McKinlay v Woods

The appeal concerned a dispute over beneficial ownership of a property located at 12 Willow Creek Road, Dural. The property was purchased by a mother and her son, the respondents, using borrowed funds secured by a mortgage. The stated purpose of the acquisition was to provide a home for the appellant, the mother's other daughter, following the breakdown of her marriage. The appellant resided in the property, paid outgoings, and made payments described as "rent" that were roughly equivalent to the mortgage repayments. Crucially, the appellant also contributed $160,000 from her divorce settlement towards reducing the principal of the mortgage. The primary judge had found that the respondents held the property on a constructive trust for themselves and the appellant in equal shares, after accounting for their respective contributions.

The central legal issues before the Court of Appeal were whether the primary judge erred in finding that the respondents held the property on a constructive trust for the parties in equal shares, and whether the primary judge erred in assessing the quantum of the parties' contributions. Specifically, the court considered whether there was a mutual understanding that the appellant had an undefined interest in the property, whether the son was merely a nominee for his mother, and whether the primary judge erred in indexing the appellant's capital contribution of $160,000.

The Court of Appeal allowed the appeal in part. It set aside the primary judge's order indexing the appellant's capital contribution at 6.46% per annum compounded from the date of payment until 9 December 2019, and also set aside the second order made by the primary judge. The court directed the parties to file agreed or proposed short minutes of order and submissions to enable the court to make final orders resolving the appeal on the papers. No order was made as to the costs of the appeal, with the intention that the parties bear their own costs.