is a chose in action consisting of a contractual right against the bank for a debt of a fluctuating amount as monies are deposited to and withdrawn from the account, and in respect of which the plaintiff and the defendant were at all relevant times joint creditors: Russell v Scott (1936) 55 CLR 440 at 450-451.
Although there is no direct evidence regarding the purpose of the deposits made to the Westpac Joint Account, I infer that it was established for the purpose of paying principal and interest instalments on the Home Loan and that funds deposited to that account by the plaintiff were only to be used for that purpose. This is indicated by a number of matters including (a) that the account was opened at the time the Home Loan was borrowed and was the account from which the principal and interest instalments on the loan were to be paid by direct debit; (b) the primary source of the funds paid into the account by the plaintiff was the proceeds of sale of her only significant asset being the Hamlyn Terrace Property; and (c) that in the event of non-payment of amounts due on the Home Loan the plaintiff would be liable to be evicted from her home due to enforcement of Westpac’s security.
While the defendant was a signatory to the account with authority as against Westpac to make withdrawals from the account, as between herself and the plaintiff, the defendant’s authority was limited to making withdrawals for the purpose of paying principal and interest on the Home Loan or to recoup amounts she had previously deposited which had not already been applied for that purpose: cf West v Mead at [81]. That is to be inferred from the overall circumstances in which the account was established and the fact that the defendant was in a fiduciary relationship with the plaintiff in acting as her attorney under the Power of Attorney, particularly given the age and relative infirmity of the plaintiff: Taheri v Vitek (2014) 87 NSWLR 403 at 427; [2014] NSWCA 209 at [115]; Downie v Langham [2017] NSWSC 113 at [8].
The unexplained failure of the defendant to appear and give evidence permits the Court to draw these inferences from the evidence before the Court with greater confidence: Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 308.
I am satisfied on the evidence, including relevant bank statements, that the amount of $74,000 was withdrawn from the Westpac Joint Account by the defendant on 7 March 2025 without the authority of the plaintiff and that it was sourced largely from funds deposited to the Westpac Joint Account by the plaintiff. The effect of the withdrawal is that the plaintiff and the defendant are in default under the Home Loan.
In the period from 9 October 2024 to 10 April 2025, the total interest charged on the Home Loan was $10,515.62 and the total amount paid from the Westpac Joint Account to pay principal and interest on the Home Loan was $13,806. Hence, there was a reduction in the principal amount of the Home Loan in the amount of $3,290.38. In the same period, the deposits to the Westpac Joint Account were $80,172 by the plaintiff and $11,829.48 by the defendant. Hence, the only part of the amount of $74,000 which could be attributable to the funds deposited by the defendant to the account was $4,926.48 ($11,829.48 less 50% of $13,806).
The defendant could not claim to be beneficially entitled to the funds deposited by the plaintiff to the Westpac Joint Account under the presumption of advancement. While a transfer of property from mother to an adult child attracts the presumption of advancement, it is rebutted here because the plaintiff made the deposits to the account to serve the purpose referred to above and not as a gift to the defendant. To the extent that the balance in the account at the time of the withdrawal of the $74,000 was attributable to previous deposits by the plaintiff, the defendant held her interest in the account on trust for the plaintiff, there being a presumption of a resulting trust in favour of the plaintiff which has not been rebutted and such a trust is entirely consistent with the purpose for which those deposits were originally made.
The appropriate order, in light of the orders to be made regarding the ownership of the Gillieston Heights Property, is that the defendant be required to repay to the plaintiff the amount of $62,170.52, being $74,000 less the amounts deposited by the defendant to the account of $11,829.48.
As the plaintiff has succeeded in the proceedings, the appropriate order is that the defendant pay her costs.
The Court will make the following orders:
Declare that the Defendant holds her half share in the property situated at 8 Pear Street Gillieston Heights NSW 2321 (being Folio Identifier 426/1198424) on trust for the Plaintiff.
Order that the Defendant repay $62,170.52 to the Plaintiff together with interest calculated from 7 March 2025 until the date of these orders in accordance with section 100 of the Civil Procedure Act 2005 (NSW) to be paid within 28 days of these orders;
Direct the trustees for sale appointed pursuant to the orders made in these proceedings on 13 March 2026 (Orders) to pay the whole of the net proceeds of sale in accordance with Order 6(e)(ii) of the Orders, to the Plaintiff.
Order that the Defendant is to pay the Plaintiff’s costs of the proceedings on the ordinary basis as agreed or assessed.
Grant liberty to the parties to apply for such further or consequential orders as may be necessary to give effect to these orders.
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Typographical amendments made to paragraphs 2, 36, 46, 49, 51, 56 and 67.
Cunningham by her tutor Cunningham
Peterson
(1988) 164 CLR 604
(1987) 164 CLR 137
(2011) 248 FLR 384
(2007) 230 CLR 89
(1989) 17 NSWLR 343
(1959) 101 CLR 298
(2024) 115 NSWLR 607
(1985) 160 CLR 583
(1936) 55 CLR 440
(2008) 248 ALR 1
(2014) 87 NSWLR 403