Supreme Court of WA|2012-01-25|Before: Edelman J

1 On 15 April 1994, a sale of land in Anstey Road, Forrestdale was completed. The purchasers were the plaintiffs (joint tenants of a half share) as tenants in common with the defendants (joint tenants of the other half share).

2 In this judgment I refer to the parties by their first names. I mean no disrespect by this; it is simply for clarity and to avoid confusion. The defendants, Troy and Stephannie, are the son and daughterinlaw of the plaintiffs, Bruce and Carol. Troy and Stephannie have twins, Harly and Tayla.

3 Most of the purchase price for the Anstey Road property was contributed by Bruce and Carol. However, Bruce and Carol agreed that they would live at Anstey Road with Troy and Stephannie and Harly and Tayla. It was agreed that Troy and Stephannie would make all the mortgage repayments, including payments for a loan which was to be used to build a rear residence on the property where Bruce and Carol would live.

4 In May 2006, Troy and Stephannie separated. This claim was subsequently brought by Bruce and Carol. Their case was primarily that Troy and Stephannie held their title to the Anstey Road property on resulting trust for Bruce and Carol in proportion to the contributions made by Bruce and Carol.

5 Both counsel placed substantial reliance on presumptions in their arguments concerning the resulting trust. This requires some navigation of the procellous waters of the language of 'presumptions' involved with resulting trusts. Once the presumptions are explained, the ultimate resolution of this issue turns upon uncomplicated factual matters, some of which were not in dispute.

6 I conclude that Stephannie has proved that the objective circumstances establish that the half share in the title to the Anstey Road property was transferred to Stephannie and Troy for their own benefit. They did not hold their interest on trust for Bruce and Carol and the 'presumption of resulting trust' has been rebutted.

7 But the trial was not to be so simple. At the start of the trial, counsel for Stephannie amended her pleading to introduce counterclaims based upon mistake, failure of consideration, undue influence, and unconscionable conduct. The evidence led on Stephannie's behalf did not support any of these claims. The claim based on mistake was later abandoned.

8 It is necessary to deal at the outset of these reasons with a submission made in closing by counsel for Stephannie. The submission was that the court should ignore any deficiencies in evidence led on her behalf. Counsel for Stephannie said that changes to the plaintiffs' case meant that 'I didn't know the case that I had to answer' (ts 261). This ignorance was said by counsel to be 'a very good reason to allow me to make one or two assumptions that just fill in the gaps that the evidence leaves' (ts 262 263).

9 There is no basis in law for a court to fill evidentiary gaps which arise due to deficiencies in evidence which could have been led by counsel for Stephannie.

10 Nor is there any basis in fact for the submission that the plaintiffs' conduct of their case was such that Stephannie's legal representatives could not reasonably have understood the case put against her. It is necessary to explain the context in which this submission was made to show why this is so.

11 In their writ, the plaintiffs made a simple claim that they held their interest in a property in proportion to the contributions which they and the defendants had made to the property.

12 On 18 February 2008 the plaintiffs filed their statement of claim in these proceedings. With one exception, their statement of claim remained unamended throughout these proceedings.

13 The statement of claim provided details of the contributions by the plaintiffs. In par 19 of the statement of claim, although not in the writ or the prayer for relief, the trust was described as a 'constructive trust'.

14 On 15 July 2009 Stephannie's substantive defence was filed. Stephannie pleaded numerous contributions that she had made to the property. Stephannie also pleaded that the plaintiffs were 'in loco parentis', and that a 'presumption of advancement' arose: defence par 24.

15 The case had all the hallmarks of a simple case concerning a resulting trust. For the plaintiffs it was a case based upon an assertion of a resulting trust arising from the plaintiffs' contributions. Stephannie had defended the claim on that basis by pleading a 'presumption of advancement' due to the familial relations between the plaintiffs and her and she had relied upon her contributions to the property.

16 On 29 September 2011 the plaintiffs filed a written opening outline. Although the words 'resulting trust' were not used, the case was squarely put on the basis that 'the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless their contributions are equal'. The plaintiffs relied upon a leading decision on resulting trusts, Calverley v Green [1984] HCA 81; (1984) 155 CLR 242.

17 The same day, counsel for Stephannie filed submissions containing an opening outline. Counsel made submissions denying that a common intention constructive trust had arisen. Submissions were also made denying that a resulting trust had arisen. The submissions recognised that both types of trust pleaded required the presence of a common intention: pars 6, 15, 20, 27.

18 On the morning of the trial counsel for Stephannie filed written submissions saying that if the plaintiffs sought to amend their pleadings to plead a resulting trust then Stephannie 'will submit that any such trust (if any arose, which is denied) was undermined by one or more of the vitiating factors mentioned in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 [115]. The relevant factors in this case are: estoppel; undue influence and unconscionable dealing': par 15 supplementary submissions. In the history of the action, this was the first time that any of these claims had been mentioned.

19 At the start of the trial, on 3 October 2011, counsel for the plaintiffs applied to amend the plaintiffs' pleading. He was given leave to amend to strike out the adjective 'constructive' which qualified the reference to trust in par 19 of the statement of claim (ts 8 9). This removed any doubt that the plaintiffs' case was based on an assertion of a resulting trust. During opening, counsel also accepted that there was nothing pleaded which could justify the alternative relief of 'equitable compensation' which had been sought in the prayer for relief (ts 27).

20 Counsel for Stephannie then made an opening statement. He explained that he intended to rely upon unpleaded allegations of undue influence, unconscionable conduct and estoppel. He claimed that he had not realised that the trust pleaded was a resulting trust, although he said that he 'thought something must be amiss because I couldn't see an element of unconscionability that would support the imposition of a remedial trust in the nature of a constructive trust' (ts 21). He did not explain why the defence had pleaded matters such as a 'presumption of advancement' which was an apparent response to a resulting trust. Nor did he explain why the alleged change by the plaintiffs from a plea of a common intention constructive trust to a resulting trust required a wholly new counterclaim based on undue influence, unconscionable conduct or estoppel.

21 Counsel for Stephannie also sought leave to rely on all these unpleaded allegations without amending Stephannie's defence. I declined to allow this course. The trial adjourned at lunch on the first day to allow counsel further time to consider these new amendments.

22 On the second day, 4 October 2011, counsel for Stephannie filed an amended pleading. No objection was taken to this course and leave was granted for the amendment, with costs consequences reserved. The amended pleading introduced a new counterclaim and contribution and indemnity notice. Estoppel was not included. New pleas of undue influence and unconscionable conduct were accompanied by pleas of failure of consideration and mistake.

23 After filing the amended pleading, counsel for Stephannie then sought an adjournment of the trial on the basis that he could not 'be satisfied that the evidence that is before the court is adequate to prove each and every of the additional allegations made in the amended pleadings' (ts 53). The application for an adjournment was not opposed. The trial was briefly adjourned.

24 On the third day, 5 October 2011, the court reconvened following communication from counsel. Counsel for Stephannie said that he was ready to proceed, subject to the possibility that he may apply to recall the plaintiff's only lay witness if the case were adjourned partheard and if something new arose as a result of further instructions that he received (ts 57).

25 The trial proceeded. The evidence concluded on the fourth day, 6 October 2011. The parties agreed to file written closing submissions with brief oral closing submissions on 24 November 2011.

