Emerald & Emerald
[2023] FedCFamC1F 183
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Emerald & Emerald [2023] FedCFamC1F 183
File number MLC4577 of 2017 Judgment of WILSON J Date of judgment 27 March 2023 Catchwords FAMILY LAW – EQUITY – RESULTING TRUSTS – detailed examination of history and development of the doctrine of resulting trusts – held, no resulting trust established.
FAMILY LAW –UNCONSCIONABLE ASSERTION OF LEGAL RIGHTS – Muschinski v Dodds and Baumgartner v Baumgartner considered – held, it would be unconscionable for applicant to maintain his assertions if a resulting trust had been established.
FAMILY LAW – LACHES – applicability of the doctrine so as to operate in such manner as to disentitle an applicant for equitable relief to the relief sought by reason of laches – review of authorities – held, applicant guilty of laches but by reason of there being no grant of equitable relief, a consideration of the application of the doctrine became unnecessary.
Legislation Family Law Act 1975 (Cth) ss 44(3), 72 and 78
Limitations of Actions Act 1958 (Vic) ss 8, 20 and 21
Cases cited Air Jamaica Ltd v Charlton [1999] 1 WLR 1399
Anderson v McPherson (No 2) [2012] WASC 19; (2012) 8 ASTLR 321
Archbold v Scully (1861) 11 ER 769
Ashby v Slipper (2014) 219 FCR 322
Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) (2000) 202 CLR 588
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51
Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 198 FCR 297
Aylward v Kearney (1814) 2 Ball & B 463
Bacall & Zagar [2020] FamCA 350
Barker v Barker (2007) 36 Fam LR 650
Baumgartner v Baumgartner (1987) 164 CLR 137
Bennet v Bennet (1878) LR 10 Ch D 474
Birmingham Canal Co v Lloyd (1812) 34 ER 413
Black v Kellner (1992) 15 Fam LR 343
Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060
Blomley v Ryan (1956) 99 CLR 362
BNMB Transport Pty Ltd v Mercedes-Benz Australia Pacific Pty Ltd & Anor [2016] FCCA 2047
Boensch v Pascoe (2019) 268 CLR 593
Bosanac v Commissioner of Taxation [2022] HCA 34
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Brown v Brown (1993) 31 NSWLR 582
Byrnes v Kendle (2011) 243 CLR 253
Calverley v Green (1984) 155 CLR 242
Campbell v van der Velde as trustee of the bankrupt estate of Marilyn Anne Rowan; in the matter of Rowan [2019] FCA 1871
Chang v Su (2002) 29 Fam LR 406
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Chen v Chen and Anor (No. 3) (2020) 63 Fam LR 448
Chief Commissioner of Stamp Duties v Buckle (1998) 192 CLR 226
Collins v Rhodes (1881) 20 Ch D 230
Commissioner of State Revenue (WA) v Rojoda Pty Ltd (2020) 268 CLR 281
Commissioner of Taxation v Bosanac (No 7) [2021] FCAFC 158
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466
Cook v Fountain (1676) 36 ER 984
CSR Ltd v Amaca Pty Ltd [2016] VSCA 320
Davies v National Trustees Executors & Agency Co of Australasia Ltd [1912] VLR 397
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431
Draper v Official Trustee in Bankruptcy [2006] FCAFC 157
Dullow v Dullow (1985) 3 NSWLR 531
Dyer v Dyer (1788) 30 ER 42
Eldridge v Knott (1774) 98 ER 1050
Emerald & Emerald [2018] FamCAFC 217.
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218
Evans v European Bank Ltd (2004) 61 NSWLR 75
Federal Commission of Taxation v Carter (2022) 96 ALJR 325
Federal Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) (2005) 220 CLR 592
Flight v Robinson (1844) 50 ER 9
Forgeard v Shanahan (1994) 18 Fam LR 281
Fysh v Page (1956) 96 CLR 233
Galea v Galea (1990) 19 NSWLR 263
Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155
Gissing v Gissing [1971] AC 886
Goodman v Gallant [1986] Fam 106
Gregory v Gregory (1815) 35 ER 530
Hepworth v Hepworth (1963) 110 CLR 309
Holloway v McFeeters (1956) 94 CLR 470
In re Maddever; Three Towns Banking Co v Maddever (1884) 27 Ch D 523
In the Marriage of Briese (1985) 10 Fam LR 642
In the Marriage of Giunti (1986) 11 Fam LR 160
In the Marriage of Marinko (1983) 8 Fam LR 849
In the Marriage of Mezzacappa (1987) 11 Fam LR 957
In the Marriage of Morrison (1994) 18 Fam LR 519
In the Marriage of Stein (1986) 11 Fam LR 353
In the Marriage of Suiker (1993) 17 Fam LR 236
In the Marriage of Weir (1992) 16 Fam LR 154
In the matter of Petrolink Pty Ltd, Re; Smith v Bone [2014] FCA 1024
J & A Vaughan Super Pty Ltd (Trustee) v Becton Property Group Ltd [2014] FCA 581
Jones v Dunkel (1959) 101 CLR 298
Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392
Kannis v Kannis (2002) 30 Fam LR 83
Kauter v Hilton (1953) 90 CLR 86
Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361
Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62
La Banque Jacques-Cartier v La Banque d'Epargne de la Cite et du District de Montreal (1887) 13 App Cas 111
Lake v Craddock (1733) 24 ER 1011
Lake v Gibson (1729) 21 ER 1052
Lin v Yew (2020) 62 Fam LR 244
Lindsay Petroleum Co v Hurd (1873) LR 5 PC 221
Lithgow City Council v Jackson (2011) 244 CLR 352
Lloyd v Spillet (1740) 26 ER 493
Lord Grey v Lady Grey (1677) 36 ER 742
Louth v Diprose (1992) 175 CLR 621
Luxton v Vines (1952) 85 CLR 352
Marker v Marker (1851) 68 ER 389
Marquis of Cholmondeley v Lord Clinton (1820) 37 ER 527
Martin v Martin (1959) 110 CLR 297
Masson v Parsons (2019) 266 CLR 554
Masterton Homes Pty Ltd v LED Builders Pty Ltd (1996) 33 IPR 417
Mayne & Tomlin [2020] FamCA 898
Monte & Monte [1986] FamCA 1
Moors v Marriott (1878) 7 Ch D 543
Murless v Franklin (1818) 36 ER 278
Muschinski v Dodds (1985) 160 CLR 583
Napier v Public Trustee (WA) (1980) 55 ALJR 1
Nelson v Nelson (1995) 184 CLR 538
Oriolo v Oriolo (1985) 10 Fam LR 665
Orr v Ford (1989) 167 CLR 316
Panwar v Panwar (2020) 63 Fam LR 44
Paviello & Paviello [2022] FedCFamC1F 592
Peldan v Anderson (2006) 227 CLR 471
Penny v Allen (1857) 44 ER 160
Pettitt v Pettitt [1970] AC 777
Pomfret v Windsor (1752) 28 ER 302
Richard Evans & Co Ltd v Astley [1911] AC 674
RnD Funding Pty Ltd v Roncane Pty Ltd [2023] FCAFC 28
Roberts v Tunstall (1845) 67 ER 645
Rochdale Canal Co v King (1851) 61 ER 270
Roe v Birch (1884) 27 Ch D 622
Ryall v Ryall (1739) 26 ER 39
S v S [1972] AC 24
Shephard v Cartwright [1955] AC 431
Smith v Clay (1767) 29 ER 743
Stewart Dawson & Co (Vic) Pty Ltd v Commissioner of Taxation (1933) 48 CLR 683
Stone v Godfrey (1854) 43 ER 798
Sze Tu v Lowe (2014) 89 NSWLR 317
Tinkerbell Enterprises Pty Ltd v Takeovers Panel and Ors [2012] FCA 1272
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Townshend v Townshend (1783) 28 ER 1292
Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278
W v D [2012] SASCFC 142
Waterman v Waterman [2017] FamCAFC 23
Wirth v Wirth (1956) 98 CLR 228
Vandervell v Inland Revenue Commissioners [1967] 2 AC 29
Secondary sources Halsbury’s Laws of England, Volume 47 (fifth edition, 2021, LexisNexis)
J. D. Heydon, M. J. Leeming and P. G. Turner, Meagher, Gummow & Lehane’s Equity (fifth edition, 2015, LexisNexis Butterworths, Australia)
J. M. Lightwood, The Time Limit on Actions (1909, Butterworth & Co, London)
R. P. Meagher and W. M. C Gummow, Jacobs’ Law of Trusts in Australia (sixth edition, 1997, LexisNexis Butterworths, Australia)
Robert Chambers, Resulting Trusts (1997, Oxford University Press)
Scott and Fratcher, The Law of Trusts (fourth edition, 1990, Little Brown)
Sir Richard Eggleston, Evidence, Proof and Probability (1983, Weidenfeld and Nicolson, London)
The Laws of England, Volume 13 (first edition, 1910, Butterworth & Co, London)
William Swadling, Explaining Resulting Trusts (2008) 124 Law Quarterly Review 72
Division Division 1 First Instance Number of paragraphs 157 Date of last submission 9 February 2023 Date of hearing 6, 7 and 8 December 2021 and 11 February 2022 Place Melbourne Counsel for the applicant Ms M. Rozner Solicitor for the applicant Zeno Lawyers Counsel for the respondent Mr P. Fary SC Solicitor for the respondent Barbayannis Lawyers ORDERS
MLC4577 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN MR EMERALD
Applicant
AND MS EMERALD
Respondent
order made by
WILSON J
DATE OF ORDER
27 March 2023
THE COURT ORDERS THAT –
1.Pursuant to s 44(3) of the Family Law Act 1975 (Cth) the wife is hereby granted leave to apply for maintenance out of time.
