Keywords: Cook v Alderson [2025] QSC 26; Supreme Court of Queensland; Trial Division; equity; equitable compensation; constructive trust; joint endeavour; equitable charge; life interest; family property arrangements; Muschinski v Dodds; Baumgartner v Baumgartner; Giumelli v Giumelli; Queensland.
By Honest Grace Legal | Aug 2025
Subject
Equitable compensation and charge after a failed family property arrangement
What Happened
- In 2015, Bonnie Cook (the plaintiff) and her daughter, Shannon Alderson (the first defendant) orally agreed to purchase a property (18 Doherty Court, Ormeau) in the defendants’ names. The plaintiff would contribute a sum to the purchase price, as well as fund a granny flat conversion. In return, she could live on the property for life, rent free and without outgoings. Although the arrangement was oral, the terms of the agreement itself were not substantially in dispute.
- By 2023, the family was in dispute, and the plaintiff had left the home. Proceedings were brought to determine the value of the plaintiff’s interest (equitable compensation) which ought to be paid to the plaintiff by the defendants.
- Contributions: $110,116.41 towards purchase; $160,804.42 to convert a garage/workshop into a one-bedroom home completed in April 2017. The defendants paid the mortgage and all outgoings. The plaintiff lived there until April 2023.
- Relations deteriorated (privacy concerns and a dispute about visits from the plaintiff’s son). After the first defendant asked to “buy [the plaintiff] out”, the plaintiff left on 18 April 2023; a later $250,000 offer was rejected.
- Current agreed market value of the property: $1,750,000.
Key Legal Issues
- Whether a joint endeavour constructive trust arose from the family arrangement for acquisition and improvement of the property.
- Whether the endeavour ended “without attributable blame”, engaging equitable relief
- What remedy satisfies the minimum equity to do justice: mere refund of contributions or something more (including value for the plaintiff’s lost lifelong, rent-free occupation).
- How to value the life interest and whether prejudgment interest should be awarded, and at what rate/period.
What the Court Decided
- Repayment of contributions: The defendants must repay $110,116.41 (purchase contribution) and $160,804.42 (granny flat works) plus prejudgment interest of $29,710 (calculated from 18 April 2023), all secured by an equitable charge over 18 Doherty Court, Ormeau.]
- Equitable compensation for life interest: $120,000, also secured by the equitable charge.
Key Findings
- The arrangement was a joint endeavour to acquire and improve a family home for mutual living, with shared expenditure and clearly agreed limits on the plaintiff’s capital interest.
- The endeavour ended without attributable blame: family privacy and relationship pressures made continued cohabitation unrealistic; fault-finding is inappropriate in this context.
- The plaintiff’s consideration for forgoing capital growth was the promise of rent free, outgoings free lifelong occupation; removing that benefit while keeping the capital advantage would be unconscionable.
- Return of nominal contributions alone would not be just and equitable, given the plaintiff’s age (76), life expectancy (approx. 14.05 years), inability to finance a new home, and the long-term benefit provided to the defendants by her capital.
- Life interest valuation: The court rejected a bare $100,000 base used in a joint valuation report but adopted its multiplier (0.45304) to the plaintiff’s total contributions, yielding $120,000 (rounded).
- Interest: Allowed at 6% from 18 April 2023 (when the cause of action arose) to reflect the non-commercial nature of the arrangement.
- Security: An equitable charge over the Ormeau property was appropriate in lieu of a proprietary share.
Outcome
The court applied the joint endeavour constructive trust framework to prevent the defendants from retaining the full benefit of the plaintiff’s contributions and the bargain’s capital advantages while the plaintiff lost her promised lifelong, cost-free occupation. Equity required more than a simple refund because the plaintiff traded away capital growth rights in exchange for a valuable lifetime benefit; returning only the historic dollars (after almost a decade) would undermine that exchange and be unconscionable. Considering her age, life expectancy, limited borrowing capacity, and the defendants’ ongoing benefit from her capital, the court awarded equitable compensation of $120,000 for the lost life interest, repayment of contributions, and interest from the date the arrangement effectively ended, with all sums secured by an equitable charge on the property.
Why This Case Matters
- Family property deals need exit plans: Where parties do not specify what happens if co-living fails, courts may step in to craft equitable relief that goes beyond refunding cash contributions.
- Life interest value is real value: If a party forgoes capital in exchange for lifelong, rent-free occupation, equity can compensate for the loss of that benefit when the arrangement ends without blame.
- Flexible tools: Courts may use equitable charges and equitable compensation (informed by valuation methods and multipliers) to strike a just and equitable balance.
Source
https://archive.sclqld.org.au/qjudgment/2025/QSC25-026.pdf