Damberg v Damberg

The case of *Damberg v Damberg* concerned a dispute between family members regarding beneficial ownership of property. The primary issue revolved around whether a parent, who had transferred legal title of property to a child, retained an equitable interest in that property. This involved considering the presumption of advancement and whether it could be rebutted by evidence of the parent's "definite intention" to retain a beneficial interest. The court also had to determine whether Australian courts would enforce a resulting trust created in a foreign jurisdiction (Germany) if the purpose for which it was created was considered illegal or unlawful under German law, particularly in relation to capital gains tax avoidance or evasion.

The legal issues before the court were twofold. Firstly, it was necessary to ascertain whether the presumption of advancement, which typically presumes a gift from a parent to a child, had been rebutted. This required an examination of the evidence to determine if the parent had a "definite intention" to retain a beneficial interest in the property. Secondly, the court had to consider the conflict of laws aspect: whether an Australian court should refuse to recognise or enforce a resulting trust established under German law if that trust was created for a purpose deemed unlawful in Germany, specifically concerning capital gains tax avoidance or evasion. This also raised the question of whether the presumption of identity between unproved foreign law and the *lex fori* (the law of the forum) should apply, especially when the relevant foreign law was likely statutory and related to complex taxation matters.

The court's reasoning involved a detailed analysis of the evidence presented to establish the parent's intention. It applied general principles of evidence to determine whether the presumption of advancement was rebutted. Regarding the conflict of laws issue, the court considered the principles governing the enforcement of foreign trusts and the circumstances under which an Australian court might decline to enforce a trust due to its unlawful purpose under foreign law. This required an examination of the specific provisions and the underlying policy of the relevant German legislation concerning capital gains tax. The court also grappled with the presumption of identity of foreign law, noting that taxation law, particularly concerning avoidance and evasion, is not typically based on broad principles that can be assumed to be common across legal systems, making the application of this presumption problematic.

The court ultimately made orders regarding the beneficial ownership of the property and the enforceability of the resulting trust, the specifics of which are detailed in paragraph 200 of the judgment.