2.I direct that a senior judicial registrar of Division 1 hears and determines any application for maintenance brought by the wife pursuant to paragraph 1 of these orders and I appoint a Senior Judicial Registrar for that purpose.
3.Pursuant to s 78(1) of the Family Law Act 1975 (Cth) the wife and the husband are declared to be tenants in common in equal shares of the real property situated at and known as E Street, Suburb O in the State of Victoria more particularly described in certificate of title volume … folio … (“the Suburb O property”).
4.Pursuant to s 78(2) of the Family Law Act 1975 (Cth) on or before 4:00pm on 26 May 2023 the husband must pay the wife a sum equivalent to 50% of the value of the Suburb O property as determined in the report of valuer Mr F of G Company filed as evidence in this proceeding (“the payment”).
5.Contemporaneously with the payment as defined in paragraph 4 –
(a)provided that the husband has made the whole of the maintenance payment to the wife as per paragraph 2 hereof, the wife must transfer all of her right, title and interest in the Suburb O property to the husband;
(b)the husband must refinance the existing joint Westpac home loan secured against the property by mortgage number … into his sole name and must indemnify the wife against the same; and
(c)the wife must do all such acts and things and must sign all such documents as are necessary to withdraw caveat number … lodged against the title to the Suburb O property at her expense.
6.The husband must pay all of the costs of and incidental to the transfer referred to in paragraph 5(a) hereof.
7.In the event that –
(a)the whole of the payment is not date by 4:00pm on 26 May 2023; and
(b)the whole or any part of the maintenance payment is not made by 4:00pm on 26 May 2023;
the parties must immediately then do all such acts and things and must sign all such documents as are necessary to sell the Suburb O property by way of public auction on such terms and conditions as agreed between the parties and failing agreement in accordance with the direction and recommendations of a selling agent appointed by the President of the Real Estate Institute of Victoria (“the sale”).
8.The proceeds of the sale must be applied as follows –
(a)first, to pay all costs, commissions and expenses of the sale;
(b)second, to pay out the Westpac home loan account number …58 and discharge the mortgage registered number …;
(c)third, the whole or any part of the payment that remains outstanding into the trust account of Barbayannis Lawyers Pty Ltd on behalf of the wife plus interest calculated pursuant to the Family Law Rules 2004 from 26 May 2023;
(d)fourth, the whole or any part of the maintenance payment that remains outstanding into the trust account of Barbayannis Lawyers Pty Ltd on behalf of the wife plus interest calculated pursuant to the Family Law Rules 2004 from 26 May 2023; and
(e)finally, the balance if any then remaining to the husband.
9.If either party refuses to sign any document required to give effect to these orders, a Registrar of the Court must be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute all deeds and documents in the name of that party and do any act or thing necessary to give validity and operation to all such deeds and documents.
10.Unless otherwise specified in these orders and except for the purposes of enforcing payment due under these or any subsequent orders –
(a)each party is solely entitled to the exclusion of the other to all property in the possession of such a party as at 27 March 2023 and the chattels and personal property in the Suburb O property shall be deemed to be in the applicant’s possession;
(b)any account in the joint names of the parties must be closed and the balance divided equally between the parties;
(c)each party hereby forgoes any claim they may have to any superannuation and/or work-related entitlements, benefits belonging to or earned by the other except as otherwise provided herein;
(d)all insurance policies shall remain the sole property of the owner named thereunder;
(e)each party is solely liable for and must indemnify the other against any liability encumbering any item of property in their name or possession as at 27 March 2023; and
(f)any joint tenancy be immediately and expressly severed.
11.Each party has liberty to apply generally.
12.All extant applications are dismissed.
13.Pursuant to r 19.50 of the Family Law Rules 2004 the Court certifies that it was reasonable for the wife to engage counsel in this proceeding including Senior Counsel.
14.The applicant’s assertion that the property was held by him and the wife on trust for his sole benefit pursuant to a resulting trust is hereby dismissed.
15.The applicant’s claim for orders for the sale of the property and payment of the whole of the net proceeds to him is hereby dismissed.
16.The applicant’s assertion that he is entitled to an equity of contribution is hereby dismissed.
17.Any party seeking costs of the trial of this proceeding must file and serve an application for costs together with any affidavit material in support plus written submissions by 4:00pm on 30 April 2023.
18.If there is opposition to any such costs application, then that party must file and serve his or her affidavit in opposition together with written submissions by 4:00pm on 30 May 2023.
19.I fix 10:00am on 2 June 2023 for a short hearing on costs limited to one hour’s duration.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Emerald & Emerald has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
This proceeding for orders for the adjustment of property interests has had a lamentable history. The proceeding commenced in 2017, two years prior to my appointment to the Family Court of Australia. While judgment was reserved following a trial conducted in 2021, the High Court of Australia entertained an appeal in Bosanac v Commissioner of Taxation[1] resulting in judgment being handed down on 12 October 2022. [2] After inviting the parties to make such submissions as they may be advised, on 9 February 2023 the parties indicated they had exhaustively submitted on point. As these reasons reveal, in my judgment no resulting trust arose and the wife is entitled to the orders she seeks both as to the declaratory relief and leave out of time to bring a maintenance application.
[1] Proceeding 42 of 2021.
[2] [2022] HCA 34.
Soon after this case was placed in my docket it became apparent that pleadings were desirable having regard to the factual and legal complexity of the case,[3] even though the amount in issue was not particularly significant. In particular, the husband raised the existence of a resulting trust in respect of certain real property the details of which are set out below.
[3] Chen v Chen and Anor (No. 3) (2020) 63 Fam LR 448 (Wilson J).
A BRIEF OVERVIEW OF THE DISPUTE
The parties’ dispute related to the land and improvements described in certificate of title volume … folio … being the land known as E Street, Suburb O in the State of Victoria (“the property”). According to the husband’s statement of claim filed 19 March 2020, the husband contended that –
(a)he and the respondent married in 1977, divorced in 1984, are the parents of five children and the respondent has not remarried;
(b)pursuant to a written contract for the sale of the property dated late 1996 the husband executed the contract as purchaser, the price being $95,000;
(c)when he executed the contract to purchase the property the husband intended to acquire the property solely in his name;
(d)he paid the deposit for the acquisition of the property in late1996;
(e)subsequent to the husband paying the deposit but on a date not known, the husband and the wife had one or more discussions during which –
(i)the applicant informed the respondent that he had purchased the property in his sole name as a home in which the respondent and the children of the applicant and respondent would live;
(ii)the applicant informed the respondent that the property would be registered solely in his name;
(iii)the respondent informed the applicant that she would not move into the property unless she was registered as a proprietor;
(iv)the applicant agreed that both he and the respondent would become registered proprietors of the property; and
(f)the applicant obtained a loan and financed the balance of the purchase price being $85,500 plus incidental costs.
The applicant further asserted in his statement of claim that the respondent executed the mortgage as a joint proprietor yet the applicant did not intend to confer any beneficial interest in the property in favour of the respondent. He claimed that the respondent is to be taken to hold her legal title to the property as a registered proprietor on a resulting trust in favour of the applicant. He contended he was entitled to a declaration to that effect. He further contended that between 1996 and 2017 the respondent and the five children of the applicant and the respondent resided at the property.
