The House is in my Name, But it Belongs to my Parents
12 July 2016
In a property settlement, any real property that has one or both of the spouses on the Title to the property, will nearly always be included as an asset of the parties. There are a few circumstances however, where this will not be the case.
In a recent case the court was faced with an application by the husband that the wife was the beneficial owner of a property (and therefore it should form part of the pool of assets to be divided between the parties). The wife opposed this claiming that her 82 year old mother was the beneficial owner of the property
Background
- Before the husband’s application, the wife had made an application in the State Supreme court to have the title for the property transferred from her name to her mother’s name. The Supreme Court made a declaration that the wife held the property ‘upon trust’ for her mother. The court also ordered that the wife transfer all of her interest in the property to her mother.
- The wife’s mother had contributed the whole of the purchase price.
- Prior to the purchase of the property, the wife’s mother had previously purchased other properties, all of which were either in the wife’s sole name or the wife’s name appeared on the title along with the parent’s names. Upon the sale of these properties the wife did not receive any funds.
- The wife’s parents paid all of the rates for the property.
- The wife signed a mortgage document naming herself as mortgagor and her parents as mortgagees for the principal sum of $350,000;
- Renovations were carried out to the property. The wife’s mother contended those renovations were paid for by her. The husband gave evidence that he contributed financially to the renovations, but he contradicted himself in relation to how much he contributed.
Decision
The Judge found:
- the wife’s parents had no intention to give to the wife any beneficial interest in the property at the time of its purchase, nor did the wife have any intention of taking a beneficial interest in it.
- the wife’s mother had made it clear via conversations with the husband and wife that she would retain beneficial ownership of the relevant property;
- the payment of rates by the wife’s parents and that the wife received no sale proceeds (from previous properties) was consistent with the wife’s claim that her mother intended to retain beneficial ownership of the property.
The Judge ordered that there be a declaration that the wife held the property ‘on trust’ for her mother, so it was not included in the property division.
