Falloon v Madden; Madden v Madden [2012] NSWSC 652

Falloon v Madden; Madden v Madden [2012] NSWSC 652

Margaret and Bill each contributed to the purchase price of the Woolooware Property and thus, in the absence of a presumption of advancement and in the context of Bill's bankruptcy, a resulting trust arose in proportion to their contributions (49.5% for Margaret, 50.5% for Bill). Bill’s interest vested in the Official Trustee as after-acquired property under the Bankruptcy Act 1966 (Cth). Both held their equitable interests as tenants in common.

Parties
First Plaintiff (2010/332163); Second Defendant (2011/25063): Eve Falloon; Second Plaintiff (2010/332163); Third Defendant (2011/25063): Chad Falloon; Defendant (2010/332163); First Defendant/executor (2011/25063): Michael Madden; Plaintiff (2011/25063): William Madden (Bill)
Jurisdiction
Australia
Judgment Date
14 June 2012
Procedural Posture
Equity Proceedings (trusts/estates) / Principal Judgment on Declaration of Trust and Reimbursement Claims
Outcome
Resulting trust as to a part interest in property established; entitlement to recovery from deceased's estate of some amounts established; further consideration required regarding Official Trustee and occupation fee; orders to follow after short minutes.
Legal Topics
Resulting Trust, Co Ownership, Bankruptcy and After Acquired Property, Entitlement to Estate Assets, Contribution to Property Purchase, Equitable Accounting, Occupation Fee
Trusts Bankruptcy Equity Succession Resulting Trust Co Ownership Bankruptcy and After Acquired Property Entitlement to Estate Assets +3 more

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Parties

Eve Falloon

First Plaintiff (2010/332163); Second Defendant (2011/25063)

Chad Falloon

Second Plaintiff (2010/332163); Third Defendant (2011/25063)

Michael Madden

Defendant (2010/332163); First Defendant/executor (2011/25063)

William Madden (Bill)

Plaintiff (2011/25063)

Procedural Posture

Equity Proceedings (trusts/estates) / Principal Judgment on Declaration of Trust and Reimbursement Claims

Legal Issues

  1. 1 Whether a resulting trust exists regarding the Woolooware Property based on contributions to purchase price
  2. 2 Whether the beneficiary’s share in trust property vested in the Official Trustee due to bankruptcy
  3. 3 Whether interests were held as joint tenants or tenants in common

Ratio Decidendi

Margaret and Bill each contributed to the purchase price of the Woolooware Property and thus, in the absence of a presumption of advancement and in the context of Bill's bankruptcy, a resulting trust arose in proportion to their contributions (49.5% for Margaret, 50.5% for Bill). Bill’s interest vested in the Official Trustee as after-acquired property under the Bankruptcy Act 1966 (Cth). Both held their equitable interests as tenants in common.

Court Disposition

Resulting trust as to a part interest in property established; entitlement to recovery from deceased's estate of some amounts established; further consideration required regarding Official Trustee and occupation fee; orders to follow after short minutes.

Orders

  • Declaration that a resulting trust arose with Margaret’s estate holding a 49.5% beneficial interest and Bill a 50.5% interest (currently vested in the Official Trustee).
  • Bill may recover from Margaret’s estate 49.5% of council rates paid and the specified amounts ($50,000, $119,877.26) paid towards the estate’s tax debts, and $156,034.06 (plus interest) for Radcliffe mortgage payments; precise orders reserved pending further submissions and consideration of occupation fee.