Alternatively, the applicant contended that he contributed the balance of the purchase price. Again alternatively, he asserted that a joint venture existed in respect of the property which came to an end when the children attained their majority and that it would be unconscionable to permit the respondent to assert any beneficial interest in the property.
By way of amended defence and counterclaim filed 17 November 2020, the respondent pleaded her version of events in response to those alleged by the applicant. A factual divergence emerged as revealed by the following –
(a)the respondent pleaded that she and the applicant remain married under Sharia law and had not divorced under Sharia law;
(b)the wife attended the auction at which the property was purchased when the wife executed a document[4] although she could not read or understand it;
[4] She pleaded that the document she executed “was with respect to the purchase of the property.”
(c)between the mid-1980s and 2004 (with the exception of 1995) most of the money received by the wife from Centrelink, namely $1500 per fortnight, was taken by the husband and used for his own purposes leaving the wife a small sum for groceries;
(d)the husband paid the deposit for the property but from money obtained by him from the wife’s Centrelink amounts he appropriated;
(e)the wife admitted that she and the husband became joint proprietors of the property;
(f)she and the husband jointly borrowed funds which were used to purchase the property;
(g)she contributed not less than 50% of the borrowed funds to the acquisition of the property;
(h)she contended that the presumption of advancement applied;
(i)she contended that the presumption of a resulting trust was rebutted;
(j)she pleaded that by reason of the applicant’s delay in seeking to enforce his asserted rights and by operation of the doctrine of laches it would be unconscionable for him to be granted the relief he seeks;
(k)she pleaded that in 2005 she moved to Sydney because she feared that the applicant would assault her and the children;
(l)it would be unconscionable for the husband to assert an entitlement to more than 50% of the property;
(m)the husband and wife had a common intention that the property would be jointly owned by them pursuant to the “acquisition conversation” (a term defined by her meaning the conversation pleaded in paragraph 5(b) of her amended defence and counterclaim); and
(n)the wife relied on a limitations defence, contending that by operation of ss 8, 20 and 21 of the Limitations of Actions Act 1958 (Vic) the husband’s claim was statute barred on and from 11 May 2002.
The wife also relied on her response she said was filed contemporaneously with her amended defence and counterclaim. The wife sought leave out of time to bring a spousal maintenance claim.
The husband filed an amended reply and defence to counterclaim on 11 February 2021. So far as is relevant, he put in issue as factual matters his payment of rates and taxes charged against the property, furniture and household effects and maintenance and upkeep. He said he was entitled to an equity of contribution.
ISSUES IN DISPUTE
In outlines of their submissions, counsel for the parties identified the issues that fell for my determination in this litigation.
The issues set out hereunder were raised by the husband. He sought –
(a)a declaration that the property was held by him and the wife on trust for his sole benefit pursuant to a resulting trust;
(b)alternatively, orders for the sale of the property and payment of the whole of the net proceeds to him;
(c)dismissal of the wife’s application for leave to bring out of time her spousal maintenance application;
(d)orders relating to an equity of contribution; and
(e)costs.
The issues set out hereafter were raised by the wife. She sought –
(a)a declaration that she and the husband owned the property as tenants in common in equal shares in relation to which the beneficial ownership corresponded with the legal title;
(b)orders for her to receive the benefit of her declared one half ownership by payment from the husband in exchange for a transfer of the whole of the property to him or by sale;
(c)orders pursuant to s 44(3) of the Family Law Act granting her leave to proceed out of time with her application for spousal maintenance; and
(d)costs.
Accepting that costs issues should await the determination of the main issues in this case, the wife’s counsel submitted that the key matters to be determined were –
(a)ownership of the property;
(b)sale and distribution of the net proceeds of the property; and
(c)the wife’s application for leave to bring her spousal maintenance application out of time.
It seemed to me that the application for leave to bring the spousal maintenance application out of time was separate and discreet from the competing claims in relation to the property. It was desirable to deal with the claims to the property first. Having regard to the fact that the husband’s contentions in relation to his entitlements were said to be grounded in a resulting trust, it is utile to address the principles of law governing resulting trusts early in these reasons. To those I now turn.
SOME OBSERVATIONS ON RESULTING TRUSTS PRIOR TO BOSANAC
Academic commentators generally agree that the modern law of resulting trusts has its origin in the early doctrines of the English Court of Chancery as to uses in or about the fifteenth century.[5] Frequently the Chancellor encountered applications for the enforcement of uses that were expressly declared. But the Chancellor was also confronted with applications for relief where uses were not expressly declared or if declared, did not include the entire beneficial interest. As Scott and Fratcher recorded, if A, having an estate in fee simple, enfeoffed B and his heirs to the use of C for life without further declaring the use, the question arose as to who was entitled to the use after C’s death. In those circumstances the Chancellor took the view that because there was nothing to indicate that B should have the use himself, the inference was that A was entitled to it and that B held the land to the use of C and upon C’s death then B held the land on a resulting trust for A.
[5] Scott and Fratcher, The Law of Trusts (fourth edition, 1990), R. P. Meagher and W. M. C Gummow, Jacobs’ Law of Trusts in Australia (sixth edition, 1997).
In a different scenario where A, having an estate in fee simple, enfeoffed B and his heirs without declaring any use (whether in A or in B or in any third person) the Chancellor took the view that an inference existed that if no consideration was given for the feoffment B was intended to hold the land to the use of A. Expressed slightly differently, in that scenario the Chancellor took the view that where land was transferred gratuitously (that is to say, without consideration) and there was no declaration of use, the transferee held the land on a resulting use for the transferor.
Scott and Fratcher identified a third scenario in which a resulting use arose. It was enlivened where A purchased land from a vendor and the vendor, at A’s direction, conveyed the land to B. In that situation the Chancellor took the view that an inference arose that A, as the payer of the purchase price, was entitled to the beneficial interest in the land because B was a gratuitous transferee so B held the land on a resulting use for A.
In each situation described above, the use and beneficial interest in the land was not expressly declared so it was inferred that the transferee was not intended to take the whole of the beneficial interest in the land. Consequently, the use or beneficial interest sprang back or resulted to the person who made the conveyance.
At the time, the courts did not consider whether the resulting use arose because of the presumed intention of the parties or whether it was imposed by law to prevent the unjust enrichment of the transferee.
The nomenclature “resulting use” served to differentiate it from a use that was expressly declared.
The learned authors of Jacobs’ Law of Trusts in Australia express the relevant legal proposition in more contemporary parlance, omitting references to feoffment or fee simple interests and uses. They wrote as follows –
An implied trust is a trust which arises by presumption of law in favour of the settlor of his representatives. The circumstances in which such trusts may arise can be grounded under two main headings: first, where the settlor has transferred property to trustees but had not disposed of, or not wholly disposed of, the beneficial interest and, secondly, where a purchaser of property directs that it be transferred into the name of a third person and there is nothing to indicate that he intended that person to take the property beneficially. In these circumstances the law presumes that the settlor or purchaser, as the case may be, intended to retain the beneficial interest which he has not disposed of. The term ‘resulting’ applied to these trusts expresses the view that the property comes back to him after it has been given away, although in truth the beneficial interest may never have left him. Implied trusts do not need to be evidenced by writing.[6]
[6] R. P. Meagher and W. M. C Gummow, Jacobs’ Law of Trusts in Australia (sixth edition, 1997 at [1201]).
Further, there seems to be general acceptance that a resulting trust arises in one of several circumstances. The first (described by Swadling as “the failed trust resulting trust”) is where an express trust fails in whole or in part. The second (described by Swadling as “a voluntary conveyance resulting trust” and in Jacobs as a “purchase in another’s name”) is where property is purchased the price of which is paid by one person and at that person’s direction the vendor conveys the property to someone else. In RnD Funding Pty Ltd v Roncane Pty Ltd,[7] judgment in which was handed down on 9 March 2023, the Full Court of the Federal Court of Australia (Beach, Derrington and Halley JJ) addressed tracing remedies in equity consequent upon the establishment of a resulting trust. Those categories of resulting trusts mentioned above arise from express trusts yet no provision was made in those express trusts concerning events if the trust failed or a surplus of the trust estate emerged. The inference was that the trustee was not to keep the property and since no other disposition is made of it, the property or the surplus should be returned to the settlor. It cannot be said that the settlor actually intended this result as there is nothing to indicate that the settlor had any intention with respect to the matter.
