Thanks, as ever, Neil

 

 

On a quick read through, the important further points seem to be.

 

1. They all agree that what is being presumed, when there is a presumption of resulting trust, is an intention to create. Swadling has long argued that (others have disagreed in the past).
2. They agree that the presumption of advancement isn’t a presumption at all (indeed, logically there can’t be a presumption of resulting trust and a presumption of advancement, regardless of what the books say). Rather, that is a situation where the presumption of resulting trust doesn’t apply.

 

FWIIW, both points seem right to me. There is some confusing stuff about presumptions of fact and law, that I didn’t like much, but otherwise a good decision that takes us forward. There didn’t seem to me to be much substantive disagreement, although there were hints of dividing lines under the surface.

 

It is a fragile thing this presumption, rebutted by a whiff of evidence, and as it is both offensive and contrary to what people seem to me to really intend in 2022, best scrapped. But the consequential necessary tidying up is surely a matter for the legislature.

 

 

Dear Colleagues;

With some trepidation (since it concerns equity not torts!) I thought I should draw attention to the decision of the High Court of Australia today in Bosanac v Commissioner of Taxation

[2022] HCA 34 (12 October 2022). A 5 member bench of the Court (3 separate judgements from Kiefel CJ & Gleeson J; Gageler J; and Gordon & Edelman JJ) holds that the “presumption of advancement” (whereby someone who has provided funds for the purchase of property is deemed under a “resulting trust” to hold the property in a share proportionate to their contribution), is still a part of Australian law, as well as the countervailing “presumption of advancement” (whereby certain family relationships between the parties will negate the resulting trust.)

In this case Mr Bosanac and Ms Bosanac (his wife) had both contributed funds towards the matrimonial home, though it was held in the wife’s name alone. The Commissioner of Taxation, seeking to recover money from Mr B, argued that he had an equitable half-share which they could get access to. The Commissioner argued that if the “presumption of advancement” applied (which it would, given that gifts from husband to wife had long been held to be included), then the High Court should declare that it no longer existed, given that it is discriminatory. (Authority holds that it does not arise in relation to a gift from a wife to a husband, and arguably it does not arise in a same-sex marriage, though I am not aware of any formal rulings to that effect. See Gageler J at [55] for a summary of the argument.)

The result of the HCA decision was to reject the Commissioner’s arguments, however. All members of the court accepted previous descriptions of the two doctrines as entrenched in the structures of the law (“landmarks”). I think these paragraphs from Gageler J represent the views of all of the court:

 

58. For better or for worse, the weight of history is too great for a redesign of that magnitude now to be undertaken judicially. This Court in Charles Marshall Pty Ltd v Grimsley67 adopted the description by Eyre CB in Dyer v Dyer68 of the presumption and counter-presumption as "landmarks" in the law and said then that the applicable law could "no longer be the subject of argument". That view was repeated by Deane J in Calverley v Green69 and by Deane and Gummow JJ in Nelson v Nelson70. Their Honours emphasised in the last of those cases that many disputes have been resolved and transactions effected based on the presumption and counter-presumption. They also explained that modern equivalents of ss 7 and 8 of the Statute of Frauds, of which s 34 of the Property Law Act is just one of many examples, assume their continuing operation. 

59 Evaluated by contemporary standards, the categories of relationships seen in the past to attract or not to attract the counter-presumption of advancement are inconsistent and discriminatory. That provides reason, consistent with equitable principle, to consider in an appropriate case expansion of those categories71. It provides no reason to bolster the anachronistic presumption of a resulting trust by abandoning the counter-presumption altogether. 

60 Unless and until they are together reappraised as an exercise in law reform and abolished or modified by legislation, the presumption of a resulting trust and the counter-presumption of advancement are here to stay. The Commissioner's contention that the counter-presumption of advancement should alone be abandoned as a doctrine of equity must be rejected. 

 

Both “presumptions” are described as “weak” and able to be rebutted by fairly modest evidence to the contrary. Here the circumstances of the dealings with property by Mr and Mrs B over the years (they each held separate items of real estate) and other matters meant that the presumption of resulting trust did not arise (or else, if it did, it was clearly rebutted by the fact that the gift was from husband to wife.) Various ODG colleagues are cited, including Bill Swadling and Jamie Glister.

But comments from colleagues who know more about equity will no doubt illuminate more!

Regards

Neil