The authorities
99 Ms Bosanac relies on the High Court's decisions in Wirth and Martin in which it is said the High Court applied the 'presumption' of advancement to the matrimonial home. The Commissioner disputes this reading of the decisions.
100 Wirth was decided by the High Court in 1956 constituted by Dixon CJ, McTiernan and Taylor JJ. The parties, while engaged to marry, purchased as joint tenants land on which to build their future matrimonial home. Although there were a number of deficiencies in, and disputes about the evidence concerning the provenance of various monies spent by the couple, it was clear that the male partner contributed at least half the purchase price of the land and a similar portion of the funds applied to the construction of a home on the land. Around the same time as construction commenced and about four months before the couple married, the female partner induced the male partner to transfer his interest in the land to her. The male partner acceded, later giving evidence to the Court that it was something her parents had done and he had effected the transfer to please his fiancé and her parents. Although it was clear that the transfer was not the result of a bargain reached between the couple, the memorandum of transfer recorded consideration in a sum equal to half the purchase price of the land. The fact that the consideration sum was never given or received provided a point of distinction for the members of the Court. Litigation ensued in consequence of the marriage breakdown some 30 years later. The question for the Court, as observed by Dixon CJ (at 235), was whether there arose from the husband's transfer in 1923 to his female partner of his interest as joint tenant in the land, a presumption of a resulting trust in his favour. At that date, she had not yet become his wife.
101 The Chief Justice considered (at 237) that despite the couple being unmarried at the time of the transfer, the purchase of the land in contemplation of marriage was sufficient to give rise to the 'presumption' of advancement such that no resulting trust arose. Until the decision of Moate v Moate [1948] 2 All ER 486, the application of the 'presumption' of advancement to an engaged couple had not been considered, but the Chief Justice said that what was important was that:
the transfer was made so to speak in preparation for the marriage and on the footing that the transferee became the transferor's wife but in advance of her doing so. While the presumption of advancement doubtless in its inception was concerned with relationships affording "good" consideration, it has in the course of its growth obtained a foundation or justification in the greater prima facie probability of a beneficial interest being intended in the situations to which the presumption has been applied.
102 His Honour went onto say (at 238) that to find to the contrary, namely, that a transfer made in contemplation of marriage raised a presumed resulting trust while a transfer after marriage would instead be presumed an advancement would involve:
…almost paradoxical distinction that does not accord with reason and can find a justification only on the ground that the doctrine depends on categories closed for historical reasons. That is not characteristic of doctrines of equity.
103 It is convenient to briefly observe now that the Commissioner relies on the latter remarks of the Chief Justice in the above passage to support his contention that it is in the nature of equity to permit adjustments of principle such as the qualification of the 'presumption' of advancement which is now pressed. The Chief Justice then concluded (at 242) that regardless of the operation of either presumption, the evidence of the case also pointed to an intention to gift as follows:
[i]f there be no presumption of advancement in the present case, and the [female partner] has to rebut the presumption of a trust, when the actual facts of the case are considered and these include the impending marriage with the [male partner], I think it is true to say she is in such a position to the [male partner] as to make it extremely probable that the transfer was intended as a gift.
104 Although McTiernan J agreed with Dixon CJ in Wirth that the legal title need not be disturbed, his Honour considered (at 240) that the male partner did not discharge the onus of proving that his fiancé held the interest that he conveyed to her on trust for him. His Honour identified a number of difficulties with applying the presumption of a resulting trust to the case, the first of which being the fact that the transfer was purportedly for good consideration (at 240-241). Regardless, his Honour considered that the facts and inferences from the evidence prevailed over any presumption to indicate that the transfer was intended as a gift (at 242). If in the alternative a presumption of a resulting trust was made out, his Honour reasoned as follows (at 241):
But if the correct principle is that a trust would have resulted from the transfer because it was voluntary and declared no trust, could the presumption of a trust prevail over the inferences to be drawn from the circumstances of the case? First there are the conversations of which the respondent gave evidence. These are consistent with the intention to benefit the appellant. The appellant relied upon the case of Moate v. Moate. If there were a presumption of advancement that would be a complete answer to the respondent's claim that a trust in his favour resulted from the transfer. Referring to the presumption of advancement, Lord Eldon said in Finch v. Finch: "This principle of law and presumption is not to be frittered away by nice refinements". I am not convinced that, if I were to say that this presumption does not apply to a conveyance without value in which no trust is declared, made by a man to the woman whom he is about to marry I would be doing what Lord Eldon condemned. But if the present case cannot be determined in the appellant's favour by that principle, I would think that the fact that the parties were about to marry coupled with the evidence given by the respondent of his motives for transferring his interest in the land to the appellant would rebut the presumption of a trust. I assume for this purpose that there was the presumption of a trust and not of a gift because the transfer was not for value and in it no trust was declared.
(Citations omitted.)
105 Taylor J (in dissent), after a detailed examination of the evidence, determined the matter on the facts, saying (at 246) that:
... Upon my view of the evidence his execution of the transfer in July 1923 resulted from his ultimate acquiescence in and the adoption of a state of affairs which was represented, both by the [female partner] and her parents as a convenient arrangement with respect to the joint property of married couples. None of the evidence given by the [male partner] on this point was denied in any way by the [female partner] and it satisfies me that both parties understood that the land was to be held by the [female partner] for the joint benefit of both parties. It may be fair criticism of this view to say that the evidence which leads to it is without great weight but formal or precise declarations of trust are not to be expected in matters of this character and the evidence does appear to me to be of considerable significance.
106 His Honour did not need to decide the matter in accordance with application of the 'presumption' of advancement, which was pressed on the Court following the English decision of Moate.
107 There is little doubt that Dixon CJ applied the 'presumption' of advancement to the matrimonial home in Wirth. McTiernan J agreed with the Chief Justice on alternate bases, one of which was the 'presumption' of advancement. However it must also be recognised that the Court in that case had the benefit of testimony from both spouses, in particular the male partner as to his motives for effecting the transfer. At no point do the reasons of McTiernan J or Taylor J suggest that the fact that the property in question was the matrimonial home had any bearing on the operation or not of the 'presumption' of advancement. Although they reached different conclusions, their Honours considered the evidence led was sufficient to establish the relevant intention without recourse to the presumptions.
108 Decided shortly after Wirth, the High Court's unanimous decision in Martin concerned a claim by a husband to certain parcels of land that had been purchased by him in his wife's name. Ms Bosanac says the High Court in this case applied the 'presumption' of advancement to a matrimonial home as part of the ratio of its decision. The Commissioner rejects this, pointing out that the decision rested instead on the actual intention of the husband and concerned instead only a parcel of farm land. It is thus necessary to address the facts in some detail.
109 A year before the couple married, in 1946, the husband had purchased 1200 acres of land called 'Whittakers' which had been improved by buildings including a house. At some point shortly after, the couple took up residence there. Whittakers was purchased in the husband's name, as was a block of 892 acres of adjoining land purchased by the husband shortly after Whittakers. Two further parcels of adjoining land were then purchased by the husband in the wife's name. These blocks totalled 1527 acres and were separated by the Whittakers land (and adjoining parcel) by a road. The Court recorded (at 302) that about a year after the couple had married, the husband proceeded to sell the Whittakers land and the couple then moved into a dwelling in the northern corner of the 1527 acres held in the wife's name. The 1527 acres were held by the wife as two separate blocks of 700 and 827 acres with the house in which the couple resided (the matrimonial home) lying on the former. A few years later a third block of 255 acres was purchased by the husband in the wife's name.
110 The marriage broke down some 10 years after the husband had first purchased the Whittakers land. The husband then commenced an action in the Supreme Court of South Australia for claims over the three adjoining parcels in the wife's name. However, as the Court made clear (at 298), during the course of oral evidence before the trial judge, the husband clarified his position, seeking instead only one of the three parcels, described as the 'upper part' of the land. This portion sought by the husband does not appear to have been where the matrimonial home was located.