[7] [2023] FCAFC 28.
A substantial body of authorities has evolved in relation to the resulting trust that arises from a purchase in another’s name. A resulting trust will be presumed where, on purchase, the legal title to real or personal property is vested in someone other than the person who is proved by direct or other admissible evidence to have provided the purchase money.[8]
[8] Ryall v Ryall (1739) 26 ER 39, Dyer v Dyer (1788) 30 ER 42, Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, Napier v Public Trustee (WA) (1980) 55 ALJR 1 and Calverley v Green (1984) 155 CLR 242.
A concise statement of principle was provided by Aickin J (with whom Stephen, Mason and Murphy JJ agreed) in Napier v Public Trustee (WA).[9] There the plurality held as follows –
The law with respect to resulting trusts is not in doubt. Where property is transferred by one person into the name of another without consideration, and where a purchaser pays the vendor and directs him to transfer the property into the name of another person without consideration passing from that person, there is a presumption that the transferee holds the property upon trust for the transferor or the purchaser as the case may be. This proposition is subject to the exception that in the case of transfers to a wife or a child (including someone with respect to whom the transferor or purchaser stands in loco parentis) there is a presumption of advancement so that the beneficial as well as the legal interest will pass. Each of the presumptions may be rebutted by evidence.
[9] (1980) 55 ALJR 1, 3.
In both Charles Marshall Pty Ltd v Grimsley[10] and in Calverley v Green[11] it was held that the statement of principle encapsulated above in Napier v Public Trustee was so well entrenched in Australia it could no longer be the subject of argument.
[10] (1956) 95 CLR 353, 364.
[11] (1984) 155 CLR 242, 266.
The principles recorded above raise presumptions. In the jurisprudence of resulting trusts, a presumption is amenable to displacement by evidence rebutting the presumption. An exposition of the evidence required to rebut the presumption was given by Dixon CJ in Wirth v Wirth[12] in the following terms –
Where a purchase was made in the name of a stranger who provided none of the purchase money the law was clear from a very early time that a resulting trust was presumed and the stranger could take beneficially only if he proved affirmatively that it was so intended.
[12] (1956) 98 CLR 228, 235.
The presumption of advancement operates as a counter-presumption and is an “ancient counter-presumption of equity”.[13] Gageler J has said that where other indications of intention are equal, or at least equivocal, the counter-presumption is a complete answer to the presumption of the existence of a resulting trust. Since as long ago as 1788 the presumption of the existence of a resulting trust and the counter-presumption of advancement have stood as “land marks” in the law.[14]
[13] Gageler J in Bosanac v Commissioner of Taxation [2022] HCA 34 (at [52]).
[14] Dyer v Dyer (1788) 30 ER 42, 46, Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 364, Calverley v Green (1984) 155 CLR 242, 266, Nelson v Nelson (1995) 184 CLR 538, 547-549 and Bosanac v Commissioner of Taxation [2022] HCA 34 (at [58]).
The duelling presumptions
The equitable doctrine of the resulting trust is of undeniable antiquity with early expositions of its operation being essayed even prior to the influence of Lord Eldon. For example, Lord Nottingham LC used the phrases “constructive trust” and “resulting trust” interchangeably in Lord Grey v Lady Grey[15] as Edelman J pointed out when sitting as a member of the Supreme Court of Western Australia.[16] Other aspects of resulting trusts were addressed in Lake v Gibson,[17] Lake v Craddock,[18] Lloyd v Spillet[19] and Dyer v Dyer.[20]
[15] (1677) 36 ER 742.
[16] Anderson v McPherson (No 2) [2012] WASC 19 and (2012) 8 ASTLR 321, 336 (at [94]).
[17] (1729) 21 ER 1052.
[18] (1733) 24 ER 1011.
[19] (1740) 26 ER 493.
[20] (1788) 30 ER 42, 43 (Eyre CB).
The label “resulting trust” does little to illuminate the operation or reach of the doctrine to which the label applies, although the adjective “resulting” is unarguably traceable to the Latin word “resalire”. Professor Chalmers in his treatise “Resulting Trusts” states that the word “resulting” invokes the metaphor of rights “jumping back to the settlor”, a view not entirely embraced by Campbell J in Black Uhlans Inc v New South Wales Crime Commission[21] who held that “resulting” means no more than resulting from the circumstances of the case.
[21] [2002] NSWSC 1060 (at [131]).
Edelman J in Anderson v McPherson held that irrespective of the rationale behind the label “resulting trust”, two important issues arise in any resulting trust. The first is that the resulting trust is a trust in favour of the settlor. The second is that the resulting trust arises for a number of different reasons.
Certain parallels exist between the resulting trust and express trusts. In each the search is for the settlor’s objectively manifested intention[22] in relation to the rights that are transferred to another and whether those rights should be held on trust for the settlor. Where evidence proves such an intention, the trust thereby created is ordinarily regarded as being an express trust. Where that intention is ascertained by presumption, the trust thereby created is ordinarily regarded as being a resulting trust or an implied trust. Edelman J in Anderson cited that a well recognised example of a resulting trust imposed by law is where an attempt to create an express trust fails or where a transfer of legal title occurs about which the transferor is wholly unaware.[23] In those circumstances the resulting trust is said to arise by reason of the transferor’s lack of intention to benefit the recipient.[24]
[22] Calverley v Green (1984) 155 CLR 242, 261 and Byrnes v Kendle (2011) 243 CLR 253.
[23] Evans v European Bank Ltd (2004) 61 NSWLR 75 (at [111]-[113], Spigelman CJ).
[24] Air Jamaica Ltd v Charlton [1999] 1 WLR 1399, 1412 (Lord Millet).
The phrase “presumption of a resulting trust” calls for explication. It is the first of the two duelling presumptions. Edelman J in Anderson v McPherson held that the phrase more properly is “presumption of a declaration of trust.” That is because –
(a)the relevant rebuttable presumption is of the fact of a manifest declaration;
(b)the presumption is not of the legal institution of the trust itself because that is a conclusion of law; and
(c)the presumption is not of the existence of trust property conveyed, because that matter (essential to the trust) must be proved by evidence.[25]
[25] William Swadling, Explaining Resulting Trusts (2008) 124 Law Quarterly Review 72, 79.
The presumption arises when the court, upon considering all the circumstances, presumes there was a declaration of trust either by word or in writing, though there be no plain and direct proof thereof.[26]
[26] Cook v Fountain (1676) 36 ER 984, 987 (Lord Nottingham LC).
The institution of the resulting trust is a “well-entrenched landmark in Australian property law which cannot be disregarded by judicial decision”.[27]
[27] Calverley v Green (1984) 155 CLR 242, 266 (Deane J), Brown v Brown (1993) 31 NSWLR 582, 588 (Gleeson CJ), Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 364 and Nelson v Nelson (1995) 184 CLR 538, 548.
Where one or more purchasers contribute purchase money towards a land purchase, a resulting trust arises in favour of that purchaser or those purchasers in the proportions in which each contributed the purchase money.[28] It follows that the trust and the proportionate beneficial interests must be determined at the time of the purchase or so immediately thereafter as to constitute a part of the transaction.[29]
[28] Calverley v Green (op cit) (at 247 Gibbs CJ, at 258 Mason & Brennan JJ and at 269 Deane J).
[29] Calverley v Green and Charles Marshall Pty Ltd v Grimsley (op cit) (at 365).
The second duelling presumption is what is commonly called “the presumption of advancement.” Yet, as Edelman J explained in Anderson v McPherson, the so-called presumption is not a presumption at all. The historical origins of the presumption of advancement can be traced to a statement in 1818 by Lord Eldon in Murless v Franklin[30] when his Lordship identified as circumstances supportive of the presumption where a purchase was made by a person in the name of another to whom the purchaser was under a species of natural obligation to provide for the nominee.[31] A relationship of father and child was said to ground that natural obligation yet the relationship between mother and child was not, for the simple reason that equity imposed no obligation on a mother to provide for her child, according to Sir George Jessel MR in Bennet v Bennet.[32] Since Nelson v Nelson, decided in 1995, judicial views in Australia differ about whether the so-called presumption of advancement should apply to the relationship of mother and child. In Anderson v McPherson Edelman J held that the presumption of advancement does not necessarily require a relationship where provision for advancement might be expected or one where a moral duty to provide was recognised in equity. His Honour held that all that can be said of the law relating to the presumption of advancement is “that it provides for a list of relationships where the presumption of resulting trust does not arise”.
