When property co-ownership turns to conflict

Disputes involving property co-ownership and informal business relationships are not uncommon. When personal relationships overlap with investment arrangements, the risk of unclear obligations and future disagreements rises significantly. The recent Supreme Court of New South Wales decision in Kyriacou v Makis [2025] NSWSC 1010 highlights these risks and provides important legal lessons on partnership disputes, estoppel, and property entitlements in New South Wales.

This blog unpacks the case’s factual background, legal issues, and the Court's findings to help individuals and businesses understand their rights and obligations in joint property investments.

Background of the Case

The case involved a long-standing property relationship between Kyriacos Kyriacou (the plaintiff) and Andrea Makis (the defendant). Their association dated back to the mid-1990s and included the joint acquisition of multiple residential properties, including a block of eight units on MacDonald Street in Lakemba, NSW.

While the properties were co-owned, the plaintiff alleged that the relationship was more than just co-ownership, that it was a partnership for property investment. Over time, disputes arose about the ownership and division of the co-owned assets, being 8 residential units held as tenants-in-common between the parties.

Core Legal Issues Before the Court

Justice Lindsay of the NSW Supreme Court was asked to determine several key legal questions:

1. Was there a legally enforceable partnership between the parties?

2. Did the unsigned “Partnership Dissolution Agreement” (PDA) have any legal effect?

3. Could the plaintiff rely on equitable estoppel to enforce an assumed agreement?

4. What was the true beneficial ownership of the MacDonald Street Units?

Arguments Presented by the Parties

The Defendant’s (Makis) Position:

• She claimed that a global partnership began in 1995 involving both parties and their spouses, which continued (with changes in membership) through to the present.

• She argued the MacDonald Street units were part of this partnership and that she was entitled to a full accounting of assets and liabilities under the Partnership Act 1892 (NSW).

• She also asserted that any informal arrangements or transfers should not defeat her claim to partnership assets.

The Plaintiff’s (Kyriacou) Position:

• He denied the existence of a broad partnership. Instead, he claimed the parties only collaborated on a transactional basis and co-owned specific properties.
• He relied on equitable estoppel, arguing that he had transferred multiple property interests and allowed the defendant to retain sale proceeds, on the understanding that she would, in return, transfer her share of the MacDonald Street units to him.
• His estoppel case was built around a 2012 document - the unsigned “Partnership Dissolution Agreement” (PDA) and the conduct of the defendant and her (now former) husband.

The Role of the PDA and the Estoppel Argument

Although the PDA was never signed, it played a central role in the plaintiff’s case. Kyriacou alleged that representations made by John (the defendant’s then husband and agent) and conduct by Makis led him to believe the PDA would be honoured.

The alleged agreement included:

• Makis transferring her share in the MacDonald Street units to Kyriacou;

• Kyriacou transferring his interests in other properties to Makis and her children;

• A mutual release of claims between the parties.

Kyriacou claimed he acted on this understanding to his detriment, including:

• Transferring valuable property interests;

• Managing and covering expenses for the MacDonald Street units;

• Making mortgage payments.

The Court’s Reasoning and Decision

On the Existence of a Partnership:

Justice Lindsay found that no legally binding, overarching partnership existed. While the parties had engaged in joint investment activity, it did not meet the legal definition of a partnership under the Partnership Act 1892 (NSW).

As the Court observed:

"Joint activities essentially transactional in nature" did not amount to a partnership carrying on a business in common.

There was no written agreement, partnership tax filings, or consistent accounting records. Importantly, the arrangement lacked the hallmarks of a business enterprise carried out in common with a view to profit.

On the PDA:

Justice Robb had earlier ruled in Kyriacou v Makis [2021] NSWSC 60 that the PDA was not enforceable, as it was unsigned and explicitly contemplated that it would only take effect upon execution.

Justice Lindsay reaffirmed that finding, but crucially distinguished between contractual enforceability and equitable estoppel.

On the Estoppel Claim:

The Court accepted Kyriacou’s claim that he was induced to act to his detriment based on representations and conduct by John (acting with Makis’s knowledge or imputed authority). Even though the PDA was not enforceable as a contract, the defendant was estopped from denying its terms.

The Court declared:

“The plaintiff is entitled to maintain his estoppel case as pleaded in his Defence to Cross Claim, and the interests of a due administration of justice point in the direction of allowing that case to be determined on its merits”.

Final Outcome:

The Court declared that Makis holds her interest in the MacDonald Street units on trust for Kyriacou.

Key Takeaways for Property Co-Owners and Investors

This decision provides valuable lessons for individuals entering joint property ventures:

1. Avoid Informal Arrangements

Verbal agreements and informal understandings can cause serious disputes down the track. If you’re co-investing in property, always formalise the arrangement in a written, signed agreement—ideally, a partnership or co-ownership agreement.

2. Understand the Limits of "Partnership"

Just because people jointly buy or manage a property doesn’t mean a partnership exists. As the Court confirmed, co-ownership alone is not sufficient to establish a legal partnership.

3. Be Cautious with Representations and Assumptions

This case demonstrates that even if a contract is unenforceable, a party may still be bound by equitable estoppel if the other party reasonably relied on representations to their detriment.

4. Third Parties Acting with Apparent Authority Can Bind You

Makis allowed her former husband to act on her behalf. The Court found this conduct, combined with silence in the face of Kyriacou’s actions, was sufficient to impute knowledge and responsibility to her.

5. Litigation Delays Can Be Costly

Multiple judgments in this matter were required because of procedural delays, including late cross-claims and evolving arguments. The Court was critical of both parties, particularly the defendant, for procedural inefficiencies.

Conclusion

The Kyriacou v Makis case illustrates how personal and financial relationships can become entangled and contentious without clear legal documentation. For property investors in NSW, the message is clear: document your intentions, seek legal advice early, and don't rely on informal arrangements—particularly when real estate and significant money are involved.