A mother purchased a house for her daughter to occupy, the relationship later broke down and the mother sought to evict her daughter and family. The daughter claimed a constructive trust in relation to half the estate. The daughter paid rental for a decade and then stopped all payments.
The court noted that in the case of a constructive trust as opposed to a resulting trust, the parties may have had no explicit intention about how legal title would be held in the event of a breakdown of the relationship and a constructive trust is imposed to prevent an unconscionable assertion of legal title. The court said:
The fundamental question in determining whether a Baumgartner kind of trust exists is “whether it would be unconscionable that the rights of the parties, on determination of the relationship, should be simply what the bare legal right of the parties to the assets is”… In order to establish the existence of a constructive trust, [the daughter] must establish that she and her mother were in a joint relationship or endeavour and that the property was acquired in the course of, and for the purposes of, that joint relationship or endeavour. It is then necessary to determine the respective contributions of the parties to that relationship so as to determine whether it would be unconscionable, following the breakdown in their relationship, for the property interests to lie where they fall.
The court found no joint endeavour and found that the mother did not buy the house intending that it would be held beneficially for her daughter. The court refused to credit the contribution made by the daughter and her husband to the maintenance of the property because they had lived in the house rent-free since 2007. The court found it would not be unconscionable for the mother to retain the whole of the legal interest in the house.
The mother was given possession.