[30] (1818) 36 ER 278.
[31] In Nelson v Nelson (1995) 184 CLR 538 Deane and Gummow JJ examined the historical foundation of the presumption as being the obligation to provide.
[32] (1878) LR 10 Ch D 474, 478.
That was the position in equity following the decision of the High Court in Martin v Martin.[33] In Calverley v Green Mason and Brennan JJ along with Murphy and Deane JJ eschewed the presumption of advancement and rested on the basis that it is the absence of any reason for assuming that a trust arose.
[33] (1959) 110 CLR 297.
Since the observations of Sir George Jessel MR in Bennet v Bennet, in Wirth v Wirth[34] Dixon CJ took a broader view of the relationships in which a presumption of advancement might arise. Those included circumstances where the purchase was made in the name of a legitimate or illegitimate child, a grandchild whose father was dead or the purchase was made in the name of the wife of the purchaser. The relationship between mother and child is nowadays indistinguishable from a relationship between a father and child.
[34] (1956) 98 CLR 228, 237.
SOME OBSERVATIONS ON RESULTING TRUSTS FOLLOWING BOSONAC
On 12 August 2022 the High Court handed down its decision in Bosanac v Commissioner of Taxation,[35] overturning the decision of the Full Court of the Federal Court of Australia (Kenny, Davies and Thawley JJ) in Commissioner of Taxation v Bosanac (No 7). [36] All five members of the High Court[37] allowed the appeal, although for three separate sets of reasons. Each repays close examination as I have done below. However, it is utile to recite, at least in précis form, the salient facts of the case.
[35] [2022] HCA 34.
[36] [2021] FCAFC 158.
[37] Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ.
The litigation related to a residential property in the Perth suburb of Dalkeith, purchased by Ms Bosanac in 2006. She and her then husband married in 1998, separated in 2012 or thereabouts and jointly lived in the property until 2015 when Mr Bosanac departed the property. Ms Bosanac was the sole purchaser under the contract of sale. The purchase price was $4.5m subject to her obtaining a loan for $3m. The deposit was paid as to $250,000 drawn from joint funds in the names of Mr and Ms Bosanac. Mr and Ms Bosanac applied for loans to pay the balance of the purchase price. Ms Bosanac became the registered proprietor of the Dalkeith property. Mr Bosanac at no stage claimed an interest in the property. The Commissioner of Taxation was a creditor of Mr Bosanac. The Commissioner brought a proceeding in the Federal Court seeking a declaration of a resulting trust over the equity in half of the property on the basis that Ms Bosanac held that interest in the property on trust for Mr Bosanac. The manner in which the case was framed was recorded in the reasons of Kiefel CJ and Glesson J in the following terms –
The Commissioner sought to take advantage of the law’s presumption, known as a presumption of resulting trust, that a person who advances purchase monies for property, which is held in the name of another person, intends to have a beneficial interest in the property[38]. That presumption is subject to an exception that, in the case of purchases by a husband in the name of a wife, or a parent (or person who stands in loco parentis) in the name of a child, there is a presumption of advancement or, in other words, a presumption that the purchaser intended that the beneficial interest would pass with the legal interest[39]. The Commissioner contended that the presumption of advancement of a wife by her husband, which operates to preclude a resulting trust from arising, is no longer part of the law of Australia in relation to the matrimonial home following the decision of this Court in Trustees of the Property of Cummins v Cummins.[40]
[38] Calverley v Green (1984) 155 CLR 242, 246.
[39] Napier v Public Trustee (WA) (1980) 55 ALJR 1, 3; 32 ALR 153, 158. See Nelson v Nelson (1995) 184 CLR 538, 547-548.
[40] (2006) 227 CLR 278, 302-303 [at 71].
At trial, McKerracher J dismissed the Commissioner’s application for declaratory relief. The Full Court took a different view. Kiefel CJ and Gleeson J recorded the Full Court’s approach in the following terms –
The Full Court (Kenny, Davies and Thawley JJ) took a different view. Their Honours held that the decision in Cummins did not qualify the presumption of advancement, but the presumption is liable to be displaced or rebutted by evidence, including evidence of the nature of the particular transaction[41]. There were facts which tended strongly against the presumption and in favour of a trust being intended by both Ms and Mr Bosanac: Mr Bosanac assumed a substantial liability without acquiring any beneficial interest[42]; the Dalkeith property was intended to be the matrimonial home for the joint use and benefit of Ms and Mr Bosanac[43]; and the funds for the purchase came from joint borrowings[44]. The Full Court declared that Ms Bosanac holds 50 percent of her interest in the Dalkeith property on trust for Mr Bosanac.
[41] Commissioner of Taxation v Bosanac [2021] FCAFC 158 (at [10]-[11]).
[42] Commissioner of Taxation v Bosanac [2021] FCAFC 158 (at [15]).
[43] Commissioner of Taxation v Bosanac [2021] FCAFC 158 (at [19]).
[44] Commissioner of Taxation v Bosanac [2021] FCAFC 158 (at [20]).
Certain key holdings in the joint judgment of Kiefel CJ and Gleeson J require recording. They included the following –
(a)a trust of a legal estate in property taken in the name of another is taken to “result” to the person who advances the purchase money (Dyer v Dyer); [45]
[45] (1788) 30 ER 42, 43.
(b)the categories of resulting trust include trusts arising from A’s payment for the conveyance of rights to B, the voluntary transfer of rights inter vivos from A to B and the transfer of rights on a failed declared trust;
(c)the term “resulting trust” states a legal response to proved facts;
(d)the presumption can be rebutted by evidence from which it may be inferred that there was no intention on the part of the person providing the purchase money to have an interest in land or other property held on trust for him or her (Stewart Dawson & Co (Vic) Pty Ltd v Commissioner of Taxation;[46]Calverley v Green[47] and Nelson v Nelson);[48]
(e)the presumption cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence;[49]
(f)where more than one person pays the purchase price, regard is necessarily had to evidence of each of their intentions;
(g)the presumption of advancement allows an inference as to intention to be drawn from the fact of certain relationships;[50]
(h)the presumption of advancement is not strictly a presumption at all and may be better understood as providing the absence of any reason for assuming that a trust arose[51] and at an evidentiary level is no more than a circumstance which may rebut the presumption of a resulting trust[52] or prevent it from arising;[53]
(i)the presumption of advancement may be rebutted by evidence of actual intention;[54]
(j)the court is concerned to determine what was intended when the property was purchased or transferred; and
(k)the presumption of advancement is especially weak today.
[46] (1933) 48 CLR 683, 690.
[47] (1984) 155 CLR 242, 251.
[48] (1995) 184 CLR 538, 547.
[49] Muschinski v Dodds (1985) 160 CLR 583, 612.
[50] Nelson v Nelson (1995) 184 CLR 538, 547.
[51] Martin v Martin (1959) 110 CLR 297, 303 and Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278, 298.
[52] Pettitt v Pettitt [1970] AC 777, 814.
[53] Wirth v Wirth (1956) 98 CLR 228, 237.
[54] Calverley v Green (1984) 155 CLR 242, 251.
Kiefel CJ and Gleeson J addressed proof of intention. The following matters of importance emerged from their Honours’ reasons –
(a)the question of intention is entirely one of fact and concerns the intention manifested by the person or persons who contributed funds towards the purchase of the property, which for the most part will be made out by the circumstances;[55] and
(b)anything relevant is admissible.[56]
[55] Martin v Martin (1959) 110 CLR 297, 304.
[56] Davies v National Trustees Executors & Agency Co of Australasia Ltd [1912] VLR 397, 403 (Cussen J).
On the facts of the case, Kiefel CJ and Gleeson J held that the inference to be drawn was that Mr Bosanac, by being a party to the loans and by using his property as security, intended to facilitate Ms Bosanac’s purchase of the property which was to be held in her name. McKerracher J was correct in concluding that no inference could be drawn to the effect that Mr Bosanac intended to have a beneficial interest in the property. Their Honours allowed the appeal.
