On their mother’s death, three siblings agreed to pool their inheritances enabling disabled brother Stephen to continue living in the family home. It was a breach of trust for Stephen to later claim he was absolute owner of the home when in his will he supposedly gifted the Hamilton property to another sibling who had not contributed to the original arrangement.
Stephen Mills suffered from multiple sclerosis. He was living with his mother at the family home in Galway Street when she died in 2004. Three of his siblings: Pauline, Wayne and Mary agreed to redirect inheritances from their mother’s estate. Instead of receiving cash, their estate entitlements would be used to part-fund purchase of Galway Street, providing Stephen with the security of having a home to live in. The Galway Trust was established to buy the property. Pauline Wayne and Mary contributed a total of $64,000. Stephen put in about $80,000; his share of the estate plus personal savings. A bank mortgage of $58,000 completed the purchase.
Terms of the trust specified the home was not to be sold while Stephen was alive and that he could live there rent free provided he paid outgoings for the mortgage, rates and insurance.
While it was intended title to Galway Street would be registered in names of Galway Trust trustees, it transpired that title was taken in Stephen’s name only. The court was told Stephen became quite emotional when visiting his lawyer to sign the paperwork, saying he wanted something in his life he did himself. His lawyer made it clear that while Stephen’s name would go on the title alone, he held the property in trust for the Galway Trust. On his death twelve years later, Stephen left an unsigned document, later confirmed to be his will, stating the house would go to another sibling, Terry. Only then, did Galway Trust trustees discover they were not registered on the title. Terry claimed he was now absolute owner of Galway Street. Terry did not contribute financially to the trust’s Galway Street purchase.
The Court of Appeal confirmed a High Court ruling that Terry did not have ownership; the property was owned by Galway Trust. Subsequent to Stephen’s death, trust beneficiaries are Pauline, Wayne, Mary and their children. Stephen’s estate was entitled to repayment of $30,300; money he lent to the Trust for purchase of Galway Street.
Mills v. Galway Trust – Court of Appeal (8.09.21)
21.152