Commissioner of Taxation v Bosanac (No 7)
[2021] FCA 249
•22 March 2021
FEDERAL COURT OF AUSTRALIA
Commissioner of Taxation v Bosanac (No 7) [2021] FCA 249
File number: WAD 291 of 2015 Judgment of: MCKERRACHER J Date of judgment: 22 March 2021 Catchwords: EQUITY – presumption of advancement – whether the presumption of advancement applies to the matrimonial home – whether the presumption has been rebutted – where both spouses contribute equally to the purchase of the matrimonial home through joint loans – where title is placed in the wife’s name only – where the Commissioner of Taxation seeks a declaration as to the husband’s beneficial interest to satisfy judgment debt – consideration of whether Trustees of Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278 qualifies the presumption of advancement Legislation: Evidence Act1995 (Cth) ss 59(1), 81(1), 135
Federal Court of Australia Act 1976 (Cth) s 37M
Taxation Administration Act 1953 (Cth) Pt IVC
Federal Court Rules 2011 (Cth) r 8.21(1)(a)
Property Law Act 1969 (WA) s 34Cases cited: Abigail v Lapin [1934] AC 491
Allen v Snyder [1977] 2 NSWLR 685
Anderson v McPherson (No 2) (2012) 8 ASTLR 321; [2012] WASC 19
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Black Uhlans Incorporated v Crime Commission (NSW) [2002] NSWSC 1060
Brown v Brown (1993) 31 NSWLR 582
Calverley v Green (1984) 155 CLR 242; [1984] HCA 81
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, [1956] HCA 28
Commissioner of Taxation v Bosanac [2016] FCA 448
Commissioner of Taxation v Bosanac (No 2) [2016] FCA 945
Commissioner of Taxation v Bosanac (No 5) [2019] FCA 2126
Commissioner of Taxation v Bosanac (No 6) [2020] FCA 339
Cook v Fountain (1676) 3 Swan 585; 36 ER 984
Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460; [1967] HCA 3
Currie v Hamilton [1984] 1 NSWLR 687
Delehunt v Carmody (1986) 161 CLR 464; [1986] HCA 67
Deputy Commissioner of Taxation v Huang [2019] FCA 1728
Deputy Commissioner of Taxation v Vasiliades [2014] FCA 1250
Deputy Commissioner of Taxation v Vasiliades [2015] FCA 412
Devoy v Devoy (1857) 65 ER 713
Doohan v Nelson (1973) 2 NSWLR 320
Dyer v Dyer (1788) 2 Cox 92; 30 ER 42
Ebner v Official Trustee in Bankruptcy (2003) 126 FCR 281; [2003] FCA 73
re Ekyn’s Trust (1877) 6 Ch D 115
English, Scottish & Australian Bank Ltd v Phillips (1937) 57 CLR 302
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
Finch v Finch (1808) 15. Ves. Jun. 43:33 E.R. 671
Gissing v Gissing [1971] AC 886
Gutierrez de Martinez v. Lamagno, 515 U.S. 417 (1995)
Hepworth v Hepworth (1963) 110 CLR 309; [1963] HCA 49
Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (2008) 167 FCR 314; [2008] FCA 369
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2009) 241 CLR 1; [2010] HCA 19
Kelly v Mina [2014] NSWCA 9
Ketteman v Hansel Properties Ltd [1987] 1 AC 189
Kingdon v Bridges (1688) 23 ER 653
Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 549
Martin v Martin (1956) 110 CLR 297; [1959] HCA 62
Moate v Moate [1948] 2 All ER 486
Murtagh v Murtagh [2013] NSWSC 926
Nambery Craft Pty Ltd v Watson [2011] VSC 136
Napier v Public Trustee (WA) (1980) 32 ALR 153
Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25
News Ltd v Australia Rugby Football League (1996) 64 FCR 410; [1996] FCA 870
Pettitt v Pettitt [1969] UKHL 5; [1970] AC 777
Silver v Silver [1958] 1 WLR 259
Silvia (Trustee) v Williams, in the matter of Williams (Bankrupt) [2018] FCA 189
Soar v Foster (1858) 70 ER 64
Stewart Dawson & Co (Vic) Pty Ltd v Commissioner of Taxation (Cth) (1933) 48 CLR 683; [1933] HCA 4
Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (2012) 332 ALR 199; [2016] FCAFC 2
Ting, H. & Anor v. Blanche, S. & Anor [1993] FCA 781; (1993) ATPR 41-282
Trustees of Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278; [2006] HCA 6
Re Vassis; Ex parte Leung (1986) 9 FCR 518
Wimpole v McIlwraith [1923] VLR 553
Windella (NSW) Pty Ltd v Hughes [1999] NSWSC 1129; (1999) 49 NSWLR 158
Wirth v Wirth (1956) 98 CLR 228; [1956] HCA 71Ford HAJ and Lee WA, Principles of the Law of Trusts (Thomson Lawbook Co) (update 181)
Heydon JD and Leeming MJ, Jacobs’ Law of Trusts in Australia (8th ed, Lexis Nexis, 2016)
Scott AW and Fratcher WF, The Law of Trusts (4th ed, Little, Brown and Company, (1989)Division: General Division Registry: Western Australia National Practice Area: Taxation Number of paragraphs: 232 Date of hearing: 8 July 2020 Date of last submissions: 3 August 2020 Counsel for the Applicant: Mr AJ Musikanth SC with Mr J Slack-Smith Solicitor for the Applicant: Australian Government Solicitor Counsel for the First Respondent: Mr R Blow Solicitor for the First Respondent: Cove Legal Counsel For the Second Respondent: Mr T Bagley with Mr B O’Connor (Pro Bono) ORDERS
WAD 291 of 2015
BETWEEN: COMMISSIONER OF TAXATION
Applicant
AND: VLADO BOSANAC
First Respondent
BERNADETTE BOSANAC
Second Respondent
JUDGE:
MCKERRACHER J
DATE OF ORDER:
22 MARCH 2021
THE COURT ORDERS THAT:
1.The application be dismissed.
2.The applicant pay the costs of the second respondent, to be assessed if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MCKERRACHER J:
In this proceeding the applicant (the Commissioner) seeks a declaration broadly to the effect that the first respondent (Mr Bosanac) has an equitable interest to the extent of 50% of the available equity in a residential property in Dalkeith, Western Australia (the Dalkeith Property). I say ‘broadly’ as there has been much debate about the precise wording of the declaration, a topic visited shortly in these reasons. The second respondent (Ms Bosanac) is the sole registered proprietor of the Dalkeith Property. On 29 April 2016, the Court entered summary judgment against Mr Bosanac in the sum of $9,344,111.89 plus costs: Commissioner of Taxation v Bosanac [2016] FCA 448. On 12 August 2016, execution of the judgment was stayed until further order: Commissioner of Taxation v Bosanac (No 2) [2016] FCA 945. The stay was lifted on 17 December 2019, with effect from 29 August 2019 (Commissioner of Taxation v Bosanac (No 5) [2019] FCA 2126), and the declaration is now sought to facilitate recovery of part of the judgment sum by the Commissioner.
The central question is whether on the facts of this case a ‘presumption’ of advancement displaces a presumption of a resulting trust and whether the operation of either presumption is rebutted by evidence of a contrary intention. What is significant is that it is the Commissioner, not Mr Bosanac who is contending for the relief sought. Even though the Bosanacs are separated and resolving their affairs through Family Court proceedings, Mr Bosanac has not sought to assert a resulting trust and has not opposed the contentions advanced for Ms Bosanac in favour of the legal status quo which also accords with a ‘presumption’ of advancement. Mr Bosanac appeared by counsel on this contested application but did not make submissions.
THE APPLICATION TO AMEND
By an amended originating application filed on 10 January 2020, the Commissioner sought the following relief at para 3:
A declaration that [Mr Bosanac] has an equitable interest to the extent of 50% of the available equity in the … Dalkeith [Property], more particularly described in certificate of title volume ...
Just minutes before the commencement of the hearing of the amended application for final relief, the Commissioner circulated a minute of proposed orders containing a differently worded declaration regarding the Dalkeith Property. During the hearing, counsel for Ms Bosanac made two preliminary and interrelated submissions concerning the Commissioner’s forms of orders. The first was that the declaration as worded in the amended originating application lacked sufficient clarity to allow rights to be enforced or the nature of the declaration to be understood, such that the Court would not make a declaration in those terms. The second was that if the Commissioner now sought a different declaration as expressed in his minute of orders, this could not be done absent a formal application, and further that the Court should not entertain any application to amend the relief sought midway through the final hearing.
In response, the Commissioner applied at the hearing to amend para 3 of the amended originating application to seek a declaration in the following terms (which differ slightly from the declaration sought in the minute):
[Ms Bosanac] holds 50 per cent of her interest in the [Dalkeith Property], Western Australia, more particularly described in certificate of title volume …, on trust for [Mr Bosanac].
(Emphasis added.)
Ms Bosanac firmly opposed the application to amend. I gave leave to the parties to file submissions for and against the proposed amendment after the hearing of the matter.
The Commissioner argues that the proposed amendment is necessary and desirable to facilitate the just resolution of the dispute, consistent with the overarching purpose reflected in s 37M of the Federal Court of Australia Act 1976 (Cth). Moreover, he says that in circumstances where the substantive issue raised by the proposed declaration appears to have been fully understood by Mr and Ms Bosanac at all relevant times, and has now been fully argued, no question of prejudice can be said to arise.