111 The High Court (Dixon CJ, McTiernan, Fullagar and Windeyer JJ) framed the issue of the case as follows (at 298):
… The land was purchased in her name by the husband and the question is whether the presumption of advancement has been rebutted and a resulting trust made out. Her appeal is on the ground that a resulting trust has not been made out by any satisfactory evidence …
112 The Court then proceeded to recite in some detail (at 298-303) the facts summarised above as well as the numerous and conflicting accounts of the husband's intention in purchasing the properties in his wife's name. Their Honours then said the following (at 303):
In the end Martin's case depends upon the correctness in the foregoing circumstances of the view taken by Abbott J [the trial judge] that Martin did not intend that his wife should have the beneficial ownership of the land. It was of course for Martin to make out positively that his wife did not take the land beneficially but as a trustee for him. 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. The presumption is in her case that the beneficial ownership went with the legal title. It is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose or in other words that the equitable right is not at home with the legal title. Evidence however that the wife was intended to take as a trustee has long been admissible.
(Emphasis added.)
113 As the Court then makes clear (at 306), the trial judge's view was that the evidence established that the husband never intended the land as an advancement to his wife. Importantly though, it is also apparent that the trial judge reached this conclusion by first applying the 'presumption' of advancement and then considering whether a contrary intention was established that rebutted the presumption:
… Towards the close of his judgment, in approaching the application to the facts of the presumption of advancement, his Honour said: "I am inclined to the view that the applicant never intended that the wife should have any equitable interest in this land, and I am satisfied that until she had taken legal advice she never thought that she had any equitable interest in it." …
114 In the end the High Court in Martin was not persuaded to disturb the trial judge's findings of fact as to the husband's intention to retain a beneficial interest in the land. However, in dismissing the wife's appeal, the Court expressed significant reservations about the findings of the trial judge (at 307-308):
… the question for this Court must be whether it should give effect to the finding of Abbott J. that Martin never intended that his wife should take the land as an advancement. It is a finding based entirely upon his Honour's opinion of Martin's real intention. It is evident that as a witness Martin could not and did not carry great weight. On the subject of his real intention he had put forward inconsistent stories and had founded inconsistent claims upon them. In the circumstances perhaps the presumption of equity might have formed a safer guide than Martin's evidence. But a court of appeal must exercise great caution in setting aside a finding upon a question of intention made by the judge who has seen and heard the parties as witnesses.
(Emphasis added.)
115 Although no ground for disturbing the trial judge's findings of fact as to the husband's intention was established before the High Court in Martin, there is little doubt that both the High Court and the court below considered the facts enlivened the 'presumption' of advancement. The Commissioner contends that it is important in this case that the parcel of land concerned was not the parcel on which the matrimonial home stood, however in my view, nothing in the reasoning reflects that contention. The relevant land was contiguous to, and part and parcel of the entirety of the land which the couple jointly lived on and worked. There is nothing in Martin which would suggest that the matrimonial home is in some different category from other property. Indeed, it is tolerably clear from the High Court's decision (at 298 and 307) that the reason the particular block of land on which the matrimonial home stood was not subject to the claim was that the husband had elected before the trial judge to seek only one of the parcels. So much of the trial judge's decision is recorded by the Court (at 307):
… After mentioning ways in which Martin asserted ownership, his Honour proceeded: "In these circumstances today a fair decision would be an equal division and were it not for what the husband has himself said, that is what I should do." (What the husband himself said was that he wanted only the upper part of the land.)…
116 In Hepworth (decided in 1963), a differently constituted High Court (Kitto, Taylor and Windeyer JJ) held that where the purchase price for land and the money for the subsequent erection upon it of the matrimonial home had been provided in part by a husband and in part by his wife, but the land had been transferred into the name of the wife alone, such transfer having been arranged not by the husband, but by the wife, and perhaps her father without the consent of the husband, the 'presumption' of advancement did not arise and the wife held the property as trustee for herself and her husband as tenants in common in equal shares.
117 The trial judge rejected much of the wife's evidence at first instance in which she claimed that the purchase monies had been contributed solely by her and her father. On appeal to the High Court, the wife did not seek to challenge these evidentiary findings but instead raised the 'presumption' of advancement (at 312). The wife was the claimant in this case, seeking declarations that she held the legal title free of any claims despite the fact that this was the prima facie legal position. It is not in dispute that the property in question was the matrimonial home.
118 In the lead judgment, Kitto and Taylor JJ identified the fact that the husband (the respondent) had not consented to the purchase as the basis for rejecting any argument that the 'presumption' of advancement could arise in the case (at 314-315):
… Of course, if moneys to which the respondent was beneficially entitled were with his full knowledge and acquiescence used for the purpose of acquiring land in her name a gift in her favour would be presumed.
…
Nevertheless, if the appellant wished then to rely upon the presumption of advancement the onus rested upon her of showing that the moneys which were, in fact, applied in the purchase of the land were so applied with her husband's consent for the purpose of acquiring the title to the land in her name.
However these passages make plain that their Honours considered the other facts of the case to give rise to the 'presumption' of advancement. Their Honours' reasons do not indicate that the wife would also need to overcome the fact that the property was the matrimonial home so as to raise the 'presumption'. Ultimately, their Honours agreed with the trial judge that the evidence of the case did not indicate that the husband had intended to gift his contribution.
119 In a concurring judgment, Windeyer J made some important observations about the role of the Court in property cases at common law. His Honour sought to emphasise that the Court is only empowered to determine and declare rights in strict accordance with common law titles and equitable doctrines (at 317). His Honour proceeded to reject the discretionary approach adopted in some English authorities saying (at 317-318):
Community of ownership arising from marriage has no place in the common law.
…
On a voluntary transfer by a husband to his wife, or on a purchase by a husband in the name of his wife, a presumption of a resulting trust does not arise - or, as some would say, less accurately I think, it is overborne by a countervailing presumption of advancement. An intention, proved or presumed, that a trust should exist is at the base of every trust: and spouses, living together, may express their intention clearly enough one to another without resorting to the language of conveyancers. Thus it sometimes happens that property which is held in the name of one spouse but which they enjoy together, belongs beneficially to both jointly or in common. Nevertheless if after a husband and wife have quarrelled disputed rights to property have to be decided, they must be decided according to the interests, legal and equitable, already created, not according to what may seem to be fair in a situation of discord that, quite probably, was not contemplated by either when the property was acquired. I say this because of some of the observations in some of the English cases that were cited, observations that may suggest that the statutory jurisdiction that was invoked in this case gives a court a discretion to disregard existing legal and equitable rights and to make such order as may seem to it fair in the circumstances existing when it is considering the case. That has not been the view of this Court: Wirth v. Wirth; Martin v. Martin …
(Emphasis added.)
120 His Honour went onto conclude (at 319) in very similar terms to Kitto and Taylor JJ that the particular conduct of the wife in this case could not properly raise the 'presumption' in her favour:
… This meant, it was urged, that the property was hers, and hers alone, in law and in equity; for, it was said, the respondent had not displaced the presumption of advancement. The onus was on him to show that the beneficial interest did not accompany and accord with the legal title. That is beyond doubt. But this case is not really one in which it is appropriate to speak of a presumption of advancement. It is not like a case in which a husband bought property and had it put in his wife's name. Here the wife bought the land, largely with what must be taken to have been the husband's money, entrusted to her for safe keeping and use for their mutual benefit. …
121 Again, this case does not suggest that the 'presumption' of advancement will not apply to the matrimonial home, indeed, it clearly stands for the proposition that it will, but in the case of fraudulent transfer, unsurprisingly, that would not be so. The reasoning turned entirely on the nature of the evidence. There was no suggestion whatsoever that the 'presumption' of advancement would not apply to the matrimonial home.
122 In Coulls v Bagot's Executor & Trustee Co Ltd (1967) 119 CLR 460, only Barwick CJ considered in passing the 'presumption' of advancement. The case concerned a husband who had purchased the matrimonial home by providing part of the money himself with the balance obtained by mortgages in the names of both spouses jointly. Upon the husband's death, the executor made demands on the wife for indemnity or contribution to the mortgage payments. The Chief Justice observed (at 480):
… It was bought by the husband and conveyed into the joint names of the two of them by way of advancement to the wife as to her joint interest in the land. Apart from any presumption, which of itself would be enough, the intention so to do is manifest in the evidence. The subject matter of the advancement was not, in my opinion, an equity but clearly a freehold: cf. per Warrington J. in Dunbar v. Dunbar. So to conclude denies any right to contribution or indemnity by the respondent in respect of the mortgage debts. Alternatively, it can properly be said that the borrowing of money upon the security of the land was to provide the deceased with the purchase money for the property. It was not borrowed for them both but for him alone. The signature of the mortgage, including its personal covenant, was not intended by the parties to create any right of contribution or indemnity. …
(Citations omitted.)