Gageler J delivered separate reasons for judgment. The more important issues that arose from his Honour’s reasons were the following –
(a)an intention to create a trust, objectively manifest, is at the base of every trust;[57]
[57] Hepworth v Hepworth (1963) 110 CLR 309, 317, Byrnes v Kendle (2011) 243 CLR 253, 275 and Gissing v Gissing [1971] AC 886, 906.
(b)the Commissioner relied on the existence of a resulting trust presumed to have arisen from the circumstance that Mr Bosanac contributed equally with Ms Bosanac to her purchase of the Dalkeith property;
(c)the Commissioner’s claim was based on an ancient presumption of equity;
(d)the presumption arises where property is purchased by one or more persons using funds contributed in whole or in part by one or more other persons;
(e)unless there is consideration for the contribution, the presumption is that everyone concerned in the purchase transaction intended the property to be held at and from the time of purchase for the benefit of the contributors as tenants in common in proportion to their respective contributions;
(f)the counter-presumption arises where a contributor and purchaser were in a recognised category of relationship, the archetypal version of which is whether the contributor is a husband and the purchaser his wife;
(g)the counter-presumption is that the contributor and purchaser intended the contribution to the purchase price to have been made and received as a gift for the purchaser’s advancement;
(h)where other indicators of intention are equal or at least equivocal, the counter-presumption is a complete answer to the presumption;
(i)the presumption and counter-presumption are “landmarks”;
(j)the presumption of a resulting trust is a presumption of fact functionally akin to a civil onus of proof;
(k)the presumption will yield to actual intention to the contrary found on the balance of probabilities as an inference drawn from the totality of the evidence;
(l)the weight to be given to the fact of a contribution having been made to the purchase price in drawing an inference as to actual intention will vary according to the totality of the circumstances of the case;
(m)the counter-presumption of advancement is not a presumption at all;
(n)the existence of a relationship within a category recognised as triggering the counter-presumption is no more than a circumstance of the evidence yet considered alone, the circumstance of such a relationship is enough to negative the presumption which arises from the bare fact of contribution to the purchase price; and
(o)whether any and if so what inference is to be drawn about the actual intention of the contributor and purchaser falls to be determined as an ordinary question of fact on the balance of probabilities.
In the end Gageler J agreed with the orders proposed by Kiefel CJ and Gleeson J.
The joint judgment of Gordon and Edelman JJ also called for detailed analysis. The important issues that emerged from those joint reasons included the following –
(a)whereas a constructive trust arises by operation of law[58] and an express trust arises due to an objective or manifested intention to create a trust,[59] a resulting trust can describe a trust that was objectively intended by the transfer of property;
(b)the resulting trust is said to “jump back” to the settlor;[60]
(c)a resulting trust frequently arises upon the failure of an express trust;[61]
(d)a resulting trust can also arise by a transfer of a person’s legal rights without that person’s knowledge or consent;[62]
(e)described as the “presumption of resulting trust”, it is a presumption that a resulting trust arises where such a trust arises by objective intention;
(f)the resulting trust has been described as anachronistic[63] (which description is correct);
(g)yet the resulting trust is too well entrenched as a landmark in the law of property to disregard it;[64]
(h)the so-called presumption of resulting trust developed in feudal times as a way to circumvent forfeiture and to deal with the vicissitudes of war;[65] and
(i)recognising that it is too late to abolish it, the presumption of resulting trust should be recognised as a weak presumption given that the circumstances justifying it have changed so much since foundations of the presumption arose in the 15th century.
[58] Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137.
[59] Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) (2000) 202 CLR 588.
[60] DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431, Federal Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) (2005) 220 CLR 592 and Peldan v Anderson (2006) 227 CLR 471.
[61] Vandervell v Inland Revenue Commissioners [1967] 2 AC 291 and Air Jamaica Ltd v Charlton [1999] 1 WLR 1399.
[62] Evans v European Bank Ltd (2004) 61 NSWLR 75.
[63] Dullow v Dullow (1985) 3 NSWLR 531, 535.
[64] Calverley v Green (1984) 155 CLR 242, 266, Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 364 and Nelson v Nelson (1995) 184 CLR 538, 548.
[65] Lloyd v Spillet (1740) 26 ER 493, 494.
Gordon and Edelman JJ addressed the “presumption” and whether it was one of fact or law.[66] Their Honours held that a presumption of fact is no more than a traditional inference based on logic and common sense which a tribunal of fact ordinarily draws from basic facts whereas a presumption of law is a rule of law which, in the absence of other or contrary evidence attaches a legal consequence to an evidentiary fact. Their Honours held that where contrary evidence exists, no probative force should be attached to a so-called presumption. Of particular significance was the following –
Whether it is classified as a presumption of fact[67] or a presumption of law,[68] and although described as "entrenched",[69] given the now weak nature of the presumption of resulting trust, the objective facts determine its position and significance (if any).
[66] Their Honours referenced Masson v Parsons (2019) 266 CLR 554, 575 and Federal Commission of Taxation v Carter (2022) 96 ALJR 325, 332.
[67] Pettitt v Pettitt [1970] AC 777, 823, Robert Chambers, Resulting Trusts (1997, Oxford University Press), 11 and Swadling, Explaining Resulting Trusts (2008) 124 Law Quarterly Review 72, 101.
[68] Swadling, Explaining Resulting Trusts (2008) 124 Law Quarterly Review 72, 101.
[69] Calverley (1984) 155 CLR 242, 266, citing Dyer (1788) 30 ER 42, 43. See also Charles Marshall (1956) 95 CLR 353, 364 and Nelson (1995) 184 CLR 538, 548, 584 and 602.
Their Honours addressed the nature of the inference about the existence of a resulting trust. Of importance were the following –
(a)an inference of a resulting trust cannot arise where a plaintiff has led evidence that tends to establish an objective intention or lack of objective intention to create a trust;[70]
(b)it is necessary to start with objective facts, best framed by the question “what were the parties’ words or conduct at the time of the transaction or so immediately thereafter as to constitute part of the transaction”;[71]
(c)so long as the three certainties of intention, subject and object are present an express trust will arise where the objective facts based on evidence led by the plaintiff tend to establish an objective intention that a provider of part of the purchase price would hold an equitable interest in respect of a particular portion or a particular property;[72]
(d)in that scenario there is no presumption of resulting trust that arises;
(e)where the objective facts based on evidence led by the plaintiff establishes even weakly an objective intention inconsistent with a declaration of trust the presumption of resulting trust will not arise;[73] and
(f)where the objective facts based on the evidence led by the plaintiff are in respect of the objective intentions of the parties neutral, equivocal, non-existent or uninformative, then, consistent with the weak presumption of resulting trust, an inference can be drawn of a declaration of trust by the provider of part of the purchase price.[74]
[70] Muschinski v Dodds (1985) 160 CLR 583, 612 and Pettitt v Pettitt [1970] AC 777, 785.
[71] Shephard v Cartwright [1955] AC 431.
[72] Kauter v Hilton (1953) 90 CLR 86, 97, Associated Alloys (op cit) and Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62, 71.
[73] Goodman v Gallant [1986] Fam 106, 110.
[74] S v S [1972] AC 24, 41, Goodman (op cit) and Nelson (op cit).
Gordon and Edelman JJ held that the presumption of resulting trust cannot prevail over the actual intention of that party as established by the overall evidence. The first step, their Honours held, is the objective factual enquiry of ascertaining the parties’ words or conduct at the time of the transaction or so immediately thereafter as to constitute part of the transaction. Relying on the observations in Calverley v Green,[75] their Honours held that the parties’ objective intention is to be determined at the time when the trust was purportedly created. Subsequent events and conduct are otherwise inadmissible.[76]
[75] (1984) 155 CLR 242, 252, 262.
[76] Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278, 300 (at [65]).
Gordon and Edelman JJ addressed the so-called presumption of advancement. Their Honours held that it is not a presumption at all but rather instead it is a circumstance of fact in which the presumption of resulting trust does not arise, especially in modern relationships where there may be no occasion to presume a resulting trust in favour of the person who provided part or all of the purchase price of a property or gratuitously transferred a property, registered in the name of the other person. In such circumstances no equitable interest is created.[77]
[77] DKLR (1982) 149 CLR 431, 463, Linter (2005) 220 CLR 592, 606, Peldan (2006) 227 CLR 471, 485, Boensch v Pascoe (2019) 268 CLR 593, 599, Carter (2022) 96 ALJR 325, 334, Commissioner of State Revenue (WA) v Rojoda Pty Ltd (2020) 268 CLR 281, 307 and Chief Commissioner of Stamp Duties v Buckle (1998) 192 CLR 226, 243.