The Dalkeith Property is registered solely in the name of Ms Bosanac but is subject to a first registered mortgage in favour of Westpac Banking Corporation. The Commissioner says that any declaration should be framed so as not to affect the interests of Westpac. Subject to the outcome of these proceedings, Ms Bosanac has what would have been described as an ‘equity of redemption’ had the land been general law land: Windella (NSW) Pty Ltd v Hughes (1999) 49 NSWLR 158 (at [21]). Under the Torrens system, the legal estate in fee simple remains vested in Ms Bosanac as registered proprietor (Abigail v Lapin [1934] AC 491 at 501), subject to the ‘statutory charge’ created by the registered mortgage: English, Scottish & Australian Bank Ltd v Phillips (1937) 57 CLR 302 (at 321). The resulting trust contended for arose, the Commissioner argues, when the Dalkeith Property was purchased.
The current formulation of the declaration (as set out in the amended originating application) was first reflected in a minute filed as part of an interlocutory application filed by the Commissioner on 12 August 2016, seeking to introduce a claim for declaratory relief relating to the Dalkeith Property. The interlocutory application was opposed by Mr and Ms Bosanac. Both were then legally represented. No issue was taken with the formulation of the proposed relief at any other time prior to the final hearing of the application for declaratory relief. On 26 October 2016, leave was granted to the Commissioner to amend the originating application to seek the declaratory relief which now appears in the amended originating application and set out above (at [3]). However, due to the protracted procedural history of this matter, which involved a stay of the judgment entered against Mr Bosanac while he pursued his rights under Pt IVC of the Taxation Administration Act 1953 (Cth), the originating application was not formally amended to include the declaratory relief until 10 January 2020. By reference to this procedural history, the Commissioner’s main point appears to be that both respondents have been on notice as to the nature of the declaratory relief sought against them since October 2016, with no objections to the form of relief being raised at any earlier time.
The Commissioner contends that the amended wording addresses the objections raised by Ms Bosanac at the hearing. He argues that no prejudice can be said to arise should para 3 be amended accordingly. That is so because since at least October 2016 ‘neither respondent appears to have been under any illusion as to the substance and effect of the relief proposed’ by the Commissioner.
Nor, the Commissioner argues, has the Court been under any misapprehension. In Commissioner of Taxation v Bosanac (No 6)[2020] FCA 339 (at [2]), the Commissioner’s application was described as one ‘for a declaration that Ms Bosanac holds a one half interest in Property in Dalkeith, Western Australia on resulting trust for Mr Bosanac’. (This summary, I observe, says nothing as to whether the relief sought was likely to be granted for any reason.)
Ms Bosanac has been unrepresented in these proceedings since 2 April 2020. Following a referral from the Court, pro bono counsel were engaged on 26 June 2020, less than two weeks before the final hearing. This context goes a considerable way to explaining why issue was not taken with the form of declaratory relief at an earlier time. In any event, Ms Bosanac submits that this is irrelevant where the Court must be satisfied that the declaration is a proper order to make in the exercise of its discretion. It is asserted that the Commissioner has confused his obligation to seek relief in terms that the Court can make, with Ms Bosanac’s right to resist the case that is actually (as opposed to theoretically) brought against her. Her status as a personal litigant is also said to be relevant. As Lord Griffiths observed in Ketteman v Hansel Properties Ltd [1987] 1 AC 189 (at 220), adopted in Ting, H. & Anor v. Blanche, S. & Anor [1993] FCA 781 (at [40]):
Justice cannot always be measured in terms of money … a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other. Furthermore, to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence.
Ms Bosanac says that the proposed amendment is substantive and represents a material change to the relief sought in three respects. First, the interest sought to be declared is now a proprietary interest, whereas before it was unclear whether the interest was proprietary or personal; second, this proprietary interest now affixes over 50% of Ms Bosanac’s legal estate (as opposed to merely the ‘available equity’); third, and consequentially, the declaration could now support a power of sale over Ms Bosanac’s primary residence where she lives with her two children.
As noted, the Dalkeith Property is encumbered by a first registered mortgage in favour of Westpac. Ms Bosanac contends that the declaration now sought affects Westpac’s interests as it would declare a proprietary interest in land. Where a court is invited to make orders directly affecting proprietary rights or liabilities of a non-party, the non-party is usually a necessary party and ought to be joined: John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2009) 241 CLR 1 (at [131]). As held by the Full Court of the Federal Court in News Ltd v Australia Rugby Football League (1996) 64 FCR 410 per Lockhart, Von Doussa and Sackville JJ (at 524-525):
where orders sought establish or recognise a proprietary or security interest in the land… all persons who have or claim an interest in the subject matter are necessary parties. This is because an order in favour of the claimant will, to a corresponding extent, be detrimental to all others who have or claim an interest.
No joinder has been sought. Nor would now be the appropriate time to join a party.
Ms Bosanac argues that there is no evidence before the Court on which it could be confident that the threat to Westpac’s security interest is illusory. The Court would not make a declaration without hearing from all affected parties, it is argued, because Westpac would have an inevitable right to apply for discharge.
Ms Bosanac notes as well that the application is unjustified by changed circumstances or new facts. Rather, on the heel of the hunt, the Commissioner has ‘abandoned’ his prior claim for declaratory relief and sought to substitute it. She observes that the Commissioner is a sophisticated litigant and has been represented throughout by experienced solicitors and very experienced senior and junior counsel. The issue raised by Ms Bosanac (that the earlier form of relief was not a form of relief that a court would properly grant) is a matter that must have been known to the Commissioner throughout. In those circumstances, Ms Bosanac relies on the following Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 factors which are said to weigh against a grant of leave to amend:
(a)the application is procedurally defective, in that there is no proposed further amended originating application;
(b)no affidavit has been proffered to explain the reason for the lengthy delay;
(c)a final hearing in the matter has been held, and evidence and submissions have closed;
(d)the potential loss of public confidence where a court is seen to accede to applications made without adequate explanation or justification: Aon (at [5], [24] and [30]);
(e)the prejudice that might be assumed to follow from the amendment and that which is shown: Aon (at [5], [100] and [102]); and
(f)the parties’ choices to date in the litigation and the consequences of those choices: Aon (at [112]).
Generally speaking, an applicant must provide an explanation for any delay before the court will exercise its discretion to allow an amendment: Aon (at [103]); Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu [2016] FCAFC 2 (at [125]). The explanation must be ‘satisfactory’: Kelly v Mina [2014] NSWCA 9 (at [47]); Nambery Craft Pty Ltd v Watson [2011] VSC 136 (at [38]).
For the following short reasons, I consider the application to amend should be allowed. I do not believe that Ms Bosanac misapprehended the case against her, nor has she identified anything that she might have done differently had leave to amend been sought earlier. Furthermore, as submitted by the Commissioner, the force and effect of the declaration sought has been understood by all parties, including the Court, to be that which is encapsulated in the amended wording since at least October 2016.
It is true that the delay has not been fully explained but I infer from the history outlined above that it is simply a process of refinement as a result of exchanged arguments. That background affords at least some explanation. However, in circumstances where neither prejudice nor an adverse effect to the conduct of the proceedings has been occasioned, any lack of, or deficiency in, explanation for delay is, ordinarily, hardly likely to be decisive.
Similarly, it is not possible to identify prejudice to Westpac. On the proposed wording, Ms Bosanac would simply hold half of her interest on resulting trust. That whole interest is already subject to a mortgage in favour of Westpac. Hence, a declaration to the effect that part of Ms Bosanac’s interest is held on trust for Mr Bosanac (a joint borrower under the loan arrangements secured by the mortgage) could cause no detriment to the mortgagee. No consequential order for sale is presently sought. Westpac is not a necessary party. It would be if an order for sale were sought.
This conclusion is also supported by r 8.21(1)(a) of the Federal Court Rules 2011 (Cth) which provides as follows:
8.21 Amendment generally
(1)An applicant may apply to the Court for leave to amend an originating application for any reason, including:
(a)to correct a defect or error that would otherwise prevent the Court from determining the real questions raised by the proceeding;
…
While it may be accepted that the original wording of the Commissioner’s declaration was defective, in circumstances where all parties have effectively understood the true nature of the relief sought in terms of the amended wording (or similar) it is appropriate to allow the amendment.
EVIDENCE
In the substantive application, the Commissioner relies on two affidavits of Yi Deng, an officer in the Australian Taxation Office’s (ATO) debt division. Those affidavits establish the foundational material from which the core facts underpinning the Commissioner’s case are established.
Ms Bosanac has filed two affidavits over the course of this litigation. The first was filed in February this year and read in support of Ms Bosanac’s application for cross-vesting to the Family Court of Western Australia (the February Affidavit): see Bosanac (No 6) in which I refused the application. The second affidavit was filed in May this year in opposition to the Commissioner’s present application for final relief (the May Affidavit). The May Affidavit was filed by Ms Bosanac when she was unrepresented. At the hearing, Ms Bosanac’s counsel indicated that neither affidavit would be read in opposition to the Commissioner’s case.
The Commissioner sought to tender specific parts of each affidavit as admissions of the fact that the Dalkeith Property was the matrimonial home (the significance of which will become apparent later in these reasons). Ms Bosanac objected to the tenders on the ground of exclusion by the hearsay rule or alternatively, that the tender of specific sentences and words from the affidavits occasioned an unfair prejudice to her such that the Court should exercise its discretion to refuse to admit the evidence under s 135 of the Evidence Act1995 (Cth).