123 Again, there seemed to be no doubt that the matrimonial home would be the subject of a 'presumption' of advancement as far as the Chief Justice was concerned.
124 At this juncture, it is necessary to depart from this relatively consistent line of High Court authority to briefly consider the decisions of the House of Lords in Pettitt (decided in 1970) and Gissing v Gissing [1971] AC 886. These cases concerned instances where a partner or spouse claimed a beneficial interest in property held in the name of the other partner or spouse based on contributions in the form of improvements and maintenance to the property rather than a contribution to the purchase price. Accordingly, the 'presumption' of advancement did not arise directly on the facts of either case, however the various speeches of their Lordships traverse as obiter dicta many of the circumstances in which a beneficial interest in the matrimonial home is claimed by one spouse against the other, and consider the appropriate inferences to draw about the intentions of such couples from their conduct. These cases have been subject of both criticism and adoption in parts by Australian courts and more will be said on this below.
125 In Pettitt, the matrimonial home was purchased by the wife using proceeds from the sale of property that she had inherited, and was placed in her name only. Her husband claimed a beneficial interest in the property based on his improvement and redecoration of it which was said to have enhanced the value. In Gissing, the husband purchased the matrimonial home in his own name while his wife contributed to the furnishings and the laying of a lawn. Upon their divorce, she claimed a beneficial interest in the home.
126 In each case, the House of Lords considered the circumstances in which a court will find a trust to exist, or indeed impose a trust to make good one party's claim to a beneficial interest in the property of the other. It seems that the prevailing principle from their Lordships' speeches is that a trust will be found to exist where the moving party can establish, having regard to the evidence and conduct of the parties, a common intention at the time of the purchase that the property was to be shared (Pettit at 804, 806, 810-811, 813, 822; Gissing at 897, 989, 900, 902, 906). Whether and to what extent recourse could be had to inferences from circumstances for findings that a subjective intention actually existed, or indeed whether in the absence of any evidence to support such an inference, the Court may impute a deemed intention to the parties by operation of law was a point of significant difference between their Lordships in these cases. The latter view that a common intention could be deemed by 'judicial imputation', espoused primarily by Lord Reid and Lord Diplock (in Pettit at 794-796 and 822-823) was not adopted by the majority in Pettitt, their Lordships finding instead that courts could only give effect to an actual intention found to have existed on the evidence of the case (at 804 and 810). In Gissing, although Lord Reid remained steadfast in his view (at 897), Lord Diplock acceded to the majority view (at 904) saying:
… I did, however, differ from the majority of the members of your Lordships' House who were parties to the decision in Pettitt v. Pettitt in that I saw no reason in law why the fact that the spouses had not applied their minds at all to the question of how the beneficial interest in a family asset should be held at the time when it was acquired should prevent the court from giving effect to a common intention on this matter which it was satisfied that they would have formed as reasonable persons if they had actually thought about it at that time. I must now accept the majority decision that, put in this form at any rate, this is not the law.
127 The House of Lords in Pettitt also disclaimed much of what had been said previously in the English cases about 'family assets' (at 795, 801, 810-811, 817). It also confirmed that the courts do not have the discretion to vary property rights under the relevant legislation, only to identify and declare them as was made clear by Windeyer J in Hepworth. These cases are examined only to contextualise their uptake (and criticism) by Australia courts (see Jacobs' Law on Trusts at [12-18]). The House of Lords in Pettitt and Gissing also expressed differing views about the ongoing utility of the presumptions, however save for where those views have been endorsed by Australian courts, it was not submitted by counsel here that I should follow any of those views.
128 In Doohan v Nelson (1973) 2 NSWLR 320 in the meantime, Mahoney J considered a claim by a widower that his late wife had held their matrimonial home on trust for him. The property was purchased in 1918 with an initial deposit paid from a wedding gift from his wife's father with the balance then paid by the husband by way of a loan secured by a mortgage over the property. The husband advanced his claim on the basis that a trust should be found (at 323):
(a) to have been created expressly by the parties; or
(b) to arise by implication of law from the circumstances; or
(c) to arise from some special principle of law applicable in the context of the husband and wife relationship.
The defendants to the claim were all those persons interested in the wife's deceased estate however they elected not to actively participate and the matter proceeded before Mahoney J unopposed.
129 His Honour recorded (at 323) the husband's evidence that he had thought it 'fair' to put the property in his wife's name because her father had gifted them the deposit but that 'little thought' had actually been given precisely to the ownership of their home. Mahoney J considered this evidence did not disclose any express trust, and that the evidence rather tended to 'negative the existence of any actual subjective intention'. His Honour proceeded to consider the two remaining grounds of the husband's claim. As to the 'presumption' of advancement, his Honour said (at 325-326):
I do not think that "under Australian case law," words used in Martin v. Martin it is open for me to hold that in the present context there is no longer a presumption of advancement. In Martin v. Martin the Court referred to the presumption of advancement in its reasoning in relation to transactions generally between husband and wife, and in Moody v. Moody, in relation to the matrimonial home, Herron C.J. in a judgment concurred in by the other members of the Court of Appeal referred to Martin v. Martin in the context of an argument based upon the possibility of a presumption of advancement applying.
It may be that, following the decision of the House of Lords in Pettitt v. Pettitt and the observations therein of Lord Reid, Lord Hodson and Lord Diplock the strength of the presumption and of the evidence required to rebut it will be less where the case concerns the ordinary matrimonial home.
…
It has been established that, in determining such questions the principles involved do not vary according to whether the case does or does not concern a matrimonial home, but it has been accepted that, as the facts and the assumptions or expectations of the parties in relation to matrimonial homes may be different from those in other cases, the fact that the principles are applied qua a matrimonial home may lead to different results from those to be expected in other cases.
(Emphasis added, citations omitted.)
130 His Honour then embarked on a detailed analysis of Pettitt and Gissing, paying particular regard to their Lordships' comments on the proper inferences as to intention that can be drawn from circumstances and conduct of spouses. His Honour concluded (at 329) that an intention to establish a trust could be 'imputed' to the husband:
If the court is to infer from these facts an intention, or alternatively is to impute an intention, subjective or otherwise, of which there is no direct evidence, the proper inference is, in my opinion, that the husband did not intend that the wife should have the benefit of all the subsequent payments made and to be made by him or to rely upon the matrimonial or personal relationship to protect his interests. If the proper inference be, as I believe it is, that the home was put into the wife's name originally because of the special circumstances of a wedding gift, any inference of intention to benefit the wife which might be drawn from that fact is, in my opinion, overborne by the inference to be drawn from the husband's acceptance of the matrimonial or practical duty to pay off and maintain the house indefinitely in the future.
…
I am, therefore, of opinion that, either as a matter of "common intention" or as the result of judicial imputation, a trust in favour of the husband absolutely was created in respect of the home.
131 As will be shortly made apparent, the proposition that the Court can impute to the parties an intention which never actually existed has been subsequently rejected in Australia. Mahoney J however considered at the time of Doohan that Pettitt and Gissing had returned a degree of consistency between the English approach and the Australian position disclosed in Wirth and Martin ( 329-330). No Australian decisions were brought to his Honour's attention that dealt with the inferences to be drawn from particular facts such that it was considered appropriate to follow Pettitt and Gissing (at 330), remembering of course that the matter was unopposed. Importantly, his Honour then reiterated the position with respect to the matrimonial home, saying (at 330):
It is in my opinion now established that, as far as concerns questions of principle, there is no differentiation to be made in any respect here relevant between cases involving ownership of a matrimonial home and cases between separate persons involving other property. The courts have finally rejected the principle that there is a judicial discretion as to property rights arising from e.g., the Married Women's Property legislation.