Their Honours held that although the presumption of advancement has been described as entrenched, its rationale has not been consistently explained and it has long been recognised that the limited classes of relationships of close trust from which the presumption arises may not accord with contemporaneous practices and modes of thought.
On the facts of the case, their Honours held that the affidavit material on which the Commissioner relied did not permit an inference to be drawn, at the time of purchase of the Dalkeith property, consistent with a declaration of trust. Their Honours held that the presumption of a resulting trust did not arise.
THE APPLICANT’S CASE AS OPENED
Counsel for the applicant husband, Ms M Rozner, opened on the basis that the resulting trust alleged was what she called a “common intention resulting trust”[78] in which, so she contended, the resulting trust arose “from the intention of the parties at the time the property was purchased.” She then corrected that to be a reference to what she called a “common constructive trust”.[79] Later still Ms Rozner said the following –
MS ROZNER – Well, your Honour, it was the intention of the parties at the time that the property was purchased that the husband would pay all of the amounts owing on the mortgage, he would pay the deposit, he would pay for the property. Your Honour, we say by reason of that, if indeed he does not succeed in establishing a resulting trust, then, indeed, the court should step in and impose a constructive trust in order to avoid inequity and - - -
[78] Transcript 6 December 2021 T 4 L 12.
[79] Transcript 6 December 2021 T 4 L 19.
Ms Rozner seemed to open her case as a resulting trust by relying on Calverley v Green (op cit) as well as the decision of the Court of Appeal of the Supreme Court of New South Wales in Sze Tu v Lowe[80] and she relied on the observations of the Full Court of the Federal Court in Commissioner of Taxation v Bosanac (No 7),[81] although by the date on which she opened, the High Court had not handed down its reasons in Bosanac.
[80] (2014) 89 NSWLR 317.
[81] [2021] FCAFC 249.
Ms Rozner opened on the basis that the presumption of advancement should not apply, which I took her to mean that the presumption as to the existence of a resulting trust had not been negated by the presumption of advancement. Ms Rozner submitted that the wife’s application for leave to bring her spousal maintenance claim out of time should be refused.
Ms Rozner opened on the basis that the wife’s contributions were in dispute in respect of the payment of the deposit, her payments towards the mortgage and her evidence about the parties’ intention when the property was purchased.[82]
[82] Transcript 6 December 2021 T 6 L 1-6.
On behalf of the wife, Mr Fary SC opened on the basis that two main issues fell for determination. The first was whether the certificate of title was correct in relation to the property in its recording of the wife as the proprietor of a 50% interest in the property. Mr Fary SC submitted that the second issue was whether the wife’s application for leave out of time to bring her spousal maintenance claim should be granted.
In developing the first issue, Mr Fary SC submitted that the starting point in arriving at the phenomenon of registration (and in what registered proportions) was the contributions she made to the purchase price. To that was added her contributions from pooled funds derived from Centrelink payments in her favour then her borrowings from AC Bank and her status as a co-mortgagor. Mr Fary SC submitted that according to the observations in Calverley v Green it is understandable but erroneous to regard payments of instalments due under a mortgage as part-payments of the purchase price. He said the wife contributed half of the repayments of money advanced by way of mortgage as well as $30,000.
Mr Fary SC submitted that the onus was on the husband to establish –
(a)the relevant beneficial ownership for which he contended; and
(b)acts as might give rise to the presumption of resulting trust, relevantly here, a common intention resulting trust, and to do so by admissible evidence.
Mr Fary SC referred to the husband’s assertion that he made improvements to the property. In respect of the husband’s assertion that the sum of $70,000 was spent as to $25,000 on a car for his daughter and as to $45,000 on renovations, the wife submitted that the payment of $45,000 was from joint funds spent improving the house.[83]
[83] In opening Mr Fary SC did not specifically focus on the sum of $25,000 for the daughter’s car presumably because the resulting trust claim related to the real property, not a car; Transcript 6 December 2021 T 7.
Mr Fary SC submitted that if I were to accept the husband’s contentions about the existence of a resulting trust, then the wife’s evidence rebutted the presumption.[84] In particular, the following matters relevantly rebutted the presumption –
(a)the parties made a deliberate decision to record their ownership jointly;
(b)they were joint borrowers;
(c)they had three children together;
(d)they remained married under Sharia law at the time of acquisition;
(e)the husband told the wife and she understood that she and the children would live in the property together; and
(f)the advance to pay for the mortgage was obtained with the wife’s consent.
[84] Transcript 6 December 2021 T 8 L 10-14.
Had the property been registered solely in the name of the husband “the wife would have had a very substantial claim to a half interest under the principles in Muschinski v Dodds and Baumgartner v Baumgartner” (Mr Fary’s words).[85]
[85] Transcript 6 December 2021 T 9 L 32-33.
Further, Mr Fary SC contended that the husband’s assertion that he is entitled to a 100% interest in the beneficial interest in the property is unconscionable having regard to the wife’s financial and non-financial contributions.
Further, Mr Fary SC submitted that if I were minded to grant the husband’s application that the property is held on a resulting trust in his favour, then the wife contended that by reason of the doctrine of laches, any such relief ought to be refused.
THE HUSBAND’S EVIDENCE
In support of his claims in this litigation, the husband relied on his own evidence without other witnesses. He made an affidavit on 3 November 2021, he made his financial statement dated 22 November 2021 and he made his affidavit 22 November 2021. The version of his 3 November 2021 affidavit with agreed objections was marked as a separate exhibit, so as to become his trial affidavit. The following matters of importance were the subject of evidence by the husband –
(a)he is 63 years old;
(b)he and the wife married in or about 1977 and divorced in 1984;
(c)they have five children together, all of whom are adults, in respect of whom he has a relationship with one only, the youngest, now aged 33;
(d)he married his current wife in 1985 or thereabouts with whom he has five further children, he having fathered 10 children in total;
(e)he met the respondent in Country J in 1977, they married the same year and he travelled to Australia in or about 1978;
(f)after arriving in Australia the applicant and the respondent took up accommodation briefly with her brother but soon thereafter rented at an address the applicant can no longer recall;
(g)the applicant found employment whereas (according to the applicant) the respondent did not work or receive Centrelink benefits during the marriage;
(h)the applicant stated that the respondent’s family exerted significant pressure on their relationship leading, according to the applicant, to the respondent’s brother assaulting him during 1980, at a time when the applicant and respondent were separated;
(i)the applicant and respondent briefly reconciled;
(j)according to the applicant, by reason of the pressure from the respondent’s family the applicant took the respondent and their (then) three children to Country J in 1982 where they lived for two to three months; and
(k)without stating who said what to whom (or even the gist or substance of the conversation or if more than one of those conversations) the applicant asserted that “it was agreed”[86] that he would return to Australia and that the respondent and the three children would remain in Country J for a further three months while the applicant worked in Australia sending the respondent money to support herself and the children.
[86] This was a conclusion and, strictly speaking, inadmissible.
The information recorded in paragraphs 18 and 19 of his trial affidavit was chronologically confusing and lacking in precision as to dates. For examples, he did not say when nor even in which month of 1982 he left Country J for Australia leaving the respondent and the children in Country J. He did not state when nor even a month when he arrived in Australia. It seemed that the five of them travelled to Country J during 1982 and stayed for up to three months. The applicant appeared to have nearly run out of money when he and the respondent agreed that he would return to Australia leaving the respondent and three children in Country J. He did not state when he left Country J and returned to Australia. However, he stated in paragraph 18 of his trial affidavit that the respondent and the children remained in Country J for a further three months, yet he did not state which were those three months nor did he say which month the respondent and the children returned to Australia. He did not say where he lived upon returning to Australia nor where he worked nor whether and if so how much he sent to the respondent while he allegedly worked in Australia when the respondent and children remained in Country J. Then in paragraph 19 he stated that he left Australia “in or around” yet he did not complete the sentence by giving a date. Nor did he give a reason why he left, whether it was pursuant to some understanding or arrangement with the respondent or whether he simply abandoned the respondent and the children. He said the eldest child was then aged five years and she had been born in 1979 so the year was likely to have been 1984 or 1985. That corresponded with other information he gave about the respondent sending him a notice of divorce and it was common ground that the applicant and the respondent divorced in 1984 after which he “searched for a new spouse” (his words). He married his second wife Ms K in Country J then returned to Australia, settling in Melbourne, not Sydney.