I gave a preliminary indication that I would reject the tender of the May Affidavit and reserve my ruling on the February Affidavit. In those circumstances, I directed the Commissioner to address why his case gives rise to the inference that the Dalkeith Property is the matrimonial home. It should be noted, however, that the crux of the substantive dispute in this case concerns an interpretation of the relevant case law, not a contest over the facts and, in any event, I consider they are sufficiently made out on the Commissioner’s own evidence and the case as it was put. Nonetheless, I indicated at the hearing that I would rule on the minor evidentiary issue, giving reasons together with judgment on the substantive issues.
In Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (2008) 167 FCR 314, Rares J considered the meaning of ‘proceeding’ in the context of its use in the definition of ‘previous representation’, being a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced. In Hoy Mobile, the respondent was seeking to resist the tender of an affidavit filed and relied upon at a previous interlocutory stage and his Honour said (at [20]):
That, however, is only the beginning of the consideration of the question of admissibility. Allphones argued that Mr Lloyd’s evidence cannot be a “previous representation” within the meaning of that term in the Evidence Act because it was made in the course of giving evidence in the proceedings in which evidence of the representation was sought to be adduced. That is, Allphones argued that the evidence now tendered at this trial had already been given in evidence “in the proceedings” when it was read during the interlocutory proceeding heard by Tamberlin J. Counsels and my own researches have not been able to uncover any authority on the meaning of “previous representation” in respect of representations made during earlier stage of a matter filed in a court which are later sought to be used as a “previous representation” in the same matter.
His Honour then ruled (at [27]) that:
I am of opinion that the proper construction of the definition of “previous representation” in the Act requires that the expression ‘in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced’ be treated as a reference to the hearing before the judge, as defined, in which the evidence is sought to be adduced. It does not extend to other hearings or phases, including any interlocutory proceeding, in which the parties have been engaged prior to that hearing. Of course, if a matter is part heard, on the resumption of hearing it is the same proceeding for the purposes of the definition of ‘previous representation’. But where one can readily segregate the interlocutory or other phases of a matter from the trial, proceeding or phase in which the evidence is sought to be adduced, I am of opinion that a representation made before the current hearing is capable of being a previous representation within the meaning of that term in the Act.
On the basis of this reasoning which I have previously followed, my preliminary indication to the parties was that, consistently with Hoy Mobile, the parts of the February Affidavit could be relied upon as admissions, while the parts of the May Affidavit could not be treated as admissions because a previous representation cannot come from a statement or document filed in the same proceeding in which it is sought to be adduced.
However, the Commissioner drew my attention to two authorities which he submits demonstrate that the tenders from both the February and May Affidavits should be admitted. The first was Wimpole v McIlwraith [1923] VLR 553. The case responds to Ms Bosanac’s s 135 objection, standing for the proposition that, although a party can tender selective parts of the other party’s affidavit, the other party cannot be prevented from referring to additional parts of the affidavit to the extent that they qualify, or affect the tendered admissions (at 555).
The second was Re Vassis; Ex parte Leung (1986) 9 FCR 518 in which Burchett J ruled (at [520]) that an affidavit filed, but not read at trial, could be tendered as an admission by the opposing party:
The first problem in this matter arose during the petitioning creditor’s case. His counsel tendered certain paragraphs of an affidavit sworn by the respondent and filed on his behalf. It was objected that, a party not being bound to read his affidavit, this tender should be regarded as an indirect subversion of the respondent’s right to withhold it, and not permitted. I ruled against the objection, and allowed the tender of the paragraphs as admissions. In the event, the respondent was thereafter called to give evidence in his own case. I allowed the tender upon the basis of authorities which are conveniently collected in [1985] Australian Current Law at p 36055, stemming from Price v Hayman [1838)4 M & W 8; 150 ER 1321. Those cases (and especially Wimpole v McIlwraith [1923] VLR 553) establish, in my opinion, that a statement by a party in an affidavit filed by him may be tendered by the opposing party as an admission, though the tenderer cannot prevent reference to other statements in the affidavit providing a qualifying context. They also support the use in other ways of affidavits not filed by the party seeking to rely on them, but it is unnecessary for present purposes to examine the limits of the rules applicable in this situation: in my view they at least justify the petitioning creditor’s tender in the present case.
Although this ruling was based on the common law, I do not consider this ruling would be affected by the content of the Evidence Act. Although the hearsay rule is well known, it is convenient to set out its terms in s 59(1) of the Evidence Act:
59 The hearsay rule—exclusion of hearsay evidence
(1)Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation.
…
The dictionary to the Evidence Act defines a ‘previous representation’ as:
previous representation means a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.
It also defines an admission as:
admission means a previous representation that is:
(a)made by a person who is or becomes a party to a proceeding (including a defendant in a criminal proceeding); and
(b) adverse to the person’s interest in the outcome of the proceeding.
The dictionary also provides (at Pt 2 cl 6) for representations made in documents as follows:
For the purposes of this Act, a representation contained in a document is taken to have been made by a person if:
(a) The document was written, made or otherwise produced by the person;
(b)The representation was recognised by the person as his or her representation by signing, initialling or otherwise marking the document.
For completeness, s 81(1) of the Evidence Act provides that:
81Hearsay and opinion rules: exception for admissions and related representations
(1)The hearsay rule and the opinion rule do not apply to evidence of an admission.
…
Both the operation of the hearsay rule and the definition of an ‘admission’ are predicated on the existence of a ‘previous representation’. If a representation is made ‘in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced’, then that representation is not a previous representation. It therefore cannot be an admission as that term is defined in the Evidence Act. However, the contents of an affidavit is not evidence adduced in the Court until such time as it has been formally read. That is, the ‘giving’ of the evidence occurs not at the time of swearing or affirming the affidavit, but at the time of being ‘read’ at the hearing of the proceeding, being in this case the hearing of the final relief and not any previous interlocutory stage. Until that time, it remains a previous representation subject both to the hearsay rule and the exception to that rule in the case of admissions.
Having now revisited this issue and considered it again with the benefit of the additional authorities cited by the Commissioner, I am of the view that an affidavit filed but not read in the same proceeding in which its tender is sought is still a ‘previous representation’ such that the hearsay rule, and the exception to that rule in the case of admissions applies.
I would therefore allow the tender of such parts of both the February and May Affidavits that constitute admissions by Ms Bosanac. This debate is somewhat academic in this case. The fact of the Dalkeith Property being the matrimonial home is not seriously in dispute. Even without the tendered statements, on the Commissioner’s own evidence and the way that both parties put their cases, the fact of the Dalkeith Property being the matrimonial home is well established. There is one further aspect of the May Affidavit in relation to ‘Rocket Loans’ secured by the Dalkeith Property that were obtained after the purchase of the property – this will be addressed later in these reasons and I allow the tender of para 12 of the May Affidavit.
THE CORE UNDISPUTED FACTS
The Commissioner’s affidavits establish the core facts. They are that Mr and Ms Bosanac were married on 3 October 1998. They separated in 2012 or 2013, however, they continued to live together until about mid-2015 and did not divorce at that time. On 27 April 2006, Ms Bosanac offered to purchase the Dalkeith Property from Badenport Constructions (WA) Pty Ltd for $4,500,000, subject to her obtaining approval for a loan of $3,000,000 from Westpac. The offer to purchase was accepted on 3 May 2006. The sale contract formed by that acceptance required Ms Bosanac to pay a deposit of $250,000 within 30 days (by 2 June 2006).
On 2 June 2006, $250,000 was withdrawn from a pre-existing joint loan account in the names of Mr and Ms Bosanac. I infer that the withdrawal was the deposit owed in accordance with the sale contract for the Dalkeith Property.
On 24 October 2006, Mr and Ms Bosanac applied for two new joint loans from Westpac in the amounts of $3,500,000 and $1,000,000 (a total of $4,500,000) (together, the October 2006 Loans). Westpac offered the October 2006 Loans to Mr and Ms Bosanac on or around 24 October 2006.
The $1,000,000 loan was accepted by Mr and Ms Bosanac, by signature, on 24 October 2006 (the day of the loan applications). There is no acceptance page in evidence for the $3,500,000 loan. However I infer, and it was not disputed, that the terms of that loan were accepted at some time between 24 October 2006 and 2 November 2006, a sum of $3,500,000 having been drawn down on the latter date from a home loan account established in the joint names of Mr and Ms Bosanac. The Booklet of Standard Terms and Conditions version ‘wpac.026’ was incorporated into the October 2006 Loans. Those terms and conditions included the following:
(a)‘You’ means the person or legal entity to whom the Letter is addressed. Where there is more than one of you, each of you is individually liable for the full amount (cll 13 and 29); and
(b)‘Letter’ means the letter entitled Loan Offer (cl 29).
The securities required for the October 2006 Loans were mortgages over the Dalkeith Property and other properties (suburbs omitted) as follows:
(a)an existing mortgage over 10/41-43 Mount Street (10 Mount Street);
(b)a new mortgage over 11/41-43 Mount Street (11 Mount Street);
(c)an existing mortgage over 8/10 Hardy Street (Hardy Street Property)
At the time of the loan applications, Mr and Ms Bosanac were living at 10 Mount Street.
As will become apparent below, the evidence does not disclose the precise ownership of these other properties. Only the certificate of title for the Dalkeith Property is in evidence which records Ms Bosanac as the sole registered proprietor.
In their loan applications, Mr and Ms Bosanac had estimated the property at 11 Mount Street to be worth $1.
The stated purpose or predominant purpose of each Loan was ‘Purchase of Established Dwelling’. However, the Dalkeith Property was the only property purchased after Mr and Ms Bosanac applied for the October 2006 Loans, the other properties having already been purchased in or before February 2006. I infer that the purpose (or predominant purpose) of the October 2006 Loans was to purchase the Dalkeith Property.