132 In Snyder (decided in 1977), the New South Wales Court of Appeal (Glass, Samuels and Mahoney JJA) considered a situation where an unmarried couple had lived in a home owned by the male partner, the female partner having made no contribution to the purchase price but had furnished the home. The couple intended to marry as soon as the female partner's divorce had been finalised. The male partner made his will in the female partner's favour in relation to the property however the couple never married. After the female partner lived alone in the home for a number of years, the male partner sought to evict her. She claimed a beneficial interest.
133 Clearly, the facts are not directly applicable to the present case, however the separate reasons of Glass, Samuels and Mahoney JJA give detailed consideration to the prevailing principles in Australia in light of the decisions in Pettitt and Gissing. While their Honours were all agreed that the female partner's claim to a beneficial interest in the property should be rejected, Glass and Samuels JJA expressly rejected parts of the obiter dicta comments in Pettitt and Gissing that Mahoney JA had applied in Doohan and in Snyder.
134 In the first paragraph of Samuels JA's reasons, his Honour indicates that he agrees with the reasons of Glass JA but that, given the importance and increasing frequency of these particular cases coming before the courts, his Honour endeavoured to also state the conclusion in his own words (at 697). Counsel for Ms Bosanac submitted that Glass JA's judgment should be read as the view of the majority of the Court in this case.
135 Glass JA commences with a statement of the relevant principles as follows (at 690):
A resulting trust is presumed in favour of the party providing the money. His beneficial interest is proportionate to his contribution. If, however, the legal owner is a wife, and the purchase price has been provided by her husband, there is countervailing presumption of advancement viz. that she takes the beneficial interest as a gift. Both presumptions, being rebuttable, will yield to evidence as to the actual intention of the parties. Constructive trusts arise where it would be a fraud for the legal owner to assert a beneficial interest. Unlike express and implied trusts, which reflect actual intentions, they are imposed, without regard to the intentions of the parties, in order to satisfy the demands of justice and good conscience: …
…
It is into this settled framework of doctrine that it is necessary to fit recent decisions involving disputes between spouses when the matrimonial home is in the name of one of them, but the other claims an interest. Pettitt v. Pettitt and Gissing v. Gissing are two decisions of the House of Lords, each of which rejected a claim by a spouse to a beneficial interest in the matrimonial home held in the name of the other. In the course of their judgments their Lordships expressed numerous obiter opinions, of which I believe the following represents a consensus.
(1) The Court merely declares the rights of the parties, and has no power to vary them in accordance with considerations of fairness: Pettitt v. Pettitt. This corresponds with what the High Court has laid down. See Hepworth v. Hepworth and cases there cited.
(2) Except for the presumption of advancement, the principles governing equitable interests are the same in disputes between spouses as in a dispute between other parties: Pettitt v. Pettitt; Gissing v. Gissing.
(3) In the absence of writing to prove an express trust, the Court will give effect to an agreement as to the manner in which the beneficial interest is to be held: Gissing v. Gissing. The oral agreement so enforced is one under which the claimant spouse, by contributions of one kind or another, has facilitated the acquisition of the home: Ibid.
(4) The common intention to which the Court gives effect may be expressed in such an oral agreement, or it may be inferred from the conduct of the parties: Gissing v. Gissing. What is enforced is an actual intention, inferred as a matter of fact: Ibid., not an imputed intention which they never had: Ibid., but would have had, if they had applied their minds to it: Ibid.; Pettitt v. Pettitt.
(Emphasis added, citations omitted.)
136 His Honour then proceeded with a detailed analysis of Pettitt and Gissing and identified 'a problem of no inconsiderable dimensions' in identifying the precise nature of the trust that courts are to give effect to upon proof of a common intention, noting that their Lordships appear to conflate resulting, implied and constructive trusts (at 691). His Honour concludes that the trust imposed must be a constructive trust, and goes on to cite a series of English Court of Appeal cases that have seized upon the reasoning primarily of Lord Diplock in Gissing to develop an entirely novel constructive trust. Glass JA rejects this approach in the English cases as well as Mahoney JA's approach in Doohan as follows (at 693-694):
… It will be observed that, in these various formulations of principle, nothing is said about the court giving effect, by means of a trust, to the express agreement or actual common intention of the parties. In its place there has been substituted a rule that the court may impose a trust on the legal owner in favour of the party making a contribution, whenever it is fair to do so. The trust is not based upon the actual intentions of the parties, inferred as a matter of fact, but upon intentions imputed to them, as a matter of law. In Doohan v. Nelson Mahoney J., as he then was, observed that "the relevant trust may be found to exist either because it is one which arises by implication of law directly, or because it arises from the imputation of a common intention where there is no evidence that such an intention originally existed in any subjective sense". In Valent v. Salamon, Holland J., being unpersuaded that he should infer a subjective intention, imputed the requisite common intention to the parties on the basis that their words and conduct were such that they should be treated as having had the intention. He made it clear that he was distinguishing between an inference of a subjective intention, and imputing one to the parties by "what Lord Reid and Mahoney J. described as judicial imputation".
With great respect to my learned colleagues, I am unable to accept the proposition that a trust of the matrimonial home may be based upon a common intention, which does not actually exist, but which is ascribed to the parties by operation of law. It is without authoritative backing and contrary to principle and authority.
(Emphasis added, citations omitted.)
137 His Honour concludes by observing that any application of Pettitt and Gissing that permits the Court to impute a common intention to the parties, whether based on what reasonable people in their shoes would have decided had they turned their minds to it or otherwise, is contrary to both a proper reading of their Lordships' decisions and the Australian positions (at 695):
The doctrine that a trust of the matrimonial home may arise in favour of a spouse as a result of her contribution to the acquisition or maintenance of the home, in the absence of any actual understanding or reciprocal intention, is also wholly inconsistent with the line of reasoning in the High Court cases referred to in Hepworth v. Hepworth. Since the decisions of the English Court of Appeal which establish a novel constructive trust are in conflict also with dicta in the House of Lords, this Court is directed by ultimate authority both in England and Australia not to follow them.
(Citations omitted.)
138 To Glass JA's observations need only be added the concluding remarks of Samuels JA (at 701):
I agree with Glass J.A. that Lord Reid's views in Gissing v. Gissing about the imputations of intention do not command the support necessary to clothe them with authority; and that Lord Denning's doctrine of the new constructive trust in Eves v. Eves is contrary to the majority opinion in Gissing v Gissing, and in Pettitt v. Pettitt also; and, I venture to think, to the reasoning in cases such as Hepworth v. Hepworth and Wirth v. Wirth. I do not consider that, by the device of the constructive trust, we are able to impose some scheme of community of ownership of property acquired for common use by spouses or others living together in a domestic relationship. Nor do I think that we should attempt to do so. It may seem an attractive way of deciding the problems that undoubtedly arise when such relationships break up. But the right solution involves questions of social policy which are for legislators to determine.
(Emphasis added, citations omitted.)
139 In Napier (decided in 1980), the deceased, who died on 1 September 1975, had lived with the appellant for some 14 years as his de facto wife in a house owned by him. The evidence was that the de facto husband had purchased an investment property in the name of his de facto wife with the arrangement being that she would hold the property for 'as long as she lived' and that it would then revert back to the de facto husband. The 'presumption' of advancement did not apply because the couple were not married and in any event, the High Court unanimously held that the evidence demonstrated an intention on the part of the de facto husband to retain a residual beneficial interest in the de facto wife's life interest. Only some brief observations of the Court need repeating.
140 In the lead judgment, Aickin J stated the principles to be applied (at 158):
The law with respect to resulting trusts is not in doubt. Where property is transferred by one person into the name of another without consideration, and where a purchaser pays the vendor and directs him to transfer the property into the name of another person without consideration passing from that person, there is a presumption that the transferee holds the property upon trust for the transferor or the purchaser as the case may be. This proposition is subject to the exception that in the case of transfers to a wife or a child (including someone with respect to whom the transferor or purchaser stands in loco parentis) there is a presumption of advancement so that the beneficial as well as the legal interest will pass. Each of the presumptions may be rebutted by evidence. It is, however, well established that no presumption of advancement arises in favour of a de facto wife: see Rider v Kidder (1805) 10 Ves Jun 360; 32 ER 884; Soar v Foster (1858) 4 K & J 152; 70 ER 64 and Allen v Snyder [1977] 2 NSWLR 685, especially at 690.
(Emphasis added.)
