Bosanac v Commissioner of Taxation (2022) HCA 34

The case of Bosanac v Commissioner of Taxation [2022] HCA 34 (12 October 2022) is a case that on the face of it is simply a tax case.  

However, the concepts and legal principles considered are of use to the family law practitioner.

The parties married in 1998.  In 2006 the wife purchased a property in her sole name applying funds from an existing joint account of the parties to pay the deposit and with both parties applying for the loans to complete the purchase. 

Securities required by the bank for the loans were mortgages over that property and properties owned either by the husband or the wife or both of them. 

The parties didn’t intermingle all of their funds. They had both separate property and some bank accounts that they shared. 

The husband was a creditor of the Tax Commissioner. 

The Commissioner sought a declaration of resulting trust over the equity in one-half of the property. 

At paragraph 8:

“The Commissioner sought to take advantage of the law’s presumption, known as a presumption of resulting trust, 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.” (Footnote 2 – Calverley v Green [1984] HCA 81)

“That presumption is subject to an exception that, in the case of purchases by a husband in the name of a wife, or a parent (or person who stands in loco parentis) in the name of a child, there is a presumption of advancement or, in other words, a presumption that the purchaser intended that the beneficial interest would pass with the legal interest.” (Footnote 3 – Napier v Public Trustee (WA) (1980) 55 ALJR 1 at 3)

The Commissioner contended ” that the presumption of advancement of a wife by her husband, which operates to preclude a resulting trust from arising, is no longer part of the law of Australia in relation to the matrimonial home following the decision of this Court in Trustees of the Property of Cummins v Cummins.” (Footnote 4 – (2006)  227 CLR 278 at 302-303 [71]

The Primary Judge dismissed the Application. 

The Full Court took a different view. 

The High Court then engages in a discussion of the presumptions with that discussion taking 12 to 18 of the paragraphs of the Judgment. 

The Court said:

“The term “resulting trust” states a legal response to proved facts.” (Footnote 12 – Swadling, “Explaining Resulting Trusts” (2008) 124 Law Quarterly Review 72 at 79)

“The presumption can 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 (or other property) held on trust for him or her.”

If more than one person pays the purchase price, then “regard is necessarily had to evidence of each of their intentions”.

“The presumption of advancement allows an inference as to intention to be drawn from the fact of certain relationships.”

At paragraph 15:

“On one view, the presumption of advancement is not strictly a presumption at all. It may be better understood as providing “the absence of any reason for assuming that a trust arose”. At an evidentiary level, it is no more than a circumstance which may rebut the presumption of a resulting trust or prevent it from arising. It too may be rebutted by evidence of actual intention.“

The Court said that this appeal concerns the intention of Ms and Mr Bosanac when the property was registered in her name.  Also, the weight they might now have to both presumptions. 

The Court then went on to consider the weight of the presumptions. 

At paragraph 22:

“The presumption of advancement, understandably, is especially weak today.” 

There is discussion in the case as to the current relevance of a concept such as the presumption of advancement with authorities commenting that abolishing the presumption may be best left to the legislature. 

The Court then moved to a consideration of concept of proof of intention. 

The Court’s consideration was “the question is what inference is to be drawn from the available facts and in particular the history of the parties’ dealings with property”, with that being a reference to Ms and Mr Bosanac.

At paragraph 35:

“There was a history of Ms and Mr Bosanac holding their substantial real and other property in their own names. Consistently with this, it was evidently the desire of Ms Bosanac to purchase the property and have it registered in her name alone. She was the moving party. These facts alone are sufficient to rebut any presumption that her interest in the property was attributable to the relationship of husband and wife and his intention to benefit her.” 

These parties had their own way of dealing with property. Apart from some shared bank accounts, there does not appear “to have been any substantial property in which Ms or Mr Bosanac had a joint interest”. 

Gageler J dealt with it in this way:

“For better or for worse, the weight of history is too great for a redesign of that magnitude now to be undertaken judicially.”

The presumption and counter-presumption are “landmarks in the law”. 

At paragraph 59:

“Evaluated by contemporary standards, the categories of relationships seen in the past to attract or not to attract the counter-presumption of advancement are inconsistent and discriminatory.” 

At paragraph 60:

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

The case provides an interesting review of these concepts. 

Gordon and Edelman JJ also published their own decision. Their discussion of presumption of resulting trust begins at paragraph 95.  We are encouraged to think about the distinction between a presumption of fact or an evidentiary presumption and a presumption of law. 

At paragraph 105 they say:

“Where the presumption (of a resulting trust) arises, the existence of a resulting trust is an inference drawn in the absence of evidence.” 

But such an inference – of resulting trust – “cannot arise where a plaintiff has led evidence that tends to establish an objective intention or the lack of an objective intention to create a trust”.

Their discussion of the presumption of advancement is this:

“First, the “presumption” of advancement is not a “presumption” at all, but is, instead, one circumstance of fact in which the presumption of resulting trust does not arise.”

“Second, although the “presumption” of advancement has been described as entrenched, its rationale has not been consistently explained and, no less importantly, it has long been recognised that the limited classes of relationships of close trust from which the “presumption” arises “may not accord with contemporaneous practices and modes of thought””.

They considered the case of Cummings and determined that it was not relevant. 

The appeal was allowed by all Judges, although there are three different discussions. 

It is an interesting case.