A settlement statement for the sale contract dated 1 November 2006 stated Ms Bosanac was required to pay $4,252,948.38 at settlement.
Two amounts totalling $4,500,000 were drawn down on 2 November 2006 ($3,500,000) and 3 November 2006 ($1,000,000), respectively, from home loan accounts held jointly in the names of Mr and Ms Bosanac. I infer these withdrawals were advances of the October 2006 Loans.
On 3 November 2006, the Dalkeith Property was transferred into the name of Ms Bosanac as sole registered proprietor. On the same day, Westpac sent a letter to Mr Bosanac confirming a joint loan account in the amount of $3,500,000 had been opened. The letter confirmed that amount, plus $998,570 in ‘Customer’s Contribution’, were applied towards the settlement. I infer the Customer’s Contribution was the $1,000,000 joint loan minus some fees.
According to the Westpac letter, a ‘surplus’ of $243,650.12 was paid into account ‘736011 635863’ (being a joint transaction account of Mr and Ms Bosanac).
The account statements for this account show the transfer was made on 2 November 2006 but reversed on 3 November 2006.
On the same day, a deposit in the sum of $243,650.12 was made into another joint loan account of Mr and Ms Bosanac (being the same account from which the deposit for the purchase of the Dalkeith Property had been withdrawn on 2 June 2006).
A mortgage was registered over the Dalkeith Property on 21 November 2006 incorporating the memorandum of common provisions ‘H232954’.
That memorandum included the following terms:
(a)‘You’ means the mortgagor described on the mortgage (section A);
(b)‘Secured Arrangement’ means any document, agreement or arrangement now or in the future to which you and the Lender are or become a party or under which obligations arise from you to the Lender (section A); and
(c)You promise to pay all money which you owe the Lender under the Secured Arrangements now or in the future, alone or with others (section B1).
Mr and Ms Bosanac moved into the Dalkeith Property in late 2006.
The ATO records show that Mr and Ms Bosanac resided at the Dalkeith Property together until 9 September 2015 when Mr Bosanac provided a new residential address. He has never made any claim for any interest in the property or adduced any evidence with regard to its ownership vis a vis Ms Bosanac. Ms Bosanac remains the sole registered proprietor of the Dalkeith Property.
During the marriage, Mr and Ms Bosanac appear to have kept their substantial assets in separate names, although the Commissioner challenges the evidentiary basis of this fact in terms of inferences that can or should be drawn. In any event, it can safely be said this does not appear to be an instance of a husband and wife sharing all of the matrimonial assets jointly, or pooling their shareholdings for example, even though the Commissioner does note that some bank accounts were shared.
No suggestion has been raised that the Dalkeith Property was registered in the name of Ms Bosanac with a view to Mr Bosanac avoiding meeting commitments to creditors with equity in that property.
THE ISSUES
It is not in dispute that Ms Bosanac has been, and remains the sole registered proprietor of the Dalkeith Property.
It is also not in dispute that both she and Mr Bosanac each contributed half of the purchase price by taking out loans to finance the purchase in their joint names.
Where parties are joint borrowers, the application of the advance towards the purchase price should be treated as being a contribution to the purchase of the property made by them equally: Murtagh v Murtagh [2013] NSWSC 926 (at [75]); Calverley v Green (1984) 155 CLR 242; [1984] HCA 81 per Mason and Brennan JJ (at 257-258), and Deane J (267-268). The deposit for the purchase of the Dalkeith Property was drawn from a loan account in the joint names of Mr and Ms Bosanac; the balance of the purchase price was also paid from two loan accounts in their joint names and after settlement, the surplus from these two loan accounts was paid into the loan account from which the deposit was drawn. Accordingly, Mr and Ms Bosanac contributed equally to the purchase price for the Dalkeith Property. However, despite his contribution, Mr Bosanac did not become a registered proprietor.
A resulting trust may be presumed in instances where the legal title that vests in one or more of the parties does not reflect the respective contributions of the parties to the purchase price. Relevantly in this case, a trust is presumed to have been declared where a person who provides money to purchase property is not vested with the legal title to that property: Dyer v Dyer (1788) 2 Cox 92, 93; 30 ER 42 per Eyre LCB (at 43); Anderson v McPherson (No 2) [2012] WASC 19 per Edelman J (at [103]-[108]). See also Napier v Public Trustee (WA) (1980) 32 ALR 153 per Aickin J (at 156 and the authorities cited therein), with whom the Court agreed (at 154, 155 and 160); Calverley per Gibbs CJ (at 246-247), Mason and Brennan JJ (at 255-258) and Deane J (at 266).
A presumption of resulting trust, applies in various circumstances including where:
(a)a person purchases property in the name of another, or in their name and that of another jointly, but the other person contributes none of the purchase money: Calverley per Gibbs CJ (at 246), Mason and Brennan JJ (at 255-256) and Deane J (at 266);
(b)purchase money is contributed by two or more persons jointly but the property is put into the name of one only: Calverley per Gibbs CJ (at 246) and Mason and Brennan JJ (at 258). See also Delehunt v Carmody (1986) 161 CLR 464 per Gibbs CJ (at 472) (Wilson, Brennan, Deane and Dawson JJ agreeing); and
(c)purchase money is contributed by two persons in unequal shares but the property is purchased in their joint names: Calverley per Gibbs CJ (at 246-247), Mason and Brennan JJ (at 258), and Deane J (at 267).
A resulting trust arises in these circumstances because it is presumed that the purchaser did not intend to gift their contribution to the other person, absent evidence of a contrary intention. This general rule is subject to an exception that arises when the parties stand in certain relationships to each other, such that it is instead presumed that the purchaser’s contribution was intended as an advancement or gift to the other party. This ‘presumption’ of advancement arises where a husband makes a purchase in the name of his wife, or as here, makes a contribution to the purchase price but does not take legal title that reflects that contribution: Martin v Martin (1956) 110 CLR 297 (at 298 and 303); Allen v Snyder(1977) 2 NSWLR 685 per Glass JA (at 690A); Calverley per Gibbs CJ (at 247), and Deane J (at 267); Napier per Aickin J (at 158); Nelson v Nelson (1995) 184 CLR 538 per Deane and Gummow JJ (at 547); Anderson (at [139]-[153]) .
Although it is referred to almost universally as a ‘presumption’ of advancement, the dominant approach in Australia is that it is not strictly a presumption. It is rather a description of certain circumstances, being the existence of particular relationships, in which the presumption of a resulting trust does not arise: Martin (at 303-304), Hepworth v Hepworth (1963) 110 CLR 309 per Windeyer J (at 317), Pettitt v Pettitt [1970] AC 777 per Lord Upjohn (at 814), Anderson (at [134]-[138]), Nelson per Deane and Gummow JJ (at 547), Dawson J (at 576), and Toohey J (at 584), Calverley per Gibbs CJ (at 247), Mason and Brennan JJ (at 256) and Murphy J (at 265). Deane J succinctly expressed the position in Calverley (at 267) as follows:
…
The third “presumption”, usually called the “presumption of advancement”, is not, if viewed in isolation, strictly a presumption at all. It is simply that there are certain relationships in which equity infers that any benefit which was provided for one party at the cost of the other has been so provided by way of “advancement” with the result that the prima facie position remains that the equitable interest is presumed to follow the legal estate and to be at home with the legal title or, in the words of Dixon C.J., McTiernan, Fullagar and Windeyer JJ. in Martin v. Martin, that there is an “absence of any reason for assuming that a trust arose”. “The child or wife has the legal title. The fact of his being a child or wife of the purchaser prevents any equitable presumption from arising”.
(Emphasis added, citations omitted.)
In these reasons, I will refer to the ‘presumption’ of advancement in inverted commas to recognise the imprecision with which the word ‘presumption’ describes the exact nature of the concept. It is by no means intended to call into doubt its operation or validity, only to acknowledge the somewhat misleading use of the term ‘presumption’.
The ‘presumption’ of advancement and the presumption of a resulting trust can both be rebutted by evidence concerning the actual intention of the person who provided the purchase money at the time of the purchase: see for instance Wirth v Wirth (1956) 98 CLR 228 per McTiernan J (at 240-241); Calverley per Gibbs CJ (at 251), and Deane J (at 269); Napier per Gibbs CJ (at 154-155); Nelson per Deane and Gummow JJ (at 547) and Toohey J (at 586). As explained by Ford and Lee in Principles of the Law of Trusts (Thomson Lawbook Co) at [21-534] (update 181):
… the characterisation of advancement as a presumption underlines the point that evidence can be adduced to show that a transfer, or purchase of property in another’s name, was made with no donative intent even though transfers and purchases made within that relationship would ordinarily be assumed to be gifts.
At the heart of this dispute is a doctrinal question as to whether the ‘presumption’ of advancement can still be raised by a wife in relation to the matrimonial home. If it does arise, there is then a question as to the inferences that can or should be drawn from the surrounding circumstances in this instance, as to Mr Bosanac’s intention at the time of the purchase of the Dalkeith Property.
The case is somewhat unusual in that only the Commissioner, a third party creditor seeking to recover a judgment debt against Mr Bosanac, has argued for the ‘presumption’ and adduced evidence in support in the proceeding. There is a dearth of evidence as to any intention on the part of Mr Bosanac beyond that which can be inferred from the core facts set out above which in themselves invite consideration of either of the competing presumptions.