141 His Honour then noted (at 159) that:
The present case is one in which "unaided by evidence of actual intention" there would be a resulting trust in favour of the appellant. In the courts below it was held that the presumption of a resulting trust was, in the circumstances, rebutted as to the entire interest in the property. …
142 The courts below had placed significant emphasis on the fact that the de facto wife had agreed to add to her will by codicil, provision for the property to revert back to the de facto husband. This was said to evidence an intention that the wife would take as the absolute owner. Aickin J, with whom the Court agreed, held instead that the presumption of a resulting trust was only rebutted by the evidence to the extent of her life interest (at 160):
The evidence, the critical parts of which I have set out above, does not, in my opinion, do more than rebut the presumption of a resulting trust in respect of the house property during the lifetime of the deceased. The reference to the codicil does not, in my opinion, bear the weight which has been placed upon it.
143 In a concurring judgment, Gibbs J cited Lord Hodson's speech in Pettitt (at 811) for the proposition (at 154) that:
… where evidence has been given as to the intentions with which the parties effected the transaction, it is unlikely that the question whether or not there is a presumption of advancement will be important… For if there is a presumption, it is only prima facie, and evidence may be given to rebut it …
144 In Calverley (decided in 1984), the High Court (Gibbs CJ, Mason, Brennan, Murphy and Deane JJ) considered whether the 'presumption' of advancement should be extended to apply to de facto couples. The case is now good authority that it does not. In four separate judgments the Court expressed a number of views on the enduring role of the presumptions with the judgments of Mason and Brennan JJ, and Deane J forming a majority on a number of important points, while also diverging in significant respects.
145 Mr Calverley and Miss Green lived together for about 10 years in a de facto relationship. At first they lived in a house owned by Mr Calverley. Later they decided to move to another area if they could find a house that he could afford to buy. They found a house, but Mr Calverley had difficulty obtaining finance. He told Miss Green that the finance company required the purchase to be in their joint names. Money was then raised on a mortgage under which the parties were jointly and severally liable to make repayments. It was agreed between them that Mr Calverley, in fact, would make the repayments and he did so while Miss Green was to meet the day to day household expenses which she did. The house was purchased by Mr Calverley paying the deposit out of his own funds and the balance being raised on the mortgage. The parties were registered as joint tenants and subsequently the relationship broke down. Miss Green then brought proceedings for the sale of the property and distribution of the proceeds equally in accordance with their joint legal interest. Mr Calverley cross-claimed seeking a declaration that Miss Green held her interest on trust for him. The trial judge found for Mr Calverley holding that the property had been put in the joint names for the purpose of enabling finance to be raised and not to confer a beneficial interest on Miss Green (at 246). The New South Wales Court of Appeal reversed this decision, finding no basis to infer any common intention that Miss Green's interest was to be held on trust and ruled that the legal status quo should prevail.
146 A majority of the High Court (Gibbs CJ at 253, Mason and Brennan JJ at 262-263 and Deane J at 271) held that the decisions of both courts below should be set aside, instead finding that the parties were equitable tenants in common to the extent of their respective contributions to the purchase price.
147 Gibbs CJ reached this conclusion first by holding that the 'presumption' of advancement should apply in this case to a de facto couple (at 248-251) while subsequently finding that the evidence that Mr Calverley had only considered putting the property jointly in Miss Green's name to secure finance was sufficient to rebut the 'presumption' (at 251-252). In finding that the 'presumption' of advancement should be so extended, the Chief Justice examined the historical basis for the 'presumption' and considered that its contemporary basis had not been adequately expounded (at 348). His Honour then adopted the reasoning of Dixon CJ in Wirth (at 249-250), noting:
In Wirth v. Wirth Dixon C.J. put the law on a more rational basis.
…
… Dixon C.J. said:
"While the presumption of advancement doubtless in its inception was concerned with relationships affording 'good' consideration, it has in the course of its growth obtained a foundation or justification in the greater prima facie probability of a beneficial interest being intended in the situations to which the presumption has been applied."
…
… the principle as stated by Dixon C.J. is intelligible and is likely to lead to a just result and should in my opinion be accepted. The presumption should be held to be raised when the relationship between the parties is such that it is more probable than not that a beneficial interest was intended to be conferred, whether or not the purchaser owed the other a legal or moral duty of support. It is true that this may require a reconsideration of the correctness of the actual results reached in some of the earlier cases, but to regard that as a barrier to acceptance of the principle would be to treat the established categories as frozen in time. As Dixon C.J. said, that would not be characteristic of the doctrines of equity.
(Emphasis added.)
148 The Commissioner's argument mirrors the reasoning of Gibbs CJ in that he considers the modern justification for the presumptions to be the prima facie probability in the circumstances of each case that a beneficial interest was (or was not) intended to be gifted, and further that such prima facie probability does not exist when spouses purchase their matrimonial home.
149 In their joint judgment, Mason and Brennan JJ imported into their statement of the operation of the presumptions a passage from Lord Upjohn in Pettitt which the Commissioner relies on for his argument that the 'presumption' of advancement no longer applies to the matrimonial home (at 259):
When two or more purchasers contribute to the purchase of property and the property is conveyed to them as joint tenants 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 …
This is the basic presumption, though it may be displaced in appropriate cases by the presumption of advancement or, perhaps, qualified by an inference of the kind espoused by Lord Upjohn in Pettitt v. Pettitt. His Lordship said:
"... where both spouses contribute to the acquisition of a property, then my own view (of course in the absence of evidence) is that they intended to be joint beneficial owners and this is so whether the purchase be in the joint names or in the name of one. This is the result of an application of the presumption of resulting trust. Even if the property be put in the sole name of the wife, I would not myself treat that as a circumstance of evidence enabling the wife to claim an advancement to her, for it is against all the probabilities of the case unless the husband's contribution is very small."
In some instances, the drawing of such an inference might work to the disadvantage of a wife who holds a legal interest in property greater than a joint tenancy and who would otherwise be entitled to rely upon the presumption of advancement to assert as large a beneficial interest as the legal interest which she holds. It is not necessary now to consider whether the founding of a joint beneficial tenancy in husband and wife upon their inferred intention "is the result of an application of the presumption of resulting trust". What is presently material is whether it is appropriate to draw the inference that the parties intended that they should have beneficially a joint tenancy in the Baulkham Hills property - an interest corresponding with the interest vested in them at law.
It may be conceded that Lord Upjohn's inference reflects the notion that both spouses may contribute to the purchase of assets during the marriage (as they often do nowadays) and that they would wish those assets to be enjoyed together during their joint lives and to be enjoyed by the survivor when they are separated by death. Such an inference is appropriate only as between parties to a lifetime relationship (like the presumption of advancement of a wife …)
(Citations omitted.)
150 Critically however, their Honours held that the 'presumption' of advancement could not apply to a de facto couple such that (at 260):
… it is unnecessary now to decide whether Lord Upjohn's inference should qualify the presumption of advancement in favour of a wife, but it can be said that the antiquity of the presumption of advancement does not preclude the elevation of such an inference to the level of a presumption to be applied where the absence of the spouses' common intention leaves room for its operation. The doctrines of equity are not ossified in history: cf. Wirth v. Wirth …
(Emphasis added, citations omitted.)
151 Their Honours then considered whether the presumption of a resulting trust had in this particular case been rebutted and set out the principles for discerning any contrary intentions (at 261-262):
… The equitable presumption can be rebutted or qualified by evidence of a contrary intention common to the contributors of the purchase price. When a common intention is in issue, it is not ordinarily to be found in an uncommunicated state of mind; it is to be inferred from what the parties do or say.
It may be that evidence of a sole purchaser's own state of mind at the time of the purchase can be received from him when the court is seeking to ascertain his intention (Martin v. Martin) but in the search for the common intention of two or more purchasers at that time, light will rarely be shed by evidence of their uncommunicated states of mind. Lord Diplock's speech in Gissing v. Gissing contains the principle ordinarily to be applied:
"As in so many branches of English law in which legal rights and obligations depend upon the intentions of the parties to a transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. On the other hand, he is not bound by any inference which the other party draws as to his intention unless that inference is one which can reasonably be drawn from his words or conduct. It is in this sense that in the branch of English law relating to constructive, implied or resulting trusts effect is given to the inferences as to the intentions of parties to a transaction which a reasonable man would draw from their words or conduct and not to any subjective intention or absence of intention which was not made manifest at the time of the transaction itself. It is for the court to determine what those inferences are."
