Written by In Bosanac v Commissioner of Taxation [2022] HCA 34, the High Court unanimously allowed an appeal concerning whether the appellant, Ms Bosanac, held half of her interest in a residential property on trust for her husband, in circumstances where Ms Bosanac purchased the property jointly with Mr Bosanac, with loans secured against properties they each separately owned. The property was registered in Ms Bosanac’s name alone, and used as the matrimonial home.
The Commissioner was a creditor of Mr Bosanac, who sought a declaration of resulting trust over the equity in one-half of the property. In other words, that Ms Bosanac held her share on trust for Mr Bosanac. The presumption of resulting trust is that a person who advances purchase monies for property, which is held in the name of another person, intends to have a beneficial interest in the property. However, that presumption is subject to an exception known as the ‘presumption of advancement’ which applies only in the case of purchases by a husband in the name of his wife, or a parent in the name of their child, and presumes that the purchaser intended that the beneficial and legal interest would pass.
This somewhat archaic presumption does not apply from wife to husband, child to parent or husband to husband or any other de facto category. For the categories of relationship in which the presumption of advancement applies, it is up to the opposing party to disprove the presumption of advancement.
The Commissioner argued that the presumption of advancement was no longer part of Australian law.
The Court held that the presumption of resulting trust may be rebutted by evidence from which it may be inferred that there was no intention on the part of the person providing the purchase money to have an interest in land held on trust for him or her. The presumption of advancement allows an inference as to intention to be drawn from the fact of certain relationships. However, the Court conceded that at an evidentiary level, it is ‘no more than a circumstance which may rebut the presumption of resulting trust,’ and it too, may be rebutted by evidence of actual intention.
The determinative issue was the intention of Ms and Mr Bosanac when the property was registered in Ms Bosanac’s name. This intention was a question of fact. Ultimately, the Court held that the parties objectively intended Ms Bosanac to be the sole beneficial owner of the property and that Mr Bosanac was merely facilitating its acquisition. The Commissioner was thus unable to rebut the presumption of advancement.
Despite the position of many wives with respect to income and property nowadays, and the recognition by statute of de facto relationships and same-sex marriage, the High Court did not decide to abandon this longstanding presumption of advancement, opining that any reform of this branch of law would be up to the legislature.