THE COMMISSIONER’S CONTENTIONS
The Commissioner argues that the ‘presumption’ of advancement does not arise on the present facts or is, in any event, rebutted. These closely related yet alternate contentions both rely on the fact that the Dalkeith Property was the matrimonial home such that the proper inference is that it was intended that each spouse would hold a one-half interest in the Property. It is thus submitted ‘that the presumption of a resulting trust arises with the effect that Ms Bosanac holds a one-half interest in the Dalkeith Property on trust for Mr Bosanac’.
The Commissioner relies principally on what he says is a unanimous acceptance of this proposition by the High Court in Trustees of Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278 (at [71]). Much of the argument in this matter focussed on the proper interpretation of this statement by the High Court and it is useful to set out both [71] and [72] in full:
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.”
(Emphasis added, 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.
(Citations omitted.)
Following Cummins, the Commissioner says that an inference that a husband does not intend to gift his contribution to the purchase price of the property may be supported, in the absence of any evidence to the contrary, simply by the fact that the property acquired was the matrimonial home. He says that Cummins therefore qualifies the ‘presumption’ of advancement and says that the qualification can be characterised either as an exception to the circumstances in which the ‘presumption’ of advancement applies or, quite simply, the circumstances from which it may be inferred that the ‘presumption’ of advancement is rebutted. These alternate characterisations are not without their conceptual differences however more will be said on this below.
Reliance is also placed on the reasoning of Lord Upjohn in Pettitt (at 815) as quoted by Mason and Brennan JJ in Calverley (at 259-260):
This is the basic presumption [of a resulting trust], 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. 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.
…
… 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 …
(Emphasis added, citations omitted.)
As is apparent from the above passage, the High Court in Calverley was concerned with the rebuttal of the presumption of a resulting trust. Only Gibbs CJ considered the facts in that case gave rise to a ‘presumption’ of advancement (at 251) and the case is now good authority for the proposition that the ‘presumption’ of advancement does not apply to de facto couples (at 259-260). The ‘presumption’ of advancement also did not arise in Cummins because the wife in that case had contributed the greater proportion to the purchase price. Again, the High Court was concerned with a rebuttal of the presumption of a resulting trust based on evidence of a contrary intention and the Commissioner accepts that the Court’s statement at [71] was made in this context. This context is said to be of little moment however, and the Commissioner submits that the High Court’s acceptance of Professor Scott’s proposition at [71] cannot be qualified, and further, that it was a necessary step in the Court’s reasoning such that it is not merely obiter dictum.
The Commissioner also notes that this Court has since applied Cummins in the context of the ‘presumption’ of advancement in Deputy Commissioner of Taxation v Vasiliades [2015] FCA 412. More will be said on this below.
On the basis of these authorities, the Commissioner says that a distinction may be drawn between property (such as a matrimonial home) acquired for the use and enjoyment of both parties to a marriage, and property acquired for the sole use and enjoyment of one of them (such as clothes and jewellery). When property is acquired for the former purpose, this is a sufficient basis to rebut any ‘presumption’ of advancement he says, drawing also on Ebner v Official Trustee in Bankruptcy (2003) 126 FCR 281 (at [20]). It is said that the inference is inescapable that the Dalkeith Property was not acquired for the use and enjoyment of Ms Bosanac alone but, relevantly, for that of Mr Bosanac too. So much may be accepted; it is not in dispute that the couple lived together in the Dalkeith Property as spouses for a number of years. The Commissioner’s contention is that, with the ‘presumption’ of advancement either inapplicable or rebutted, the presumption of a resulting trust prevails such that Ms Bosanac holds a one-half interest in the Dalkeith Property on trust for Mr Bosanac.
The Commissioner relies on the following facts to support the inference that Mr Bosanac did not intend to gift his contribution to the purchase price to Ms Bosanac:
(a)Mr and Ms Bosanac moved into the matrimonial home, as husband and wife, in late 2006, the property having been transferred into the name of Ms Bosanac in early November of that year;
(b)Mr and Ms Bosanac then resided together in the Dalkeith Property for a period of more than seven years, including a period following their separation in 2012 or 2013;
(c)Mr Bosanac’s contribution to the purchase price of the Dalkeith Property took the form of borrowed funds from Westpac;
(d)those funds were borrowed on the condition that Ms Bosanac would register a mortgage in favour of Westpac over the Dalkeith Property to secure the loan funds;
(e)both Ms Bosanac and Mr Bosanac were, jointly and severally, liable to pay the entirety of the funds advanced; and it follows that Mr Bosanac assumed a (very substantial) liability in contributing to the purchase of the Dalkeith Property without the benefit of having his name registered as a proprietor on the title; and
(f)in 2007 a ‘Rocket Investment Loan’ was offered by Westpac to Mr and Ms Bosanac, secured by the existing mortgages over the Dalkeith Property and the Hardy Street Property. The funds were purportedly used by Mr Bosanac to conduct share trading.
CONTENTIONS FOR MS BOSANAC
Ms Bosanac denies that the Commissioner has established a resulting trust in favour of Mr Bosanac. She does so on the basis that longstanding authority binding this Court applies the ‘presumption’ of advancement to a disposition by a husband to his wife of the matrimonial home and none of the facts relied on by the Commissioner (i.e. that the home was cohabited during the marriage and that Ms Bosanac contributed to the loans) could logically rebut the ‘presumption’. Ms Bosanac argues that as they are basal facts that give rise to the ‘presumption’ of advancement, they cannot logically be relied upon to rebut it.
The Commissioner has led no evidence of Mr Bosanac’s actual intention at the time of the purchase, which is the key evidence required to rebut the ‘presumption’. It is argued that the ‘presumption’ of advancement applies to the contribution by Mr Bosanac as co-signor to loans used to purchase the matrimonial home. By way of summary, Ms Bosanac submits that the ‘presumption’ of advancement applies to contributions by a husband to purchases of property by the wife and the High Court has repeatedly applied the ‘presumption’ in the context of the matrimonial home.
As Ms Bosanac contends, courts have long recognised the ‘presumption’ of advancement as a ‘well-entrenched’ landmark in the law of property which cannot be disregarded by judicial decision: Calverley per Deane J (at 266). As McTiernan J noted in Wirth (at 241), citing Lord Eldon held in Finch v Finch (1808) 15. Ves. Jun. 43; 33 E.R. 671 ‘this principle of law and presumption is not to be frittered away by nice refinements’. On this basis, courts in more recent times have signalled that any change to the operation of the presumptions is best left to Parliament. As McHugh J stated in Nelson (at 602):
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 law to the legislature which can, if its thinks fit, abolish or amend the presumptions prospectively.
(see also Nelson per Deane and Gummow JJ at 548; Calverley per Deane J at 266; Snyder per Samuels JA at 701C. See also more generally: Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ at 364; Brown v Brown (1993) 31 NSWLR 582 per Gleeson CJ at 588; and Anderson at [115]).
Contrary to the Commissioner’s assertion that the matrimonial home can no longer be the subject of the ‘presumption’ of advancement, Ms Bosanac argues that the High Court has applied the ‘presumption’ of advancement to the matrimonial home in Wirth per Dixon CJ (at 237) and McTiernan J (at 241), and Martin per Dixon CJ, McTiernan, Fullagar and Windeyer JJ (where the matrimonial home was a farm). For these reasons, the Commissioner’s contrary submission that advancement of the matrimonial home is, in and of itself, a ‘sufficient basis to rebut any presumption of advancement’ must be rejected she says. She contends that the ratio of each of Wirth and Martin is that the ‘presumption’ of advancement applies to any property transferred from husband to wife, including the matrimonial home. The Commissioner disputes Ms Bosanac’s characterisation of these authorities as applying the ‘presumption’ to the matrimonial home.
Nevertheless, Ms Bosanac contends that the ‘presumption’ of advancement is simply not expressed in a qualified way so as to only apply to particular species of property. For reasons that will be explained below, Ms Bosanac disputes the Commissioner’s reliance on the reasoning in Ebner and the Court’s application of Cummins in Vasiliades. Ms Bosanac does concede however, that the High Court in Cummins has quoted (at [71]) passages from the academic work of Professor Scott that are inconsistent with the application of the ‘presumption’ of advancement to the matrimonial home. It is contended however, that because the facts in Cummins did not give rise to a ‘presumption’ of advancement, and because the High Court’s reasoning at [71] was in the context of considering the rebuttal of the presumption of a resulting trust, the acceptance of Professor Scott’s quote was not a necessary step in the course of the Court reaching its conclusion. It is therefore said to be obiter dictum. Although Ms Bosanac notes that the High Court has enjoined against lower courts ignoring ‘long-established authority and seriously considered dicta of a majority of this Court’: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 (at [135]), she argues that Professor Scott’s quotation in Cummins represents neither long-established authority, nor seriously considered dicta. It should not be adopted by this Court in the face of binding authority to the contrary, she says.
CONSIDERATION
It is necessary to examine how the authorities in Australia have approached each of the competing presumptions and the nature of their interaction.
As discussed by Edelman J in Anderson (at [106]-[116]), when a resulting trust arises by presumption, what is presumed is an actual declaration of trust. As his Honour put it, ‘the rebuttable presumption is the fact of a manifest declaration of trust… [t]he presumption is not of the legal institution of the trust itself (which is the conclusion of law)’. As Lord Nottingham explained in Cook v Fountain (1676) 3 Swan 585 (at 591); 36 ER 984 (at 987):
[E]xpress trusts are declared either by word or writing; and these declarations appear either by direct and manifest proof, or violent and necessary presumption. These last are commonly called presumptive trusts; and that is, when the Court, upon consideration of all circumstances presumes there was a declaration, either by word or writing, though the plain and direct proof thereof be not extant.