The Court of Appeal correctly took the time of the acquisition of the Baulkham Hills property as the material time for determining the beneficial interests of the parties. The evidentiary material from which the court might have drawn an inference as to the intention of the parties included their acts and declarations before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction. Evidence of those acts and declarations were admissible either for or against the party who did the act or made the declaration, but any subsequent declarations would have been admissible only as admissions against interest …
(Citations omitted.)
152 In this instance, their Honours agreed with the conclusion of the Court of Appeal that the evidence did not disclose a common intention, but held (at 262) that the error in the Court's approach had been to not first apply the presumption and then consider whether it was rebutted by evidence of intention.
153 It is notable from Deane J's judgment that his Honour took care to identify the specific parts of Mason and Brennan JJ's reasons with which there was agreement. At 268, his Honour considers the joint judgment gives 'convincing reasons' why the 'presumption' of advancement should not be extended to de facto couples. At 271, Deane J expresses agreement with the joint judgment as to the rebuttal of the presumptions and the regard to be had to Mr Calverley's repayment of the mortgage. Nowhere in the judgment does Deane J express agreement with Lord Upjohn's inference from Pettitt as cited by Mason and Brennan JJ.
154 Deane J does however express his own doubts about the utility of the presumptions, remaining steadfast in the view however that they establish an important civil onus of proof in cases such as the present (at 266):
... Even in those times however, there was much to be said for the view that, except where they served the same function as a civil onus of proof and operated to resolve a factual contest in circumstances where the relevant evidence was either uninformative or truly equivocal, the worth of those presumptions was at best debatable. …
…
The relevant presumptions are, however, too well entrenched as "land-marks" in the law of property (per Eyre L.C.B., Dyer v. Dyer) to be simply discarded by judicial decision. Indeed, the law embodying them has been said in this Court to be so clear that it "can no longer be the subject of argument": per Dixon C.J., McTiernan, Williams, Fullagar and Taylor JJ., Charles Marshall Pty. Ltd. v. Grimsley. If they are to be modified to avoid prima facie assumptions that a person intends the opposite to that which he does, it must be by legislative intervention which will not disturb past transactions which may conceivably have been structured by reference to them. …
(Emphasis added, citations omitted.)
155 As to the steps in the analysis and the evidence that may rebut the presumptions his Honour said (at 269):
In these circumstances, the starting point for the determination of the extent of the respective beneficial interests of Mr. Calverley and Miss Green in the Baulkham Hills property was a presumption that the property was held upon resulting trust for them according to their respective contributions to the purchase price. That presumption could be rebutted or qualified by admissible evidence which indicated either that Miss Green was intended to have a full half beneficial interest in the property or that Mr. Calverley was intended to have the whole beneficial interest. In Charles Marshall Pty. Ltd. v. Grimsley, it was said in the judgment of the Court (Dixon C.J., McTiernan, Williams, Fullagar and Taylor JJ.):
"The presumption can be rebutted or qualified by evidence which manifests an intention to the contrary. Apart from admissions the only evidence that is relevant and admissible comprises the acts and declarations of the parties before or at the time of the purchase ... or so immediately thereafter as to constitute a part of the transaction."
This passage constitutes a guide to the evidence which will ordinarily be relevant and admissible to confirm or rebut a presumption of resulting trust or a "presumption" of advancement, namely, acts and declarations of the parties before or at the time of the vesting of the legal estate and admissions against interest. The passage should not, however, be accepted as good law to the extent that it purports to lay down that no evidence other than that mentioned will ever be admissible. Regardless of whether the circumstances are such as to bring the case into one of the categories of advancement, evidence of the relationship - both legal and factual -between the parties will always be admissible. …
(Citations omitted.)
156 Importantly, his Honour held that it was no longer the case that the presumptions 'should not give way to slight circumstances'. Despite proceeding to hold that modern experience may undermine any rational basis for the continued operation of either presumption, his Honour reiterated his view that their role as a civil onus of proof should be preserved (at 270):
… Indeed, in a case where a presumption of resulting trust or a "presumption" of advancement applies in circumstances where the relationship between the parties does not, as a matter of modern experience, provide any firm rational basis for presuming either an intention to retain the beneficial interest or an intention to confer it on the other party, the presumption may be found to be of practical importance only in those cases where the evidence, including evidence of the actual relationship between the parties, does not enable the Court to make a positive finding of intention: cf. per Gibbs A.C.J. in Napier and per Lord Upjohn, Pettitt v. Pettitt
(Citations omitted.)
157 In the above passage Deane J also cites Lord Upjohn's speech in Pettitt in which, in addition to the inference cited by Mason and Brennan JJ, his Lordship said (at 813-814):
… If there is no such available evidence then what are called the presumptions come into play. They have been criticised as being out of touch with the realities of today but when properly understood and properly applied to the circumstances of today I remain of opinion that they remain as useful as ever in solving questions of title. First, then, in the absence of all other evidence, if the property is conveyed into the name of one spouse at law that will operate to convey also the beneficial interest and if conveyed to the spouses jointly that operates to convey the beneficial interest to the spouses jointly, i.e. with a benefit of survivorship, but it is seldom that this will be determinative.
(Emphasis added.)
158 Applying those principles to the facts, Deane J concluded that the evidence of the case did not disclose any intention capable of rebutting the presumption, being the presumption of a resulting trust, in that case (at 271):
… Even so regarded however, the presumption remained unrebutted by the evidence. In that regard, the fact that Miss Green was added as a purchaser and mortgagor to facilitate the arrangement of finance is equivocal ("amphibolous": Martin) in that it can be viewed as either an explanation of her acquisition of a beneficial interest in the property or as an explanation of her being but a trustee for Mr. Calverley. …
(Citations omitted.)
159 Murphy J in dissent thought that the presumptions were inappropriate to 'our times' and the matter was better dealt with by the Family Law Act 1975 (Cth). In the absence of such legislation his Honour considered the legal title to be the most accurate reflection of the prima facie probability of the parties' intent unless circumstances prevailed to displace it (at 265):
… Transfer of the title of property wholly or partially to another is commonly regarded as of great significance, especially by those in de facto relationships. The notion that such a deliberate act raised a presumption of a trust in favour of the transferor, would astonish an ordinary person.
In the absence of those presumptions, the legal title reflects the interests of the parties, unless there are circumstances (not those false presumptions) which displace it in equity. False presumptions which override the registered title are destructive of an orderly Torrens title system and should not be tolerated. The Torrens system permits the protection of interests by the use of caveats, so that the registered title reflects the true position and prevents the Torrens system becoming as complex as the old system.
160 In Currie v Hamilton [1984] 1 NSWLR 687 and Delehunt (decided in 1986), the Supreme Court of New South Wales and the High Court respectively considered the beneficial interests of de facto couples where both parties had contributed to the purchase prices of their homes. In stating the principles to be applied, both McClelland J in Currie (at 690) and Gibbs CJ in Delehunt (at 472, and with whom Wilson, Brennan Deane and Dawson JJ agreed), acknowledged the application of the 'presumption' of advancement to certain relationships, albeit not the ones in those cases.
161 In Nelson (decided in 1995), a mother paid the purchase price for a house which was transferred into the names of her adult son and daughter. The purpose of the arrangement was to enable the mother, if she wished, subsequently to purchase another house with the benefit of a subsidy under the Defence Service Homes Act 1918 (Cth). She would not have been eligible for a subsidy under that Act if she owned another house. She did later purchase another house and received a subsidised loan under the Act, falsely declaring that she did not own or have a financial interest in a house other than the one for which the loan was sought. The first property was sold and the mother and her son sought a declaration and order that the proceeds be paid to her accordingly. The daughter sought a declaration that she had a beneficial interest in the proceeds of sale. It was held that while the 'presumption' of advancement applies in the case of gifts by a mother to a child, (as well as a husband to a wife), in this case it was rebutted by the evidence of the mother's intention to hold the beneficial interest herself.
