Swettenham v Wild

Swettenham v Wild [2005] QCA 264

This case draws very strong focus on the importance of having a written agreement.

This is a Supreme Court of Queensland Court of Appeal decision.  This means that there were two court hearings.  This would have involved very significant expense.  The daughter was ordered to pay the granny’s (father’s) costs.

The facts are quite straightforward.  The father was an elderly widower.  He had decided to sell his house in Melbourne and move to Queensland where his daughter lived with her husband, in rented accommodation..

He purchased a house in his name but later transferred it to his daughter.  So his daughter became the registered owner.  The daughter and her husband made some financial contribution to the funding of the house, but the father contributed the vast majority.

The arrangement was that the father would have his own living area, but would share evening meals with his daughter and take part in family activities.  The daughter would assist with the father’s cleaning and in other ways.  It was agreed, without a written agreement, that the father had the right to remain at the property for the rest of his life.

This was a mutually beneficial arrangement – the daughter had the security of having the home in her name, and the father had the security of life time accommodation and the companionship of his daughter and her family.

Things were pretty much harmonious for a period of time, but after the transfer of the title to the daughter there was a serious family dispute which caused a complete break down in the relationship.  This break down was not foreseen and, as the court put it “..(the arrangement) was an endeavour which (failed) without attributable blame.”

In court the daughter asserted that the transfer of the property to her was a gift (arguing the presumption of advancement).

The court said this was not the case – “Where that common endeavour breaks down, the presumption of advancement may no longer apply……the gift to Ms Wild was dependent upon the on-going relationship or joint endeavour. If the joint endeavour failed, then a constructive trust may arise.”

The court held that a constructive trust did arise and that the daughter held that part of the property that represented the father’s financial contribution, on trust for her father.

A financial disaster for the daughter.

A properly written granny flat agreement will take account of a break down in the relationship and set out what will happen.  Accordingly, during the process of drawing up the agreement the parties will be able to think about this outcome and decide what to do in advance.  This would have avoided the two court cases in this example and the family disruption that lead to.