This characterisation of the presumed resulting trust lends support to the view, as adopted in the authorities referred to above (at [65]), that the so-called ‘presumption’ of advancement is better understood as particular sets of circumstances in which a presumed resulting trust will not arise. In other words, the person who provided the purchase money (or part thereof, in this case Mr Bosanac), is taken not to have declared a trust in his favour over the property. I agree with the authorities that the ‘presumption’ of advancement is best characterised as the absence of a presumed resulting trust such that the equitable interests remain at home with the title and the legal status quo is left undisturbed. Though those authorities have been set out above, they bear repeating here: Martin (at 303-304); Hepworth per Windeyer J (at 317); Pettitt per Lord Upjohn (at 814); Anderson (at [134]-[138]); Nelson per Deane and Gummow JJ (at 547), Dawson J (at 576), and Toohey J (at 584); Calverley per Gibbs CJ (at 247), Mason and Brennan JJ (at 256), Murphy J (at 265) and Deane J (at 267); see also Heydon JD and Leeming MJ, Jacobs’ Law of Trusts in Australia (8th ed, Lexis Nexis, 2016) (at [12-12]).
As alluded to above (at [70]), the Commissioner advances a number of interrelated yet alternate contentions for why the ‘presumption’ of advancement has no application to the present case. At [43] of his written submissions the Commissioner submits that in the circumstances of this matter:
(a)there is a presumed resulting trust;
(b)the presumed resulting trust is to the effect that Ms Bosanac holds a one-half interest in the Dalkeith Property on trust for Mr Bosanac;
(c)the presumption of advancement is inapplicable or has been rebutted; and
(d)the presumption of resulting trust has not been rebutted.
(Emphasis added.)
These contentions require some dissection. In order for the contentions at (a) and (b) to be made good in the circumstances of this case, the Commissioner must show that the ‘presumption’ of advancement does not arise. He attempts to do so by contending that the High Court’s decision in Cummins qualifies the ‘presumption’ of advancement such that it no longer applies to purchases by spouses of a matrimonial home. Thus, the initial question is whether the ‘presumption’ of advancement applies at all to this case, having regard to the competing lines of High Court authority on which the parties rely. Should the Commissioner succeed on this question, that will be dispositive of the case unless an intention to gift can be inferred on the part of Mr Bosanac. If however, the ‘presumption’ of advancement continues to apply to purchases of a matrimonial home, the second question is whether it has been rebutted, as the Commissioner contends in the latter portion of (c) above. But rebuttal of the ‘presumption’ of advancement (or the presumption of a resulting trust) is only achieved by evidence of a contrary intention on the part of the purchaser at the time of the purchase (here, Mr Bosanac). If such an intention is found to have existed at the relevant time, then the Court will give effect to that intention such that it will displace the presumption that has arisen on the facts (here, the ‘presumption’ of advancement). Contrary to the Commissioner’s contention at (d) above, it is with respect, misconceived to contend that the ‘presumption’ of advancement is rebutted such that the presumption of a resulting trust prevails.
Again, the reasoning of Edelman J (at [135]-[138]) in Anderson is, with respect, illustrative of the point:
135 On the other hand, there have been suggestions in some cases, and by some judges, that the presumption of advancement is a genuine presumption of a manifest intention to make a gift. These suggestions presuppose a confused evidentiary process where the presumption of advancement would need to be rebutted by the transferor, which would then reinstate a presumption of a declaration of trust in favour of the transferor, which the recipient would then need to rebut. This was the view of Maitland and Holdsworth: see F W Maitland, Equity: A Course of Lectures (1910), pp 79-80, also (2nd ed, 1936), pp 77-80; William Holdsworth, A History of English Law (1924) VI, p 644. See also the discussion of some of the authorities to this effect in J Glister, “Is there a presumption of advancement?” (2011) 33 Sydney Law Review 39.
136 The dominant Australian approach, however, is that of Dixon CJ: the “presumption of advancement” is not a presumption but is simply a circumstance in which the “presumption of resulting trust” does not arise. Thus, in Martin v Martin (1959) 110 CLR 297, the High Court (Dixon CJ, McTiernan, Fullagar and Windeyer JJ) explained that the presumption of resulting trust did not apply where a husband purchased land in the name of his wife: “as she was his wife the fact that he found the purchase money for the land raised no presumption in his favour of a resulting trust as it would or might have done had she been a stranger”. The court explained that the presumption “is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose”.
137 Various of the judgments in Calverley v Green also reiterate this point: (Gibbs CJ), (Mason & Brennan JJ). The judgments of Deane J and Murphy J are the most explicit. Murphy J said that ‘[t]he presumption of advancement, supposed to be an exception to the presumption of resulting trust, has always been a misuse of the term presumption, and is unnecessary’. Deane J said this:
[T]he ‘presumption of advancement’, is not, if viewed in isolation, strictly a presumption at all. It is simply that there are certain relationships in which equity infers that ... there is an ‘absence of any reason for assuming [presuming] that a trust arose.
138 The question for resolution in this case, therefore, is whether the ‘presumption of advancement’ applies. If so, this would then have the effect that there is no presumption of a declaration of trust.
(Emphasis added, citations omitted.)
In the absence of actual evidence of the purchaser’s intention at the time of the purchase, the role of the presumptions is to guide the Court in determining the proper inference that should be drawn from particular and recognised sets of circumstances. In this way, they operate as a kind of civil onus of proof: Calverley per Deane J (at 266 and 271); Nelson per Deane and Gummow JJ (at 547). When understood in this light, I do not think that the presumptions should be conceptualised as capable of rebutting one another. Rather, each arises on particular and distinct (albeit similar) circumstances, and each may only be rebutted by evidence of a contrary intention which, if available, will prevail. As the authors explain in Jacobs’ Law of Trusts (at [12-13]):
… the law endeavours always to give effect to the intentions of the parties, but in the absence of any evidence of such intention except the bare fact of the transfer to someone other than the purchaser, it presumes until the contrary is proved, in the first case, in favour of the person providing the purchase money and, in the other, in favour of the wife or child or person in loco filii.
(Citations omitted.)
Further, as the High Court noted in CharlesMarshall (at 365):
The plaintiffs are the daughters of the donor and the initial presumption is that he intended to give the shares to them or, in other words, to make them the absolute beneficial as well as the legal owners of the shares. The plaintiffs start with this advantage. 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 (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. If that evidence is insufficient to rebut the presumption the beneficial gift, absolute or subject only to qualifications imposed upon it at the time, is complete and no subsequent changes of mind or dealings with the property inconsistent with the trust by the donor can as between himself and the donees alter the beneficial interest.
(Emphasis added.)
This statement of principle is subject only to slight qualification by the High Court in Cummins in the manner discussed below.
Neither party in this case has put forward any evidence of the actual intention of Mr Bosanac at the time of purchasing the Dalkeith Property. However, the Commissioner also contends that, in the event that the ‘presumption’ of advancement is found to arise in this case, there is to be inferred from the circumstances and conduct of Mr Bosanac an absence of intention to gift his contribution to Ms Bosanac, and instead that he intended that she would hold the Dalkeith Property on trust for him to the extent of his contribution.
It is to be noted that a question can arise as to the form of trust that is to be enforced if evidence of an intention capable of rebutting the ‘presumption’ of advancement arises. In Nelson Deane and Gummow JJ held it to be a resulting trust, citing with approval a subset of the following passage from Scott AW and Fratcher WF, The Law of Trusts (4th ed, Little, Brown and Company, (1989):
It might be thought that evidence of an oral agreement by the grantee to hold the property in trust for the payor would be inadmissible because of the Statute of Frauds, where the grantee is a natural object of bounty of the payor. It might be argued that in the absence of such evidence a gift would be inferred and that although parol evidence is admissible to rebut a resulting trust it cannot be admitted to establish an express trust. The courts have explained, however, that the trust which is enforced is a resulting trust, not an express trust; that the presumption of a gift to a relative is a rebuttable presumption, and parol evidence is admissible to rebut the presumption of a gift and thus automatically to create a resulting trust. This reasoning is somewhat artificial; but trusts arising where evidence shows an intention to create a trust when land is purchased in the name of a relative were considered to be resulting trusts before the enactment of the Statute of Frauds, and that statute expressly excepts resulting trusts from its operation.
(Citations omitted. See also Ford and Lee at [21-534].)
Thus, while rebuttal of the ‘presumption’ of advancement will give rise to a resulting trust, as Edelman J observed in Anderson (at [135]) it does not operate in the same way as the presumption of a resulting trust that arises between strangers in that it cannot then be further rebutted by evidence. The legislative provision that exempts resulting trusts from the requirement of writing in Western Australia, is s 34 of the Property Law Act 1969 (WA).
Accounting for the above analysis of the Australian authorities, the Commissioner contends that the ‘presumption’ of advancement does not apply in circumstances that involve the purchase of a matrimonial home. In effect, he contends that, where previously a contribution by a husband to the purchase price that exceeded his share in the legal title would not have given rise to the presumption of a resulting trust, those circumstances should now give rise to a presumed resulting trust where the property in question is the matrimonial home. This amounts to a narrowing of the circumstances or states of affairs that comprise the ‘presumption’ of advancement. Indeed, the Commissioner contends that the High Court’s decision in Cummins qualifies the ‘presumption’ of advancement. This qualification is said to arise from the fact that the continued operation of the ‘presumption’ of advancement must be informed by its underlying basis. The Commissioner says the High Court accepted in Cummins (not simply quoted the passage from Professor Scott) that where a husband and wife each contribute to the purchase of a matrimonial home and title is taken in the name of one of them, it may be inferred that it was intended that each spouse should have a one-half share. In other words, it is said to be prima facie probable that each spouse would have a one-half share. Such a basis was proffered by Dixon CJ in Wirth (at 237) and found favour with Gibbs CJ in Calverley (at 249-250), however it is not without its criticism: see Nelson per Toohey J (at 586) and Anderson (at [128]-[132]).