162 At 547, Deane and Gummow JJ commenced a consideration of the presumptions with the proposition that:
[t]he presumptions operate to place the burden of proof, if there be a paucity of evidence bearing upon such a relevant matter as the intention of the party who provided the funds for the purchase. …
Their Honours then said that the operation of a 'presumption' of advancement may be rebutted by evidence of the actual intention at the time of the purchase of the parent or other person who provided the purchase money, citing Charles Marshall (at 364-365, see above at [90]). Evidence also may be given to support the presumption of advancement, citing, amongst other things, Stewart Dawson & Co (Vic) Pty Ltd v Commissioner of Taxation (Cth) (1933) 48 CLR 683. Their Honours said that where the presumption of advancement is rebutted, the trust which then is enforced is a resulting trust, not an express trust. The trust thus is outside the operation of the requirement for writing in s 7 of the Statute of Frauds 1677 (Eng) and its modern Australian equivalent in property law legislation (in this case, s 34 of the Property Law Act (WA)). It followed that oral evidence was admissible to rebut the presumption of gift and also to affirm the operation of the presumption of resulting trust. As noted above (at [93]), their Honours cited the explanation offered by Professor Scott for this somewhat 'artificial' reasoning.
163 Their Honours described (at 548) the presumptions of advancement and resulting trust as entrenched 'land marks' in the law of property with many disputes being resolved and transactions effected on that foundation. Further, their Honours said (at 548-549):
… We prefer to approach this appeal on the footing that the existence of a presumption of advancement of her children by Mrs Nelson was properly accepted in the Supreme Court.
In a case such as the present, the presumption of advancement may be of practical importance only if the evidence, including that of the actual relationship between the parties, does not enable the court to make a positive finding of intention.
(Emphasis added, citation omitted.)
Their Honours considered, however, that it was possible in that case to make a positive finding of intention.
164 Dawson J also acknowledged and discussed the existence of the 'presumption' of advancement at some length (at 574-576), focussing on the question of whether or not there was any reason to suppose that the probability of a parent intending to transfer a beneficial interest in property to a child was any the more or less in the case of the mother than in the case of a father. The main question for his Honour as with the plurality was the effect of the mother's illegal purpose in transferring the property to her children, which she was forced to reveal to rebut the 'presumption' of advancement.
165 While observing that the case would have yielded the same result whether or not the 'presumption' of advancement applied, Toohey J (at 583-584) also focussed his analysis on whether the 'presumption' applies to gifts from a mother to her adult children. His Honour also briefly considered some of the authorities, in particular, the approach to the basis of the 'presumption' adopted by Gibbs CJ in Calverley, that the 'presumption' should apply where it is more probable than not that a gift was intended (see above at [147]). Toohey J considered (at 586) that:
At the same time the approach taken by Gibbs CJ does have a question begging aspect and the uncertainty it generates is perhaps evidenced by the fact that in Calverley v Green only the Chief Justice held that the presumption of advancement applied to a de facto relationship.
166 In an analysis between 583-585, his Honour considered it was important for the Court to resolve the issue of advancement in the context of the case before it because of uncertainty as to whether advancement from a mother would be treated in the same form as advancement from a father, given the historical obligation of the father to provide for children. His Honour agreed that it was inappropriate to distinguish between the parents and the presumption should apply to the mother.
167 McHugh J (at 601-603) said:
The presumption of advancement is a consequence of the equitable rule that, when a person transfers property without consideration or purchases property and directs the vendor to transfer the property into the name of another, the transferee is presumed to hold the property on a resulting trust for the transferor. No doubt in earlier centuries, the practices and modes of thought of the property owning classes made it more probable than not that, when a person transferred property in such circumstances, the transferor did not intend the transferee to have the beneficial as well as the legal interest in the property. But times change. To my mind - and, I think, to the minds of most people - it seems much more likely that, in the absence of an express declaration or special circumstances, the transfer of property without consideration was intended as a gift to the transferee. That being so, there is a strong case for examining whether the presumption of a resulting trust accords with the effect of contemporaneous practices and modes of thought. If that presumption goes, there is no compelling reason for a presumption of advancement in the case of transfers of property by parents to children. Indeed, the presumption of advancement itself may not accord with contemporaneous practices and modes of thought.
A presumption is a useful aid to decision making only when it accurately reflects the probability that a fact or state of affairs exists or has occurred. As Murphy J said in Calverley v Green "[p]resumptions arise from common experience ... As standards of behaviour alter, so should presumptions". If the presumptions do not reflect common experience today, they may defeat the expectations of those who are unaware of them. Nevertheless, as Deane J pointed out in Calverley, the presumptions are "too well entrenched as 'landmarks' in the law of property ... to be simply discarded by judicial decision". Although the operation of the presumptions may sometimes defeat the expectations of transferors and transferees, it may be that many transfers of property have been made on the basis of the presumptions. If evidence was no longer available to confirm that property had been transferred to achieve a result in accord with the presumptions, serious injustice might be done to those who have dealt in the property. In the absence of knowledge as to what effect the abolition of the presumptions would have on existing entitlements, the better course is to leave reform of this branch of the law to the legislature which can, if it thinks fit, abolish or amend the presumptions prospectively.
The appellant contends that, if the presumption of advancement continues as a legal principle, it should be restricted to cases in which the inference of advancement would be drawn in the absence of evidence of intention. This is another way of suggesting that the presumption does not arise unless the circumstances surrounding the bare relationship of the parties are consistent with the presumption. It would mean that where, for example, "a widowed mother, of modest means, makes a payment of substantially the whole of her assets ·to contribute to the purchase of real estate, and legal title is vested in her adult, able-bodied sons", no presumption of advancement would arise because the mother had no moral obligation to give her assets to her adult and able-bodied sons.
If the presumption of advancement could be displaced by the objective circumstances of the relationship, the appellant might be able to succeed without disclosing her illegal purpose, for the facts of her case closely resemble the facts of the above example. But to accept the appellant's contention would seriously undermine the operation of the presumption of advancement. It would allow it to operate only where the surrounding circumstances were consistent with the presumption. It would also substitute an inquiry into the circumstances of the case for the automatic operation of the rule, thus increasing the uncertainty of property titles and promoting litigation. As long as the presumption of advancement continues to apply to property dealings, it should apply whenever the parties stand in a relationship that has been held to give rise to the presumption. The circumstances surrounding a relationship may be used to rebut the presumption, but they cannot be used to prevent it from arising.
(Emphasis added.)
168 In Black Uhlans Incorporated v Crime Commission (NSW) [2002] NSWSC 1060, the plaintiff motorcycle club sought as against the New South Wales Crime Commission a declaration that the club's member in whose name its premises had been purchased was held on trust in favour of it, either as an express trust or resulting trust. Campbell J (as his Honour then was) discussed the interaction between resulting trusts and a 'presumption' of advancement (at [128]):
128 Judicial findings about who holds the beneficial interest in land are made with the assistance of presumptions. The first is "… that prima facie the beneficial ownership of real property is commensurate with the legal title." (Currie v Hamilton (1984) 1 NSWLR 687 at 690 per McLelland J.) In some situations this first presumption is displaced by a presumption of a resulting trust, while in other factual situations a presumption of advancement operates. The fundamental nature of the presumption that the beneficial interest is the same as the legal interest is illustrated in the explanation of Deane J in Calverley v Green (1984) 155 CLR 242 at 267 of how the presumption of advancement operates.
169 His Honour proceeded to adopt the statement of Deane J in Calverley (at 267 cited above at [65]) and that of Deane and Gummow JJ in Nelson (at 547) as to the onus of proof role that the presumptions play (see above at [162]), as well as the statement from Charles Marshall (at 365) as to the requisite standard of evidence required to rebut the presumptions (see above at [90]).