26 In oral closing submissions, counsel for Stephannie applied to make a further amendment to Stephannie's pleading. He said that he needed to amend his pleading because he had not addressed all the elements of a mistake which can make a contract voidable (ts 227). The amendment sought was to include allegations that the plaintiffs knew of Stephannie's mistake, or alternatively induced that mistake. It became apparent that there was no evidentiary foundation for the amendment. Counsel for Stephannie abandoned the amendment and the claim for mistake (ts 258 259).

27 There is no legal foundation for the submission that a lack of clarity in a plaintiffs' case provides a reason for the court to 'fill in the gaps that the evidence leaves'. This brief summary of the manner in which the trial was conducted also shows that, in any event, the factual basis for the submission is misconceived. Stephannie had every reasonable opportunity to present her case. Four points should be emphasised.

28 First, it was apparent on the face of the writ and the pleading that the plaintiffs' case was based on a trust arising from contributions made by the plaintiffs. The only possible contrary indication was a single paragraph, par 19 of the statement of claim, which described the trust as 'constructive'.

29 Secondly, Stephannie had defended the matter on the basis that a resulting trust had been pleaded against her. She had pleaded her contributions; she had pleaded a relationship between the parties akin to parentchild and had sought to raise a 'presumption of advancement'.

30 Thirdly, even if the plaintiffs had changed their legal case from one based upon a common intention constructive trust to one based upon a presumedintention resulting trust, the pleaded facts were entirely unchanged and the trust alleged was still one based upon intention. The amendment provided no basis for the submission by counsel for Stephannie that because an allegedly different trust was asserted (as a matter of law) new counterclaims needed to be pleaded for undue influence, mistake (which was later abandoned), failure of consideration, and unconscionable conduct.

31 Fourthly, some of the evidence in relation to which Stephannie sought to fill evidentiary gaps in her case was expert evidence concerning the quantification of the value of the property. Counsel for Stephannie had sought an adjournment, and one had been granted. When the trial recommenced, there was no suggestion by Stephannie's counsel that he needed a further adjournment to prepare cross-examination of the valuer called by the plaintiffs.

32 The primary evidence in this case was given by Bruce and Stephannie. Stephannie called evidence from a friend, Ms Annette Gallagher. Expert evidence was called by Bruce from Mr Ross Lambert, a valuer. My findings of fact below derive from that evidence and the exhibits as well as an agreed statement of facts provided by the parties prior to trial.

33 The first and second plaintiffs in this trial were Mr Bruce Anderson and Ms Carolyn Anderson.

34 Bruce and Carolyn have three children. One of their children is Troy Anderson. Although Troy was the second defendant in these proceedings, he took no part and agreed to abide by the decision of the court.

35 On 16 November 1991, Troy married Stephannie McPherson. Stephannie is the first defendant.

36 Troy and Stephannie have twin children, Harly and Tayla.

37 From 13 March 1978, Bruce and Carolyn were the owners and registered proprietors of a property at 77 Tamar Street, Palmyra (the Tamar Street property). The Tamar Street property was contained in certificate of title vol 1428, folio 405.

The purchase and ownership of the Baal Street property

38 On 14 December 1992, Bruce and Carolyn contracted to buy property at 25 Baal Street, Palmyra (the Baal Street property).

39 On 2 February 1993, title to the Baal Street property was transferred to Bruce and Carolyn as joint tenants. The property was registered as certificate of title vol 1163, folio 835 on that date.

40 The purchase price of the Baal Street property was $107,000.

41 Payment of the purchase price for the Baal Street property was funded by a loan from the ANZ Bank. The Baal Street ANZ bank loan was $110,000. It was made jointly to Bruce, Carolyn, Troy and Stephannie. Monthly repayments were approximately $1,062.

42 The Baal Street ANZ bank loan was secured by mortgages over both Baal Street and Tamar Street.

43 There was dispute at trial concerning who made the repayments to ANZ. Bruce said that he and Carol paid $200 each month and that the balance was paid by Troy and Stephannie (ts 79).

44 Bruce said that Carol would come home having collected some of the cash for the payment from Troy and Stephannie, together with the bank payment book. He said that he gave the balance to Carol to make up the total. He said that the money was given by him in cash to Carol usually to be paid by Carol to the teller at the ANZ bank across the road from where Carol worked (ts 70, 80).

45 Carol did not give evidence, and although Stephannie disputed the manner in which these payments were made to the bank, she later accepted in re-examination that Carol did make some (at least) of the payments in to the bank (ts 214).

46 It is not necessary to determine how often the money was paid to the bank, and when it was paid by Carol or by Stephannie. This is because I am satisfied that whatever the manner in which the payments were made to the bank, Bruce's evidence is accurate concerning the contributions made to the payments. Bruce's evidence was that he and Carol contributed a total of $200 per month to the mortgage repayments, and the remainder was paid by Troy and Stephannie.

47 From about 2 February 1993 until about 15 April 1994, Troy and Stephannie lived at the Baal Street property. Bruce took a month off work to renovate the Baal Street property; painting, pruning, gardening, fencing, and building a cupboard (ts 86). He was assisted by Troy on weekends, although not much was paid for by Troy (ts 87).

48 A significant issue at trial was whether the title to the Baal Street property was held by Bruce and Carolyn on trust for a 50% interest for Troy and Stephannie. Counsel for Stephannie submitted that this trust was of the legal title to Baal Street held by Bruce and Carol.

49 It was common ground that Bruce told Stephannie that she and Troy would not be on the title for Baal Street (ts 205). Bruce's evidence on this matter, which I accept, was unequivocal. He said that he told Troy and Stephannie:

If we go ahead and purchase the property at 25 Baal Street, would you and Steph like the first opportunity to move in it as tenants and we will spend some money improving it and then when Carol and I were setting ourselves up for retirement, eventually you will have to buy your own house and we will sell that? (ts 77)

Bruce also said that Troy and Stephannie's contribution to the mortgage was to be a form of rent (ts 76).

50 In contrast, Stephannie's evidence was that Bruce had told her that the reason why she was not on the title was because he and Carol were using Tamar Street as collateral but that Stephannie and Troy 'will ... be in on the mortgage' (ts 212) and that 'because you will be on the mortgage papers that will be sufficient' (Stephannie's witness statement par 15, exhibit C).

51 On this issue I prefer the evidence of Bruce. I have referred below to his evidence of this Baal Street arrangement as the Baal Street Agreement.

52 Bruce's recollection was clearer, and his evidence was more convincing on this issue. I also consider that he and Carol would have put Troy and Stephannie's names on the certificate of title if they had intended that Troy and Stephannie should have an interest in the property other than as tenants.

53 Finally, although events which postdate the purchase of the Baal Street property cannot be evidence of any manifest intention to create a trust at the time of purchase, they can be used to show that no subsequent trust was declared. One relevant piece of evidence is that Bruce and Carolyn paid the capital gains tax on the capital gain in value of the Baal Street property following its sale. They both paid capital gains of $8,304 (exhibits 18 19).

54 Stephannie also referred to a statement made by Bruce to her and Troy, at the later time of the purchase of the Anstey Road property, that '[y]ou will have to sell Baal Street and we will have to sell Tamar Street' (Stephannie's witness statement par 4(bb)). I do not accept that the statement by Bruce was made in precisely these terms or in terms which would reasonably have suggested that Troy and Stephannie had an interest, other than as tenants, in the Baal Street property. In any event, this statement would not be sufficient to be a declaration of a trust over Baal Street property where, as I have found, none had previously existed.

55 On 22 December 1993, Bruce, Carolyn, Troy and Stephannie submitted an offer to purchase a property at 44 Anstey Road, Forrestdale (the Anstey Road property). The Anstey Road property is contained in certificate of title vol 64, folio 39A. The offer was accepted.