Ms Bosanac relies on an older line of High Court authority in which it is said the ‘presumption’ of advancement did arise on the facts and was applied to the matrimonial home. She contends that nothing in the High Court’s reasoning in Cummins or other subsequent cases has overturned the ratio of these cases and that this Court could not do so on the basis of what she says is obiter dictum in Cummins. It will be necessary in light of these contentions to examine both lines of authority in some detail.
First, however, it is convenient to reiterate the core relevant facts that are not in dispute. There is no dispute that the Bosanacs were married at the time of purchasing the Dalkeith Property. It is also not disputed, and it is established on the Commissioner’s evidence, that the purpose of the purchase was to acquire a matrimonial home and the Bosanacs lived together at the Dalkeith Property in fulfilment of that purpose for a number of years before separating. Further, by entering into a joint loan agreement, the Bosanacs each contributed half of the purchase price of the Dalkeith Property however, Ms Bosanac is, and has been since the time of the purchase, the sole registered proprietor.
It is not disputed that, absent the fact of the Bosanacs’ marriage, the core facts stated above would clearly give rise to a presumption of a resulting trust in favour of Mr Bosanac to the extent of a one-half interest in the Dalkeith Property (equal to the proportion of his contribution to the purchase price). However, the Bosanacs were married at the time of the purchase, a fact that Ms Bosanac says enlivens the ‘presumption’ of advancement and prevents the presumption of a resulting trust from arising at all. The Commissioner contends that the only reason the ‘presumption’ of advancement does not arise in this case is because the purchase in question was of the matrimonial home. It is said that historically, the basis for the ‘presumption’ of advancement was the natural obligation of a husband towards a wife: Anderson (at [125]). The ‘modern’ justification, he says, is that there is a prima facie probability that a beneficial interest was intended to be transferred by a husband to a wife. But in the case of the matrimonial home, a property clearly purchased for the use and enjoyment of both spouses, that justification for the ‘presumption’ of advancement cannot hold, and the better inference has to be that Mr Bosanac intended to enjoy the benefit of his contribution. Accordingly, the presumption of a resulting trust should not be disturbed.
A qualification of the ‘presumption’ of advancement by reference to the species of property in question is undoubtedly a departure from the traditional formulation of the ‘presumption’ as developed in the old English cases: for example Dyer (at 43-44); Kingdon v Bridges (1688) 23 ER 653; Devoy v Devoy (1857) 65 ER 713 (at 714); Soar v Foster (1858) 70 ER 64 (at 67); re Ekyn’s Trust (1877) 6 Ch D 115 (at 118). However, it is also clear that the nature and application of these presumptions has developed together with societal attitudes and structures such that there is certainly merit in the Commissioner’s contentions. I turn now to consider the competing lines of authorities relied on by the parties.
The authorities
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.
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.
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.
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.
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.
Diverse views have been expressed. Murphy J in Calverley would have done away with both presumptions and his Honour’s view was supported by Kirby P (as his Honour then was) also in dissent in Brown (at 595E-G). McHugh J in Nelson thought that both presumptions should be examined to consider whether they accord with contemporary thought and said (at 602):
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.
As Edelman J said in Anderson (at [129]):
The state of the law, then, is that the presumption of advancement does not necessarily require either a relationship where advancement might be expected or one where a moral duty to provide was recognised in equity.
Practically speaking, the presumptions will only be decisive where evidence of relevant intention is completely lacking: see Gibbs CJ in Napier (at 154 citing Lord Hodson in Pettitt at 611). Indeed, in almost all the authorities above at least some members of the courts have considered the evidence of the cases sufficient to displace the presumption that arose.
This is by no means to say that the presumptions are now without utility. As Deane and Gummow JJ have said in Nelson, the presumptions continue to play an important role dictating the civil onus of proof. Similarly, Mason and Brennan JJ in Calverley (at 262) rebuked lower courts from searching for intention without first applying the relevant presumption on the facts. McHugh J expressly rejected a similar argument in Nelson (at 603) to that advanced by the Commissioner here, considering that it would increase uncertainty in property titles, promote litigation and seriously undermine the ‘presumption’ of advancement if an inquiry into the objective circumstances of the relationship replaced the ‘automatic operation of the rule’.
In circumstances where both presumptions have long been accepted as entrenched landmarks of Australian law, Deane J in Calverley and McHugh J in Nelson are, with respect, correct in their observation that any significant judicial qualification of the presumptions risks jeopardising past transactions conceivably executed with the operation of the presumptions in mind. Thus, although their Honours both expressed serious doubts about the continued relevance of the presumptions, it was reasoned that any modification must be left to the legislature. Respectfully, I adopt this view. The very fact that these presumptions have remained entrenched in our law for as long as they have is reason enough not to carve out, by judicial decision, a species of property as significant as the matrimonial home, particularly in circumstances where operation of the presumptions in Australia has only been considered by reference to the relationship that exists between the parties.
I do not think that this conclusion goes against Dixon CJ’s observations in Wirth that the doctrines of equity should not depend on categories closed for historical reasons. In that case the Chief Justice perceived a ‘paradoxical distinction’ between the operation of the presumptions before and after marriage when a transaction completed beforehand was done in contemplation of marriage. Here, the Commissioner contends for the carving out from the operation of the ‘presumption’ of advancement of one of the most common and significant purchases that married couples will make. It cannot, with respect, be accepted.
Is the ‘presumption’ of advancement rebutted?
Assuming the ‘presumption’ of advancement may apply to the matrimonial home, those basic facts apply in this case. It is necessary then, to turn to a consideration of whether the ‘presumption’ has been rebutted.
It will be recalled that Mr Bosanac has taken no active part in this proceeding in relation to the Commissioner’s application for declaratory relief. He has not put on any evidence and significantly, the Commissioner has not sought to call him as a witness. The Court is bereft of any positive evidence from Mr Bosanac and is left to discern any intention from his conduct both at the time of the purchase and following it, as well as the broader circumstances of the case.
The legislature’s role in conferring broad powers on the family courts to adjust property rights has significantly reduced the need for recourse to the presumptions in determining conventional property disputes between spouses following divorce. Increasingly, the presumptions are called upon by third parties to recover from one spouse; in this case the Commissioner seeking his judgment debt. This result gives rise to instances such as the present case where evidence of a relevant intention has not been fulsomely adduced before the Court, principally because at least one spouse has no interest in participating in the proceedings.
Despite the paucity of evidence however, the Court’s task remains unchanged. As Lord Morris of Borth-y-Gest said in Pettitt (at 799 and 803):
The difficult case is where each party claims ownership and where the evidence is meagre. It cannot, in my view, be that the jurisdiction of the court is then on a different basis. The search must still be to find an answer to the question as to where ownership lies. The court has to reach decision in very difficult circumstances but the task, the duty and the objective of the court does not change.
…
The duty of the court in an application under section 17 will not differ from its duty in a situation where a question of title arises not as between husband and wife but by reason of an outside claim. If either husband or wife became bankrupt a court would have to decide what property did and what property did not pass to the trustee in bankruptcy. If there is a judgment against either a husband or a wife a decision may have to be made as to what property could and what property could not be the subject of execution. When acting under section 17 the court must be guided by the same principles as would apply in any other proceedings where the ownership of property was in question.
This accords with the Australian position as explained by Windeyer J in Hepworth. This Court’s jurisdiction is limited to declaring the rights and interests that exist between the parties as created by them according to legal and equitable principles that govern such dealings in property. This Court cannot alter property rights based on considerations of fairness or otherwise. Those are matters for the family courts and their statutory powers under the Family Law Act 1975 (Cth). Nor can this Court impute to either of the parties an intention which they did not actually hold, but which reasonable people in their shoes would have held had they turned their minds to it. This approach adopted by Lord Reid and Lord Diplock in Pettitt has been resoundingly rejected in Australia: Snyder (at 694). The only imputation or presumption which the Court applies takes the form of either the presumption of a resulting trust or the ‘presumption’ of advancement and it does so as the starting point of its analysis, strictly in accordance with the principles explained by the authorities discussed above. It then searches for evidence of a contrary intention that could rebut the operative presumption.
As the starting point then, the ‘presumption’ of advancement operates to preserve the legal status quo in favour of Ms Bosanac. It is the task of the Commissioner to prove that Mr Bosanac held, at the time of the purchase of the Dalkeith Property, an intention to retain a beneficial interest to the extent of his contribution to the purchase price.
In Cummins, the High Court adopted the statement from Charles Marshall (at 365) that, apart from subsequent admissions against interest, the only evidence that is relevant and admissible comprises the acts and declarations of the parties before or at the time of the purchase. It did so subject to one qualification (at [65]) that ‘evidence of facts as to subsequent dealings and of surrounding circumstances of the transaction may be received.’ A similar qualification to the statement from Charles Marshall was expressed by Deane J in Calverley (at 269) to the effect that ‘evidence of the relationship – both legal and factual – between the parties will always be admissible’.
