Does Financial Assistance from Father to Daughter to Assist in Buying a House Constitute a Loan or Resulting Trust?

In 2011, Natalie purchased a property in Shaol Bay, NSW. Natalie’s father, John, assisted her financially with the purchase by providing $15,000 for the deposit and $60,000 towards the purchase price. After the purchase, John also contributed money towards renovations and property maintenance and made monthly payments of $1,400 to Natalie’s bank account, which she put towards the mortgage repayments. The recent case of Koprivnjak v Koprivnjak [2023] NSWCA 2 concerns a dispute that arose regarding the beneficial ownership of the property when the house was sold in 2020.

In original proceedings, John claimed Natalie held 25% of property on trust for him because of his contributions to the purchase price and the remaining 75% was held on constructive trust, given there was a common understanding concerning his assistance with mortgage payments and property maintenance costs. These claims were dismissed.

On appeal, the father adduced evidence that was not produced at trial, including a rental agreement and insurance documents relating to the property, which contained his name, and also text messages. The NSW Court of Appeal dismissed the appeal, as the documents did not contain admissions against interest and did not demonstrate a common intention that Natalie held the property on trust for him. It was held that the father’s contribution to the property constituted a loan, rather than resulting trust. The rental agreement was dated 12 months after the settlement of property and although the father was identified as a contact person, this did not establish he held beneficial interest in the property. The text messages were ambiguous, given they were exchanged in the context of the breakdown of their relationship.

This case demonstrates a party seeking to establish beneficial interest in property must prove there was an intention for the property to be held on resulting trust, which is determined at the time of purchase or immediately thereafter. Documents around the time of purchase are pivotal in determining beneficial ownership.