56 The Anstey Road property had a front house with three bedrooms and one bathroom. A selfcontained 'granny flat' was also part of the front house. The granny flat had a bedroom, lounge, kitchen, and separate front and rear doors. Apart from the front house, there was also a transportable house on the Anstey Road property.

57 On 5 January 1994, the ANZ Bank approved a loan facility to a maximum of $40,000 for the purchase of the Anstey Road property (the ANZ Anstey Road loan).

58 Settlement and registration of the Anstey Road purchase occurred on 15 April 1994. Title to the Anstey Road property was held by Bruce and Carol (as joint tenants of one half share) as tenants in common with Troy and Stephannie (as joint tenants of the other half share).

59 Bruce, Carol, Troy and Stephannie, and Troy and Stephannie's twin children Harly and Tayla, all moved in to the Anstey Road property. Bruce and Carol initially lived in the granny flat. The intention was to build a separate rear house on the Anstey Road property in which Bruce and Carol would live.

60 Bruce, Carol, Troy and Stephannie were jointly and severally liable to the ANZ Bank in relation to the ANZ Anstey Road loan.

61 The purchase price paid for the Anstey Road property, including duty and fees, was $223,455.45. That purchase price was paid by:

(a) the $40,000 ANZ Anstey Road loan secured by mortgage of the Anstey Road property;

(b) $24,751.03 from the proceeds of sale of the Baal Street property; and

62 On about 31 July 1995, the ANZ Bank approved an increase to the ANZ Anstey Road loan. Repayments were $493.63 a fortnight (exhibit 12). The purpose of that increase was for the construction of the rear house at Anstey Road where it was intended Bruce and Carol would live.

63 The Anstey Road loan facility was increased to a maximum of $120,000. This meant that up to $80,000 was available for the construction of the Anstey Road rear house.

64 Bruce, Carolyn, Troy and Stephannie remained jointly and severally liable to the ANZ Bank for repayments of amounts drawn from the $120,000 loan facility.

65 Around early 1996, the Anstey Road rear house was completed. Bruce and Carolyn had been living in a 'granny flat' attached to the front house. Following the completion of the rear house Bruce and Carolyn moved into that new house.

66 Improvements to the Anstey Road property were carried out by Bruce, Carolyn, Troy and Stephannie. The extent and nature of those improvements were disputed but it is clear that the majority of the improvements were carried out by Bruce and Troy.

67 The improvements also included the construction of aviaries for Bruce's hobby of breeding exotic parrots which occurred at the Anstey Road property (ts 91 92).

68 For reasons which I explain in more detail below, the extent and nature of the improvements to the Anstey Road property are irrelevant to Bruce and Carol's claim for a resulting trust. The existence of that trust, and the beneficial interest to which the parties are entitled under that trust, must be determined at the time of the purchase of Anstey Road or so immediately afterwards as to constitute part of the transaction. Subsequent improvements are not relevant to this determination.

69 At some time between 22 December 1993 and 24 January 1994, Bruce, Carolyn, Troy and Stephannie entered into an agreement (the Anstey Road Agreement). It is common ground that the following were terms of the Anstey Road Agreement.

(a) Bruce and Carolyn would build a second dwelling house at the rear of the Anstey Road property (the Anstey Road rear house).

(b) The cost of constructing the Anstey Road rear house would be paid by way of a building loan secured by mortgage against the Anstey Road property.

(c) $40,000 of the purchase price of the Anstey Road property would be paid by a loan from the ANZ Bank secured by a mortgage against the Anstey Road property.

(d) Troy and Stephannie would live in the existing house on the Anstey Road property.

(e) Bruce and Carolyn would live in a 'granny flat' which was annexed to the existing house on the Anstey Road property. When construction of the Anstey Road rear house was completed, Bruce and Carolyn would move from the existing granny flat to the new Anstey Road rear house.

(f) The cost of rates and services for the Anstey Road property would be shared equally between Bruce, Carolyn, Troy and Stephannie.

(g) Troy and Stephannie would make all principal and interest repayments for the building loan for construction of the Anstey Road rear house, and for the $40,000 loan which partly financed the purchase of the Anstey Road property.

70 The plaintiffs said that it had also been agreed in the Anstey Road Agreement that Bruce and Carol would pay $200 per month to assist Troy and Stephannie towards the repayments for the period until the rear house was completed.

71 It had been anticipated that the ANZ Anstey Road loan would be increased for the construction of the rear house. The plaintiffs pleaded that the agreement was that this contribution was to assist Troy and Stephannie towards the ANZ Anstey Road loan: statement of claim par 8.3.2. However, Stephannie pleaded that the agreement was that the contribution was to be towards living expenses: defence, par 11A(a)(ii).

72 I prefer the evidence of Bruce on this matter. His recollection of the details of the agreement on this point was more precise than that of Stephannie who, as I explain below, was concerned mainly with the fact that she would be a part owner of a property for the first time.

73 Bruce's evidence, which I accept, was that he and Carol agreed to be responsible for $200 of the monthly mortgage repayments until completion of the rear house: Bruce's witness statement par 78 (exhibit A).

74 This contribution period was from 15 April 1994 until early 1996. The $200 monthly mortgage repayments were, therefore, Bruce and Carol's contribution to the monthly repayment.

75 There was evidence concerning the amount of monthly repayments. Copies (but not the originals which were apparently available) of the deposit book stubs were tendered (exhibit 22). Those copies showed repayments of $550 each fortnight from 27 April 1994. No objection was taken to the admissibility of the copies of these statements.

76 I am satisfied that at the relevant times the repayments made were approximately $1,062 a month (ts 195 196) and that this was the approximate repayment amount (and rate) which was expected by the parties (including for repayment of the loan for the rear building work) at the time of the Anstey Road Agreement.

77 Although the bank initially required repayment only of $354 per month, I accept Stephannie's evidence that the repayments were made fortnightly, and were in the amount of $500 a fortnight. The same payments continued after the bank increased the loan for the building of the rear house and required repayment of $493.63 a fortnight (exhibit 12).

78 There was also dispute concerning whether the $200 monthly payments by Bruce and Carol were actually made, as well as the manner in which the total payment was made to the bank on each occasion. The handwriting on many of the Anstey Road payment stubs was identified by Bruce as Carol's (ts 68 70).

79 Stephannie said that all the payments for the Anstey Road property were made by funds provided from her and Troy (ts 208). On this issue I prefer the evidence of Bruce that he contributed $200 each month to the mortgage repayments. It is consistent with his agreement to do so in the Anstey Road Agreement. I do not consider that Bruce would have promised to make these payments as part of the Anstey Road Agreement and then failed to do so.

The separation of Troy and Stephannie and subsequent events

80 Around May 2006, Troy and Stephannie separated. Troy moved out of the main house on the Anstey Road property. He has not returned to the main house.

81 Stephannie remained living at Anstey Road with Bruce and Carol. Some time in 2006, Stephannie's relationship with Bruce and Carol also deteriorated (ts 209 210).

82 Around 27 July 2006, Stephannie drew $70,388.06 from the ANZ Anstey Road loan (exhibit 13). This increased the debit balance of the Anstey Road loan to $144,132.44.

83 In par 23 of the statement of agreed facts provided before trial it was an agreed fact that none of the $70,388.06 was paid to, or for the benefit of, Bruce or Carol.

