Written by Thinking about borrowing money from a family member to purchase property? Koprivnjak v Koprivnjak [2023] NSWCA 2 serves as a cautionary tale for families mixing financial support with property ownership. When John Koprivnjak gave his daughter, Natalie, $75,000 towards a home in Shoal Bay, he saw it as an investment. Natalie saw it differently. The property was in her name alone. Years later, when the home was sold during family court proceedings due to Natalie’s divorce, John argued that his financial contributions entitled him to a share of the property. Natalie maintained the funds were a loan and that no trust had been created in favour of her Father, and that was the position which the courts favoured.
Ownership in property law is not always straightforward. There is a distinction between legal ownership—the name on the title—and equitable ownership, which arises when someone has a financial stake that is not formally recorded. Typically, when a person contributes money toward a property held in another’s name, a resulting trust is presumed, meaning the recipient holds part of the property for the contributor. However, in family relationships, the law assumes generosity, applying the presumption of advancement: financial contributions from a parent to a child are presumed to be gifts unless proven otherwise. John’s case hinged on whether he could rebut this presumption and prove that his money was not a gift. He claimed a 25% interest in the home due to his initial contribution and sought a further 75% based on his additional financial support. However, the court found his evidence unconvincing. Many of his documents were created years after the purchase and failed to show the parties’ intentions at the time. Ultimately, John’s appeal, relying on rental and insurance documents listing his name, failed to shift the court’s view.