Khoury v Khoury - [2025] NSWSC 760

Supreme Court

New South Wales

Medium Neutral Citation: Khoury v Khoury [2025] NSWSC 760
Hearing dates: 7 to 10 July 2025
Date of orders: 17 July 2025
Decision date: 17 July 2025
Jurisdiction: Equity - Real Property List
Before: Ball JA
Decision:
See [57]-[58]

Catchwords:
EQUITY – trusts and trustees – common intention constructive trusts – informal agreement between two brothers to build duplex development – where one brother owns underlying land – each brother to occupy respective property on completion of duplex development – loan for construction costs taken out jointly and secured over the property – designers and tradespersons engaged jointly by brothers – construction completed – subdivision undertaken – where brother registered on both titles dies intestate and prior to transferring title to one lot to other brother – title to both lots transferred to deceased’s widow following transmission application – whether lot occupied by living brother held on trust for him pursuant to agreement with deceased brother – whether detriment established for purposes of common intention constructive trust – detriment established – common intention constructive trust established

Legislation Cited:
Trustee Act 1925 (NSW)

Cases Cited:
Galati v Deans [2023] NSWCA 13
Grant v Edwards [1986] Ch 638; 2 All ER 426
Green v Green (1989) 17 NSWLR 343
Marchese v Marchese [2021] WASC 385
Secretary, Department of Social Services v Hulett [2025] FCA 23

Category: Principal judgment
Parties: Jason Khoury (Plaintiff)
Karisa Lee Khoury (Defendant)
Representation:
Counsel:
N Kulkarni (Plaintiff)
AL Connolly (Defendant)
Solicitors:
Lane and O’Rourke (Plaintiff)
Muscat Law (Defendant)

File Number(s): 2024/279596
Publication restriction: None

JUDGMENT

Introduction

The plaintiff, Mr Jason Khoury (Jason), and his late brother, Mr Tony Khoury (Tony), were very close. They had worked together originally in the family fruit shop business in Sans Souci, NSW with their father and another brother, Mr John Khoury (John). In 2005, Tony, Jason and John through a family company, GY Khoury & Sons Pty Ltd, purchased another fruit shop business at Westfield Mount Druitt, NSW which operated successfully until 2022, when it was forced to close as a result of the COVID-19 pandemic. Subsequently, Jason and Tony bought a fruit shop in Sutherland, NSW through Fresh N Full Pty Ltd, a company they had incorporated in November 2022. They operated that fruit shop together until Tony’s unexpected death on 26 December 2023 at the age of 43.
In 2013, Jason and Tony built duplex houses on land in Holt Road, Taren Point (the Property) that Tony had acquired in June 2002 for $457,000 using funds he had borrowed from Westpac Banking Corporation (Westpac). The costs of building the duplex houses were also financed by a loan from Westpac which was secured over the Property.
On completion of the building work, Tony and his family moved into the house known as 162A Holt Road and Jason and his family moved into the house known as 162 Holt Road. Jason was principally responsible for making the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Khoury v Khoury

Details

AGLC: Khoury v Khoury [2025] NSWSC 760
Case: [2025] NSWSC 760
Decision Date: 17 July 2025

CaseChat Overview and Summary

In the case of Khoury v Khoury, the High Court of Australia considered an equitable dispute arising from an informal agreement between two brothers, the plaintiffs and the defendants in the case. The brothers agreed to jointly develop a duplex on land owned by one of them. They intended to occupy the respective properties upon completion of the construction. The court was tasked with determining whether the surviving brother held the property he occupied under a common intention constructive trust for his deceased brother, in light of the informal agreement.

The primary legal issue before the court was whether a common intention constructive trust existed over the property occupied by the living brother, based on the informal agreement. This required the court to examine the nature and content of the agreement, the intentions of the parties, and whether the living brother had suffered a detriment that could give rise to a common intention constructive trust. The court also had to consider whether the deceased brother's failure to transfer title to the living brother before his death could be sufficient to establish the trust.

The court held that the living brother did hold the property on trust for his deceased brother, pursuant to their informal agreement. The court found that the agreement established a common intention that the living brother would occupy one of the lots, and that this intention was manifested in the actions of both parties. The court determined that the living brother had suffered a detriment by contributing to the construction costs and by forgoing other opportunities, which was sufficient to establish the requisite detriment for a common intention constructive trust. Consequently, the court held that the deceased brother held the property on trust for the living brother.

The final orders of the court were not explicitly detailed in the provided text, but it is reasonable to infer that the court would have ordered the deceased brother's widow to hold the property in trust for the living brother, in accordance with the terms of the informal agreement. This would ensure that the living brother's interest in the property is recognised and protected, reflecting the equitable principles underpinning the common intention constructive trust.

Orders