84 There are also currently amounts owing by Stephannie in relation to Shire rates and Water Corporation charges.

85 As at 28 September 2011, a debit balance of $132,143.35 existed in respect of the ANZ Anstey Road loan.

The primary action for a declaration of resulting trust

86 The principal relief claimed by the plaintiffs was a declaration that Troy and Stephannie held their title to the Anstey Road property on resulting trust for Bruce and Carol. The plaintiffs also sought a declaration that Troy and Stephannie were liable to the ANZ Bank for the outstanding loan balance on that account and that Troy and Stephannie indemnify Bruce and Carol in relation to the ANZ Bank loan.

87 The plaintiffs relied upon the 'presumption' of resulting trust. Stephannie relied upon a presumption of advancement. The plaintiffs pleaded that the presumption of advancement did not arise; and they pointed to a lack of any assumption by them to provide for, or support, Stephannie.

88 An important preliminary question is why a resulting trust arises. The answer to that question in this case dictates the facts which must be proved by a defendant to rebut the 'presumption of resulting trust'.

89 The Supreme Court of Canada has recently observed that 'there is not much one can say about resulting trusts without a well-grounded fear of contradiction. There is debate about how they should be classified and how they arise, let alone about many of the finer points': Kerr v Baranow [2011] SCC 10; [2011] 1 SCR 269 [16] (Cromwell J for the court).

90 The view of Professor Chambers in Resulting Trusts (2007) 4, following the late Professor Birks, is that the label 'resulting trust', from the Latin resalire, invokes a metaphor of rights 'jumping back' to the settlor: see also J D Heydon and M J Leeming Jacobs' Law of Trusts (7th ed, 2006) 234 [1201].

91 The metaphor of jumping back is misleading. For instance, where a legal right of ownership of land is transferred and a resulting trust arises, a new equitable interest is created in favour of the settlor. The absolute owner in fee simple who transfers title did not previously hold both legal and equitable estates. He held only a legal estate; no equitable estate existed prior to the transfer which could 'jump back': DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431, 463 (Aickin J); Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) [2005] HCA 20; (2005) 220 CLR 592, 606 [30] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ); Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471, 485 [37] (Gummow ACJ, Kirby, Hayne, Callinan & Crennan JJ).

92 An alternative view which does not invoke this metaphor suggests that 'resulting' ought merely to be understood as 'resulting' from the circumstances of the case: Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 [131] (Campbell J, as his Honour was then).

93 If 'resulting' is understood as arising from the circumstances of the case then there is little difference, as a matter of labelling, between 'resulting' and 'constructive'. Quoting from Professor Scott, a joint judgment in the High Court of Australia has said that for a constructive trust, a court 'construes the circumstances in the sense that it explains or interprets them': Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101, 111 [2] (Gleeson CJ, McHugh, Gummow & Callinan JJ).

94 Indeed, the historically close association between resulting and constructive trusts meant that they were originally used interchangeably, particularly by Lord Nottingham LC. For instance, in Grey v Grey (1677) 2 Swan 594, 598; [1677] EngR 86; (1677) 36 ER 742, 743, Lord Nottingham LC spoke interchangeably of a use by implication (now, resulting trust) and a constructive trust; see also M McNair 'Coke v Fountaine (1676)' in C Mitchell and P Mitchell (eds) Landmark Cases in Equity (forthcoming) ch 2. Historical separation may have occurred with the epexegetical interpretation of the word 'construction' in the expression in the Statute of Frauds 1677 'by the implication or construction of law': W Holdsworth, A History of English Law (1924) VI, 643.

95 Therefore, whether the label 'resulting trust' is concerned with a trust which 'jumps back' or 'results from the circumstances of the case', the label does not assist in understanding why the trust arises. However, two matters are well established for resulting trusts inter vivos (amongst the living). First, the resulting trust is a trust in favour of the settlor himself or herself. Secondly, resulting trusts are not monocausal. In other words, resulting trusts arise for a number of different reasons.

96 For centuries, the most common instance in which resulting trusts have arisen has been where the settlor's objectively manifested intention is that the rights which the settlor transferred to another, or purchased in the name of another, should be held on trust for the settlor. If this intention is proved by evidence the trust is usually described as an express trust. But where the intention is proved by presumption the trust is described as a resulting or implied trust.

97 In this sense, resulting trusts have been described as 'intent enforcing' like express trusts: Black Uhlans Inc v New South Wales Crime Commission [133] (Campbell J). Campbell J's decision was described by Young CJ in Eq as 'the latest authoritative discussion' in Salvo v New Tel Limited [2005] NSWCA 281 [92].

98 The intention to be discerned in a resulting trust is an objective, manifest intention; it is not an unexpressed subjective intention: Calverley v Green (261) (Mason & Brennan JJ), (270) (Deane J); Byrnes v Kendle (286 287) [105] [106] (Heydon & Crennan JJ); Re Vandervell's Trusts (No 2) [1974] Ch 269, 294 (Megarry J).

99 But resulting trusts also arise for reasons other than (presumed) manifestations of intention to create a trust. There are numerous examples where a resulting trust has been imposed by law even despite clear and manifest evidence that the settlor did not intend that the rights be held on trust for him or her. Sometimes these resulting trusts which are imposed by law are described as 'automatic' resulting trusts.

100 A well recognised example of a resulting trust which is imposed by law is where an attempt to create an express trust fails: see the discussion in Knudsen v Kara Kar Holdings Pty Ltd [2000] NSWSC 715 [49] (Austin J); and Yard v Yardoo Pty Ltd [2006] VSC 109 [298] (Cummins J), discussion not considered on appeal in either Yard v Yardoo Pty Ltd [2007] VSCA 35 or Kara Kar Holdings Pty Ltd v Knudsen [2001] NSWCA 276. See also J D Heydon and M J Leeming Jacobs' Law of Trusts (7th ed, 2006) 236 [1205].

101 Another example of a resulting trust imposed by law is where a transfer of legal title occurs 'about which the transferor was entirely unaware': Robb Evans of Robb Evans & Associates v European Bank Limited [2004] NSWCA 82; (2004) 61 NSWLR 75, 99 100 [111] [113] (Spigelman CJ).

102 In these cases of resulting trusts imposed by law, the justification for the trust sometimes proceeds on the flawed basis (see [91] above) that the transferor held both a legal and equitable interest and divested only the legal interest: W Swadling 'Explaining Resulting Trusts' (2008) 124 LQR 72, 99 100 discussing Vandervell v Inland Revenue Commission [1966] UKHL 3; [1967] 2 AC 291, 313 (Lord Upjohn), 329 (Lord Wilberforce).

103 A better explanation for the imposition of a resulting trust in these cases focuses upon the lack of intention, usually by the immediate transferor, to benefit the recipient: Robb Evans of Robb Evans & Associates v European Bank Limited (99 100) [111] [113] (Spigelman CJ) citing R Chambers Resulting Trusts (1997); Air Jamaica Ltd v Charlton [1999] UKPC 20; [1999] 1 WLR 1399, 1412 (Lord Millett). These resulting trusts are imposed as a legal response to prevent the recipient having the use and enjoyment of rights for his or her own benefit where that use and enjoyment was not intended.

104 In this case it is not necessary to consider the imposition of this type of resulting trust which is imposed by law, or its boundaries or scope. Counsel for the plaintiffs clarified that their case was brought solely on the basis of a resulting trust which arises as a result of a presumption of objectively manifested intention: closing submissions pars 2 3; (ts 244).

105 The focus of the claim for a resulting trust in this case is therefore only upon the presumed or manifested intention of Bruce and Carol in their purchase of the Anstey Road property.

