Article by Manny Wood published in the Coffs Coast News Of The Area on 31 March 2023.

Peter is looking for a premises to operate his business and finds an appropriate industrial shed.

He asks his mother, Mary if she could help him purchase the freehold. He explains that if he is registered on title as an owner, that he will then be able to secure an overdraft to support his business.

Mary pays the whole of the $400,000 purchase price and they are both registered on title as “tenants in common” with a 50% share each.

Unfortunately, Peter’s business fails a couple of years later and he rents out the shed and receives the whole of the rent, which he uses to fund the repayment of his business debts.

When Mary is diagnosed with Alzheimer’s Disease, her appointed power of attorney investigates the dealings regarding the industrial shed.

The attorney wants the shed sold to fund care arrangements for Mary. The attorney claims that because Mary paid the whole of the purchase price, Peter holds his 50% share on “resulting” trust for Mary and that she is entitled to the whole of the proceeds of sale. The attorney also claims that Peter should pay Mary the whole of the rental income that he has received.

Peter claims that Mary gifted the 50% share of the shed to him as well as the whole of the rental income.

Mary cannot give evidence due to her condition.

The matter proceeds to a two-day hearing in the Supreme Court.

After considering the evidence, which included expert medical evidence, the Court finds that Mary validly gifted the 50% share of the property to Peter on the basis of a legal “presumption” that transactions regarding children are generally considered to be gifts but also finds that Mary is entitled to half of the rental income.

The Court orders the property to be sold and the proceeds distributed accordingly.

Email Manny Wood, Principal Solicitor and Accredited Specialist in Wills and Estates at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487. This column is only accurate at today’s date and cannot be relied upon as legal advice.