Ly v Ly [2012] NSWSC 643

A brother and sister purchased property as tenants in common in shares 30:70. The sister paid the bulk of the mortgage repayments and costs. The sister claims that her brother holds his 30% interest as constructive trustee for her by virtue of her having carried the burden of the mortgage repayments and costs given his refusal to contribute his share.

The court found that there should be an adjustment of interests because a co-owner of a property cannot leave the whole burden of repaying the loan obtained to purchase the property and other ongoing necessary expenses such as council rates and insurance to the other co-owner without eroding his beneficial interest in the property The court found that some allowance should be made for the fact that the brother moved out when he married and did not have the benefit of the property. The court found that the brother owed his sister more than his equity in the property.

The court ordered that the brother transfer his 30% interest to his sister and that his reimbursement for having moved out should be paid by way of an offset for costs which the sister is entitled to given she has been largely successful in the proceedings. 

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