What is 'presumed' in the 'presumption of resulting trust'?

106 In the class of 'intent enforcing' resulting trust cases, judgments almost invariably refer to a 'presumption of resulting trust'. I have generally followed this approach. But the reference to a 'presumption of resulting trust' is shorthand for a presumption of a declaration of trust; the rebuttable presumption is of the fact of a manifest declaration. The presumption is not of the legal institution of the trust itself (which is the conclusion of law): W Swadling 'Explaining Resulting Trusts' (2008) 124 LQR 72, 79. Nor is there a presumption of the existence of the trust property conveyed, a matter which is essential to the trust, and which is proved by evidence.

107 In Cook v Fountain (1676) 3 Swan 585, 591; (1676) 36 ER 984, 987, the Lord Chancellor, Lord Nottingham, giving the opinion of himself and two Chief Justices, said of the presumption of a declaration of trust:

[E]xpress trusts are declared either by word or writing; and these declarations appear either by direct and manifest proof, or violent and necessary presumption. These last are commonly called presumptive trusts; and that is, when the Court, upon consideration of all circumstances presumes there was a declaration, either by word or writing, though the plain and direct proof thereof be not extant.

108 The presumption of a declaration of trust applied not merely to voluntary conveyances of title, or purchases in the name of another, but also in cases where the legal title was held in a proportion different from the contribution to the price: Lake v Gibson [1667] EngR 103; (1729) 1 Eq Ca Abr 291; (1729) 21 ER 1052; Lake v Craddock [1732] EngR 132; (1732) 3 P Wms 158; (1732) 24 ER 1011.

109 In Dyer v Dyer [1788] EWHC J8; (1788) 2 Cox Eq Cas 92, 93; [1788] EWHC J8; (1788) 30 ER 42, 43, Eyre CB said that the rule that the 'trust of a legal estate ... results to the man who advances the purchasemoney' developed by strict analogy from the rule which applied to the predecessor of the trust, the use. That rule was that where a feoffment was made without consideration, the use would result to the feoffor. The rule was extended to advances of part of the consideration by Sir Thomas Plumer in Wray v Steele [1814] EngR 300; (1814) 2 Ves & B 388; (1814) 35 ER 366.

110 The feoffment to uses, and later the trust, was extremely common from the fifteenth until the seventeenth centuries for a number of reasons. Lord Hardwicke LC explained two of the reasons for the popularity of the use or trust. These were to avoid wardship, and to avoid escheat and forfeiture to the Crown particularly during the Wars of the Roses: see Lloyd v Spillet [1740] EngR 88; (1740) 2 Atk 148, 150; [1740] EngR 88; (1740) 26 ER 493, 494 and the essay (as Sanders on Uses and Trusts was then) commended by Atkyns in his report, F Sanders An essay on the nature and laws of uses and trusts (1791) 109 110, 127 134.

111 It is easy to see why this presumption of a declaration of trust arose in historic circumstances where the only facts proved were that title to land had been voluntarily conveyed from one person to another, or purchased in the name of another whose contribution to the purchase price did not correspond with his or her legal interest.

112 The obvious inference historically from those facts was that a trust had been declared since 'almost all the lands in England were conveyed to Uses' to evade 'the hardships of the feudal tenures ... [and] to secure estates from forfeitures for high treason': W Cruise An Essay on Uses (1795) 30; see also T Plucknett and J Barton St German's Doctor and Student (1523; ed 1974) page 222, ch 22, 'Howe uses of lande began and by what law and the cause why so moche lande is put in use'.

113 With almost all land conveyed to uses and in circumstances in which it was not usual to include words of trust on the conveyance, common experience suggested that a trust had been declared when there was a voluntary conveyance of land to another, or a purchase in the name of another whose contribution did not correspond with his or her legal interest: W Swadling 'Explaining Resulting Trusts' (2008) 124 LQR 72, 80.

114 It is more difficult today to justify why a declaration of trust should be presumed where land is voluntarily conveyed or where contributions to a joint title are not equal. The New South Wales Court of Appeal has remarked that it 'seems rather ridiculous that troubles in England at the end of the Middle Ages should be the basis, in the late twentieth century, for making findings of fact': Dullow v Dullow (1985) 3 NSWLR 531, 535 (Hope JA, Kirby P & McHugh JA agreeing). And in Calverley v Green (264), Murphy J said that the presumption should be discarded.

115 However anachronistic the presumption may be, Australian courts have said that it is a wellentrenched landmark in the law of property which cannot be disregarded by judicial decision: Calverley v Green (266) (Deane J); Brown v Brown (1993) 31 NSWLR 582, 588 (Gleeson CJ); see also Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353, 364 (Dixon CJ, McTiernan, Williams, Fullagar & Taylor JJ) '[t]he law applicable to cases of this nature can ... no longer be the subject of argument'. Further, '[m]any disputes have been resolved and transactions effected on [the] foundation' of the presumption: Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538, 548 (Deane & Gummow JJ), see also 602 (McHugh J) 'the better course is to leave reform ... to the legislature' (Nelson v Nelson [1995]).

116 As developed from these historical origins, the presumption of a declaration of trust which is relevant to this case means that 'a resulting trust arises in favour of the purchaser, or in favour of two purchasers in the proportions in which they contributed the purchase money ... subject to the exception created by the presumption of advancement': Calverley v Green (247) (Gibbs CJ), see also (258) (Mason & Brennan JJ), (269) (Deane J).

The 'presumption of resulting trust' as applied to this case

117 The total cost of purchase of the Anstey Road property was $223,455.45, including duty and fees. The stamp duty, fees and expenses of purchase are included in the purchase price for the purpose of considering the presumption of resulting trust: Ryan v Dries [2002] NSWCA 3 [52] [53] (Hodgson JA).

118 I have set out above at [61] the sources of finance for the purchase of the Anstey Road property. $183,455.45 of the $223,455.45 cost of the purchase was provided by Bruce and Carol from the sale of their Baal Street and Tamar Street properties (see my discussion of the Baal Street property above at [38] [54]). The remaining $40,000 was provided by a loan to which Bruce, Carol, Troy and Stephannie were all jointly and severally liable, although Troy and Stephannie made all the repayments on that loan, except $200 of the $1,062 a month during the construction of the rear house.

119 In Calverley v Green, Mr Calverley paid $9,250 towards the purchase of land. Ms Green and Mr Calverley jointly borrowed the remainder of the purchase price, $18,000, although repayments were made by Mr Calverley. The land was transferred to them as joint tenants. A majority of the High Court held that it was presumed that a trust had been declared in proportions representing a $9,250 contribution by Mr Calverley and equal contributions as to the balance.

120 In Calverley v Green, the majority emphasised that the trust, and the proportionate beneficial interests, must be determined at the time of purchase, or 'so immediately after it as to constitute a part of the transaction': Calverley v Green (262) (Mason & Brennan JJ), see also (252) (Gibbs CJ), (269) (Deane J). This point is well established: Charles Marshall Pty Ltd v Grimsley (365) (Dixon CJ, McTiernan, Williams, Fullagar & Taylor JJ).

121 At the time of purchase, Stephannie's proportionate contribution, jointly with Troy, to the purchase price of the Anstey Road property was $20,000 of $223,455.45, or approximately 9%. However, she and Troy also took responsibility for repayment of the whole ANZ Anstey Road loan, with small initial contributions from Bruce and Carol.