170 In Ebner (decided in 2003), Mrs Ebner, the wife of a bankrupt, sought as against the bankrupt's official trustee delivery up of personal property which had been seized by the trustee which he contended was at least in part property of the bankrupt estate despite assertions of the bankrupt that he owned no personal property apart from a few items of clothing. Finkelstein J rejected the evidence of Mrs Ebner that she had paid for the items, but noted that in the alternative, Mrs Ebner relied upon the 'presumption' of advancement to displace the presumption of resulting trust in favour of her husband as the person who paid the purchase price of the items. His Honour cited Dyer and noted that that case concerned real property but the rule applied also to personal property, citing various authorities. His Honour said (at [20]) that Mrs Ebner's argument broke down on the facts of the case. His Honour held that he did not accept that the 'presumption' of advancement could easily be applied in relation to household goods for use or display in the family home, being personal property acquired for the use or enjoyment of both parties to a marriage which was sufficient to rebut the presumption as noted in Silver v Silver [1958] 1 WLR 259 in the context of real property. The rationale applied was that in the case of family assets acquired for joint use, the presumption can easily be rebutted as it was different from the case where the property acquired was for the wife's exclusive personal use. This proposition goes some way to supporting the Commissioner's contention that the 'presumption' does not apply or is rebutted in the context of the matrimonial home, though it should be noted that Silver predates Pettitt and Gissing, and Finkelstein J did not refer to any of the Australian authorities discussed above.
171 Cummins (decided in 2006) concerned a barrister who became bankrupt in 2000, having failed to lodge tax returns for about 45 years. In 1987, he transferred his legal and beneficial interest as joint tenant in the matrimonial home to his wife. The purchase price of the matrimonial home had been contributed by the bankrupt and his wife in proportions of about 23% and 76.3% respectively some years before the transfer of the husband's interest to the wife. The trustee in bankruptcy sought declarations that the transfer was void against them because the 'main purpose' had been to place the property out of the reach of creditors. The trustees were successful at first instance, but failed on appeal. In the appeal, the High Court examined whether the bankrupt's main purpose was to prevent the transferred property becoming divisible amongst his creditors and, secondly, whether the bankrupt and his wife held title in the home as joint tenants or beneficial tenants in common in shares in the portions to which they had contributed to the purchase price. Much of the judgment was devoted to the proper construction of s 121(1)(b) of the Bankruptcy Act 1966 (Cth), in the circumstances of the case.
172 In the context of the issue presently under consideration, it was held (at [65]-[67]) that evidence of subsequent statements of intention, not being admissions against interest were inadmissible to rebut the 'presumption' of an intention of advancement in family relation cases. But evidence of facts as to subsequent dealings and of surrounding circumstances of the transaction were admissible in determining whether any presumption of resulting trust or advancement might be rebutted by evidence manifesting a contrary intention. The relevant transaction had been a composite of the purchase of the property followed by construction of a dwelling house occupied as the matrimonial home for many years prior to the impugned transaction. The facts were inconsistent with the displacement of the joint tenancy that existed before the transfer in 1987 in favour of an equitable tenancy in common of which the wife would have held the larger share.
173 Significantly, the Court, Gleeson CJ, Gummow, Hayne, Hayden and Crennan JJ, in a joint judgment noted (at [55]) the generally accepted principles affirmed for Australia in Calverley to the effect that:
if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money. … Further, the presumption of advancement of a wife by the husband has not been matched by a presumption of advancement of the husband by the wife. The "presumption of advancement", where it applies, means that the equitable interest is at home with the legal title, because there is no reason for assuming that any trust has arisen.
(Emphasis added, citations omitted.)
174 That distinction was pertinent in Cummins, as it was the wife who had contributed the greater proportion to the initially jointly held property, not the husband.
175 The Court asked what was there to conclude at the time of the transactions that the face of the register did not represent the full state of the ownership of the property and that the ownership as joint tenants was at odds with, and subjected to, the beneficial ownership established by trust law? The Court noted that no part of the purchase price was paid by Mrs Cummins in the August 1987 transfer such that the transfer of the property to her was voluntary. However, she did pay the ad valorem stamp duty on the contract and the valuer's fee. The High Court considered it unlikely that she would have incurred these costs if she believed she already held approximately a two-thirds beneficial interest. In any event, the Court found (at [58]) that the matters suggested that in August 1987, the parties were proceeding on the conventional basis that the equitable estate was at home with the registered estate of joint tenancy. The Court said (at [59]) that it was important for a consideration of the issues concerning the operation, if any, of the principles with respect to resulting trusts that the registered title was that of joint tenants rather than tenants in common. The severance effected in August 1987 had the effect of putting to an end the incident of survivorship.
176 In the context of discussion of the effect of joint tenancy versus tenancy in common, the Court considered Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 549 but in the commercial context of that case there was no scope for the operation of a 'presumption' of advancement. Importantly, their Honours then considered the well-known statement of the Court in Charles Marshall (at 365) concerning the admissibility of evidence to rebut the presumptions (quoted above at [90]) and approved in Calverley (at 262 and 269). Their Honours qualified this principle as follows (at [65]):
In Charles Marshall, the plaintiffs were daughters of the donor and the Court said that the presumption of an intention of advancement, that they be made beneficial as well as legal owners of the shares, might be rebutted by evidence manifesting a contrary intention. Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ said of the rebuttal of presumptions by manifestation of a contrary intention:
"Apart from admissions the only evidence that is relevant and admissible comprises the acts and declarations of the parties before or at the time of the purchase (in this case before or at the time of the acquisition of the shares by allotment) or so immediately thereafter as to constitute a part of the transaction."
(Emphasis [in original].)
However, as Malayan Credit illustrates, whilst evidence of subsequent statements of intention, not being admissions against interest, are inadmissible, evidence of facts as to subsequent dealings and of surrounding circumstances of the transaction may be received.
(Citations omitted.)
177 There is then a passage on which much turns in this case. At [71]-[73], the Court said:
70 In the present case, Sackville J referred in the second judgment to the operation of statute law to produce divergent outcomes in particular classes of case. In particular, his Honour referred to the regimes established by the Family Law Act 1975 (Cth), s 79, and, in New South Wales, by the Property (Relationships) Act 1984 (NSW). The New South Wales statute provides for the declaration of title or rights in respect of property held by either party to a "domestic relationship". That term is broadly defined in s 5 as extending beyond the already broad definition of de facto relationship in s 4. The extent to which these statutory innovations may bear upon further development of the principles of equity is a matter for another day.
71 The present case concerns the traditional matrimonial relationship. Here, the following view expressed in the present edition of Professor Scott's work respecting beneficial ownership of the matrimonial home should be accepted:
"It is often a purely accidental circumstance whether money of the husband or of the wife is actually used to pay the purchase price to the vendor, where both are contributing by money or labor to the various expenses of the household. It is often a matter of chance whether the family expenses are incurred and discharged or services are rendered in the maintenance of the home before or after the purchase."
To that may be added the statement in the same work:
"Where a husband and wife purchase a matrimonial home, each contributing to the purchase price and title is taken in the name of one of them, it may be inferred that it was intended that each of the spouses should have a one-half interest in the property, regardless of the amounts contributed by them.
(Footnote omitted.)
72 That reasoning applies with added force in the present case where the title was taken in the joint names of the spouses. There is no occasion for equity to fasten upon the registered interest held by the joint tenants a trust obligation representing differently proportionate interests as tenants in common. The subsistence of the matrimonial relationship, as Mason and Brennan JJ emphasised in Calverley v Green, supports the choice of joint tenancy with the prospect of survivorship. That answers one of the two concerns of equity, indicated by Deane J in Corin v Patton, which founds a presumed intention in favour of tenancy in common. The range of financial considerations and accidental circumstances in the matrimonial relationship referred to by Professor Scott answers the second concern of equity, namely the disproportion between quantum of beneficial ownership and contribution to the acquisition of the matrimonial home.
73 In the present litigation, the case for the disinclination of equity to intervene through the doctrines of resulting trusts to displace the incidents of the registered title as joint tenants of the Hunters Hill property is strengthened by further regard to the particular circumstances. Solicitors acted for Mr and Mrs Cummins on the purchase in 1970. The conveyance was not uneventful. The contract was dated 14 April 1970 and was settled on 27 July 1970, but only after the issue by the solicitors for the vendor on 10 July of a notice to complete. It is unrealistic to suggest that the solicitor for the purchasers, Mr and Mrs Cummins, did not at any point advise his clients on the significance of taking title as joint tenants rather than as tenants in common. Secondly, use of the valuation obtained in 1987 to fix what was shown as the purchase price for the acquisition by Mrs Cummins of the interest of her husband is consistent, as already indicated, with the conventional basis of their dealings which treated the matrimonial home as beneficially owned equally.
(Emphasis added, citations omitted.)