The dispute revolved around a property in Katoomba between a father (plaintiff) and his son (defendant). The property was purchased as vacant land by the defendant for $18,000 in 1987. He obtained a mortgage from the St George Building Society to enable him to fund that purchase.
At that time, the defendant and his parents were living in a housing commission house at Minto, his parents being the tenants to that commission.
The defendant at this stage was wishing to build a house on the Katoomba land. He approached a bank for a loan for that purpose. At that stage, the bank was offering concessional rates of interest to certain persons however the bank manager told the defendant that his income was not sufficient. The bank manager suggested that his father, namely, the plaintiff, should become a borrower as well. The bank letter of offer on its face had errors in it and whether or not the plaintiff eventually became a guarantor to a mortgage loan or became a co-borrower with the defendant is not clear, however he did become liable to the Bank for the repayments due under the loan.
The amounts payable to the bank under the mortgage calculated on monthly payments for principal and interest plus an amount for insurance came to $959 per month, which equated to approximately $221 per week. It was agreed between the defendant and his parents that they would contribute the sum of $110 per week. There is an argument as to whether or not this was a contribution to the mortgage payments of $110 per week, being half their amount, or whether it was board.
Payments kept up until 1992, when his work was less regular, and his wife became ill and he became carer for her. It was agreed that the payments would cease.
The plaintiff and his wife and the defendant lived together in the Katoomba property until 1995. The defendant then moved to England for five years. The plaintiff’s wife died in January 1996. After that date the plaintiff lived alone in that house for four years until the defendant returned in 2000. And from the year 2000 until 2002 when the property was ultimately sold, the plaintiff and the defendant lived together until what seems to be the last few weeks. While all three were living in the property, the evidence showed that the parents and son contributed more or less equally to the general outgoings on the home. After the defendant went to England, he provided funds for his father to make the mortgage payments and to pay the rates on the property. His father paid the other outgoings on the property.
The plaintiff put his claim in various ways. First he said that there was a representation made that if he contributed to the improvement and acquisition and maintenance of the land he would acquire an interest in the land, or be able to live on the land for the rest of his life and in reliance on those representations, he carried out the improvements and made the contributions.
There was no evidence of that representation and no evidence of reliance on it. The closest the evidence could go to this was that the plaintiff and his wife gave up what might have been described as a “secure tenancy” from the housing commission to go to live in Katoomba. That in itself cannot give rise to some implied representation.
There was a further claim that it was the common understanding that if the plaintiff contributed to the acquisition, that he would acquire an interest in the land. A claim of conventional estoppel. Once again it was not made out. There was, in effect, no evidence of it nor that the parties acted in accordance with that assumed position.
There was a claim that the plaintiff contributed to the improvement, acquisition and maintenance of the property in a joint relationship or endeavour which had failed and that it would be unconscionable for the defendant to retain a benefit from those contributions. That is a claim based upon Morris v Morris  1 NSWLR 61 and it was not made out.
The plaintiff sought the following relief. That the defendant held the property at Katoomba on trust for himself and the plaintiff in shares to be determined by the Court. That claim was made on the basis that the plaintiff has an interest in the property, proportionate to his contribution to the mortgage. This claim, was based on a Calverly v Green (1984) 155 CLR 242 type claim. But that decision related to interest that joint owners have in a property determined by their contribution to the purchase price of that property. So far as that law is concerned, the property is the land. Improvements that are put on to it later are a separate matter.
It was clear that the defendant obtained some benefit from the plaintiff by the plaintiff agreeing to become liable under the mortgage whether as borrower or guarantor, and to that extent, at least he obtained the benefit of a favourable rate of interest. However, the trust claim had no basis and thus failed.
The second claim was for a declaration that the defendant held the property at Katoomba on trust during the life of the plaintiff to permit him to occupy the land until he died or so long as he desired. That claim was not made out either.
There was no doubt that the parties went to Katoomba together assuming they would live happily there together. That did not give rise to some trust in the nature of a right in the plaintiff to occupy the property for as long as he wished, whether he made any payments towards it or not.
The third declaration sought was one that the plaintiff was entitled to a share of the proceeds of sale with the share said to be determined in some way by taking the proportionate contributions made towards the mortgage by the plaintiff and his son.
The fourth claim however is for a declaration that the plaintiff is entitled to a charge on the land to secure payment to him of some sum which the Court should determine.
It was accepted that the property had been sold, and that if the plaintiff was entitled to one of the declarations sought, then, as those declarations cannot be given effect, it would be possible for the court to make some award of equitable compensation which would give the same benefit to the plaintiff as he sought under those orders. The property was sold for $240,000 and that there was $50,000 retained in trust and pending the outcome of the proceedings.
If the money, namely the $110 per week, was paid to the defendant by way of board then it was quite clear that the plaintiff’s claim for any relief must fail (taking into account that from 1993 until 2002, no payment of board was made). If however, contrary to that conclusion, the plaintiff and his wife did make payments of $110 per month towards the monthly mortgage repayments, then the amount which they so contributed was either about $17,300 or about $15,500.
The Court found that $16,500 as being a reasonable determination of the amounts paid by them on the basis of $110 per week.
The Court held it would be proper to impose a charge over the monies held in trust for that figure, together with interest from the date on which the plaintiff went out of possession when he lost the benefit of those monies that he had paid.
This was the most that the plaintiff could have achieved in these proceedings as represented a proper amount of compensation to him for the fact that he did enable the defendant to obtain the mortgage on the favourable terms and may have enabled the house to be built. However this amount was cancelled out by the period the plaintiff and his wife occupied the house and paid no rent.
The other matters put forward by the plaintiff did not give rise to any entitlement. Accordingly judgment for defendant and costs awarded.