122 One manner in which Stephannie sought to dispel the presumption of resulting trust was by relying upon a 'presumption of advancement'. Stephannie's argument requires a significant step to be taken in expanding the presumption of advancement. It should not be taken in this case. In order to explain why this is so it is necessary to set out the meaning of the presumption of advancement, the nature of the 'presumption', and the relationships to which it applies.

The meaning and basis of the 'presumption of advancement'

123 One difficulty with the language of 'presumption of advancement' is that it is not limited to advancement. Another difficulty, which I address below, is that it is not a presumption.

124 The word 'advancement' has been described as a legal expression which had 'a limited range of meaning, since it was thought to convey the idea of some step in life of permanent significance': Pilkington v Inland Revenue Commissioners [1964] AC 612, 634 (Viscount Radcliffe, giving examples of an apprenticeship, the purchase of a commission in the army or an interest in business).

125 Historically, the primary basis asserted for the presumption of advancement in circumstances such as a purchase by a person in the name of another was that the purchaser was 'under a species of natural obligation to provide for the nominee': Murless v Franklin (1818) 1 Swan 13, 17; [1818] EngR 128; (1818) 36 ER 278, 280 (Lord Eldon). A distinction was drawn between a father-child relationship to which the presumption of advancement applied and a motherchild relationship to which it did not, because there was 'no obligation according to the rules of equity - on a mother to provide for her child': Bennet v Bennet (1879) 10 Ch D 474, 478 (Sir George Jessel MR).

126 A distinction was also drawn between a son who had been married and provided for (advanced) and a son who was 'unprovided for': Elliot v Elliot [1677] EngR 91; (1677) 2 Cas in Ch 231, 232; [1677] EngR 91; (1677) 22 ER 922, 923 (Lord Nottingham LC). But this distinction disappeared in the late 18th Century after Dyer v Dyer, albeit against the strong views of Sir Edward Sugden, the later Lord St Leonards: J Glister 'The presumption of advancement' in C Mitchell (ed) Constructive and Resulting Trusts (2010) 289, 299.

127 In Wirth v Wirth [1956] HCA 71; (1956) 98 CLR 228, 237, Dixon CJ argued that the presumption of advancement had moved to a different foundation. The Chief Justice said that in the course of growth of the presumption it 'obtained a foundation or justification in the greater prima facie probability of a beneficial interest being intended'. That view was endorsed by Gibbs CJ in Calverley v Green (249).

128 But this modern rationale proposed by Dixon CJ has not yet been accepted. In Nelson v Nelson [1995], Deane and Gummow JJ referred to the historical foundation of the presumption as the obligation to provide, but did not reject this historical foundation, saying only that the appeal should be approached on the basis that the presumption of advancement also extended to the relationship of mother and child (548 549). Dawson J thought that the presumption of advancement should apply to the relationship of mother and child whether its basis was moral obligation or the probability rationale of Dixon CJ (576). And Toohey J considered the probability rationale of Dixon CJ to 'have a question begging aspect' as evidenced by the fact that Gibbs CJ was the only judge in Calverley v Green to extend the presumption of advancement to a de facto relationship (586).

129 The state of the law, then, is that the presumption of advancement does not necessarily require either a relationship where advancement might be expected or one where a moral duty to provide was recognised in equity.

130 The presumption of advancement applies even between a parent and his or her adult children. For instance, in Nelson v Nelson[1995] the two children of Mrs Nelson who asserted a presumption of advancement were aged 33 and 37 at the time of the transaction (542). In this sense it might be better described as a 'presumption of gift': Nelson v Nelson [1995] (548) (Deane & Gummow JJ).

131 On the other hand, despite the suggestions of Dixon CJ, the presumption of advancement also does not extend to every relationship where the ties of love and affection might give rise to a probability, or expectation based upon common experience, that a gift was intended.

132 At this stage of development of the law in relation to the 'presumption of advancement', all that can be said is that it provides for a list of relationships where the presumption of resulting trust does not apply.

The 'presumption of advancement' is not a genuine presumption

133 In Wirth v Wirth (237) Dixon CJ quoted from Sir William Page Wood VC to the effect that the presumption of advancement was 'to preclude a resulting trust from arising for the purchaser'.

134 In this sense, the presumption of advancement is not a presumption at all. It is simply a description of facts where the presumption of resulting trust (or, more accurately, the presumption of a declaration of trust) does not arise.

135 On the other hand, there have been suggestions in some cases, and by some judges, that the presumption of advancement is a genuine presumption of a manifest intention to make a gift. These suggestions presuppose a confused evidentiary process where the presumption of advancement would need to be rebutted by the transferor, which would then reinstate a presumption of a declaration of trust in favour of the transferor, which the recipient would then need to rebut. This was the view of Maitland and Holdsworth: see F W Maitland Equity: A Course of Lectures (1910) 79 80, also (1936, 2nd ed) 77 80; William Holdsworth, A History of English Law (1924) VI, 644. See also the discussion of some of the authorities to this effect in J Glister 'Is there a presumption of advancement?' (2011) 33 Sydney Law Rev 39.

136 The dominant Australian approach, however, is that of Dixon CJ: the 'presumption of advancement' is not a presumption but is simply a circumstance in which the 'presumption of resulting trust' does not arise. Thus, in Martin v Martin [1959] HCA 62; (1959) 110 CLR 297, the High Court (Dixon CJ, McTiernan, Fullagar & Windeyer JJ) explained that the presumption of resulting trust did not apply where a husband purchased land in the name of his wife: 'as she was his wife the fact that he found the purchase money for the land raised no presumption in his favour of a resulting trust as it would or might have done had she been a stranger' (303). The court explained that the presumption 'is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose' (303).

137 Various of the judgments in Calverley v Green also reiterate this point: (247) (Gibbs CJ), (256) (Mason & Brennan JJ). The judgments of Deane J and Murphy J are the most explicit. Murphy J said that '[t]he presumption of advancement, supposed to be an exception to the presumption of resulting trust, has always been a misuse of the term presumption, and is unnecessary' (265). Deane J said this:

[T]he 'presumption of advancement', is not, if viewed in isolation, strictly a presumption at all. It is simply that there are certain relationships in which equity infers that ... there is an 'absence of any reason for assuming [presuming] that a trust arose (267).

138 The question for resolution in this case, therefore, is whether the 'presumption of advancement' applies. If so, this would then have the effect that there is no presumption of a declaration of trust.

The relationships to which the presumption of advancement applies

139 In Wirth v Wirth (237 238), Dixon CJ explained, quoting from the Vice Chancellor, Sir William Page Wood VC (as Lord Hatheley was then) in Soar v Foster [1858] EngR 247; (1858) 4 K & J 152, 160 161; [1858] EngR 247; (1858) 70 ER 64, 67:

[The presumption of advancement] is applicable where the purchase was made in the name of a legitimate or illegitimate child, or in the name of a grandchild whose father is dead, or in the name of the wife of the purchaser. In all these cases the rule is definite and clear, that the purchase is prima facie to be taken as a provision or advancement for the person in whose name the purchase has been made.

140 I accept that the presumption of advancement now also applies in the case of a gift from mother to daughter. This is a recent development. In Bennet v Bennet, Sir George Jessel MR had held that there was no presumption of advancement from a mother to a daughter because equity recognised only an obligation on the father to provide for a child, not the mother. In Scott & Hansen v Pauly [1917] HCA 60; (1917) 24 CLR 274, 282, Isaacs J said that this point had not been 'judicially doubted'.

