Cockburn v Coburn [2005] NSWSC 993

In this case a mother transferred titles over three blocks of land to her son so he could provide them as security to borrow money on the basis that he would transfer the titles back to her when the mortgages were discharged.  Then the son died.

The wife refused to reconvey the property. The issue in dispute was whether the mother had established an oral agreement with the son for the property to be transferred back to her, or whether they agreement was that the property would be held on trust for her. A constructive trust was found to exist because “the holder of the legal title could not in good conscience retain the beneficial interest in the land”. In determining whether a constructive trust exists, the court looks at equitable principles and whether it is a fraud for the party in question to deny the trust, not at the actual or presumed intentions of the parties. The court found the mother had not been late in bringing her claim because the caveats she placed on the property were put on during the son’s lifetime and he had the opportunity to apply for their removal.

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