The Commissioner says the following circumstances of the relationship between Mr and Ms Bosanac, and the circumstances surrounding the purchase of the Dalkeith Property evidence an intention on his part to retain a beneficial interest in the Property:
(a)the Dalkeith Property was the matrimonial home of Mr and Ms Bosanac, it being purchased in late 2006 after which they resided there together for a period of more than seven years;
(b)Mr Bosanac’s contribution to the purchase price took the form of borrowed funds from Westpac and those funds were borrowed on the condition that Ms Bosanac would register a mortgage in favour of Westpac over the Dalkeith Property to secure the loan funds;
(c)both Mr and Ms Bosanac were jointly and severally liable to pay the entirety of the funds advanced and it follows that Mr Bosanac assumed a very substantial liability in contributing to the purchase without the benefit of having his name registered as a proprietor on the title; and
(d)there is evidence of shared back accounts and some sharing of other property assets.
The Commissioner says that these circumstances give rise, in the absence of evidence to the contrary, to the inescapable inference that Mr Bosanac did not intend to gift the Dalkeith Property to Ms Bosanac and instead intended to retain a beneficial interest in the Property.
This inference is said to be strengthened by the fact that in June 2007 (almost a year after the purchase of the Dalkeith Property), Westpac offered finance to Mr and Ms Bosanac by way of the following two loans:
(a)Rocket Investment Loan for an amount of $2,000,000; and
(b)Rocket Repay Home Loan for an amount of $1,600,000 (together the Rocket Loans).
Both loan offers list their predominant purpose as ‘Refinance of Existing Home Loan’ and security for the loans was given by way of the existing mortgages over the Dalkeith Property and the Hardy Street Property.
Further, in Ms Bosanac’s May Affidavit, she deposes to the fact that the Rocket Investment Loan was used by Mr Bosanac to conduct share trading. She says that she had no problem with Mr Bosanac using the house for security because ‘he was my husband and I had no reason not to trust him.’ For the reasons given above, I accept the tender by the Commissioner of this part of the May Affidavit as an admission against interest. The Commissioner says the fact that funds secured by mortgage over the Dalkeith Property were used by Mr Bosanac to conduct share trading lends further weight to the inference that he did not intend to gift his contribution to the purchase price.
Ms Bosanac contends that given the Rocket Loans were offered a year after the purchase of the Dalkeith Property, they do not form part of the circumstances surrounding the purchase of the Property and are therefore irrelevant. Following the High Court’s clear qualification in Cummins of the statement from Charles Marshall, this submission cannot be accepted.
It is also contended for Ms Bosanac that, contrary to the Commissioner’s submission, the evidence actually reveals that Mr and Ms Bosanac held most of their property separately and did not ‘pool’ their assets in the way that some married couples do. She accepts that there were shared bank accounts but says this is not determinative either way.
Finally, Ms Bosanac points out that a significant factor to be weighed against the inference which the Commissioner contends for is the fact that since moving out of the Dalkeith Property in September 2015, Mr Bosanac has not taken any steps, or made any claim to an interest in the Dalkeith Property. She says that, in the absence of any countervailing evidence from Mr Bosanac, it is a reasonable inference to draw that if Mr Bosanac did own half of the equitable estate in the Dalkeith Property, he would have made some claim for it.
The Commissioner argues that such an inference would not be reasonable given the history of the proceedings against Mr Bosanac for recovery of his tax debts. By the time the Commissioner’s application for declaratory relief was filed, a judgment debt had already been secured against Mr Bosanac whose assets are also subject to freezing orders. Additionally, Family Court proceedings were only commenced by Ms Bosanac in January 2020. In these circumstances, the Commissioner says Mr Bosanac would have had nothing to gain from making a claim over the Dalkeith Property because bankruptcy would have been inevitable. I accept that there would have been little utility in Mr Bosanac making a claim over the Dalkeith Property in the particular circumstances of this case. I do not consider his lack of action in the years since moving out of the Dalkeith Property to be helpful in demonstrating his intention at the time the Property was purchased in 2006.
As to the relevant circumstances surrounding the purchase of the Dalkeith Property (set out above at [213]) I accept Ms Bosanac’s submission that the fact that the Property was the matrimonial home and that Mr Bosanac assumed a very substantial liability by signing on to the loan documents does not ground an inference that he intended to retain a beneficial interest. There is no evidence in this case as there was in Calverley that Westpac required both Mr and Ms Bosanac to sign onto the loans to obtain finance. Gibbs CJ considered such evidence rebutted the ‘presumption’ of advancement in that case (at 251) however Deane J (at 271) considered the same evidence was ‘amphibolous’ because it could 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.’ In the absence of any evidence here that Ms Bosanac’s name was only required on the loans to obtain finance, there is nothing to be drawn from the fact that Mr Bosanac assumed a substantial liability without the benefit of the beneficial interest. That is even more so in this case where, unlike in Calverley, the Dalkeith Property was purchased only in Ms Bosanac’s name, not in their joint names.
As to the ownership of assets, I accept that there were shared bank accounts. It is also clear from the loan documents that Mr Bosanac held a substantial share portfolio. At the hearing, there was debate about the extent to which Mr and Ms Bosanac’s disclosure of their assets in the loan applications could reveal their ownership of their properties. I am not satisfied however, that the loan documents are determinative either way as to the precise ownership. In the loan applications for the October 2006 Loans, Mr Bosanac is listed as the primary applicant and Ms Bosanac the co-applicant. Under the heading for the primary applicant’s assets, the phrase ‘includes joint assets’ appears in brackets. Moreover, in a loan application made in February 2006, there is significant variation in how the couple have listed the ownership of their assets.
The Commissioner also put into evidence an audit of Mr Bosanac’s income tax returns for the years 2006-2013. The audit is accompanied by written reasons which produce (at [54]-[55]) a table of Mr Bosanac’s property interests:
54.We obtained information from the Western Australia Land Information Authority (Landgate) regarding the properties you held, or had interest in, during the period of review. Refer to table 6 below:
Property Address
Purchase Date
Purchase Price ($)
Sale Date
Sale Price ($)
Unit 12/41 & 13/41 Mount St West Perth WA
23/12/2002
1,950,0000 [sic]
15/03/2006
4,250,000
82 Phillip Street Dalkeith WA (current main residence)
11/03/2006
4,500,000
n/a
n/a
Unit 10/41 Mount St West Perth WA (previous main residence)
05/05/2001
995,000
23/11/2007
1,500,000
55.Transfer documents for the property at Units 12/41 and 13/41 Mount St, West Perth show you sold the property to Siquil Pty Ltd.
The reasons continue ([136]-[137]) as follows:
136.Property searches revealed that you were the sole owner of two properties, during the period under audit. These properties were financed largely by loans, with liability for making the loan repayments belonging to you.
137.Property searches identified that Unit 12/41 and 13/41 Mount St West Perth were purchased on 23 December 2002 for $1,950,000 and sold on 15 March 2006 for $4,250,000. Stamp duty on the purchase of the property has been estimated at $101,050 based on the transfer of land documents provided from the Western Australia Landgate Office. Stamp duty has been included in the cost base of the property when calculating the capital gain.
In light of what the Commissioner contends for by his declaratory relief, it is unsurprising that the Dalkeith Property is listed in the table above. Absent from the table however, are the Hardy Street Property and 11 Mount Street which were both used as security for the October 2006 Loans (though the 11 Mount Street property was valued at $1 in the loan applications). The Hardy Street Property was also used as security for the Rocket Loans. In circumstances where the Commissioner’s property searches have revealed that Mr Bosanac held no interest in that property, I infer that the Hardy Street Property was owned solely by Ms Bosanac.
The Rocket Loans were thus secured by mortgages over two properties of which Ms Bosanac was the sole registered proprietor. Although a portion of those loans was used by Mr Bosanac for his share trading, any inference that could be drawn from the use of the Rocket Loans about Mr Bosanac’s intention in relation to the Dalkeith Property at the time of its purchase is significantly weakened by the fact that the Hardy Street Property was also security for the loans, over which no interest is claimed.
There is considerable evidence of separate ownership of property and the use of separately owned properties as security for joint loans.
CONCLUSION
Given that Cummins does not preclude the ‘presumption’ of advancement from arising where the transaction involves the matrimonial home, and on the basis of long standing authority, I consider that the ‘presumption’ of advancement arises in Ms Bosanac’s favour. The Commissioner has not adduced evidence sufficient to rebut the ‘presumption’.
In considering all of these circumstances both individually and cumulatively, I do not consider the evidence adduced is capable of supporting an inference that Mr Bosanac intended to retain a beneficial interest in the Dalkeith Property. The ‘presumption’ of advancement stands unrebutted.
The notion that a husband is to be presumed to gift property to his wife, while the same will not be presumed of a wife to husband, between same sex spouses, or between de facto partners, may grate with modern ideals and expectations of equality. But as things currently stand the ‘presumption’ of advancement remains part of Australian law even for the matrimonial home. It is not for a judge sitting at first instance to depart from such long-standing legal concepts. Additionally, Mr Bosanac in particular describes himself as a ‘self-styled venture capitalist’ and at the time of registration of the title to the Dalkeith Property in Ms Bosanac’s name, he was a sophisticated businessman. When considering inferences from all the circumstances as to his intention at the time of the purchase, he must be taken to have appreciated that the name in which real property is held is of significant consequence in almost all situations. The registration choice may have been made for many reasons but here the evidence as to the intent of either party is very slim indeed and the Court cannot impute to the parties an intention based on what would be reasonable or fair with hindsight. There is much to be said for the register to prevail, the system is after all, one of title by registration. The estate of the registered proprietor is paramount. Usually.
The application will be dismissed with costs. I thank pro bono counsel for their considerable assistance to the Court.
I certify that the preceding two hundred and thirty-two (232) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate:
Dated: 22 March 2021
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