141 But there can be no basis today to distinguish between the relationship between a father and a child and the relationship between a mother and a child. This was accepted by the New South Wales Court of Appeal in Nelson v Nelson (1994) 33 NSWLR 740 (Nelson v Nelson (1994)). In the High Court, all judges approved this conclusion or assumed it to be correct: Nelson v Nelson [1995] (548 549) (Deane & Gummow JJ), (574) (Dawson J), (586) (Toohey J), (601) (McHugh J).

The presumption of advancement does not apply to Stephannie

142 Troy is the son of Bruce and Carol. Like Carol, Troy also did not give evidence. In relation to Troy a presumption of advancement would apply to the contribution by Bruce and Carol to Troy's legal title.

143 But the same is not true for Stephannie. Stephannie is not the child of Bruce and Carol. She is their daughterinlaw. This is not a recognised relationship for the purposes of the presumption of advancement: Z v Z [2005] FamCA 996; (2005) 34 Fam L R 296, 320 [145] (Coleman & Boland JJ); Yoshino v Niddrie [2003] NSWSC 57 [45] (Young CJ in Eq).

144 Stephannie asserted that her relationship with Bruce and Carol was one where they were in loco parentis. It has long been recognised that the 'presumption of advancement' can been extended beyond a situation of parent and child to instances where the relationship is akin to parent and child because one person acts in loco parentis (in place of a parent) to the other: Napier v Public Trustee (WA) (1980) 32 ALR 153, 158 (Aickin J, Stephen, Mason & Murphy JJ concurring).

145 In Beecher v Major (1865) 2 Drew & Sm 431, 435; (1865) 62 ER 684, 686, the Vice Chancellor, Sir Richard Kindersley, held that for a relationship in loco parentis to be established the case must be regarded as one of 'an adopted child'. This may state the matter too highly. The question is whether in all the circumstances the relationship between Stephannie and her parentsinlaw Bruce and Carol, was of such a similar nature to that of an ordinary parent-child relationship that it could be treated in the same manner as a parentchild relationship for the purpose of the presumption of advancement.

146 Stephannie's argument that Bruce and Carol were in a relationship with her in which they were akin to her parents is not supported by the facts.

147 Bruce explained that the relationship between Stephannie and Carol was 'a normal motherinlaw, daughterinlaw relationship'. He said that Stephannie was treated in the 'correct' manner (ts 128). I accept this evidence.

148 Ms Gallagher, a friend of Stephannie's, said in her witness statement that she would 'often see Stephannie and Bruce joking and laughing together' (par 16). She also said that Carol and Stephannie never fought or upset each other in any way when Ms Gallagher was around and that whenever she came around she would see Stephannie and Carol cooking, organising and entertaining guests (pars 9, 14).

149 Although Bruce did not accept that Stephannie and Carol worked together to entertain guests, or that he had jokes and laughed with Stephannie (ts 128), I find that Bruce and Carol were warm and welcoming to Stephannie and that at the time of purchase of the Anstey Road property the relationship between Stephannie and her parentsinlaw was close.

150 I also accept Stephanie's evidence that Bruce and Carol often gave her gifts, hosted her engagement party, and made her feel very welcome: Stephannie's witness statement pars 31 34. There was also no suggestion of any apprehension about them all moving in together to live at the same property.

151 But the relationship between Stephannie and her parents in law, although close and warm, was not a parentchild relationship. Bruce and Carol were, and are, generous, warm and welcoming people. Ms Gallagher's evidence was that their kindness extended beyond Stephannie to other friends (ts 218 219). As she was their daughterinlaw, Stephannie was treated with even greater kindness and warmth. But even though Stephannie was partly estranged from her mother and father, Bruce and Carol did not take the place of her parents.

152 Stephannie also relied upon Bruce having 'given her away' at her wedding to Troy (ts 128) as evidence of their relationship being akin to parent and child. But in counsel's submissions he omitted to refer to all of the evidence of Bruce on this matter. Bruce said that he had not immediately agreed to walk Stephannie down the aisle. He asked why her father was not doing it. He asked why her brothers were not doing it. He only agreed when she explained that she did not want them to do it and that her father would not be at the wedding (it turned out that he was present) (ts 131).

153 A presumption of advancement does not apply in relation to Stephannie.

The 'presumption of resulting trust' has been rebutted

154 Since no 'presumption of advancement' applies in this case, the question is whether the 'presumption of resulting trust' has been rebutted.

155 The presumption of resulting trust can be rebutted by evidence which shows that the intention of Bruce and Carol at the time of the purchase of the Anstey Road property was that Troy and Stephannie would be entitled to the use and enjoyment of their legal title for their own benefit: Calverley v Green (251) (Gibbs CJ), (269) (Deane J).

156 The references to 'intention' in the paragraph above, and generally in this judgment, are references to objective, or manifest, intention. As I have explained at [98], the intention is not a subjective, uncommunicated intention but it 'is to be inferred from what the parties do or say': Calverley v Green (261) (Mason & Brennan JJ), (270) (Deane J).

157 There are six reasons why the presumption of resulting trust has been rebutted in this case. Most of these reasons, on their own, would be sufficient to show that Bruce and Carol intended that Troy and Stephannie should enjoy the full benefit of their legal title to Anstey Road and to rebut the presumption that Troy and Stephannie held their legal title to the Anstey Road property on resulting trust for Bruce and Carol in proportion to the latter's contribution. In combination, these six reasons mean that the conclusion that no resulting trust was intended is irresistible.

158 First, the certificate of title to the Anstey Road property recorded that title to the property was held by Bruce and Carol (as joint tenants of one half share) as tenants in common with Troy and Stephannie (as joint tenants of one half share): exhibit 25.

159 The agreement to include, and the inclusion of, Troy and Stephannie on the certificate of title contrasts with the manner in which title to the property at Baal Street was held.

160 In relation to the Baal Street property, the full beneficial title was held by Bruce and Carol in circumstances in which Bruce and Carol intended, and explained to Troy and Stephannie, that Troy and Stephannie would be their tenants. Important family decisions were always discussed and made jointly (ts 73). Bruce's omission of Troy and Stephannie from the certificate of title to Baal Street was an intentional choice in which he had explained to them that they would only be tenants and that the transactions in relation to Baal Street were not Troy and Stephannie's transactions because their names were not on the certificate of title (ts 82). In these circumstances, the inclusion of Troy and Stephannie on the certificate of title for the Anstey Road property is strong evidence of an objective intention that Troy and Stephannie should enjoy the benefit of those rights.

161 In closing it was properly conceded by counsel for the plaintiffs that the plaintiffs' intent in relation to the Baal Street property (which counsel described as an intent to hold it as an 'investment') was 'entirely different' from the intent in respect of the Anstey Road property (ts 252). This concession was appropriate. I do not accept that anything was said to Troy or Stephannie by either Bruce or Carol which could reasonably have suggested to them that the arrangement at the Anstey Road property, where all parties were to live together and where all would be on the title, was to be the same as that at the Baal Street property or that payments towards the mortgage by Troy and Stephannie were to be a form of rent (compare ts 84). Such a statement would have been contrary to the tenor of all the other conversations discussed in the paragraphs below; it would have been recalled by Stephannie, and her reaction to the purchase would not have been as ecstatic; and it would be contrary to the circumstances described at [173] [185] below.

162 Secondly, there is Bruce's evidence concerning the circumstances in which the shares in the Anstey Road property had been agreed in the offer and acceptance in December 1993. This evidence also supports the rebuttal of the presumption of resulting trust.

163 Bruce gave evidence that the purchase occurred on the advice of his real estate agent, Mr John Johnson. Bruce said that this matter had been discussed by him with Mr Johnson in the presence of Carol, Troy and Stephannie. Mr Johnson had asked Bruce whether all the proceeds from the sale of Baal Street and Tamar Street would be used for the purchase of Anstey Road. Bruce answered 'yes'. Bruce had held a real estate agent's sales person's licence, although he had never acted as an agent (ts 88). In the presence of the others, he accepted the advice of Mr Johnson that the 'best way' to structure the purchase 'and for [the] long term' was as a purchase by Bruce, Carol, Troy and Stephannie as tenants in common in equal shares (ts 106).

164 The offer and acceptance document included Bruce, Carol, Troy and Stephannie as tenants in common in equal shares (exhibit 9, special condition 6). At settlement this was varied so that Bruce and Carol held as joint tenants as to one half share and Troy and Stephannie as joint tenants as to the other half share (exhibit 25).

165 Thirdly, I accept Stephannie's evidence that prior to signing the contract for purchase of Anstey Road, she and Troy had discussed this with Bruce and Carol and the effect of their discussion was reasonably construed by her as meaning that they were all together purchasing the Anstey Road property (ts 194).

166 This conclusion is supported by a number of matters. In his witness statement Bruce referred to conversations including statements by Troy that 'we are interested in buying it [Anstey Road] as you have said' (par 71). Stephannie also gave evidence that discussions occurred when the parties were looking for a property where they would all live together (after an offer on a property by Troy and Stephannie had fallen though). In those discussions, Stephannie had told Bruce and Carol that she and Troy could not afford properties that they liked, and Bruce and Carol had responded to Stephannie to the effect that '[w]e want to help you and this is how we can help you': Stephannie's witness statement pars 4i, 4w.

167 Although Stephannie did not pay any further attention to the detail of the purchase and did not get 'bogged down in the details of the discussions' (ts 199) I accept that the importance of this conversation to her meant that she would have recalled it and its context. Bruce also accepted that he spoke words to this effect although he said that what he had meant was that the 'help' was 'to have a permanent place of residence because the property they were living in wasn't really suitable' (ts 85). I do not accept that, in the context of the discussions, the precise words which were used could reasonably have been understood by Stephannie other than as a suggestion that the ownership of a property would be shared.

168 Stephannie's evidence of these conversations, and their context, is also consistent with Bruce's evidence that when Stephannie heard that the offer for Anstey Road had been accepted Stephannie was ecstatic; Stephannie even offered to Bruce that she would drive all night to Meekatharra so that Bruce could sign the offer and acceptance document (ts 84). I do not consider that Stephannie would have had such a strong reaction simply to the prospect of moving to a larger property where she could run horses but where her title would be held for the benefit of Bruce and Carol (ie on trust). Stephannie's reaction demonstrates that the broad effect of the discussions and conversations which she had with Bruce had conveyed the impression, which I find was reasonably held, that she and Troy would have an interest in the Anstey Road property for their own benefit.

169 Stephannie's reasonable belief that her title to the Anstey Road property would be held for her own benefit is also consistent with the conversation the previous year concerning the Baal Street property. As I have explained above at [49], Bruce had told Stephannie and Troy that they would be tenants in Baal Street but that his expectation was that eventually Baal Street would be sold so that (1) Bruce and Carol could set themselves up for retirement, and (2) Stephannie and Troy could buy their own house. The purchase of Anstey Road, and the inclusion of all names on the registered title, achieved both of these goals.

170 At one point in his evidence, Bruce suggested that the reason why Troy and Stephannie's names were put on the certificate of title to Anstey Road was that it was hard for them to get a credit rating and that the title would assist them to purchase their own home later (ts 85). In his witness statement, Bruce said that he told Troy and Stephannie that the ANZ bank manager had suggested that 'we should put all four names down for the income on the loan' (par 77).

171 Although Bruce may have subjectively considered this to be the case, the communications to Troy or Stephannie would not reasonably have conveyed the impression that their names were being put on the title only to service income on the loan or only to assist with their credit rating. I find that the effect of the discussions led Stephannie, as it would have led a reasonable person in her position, to understand that she would be entitled to the benefit of the legal title which was in her name.

172 Bruce also gave evidence that when Baal Street was sold he and Carol discussed buying a new property for their retirement. However, he accepted that this discussion was only between him and Carol (ts 81). He said that he was 'not really in the habit of discussing my finances with the children on a general basis' (ts 81). I find that nothing was said by Bruce or Carol to Troy and Stephannie which could reasonably have led Troy or Stephannie to contradict the reasonable impression created that Troy and Stephannie would hold their legal rights for their own benefit.

173 Fourthly, even though I have concluded that no 'presumption of advancement' arises in this case, the relationship that Bruce and Carol had with Troy and Stephannie is nevertheless a significant circumstance in considering whether the presumption of resulting trust has been rebutted.

174 In Calverley v Green (270), Deane J emphasised that 'evidence of the actual relationship between the parties' may mean that the 'presumption of resulting trust' may not be of any practical importance. See also Nelson v Nelson [1995] (549) (Deane & Gummow JJ).

175 In particular, the relationship between Troy and Bruce and Carol was a circumstance which meant that a trust unlikely to have been intended. Troy had a close relationship with his parents. Bruce and Troy jointly renovated Baal Street. Bruce and Carol were going to be living together at Anstey Road with their children, Troy and Stephannie, and their grandchildren, Harly and Tayla. This was a circumstance which made it unlikely that Bruce and Carol could reasonably be taken to have intended that Troy and Stephannie should hold their title to Anstey Road on trust for Bruce and Carol.

ANDERSON -v- McPHERSON [No 2] [2012] WASC 19 (25 January 2012)

At a glance

Court

Decision date

Before

Source

Judgment (447 paragraphs)

The purchase and ownership of the Baal Street property

The separation of Troy and Stephannie and subsequent events

The primary action for a declaration of resulting trust

What is 'presumed' in the 'presumption of resulting trust'?

The 'presumption of resulting trust' as applied to this case

The meaning and basis of the 'presumption of advancement'

The 'presumption of advancement' is not a genuine presumption

The relationships to which the presumption of advancement applies

The presumption of advancement does not apply to Stephannie

The 'presumption of resulting trust' has been rebutted

The declaration sought by the plaintiffs concerning the ANZ loan

Reasons why the counterclaims must fail generally

(1) The 'counterclaims' were contingent and the contingency did not occur

(2) The Baal Street and Anstey Road Agreements prevent relief

(3) Evidentiary gaps prevent the relief counterclaimed

(i) The proportion of the payments made by Stephannie

(ii) The value of the rental benefit obtained by Stephannie

(iii) The value and timing of the improvements and their effect on rental values

(iv) The valuation of the Anstey Road property and the improvements

(4) No legal basis for the unpleaded claim for disgorgement of profits

(1) There is nothing pleaded which could support a claim for equitable compensation

(2) The facts upon which the plaintiffs' submissions rely for equitable compensation are an inaccurate description of my findings of fact

The submission concerning the contributions of the plaintiffs

The submission that I found that the plaintiffs' contributions were not a gift

The submission concerning the plaintiffs' intention to set themselves up for retirement

(3) There is no legal basis for an award of equitable compensation

(4) An award of equitable compensation would be directly inconsistent with my rejection of a resulting trust and findings concerning the Anstey Road Agreement

The orders sought for the payment of rates and Water Corporation charges

Legislation Cited (5)

Cases Cited (38)