At all events, the applicant stated that in 1986 his eldest child (then seven years of age) telephoned him and they spoke for the first time in two years. He said the eldest child indicated her wish to live with the applicant so, according to the applicant, he arranged for the three children to travel from Sydney to Melbourne. He said that upon collecting his children at the Airport, he was shocked to see the respondent with them because, so he asserted “this was not the plan nor was it discussed.” Any such plan or discussion could only have arisen from discussions with his seven year old child because the applicant did not give evidence of any conversation or plan involving the respondent during 1986. For that matter, the last prior conversation involving the applicant and respondent was one in 1982 when “it was agreed” (the applicant’s words) for the applicant to return to Australia from Country J after a two or three months stay. The applicant stated that he was left with no choice but to house the respondent (then his ex-wife) with his current wife in his home.
The applicant stated that the living arrangements involving six people living in the one house (three children, the applicant, his ex-wife and his current wife) caused difficulties in his marriage so he decided to search for rental accommodation for the respondent and the three children.[87] He said he secured rental accommodation in Suburb L for the respondent and three children. He said she left the rental accommodation after a period (he was unable to say how long) and sought housing commission accommodation in Suburb M.
[87] It seems likely (although the applicant did not say as much in his evidence) that the children Ms Z and Mr R had not then been born.
The applicant said the children became anxious while living in Suburb M. He said the respondent told the applicant she wanted to live with the applicant and his second wife. He said the respondent and the three children moved back with the applicant and the applicant’s second wife for what he said was a short time, although he did not say how long that was. He denied taking the respondent’s Centrelink benefits.
The applicant deposed to his fourth child Ms Z with the respondent being born in 1987. Yet his chronological narration of events spoke of the year 1986 in paragraph 21 of his trial affidavit then his belief that the respondent lived in government housing around the date of the birth of Mr R in 1989 but he omitted altogether any reference to events leading to the conception, pregnancy and birth of Ms Z in 1987 and prior thereto. Such a significant omission caused me to question whether the applicant had been faithful to his promise to tell the truth, the whole truth and nothing but the truth.[88]
[88] Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361.
Using the very imprecise chronology given by the applicant, according to him the respondent commenced living in Suburb Q Victoria soon after Mr R’s birth[89] then returned to Sydney when Mr R was a baby. He said that after the respondent returned to Sydney with the children (by then five had been fathered by the applicant), in the early 1990s he took his two eldest children from his marriage with the respondent to Country J. He did not say what part of that decade he took his two eldest children to Country J. However, he did say in paragraph 32 of his trial affidavit that the respondent followed him to Country J with the three younger children. He did not give evidence about the reaction from his then wife Ms K to that trip. He did not say how long he was in Country J yet he said he enrolled the two eldest children in V School in Country J. He said those two children lived with his parents. He did not say where the respondent lived or where his other three children from the respondent lived. He said he returned to Australia thereafter, yet he did not say when. He said he sent money to the respondent. He did not say the date when he said the respondent and his five children with the respondent returned to Australia. However he did say they moved to Sydney. He said the respondent returned to Melbourne in 1996. He did not say where the respondent lived upon her return to Melbourne and whether and if so which children lived with her.
[89] August 1989.
By the year 1996, the applicant’s and the respondent’s five children were aged 17, 16, 14, 9 and 7. In addition he had several children with his second wife by then. He gave no information about his financial circumstances especially whether he owned real property and if so its value, whether he owned personal property and if so its value, he gave no evidence of his earnings, he gave no information about the private school fees at the U School he said he paid, he gave no information about how much money he said he sent the respondent while she resided in Country J nor did he say how much the fees for V School in Country J were.
Thus far I have narrated only some of the information recorded in the applicant’s trial affidavit in the period between 1977 and 1996, 19 years in total. Significant items of information were omitted. I mention this to record that on this application in relation to a resulting trust, the applicant bore the burden of proof. He needed to persuade me of certain matters on the balance of probabilities.
It will be recalled that the requisite intention in relation to the existence of a resulting trust is fixed at the date of the purchase of the relevant property.
In a temporal context the relevant events commenced in late 1996.[90]
[90] Paragraph 36 of the applicant’s trial affidavit.
The reasons for judgment of the members of the High Court in Bosanac v Commissioner of Taxation illuminate the evidentiary matters that need to be proved by a plaintiff (relevantly here an applicant) when seeking to demonstrate the existence of a resulting trust. Extracts of those reasons have been set out above. In particular I refer here to the comments above in that regard.[91] The applicant said the following in paragraph 36 of his trial affidavit –
In or around [late] 1996 as I was driving around [Suburb O] I saw an Auction board for a home in [E Street], [Suburb O]. I stopped and inspected the property. The property was being sold on the very same day. I purchased the property that day and signed the contract of sale for [E Street], [Suburb O]. The contract was in my sole name. The purchase price was $95,000. I paid a deposit of $9,500 from my savings. [Ms Emerald] was not with me on this day. [Ms Emerald] did not inspect the property before it was purchased. [Ms Emerald] was not consulted about the property
[91] See above paragraphs 41 to 43, 44, and 46 to 52.
The applicant stated in paragraph 38 that it was the intention of Ms K and the applicant for the property to be registered in the sole name of the applicant. Ms K’s intention was not made relevant.
The applicant did not exhibit to his trial affidavit any documentation to support his assertion that the deposit of $9,500 was paid from his savings.
In paragraph 39 of his trial affidavit the applicant stated that the respondent put so much pressure on him that he finally told her he would register the property in both names (inferentially, his and the respondent’s). The precise terms of his evidence on point was as follows –
39. [Ms Emerald] put so much pressure on me until I finally told her that I would register the property in both names. I did it for the sake of the children, so the children could have stable accommodation rather than being dragged around Melbourne and Sydney. At no time did I intend [Ms Emerald] to have an interest in the property. I had no choice but to register [Ms Emerald’s] name for the sake of the children. In 1996, [Ms W] was aged 17 years old, [Ms X] was 16 years old, [Ms Y] was 14 years old, [Ms Z] was 9 years old and [Mr R] was 7 years old. The three oldest children were in high school while the younger two were in primary school.
40. I applied for a home loan with the [AC Bank]. [Ms Emerald’s] name was on the home loan as her name was to be registered on the title. I did not receive any money from [Ms Emerald] or her agents. At the time the property was purchased I was employed. My partner and I were not in receipt of Centrelink.
41. As deposed above, I paid all the costs associated with the purchase of [E Street], including the deposit, stamp duty, conveyancing fees and other ancillary costs. [Ms Emerald] did not contribute anything.
Pausing at that juncture in the factual narration, the applicant did not put in evidence the conveyancing file in relation to the transfer of title into joint names. For that matter he did not even give evidence of the date when he said in paragraph 39 of his trial affidavit that he finally told the respondent that he would register the property in her name. He said that at no stage did he intend for the respondent to have an interest in the property. His comment “I had no choice but to register [Ms Emerald’s] name for the sake of the children” caused me concern about the volition of his act in seeking the registration of the respondent’s interest. At no stage was it alleged by the applicant that he was deceived into registering the respondent’s interest or that he was under duress in so doing. None of the usual factors that vitiate consent or which tend to negate volition were asserted by the applicant. Precisely why he contended that he had no choice was not stated. It was readily apparent that he had full choice – either to do nothing or to register the respondent as a co-owner. He chose to register the respondent as a registered proprietor. In addition, as a matter of standard banking and finance practice, it would have been most unusual for a lender to require a person to become a borrower (and therefore liable to the bank under a mortgage) unless that borrower was to have some status as a registered proprietor of some legal interest in the property or he or she was a guarantor. The applicant conceded that the respondent’s names was “on the home loan” (to interpolate, she was to become a borrower) “as her name was to be registered on the title” (to interpolate, she was to become a registered proprietor of an interest in the property). He said he did not receive any money from the respondent. That was a factual matter in dispute. He said he paid all costs associated with the purchase of the property including the deposit, stamp duty, conveyancing fees and other ancillary costs. He provided no documentary evidence in respect of his alleged payment of stamp duty, conveyancing fees and other ancillary costs.
According to the reasons for judgment of all justices of the High Court in Bosanac, the relevant date for the ascertainment of intention is the date of acquisition of the relevant property, here late 1996.
It was necessary to examine the evidence adduced in Mr Fary’s cross-examination of the applicant. The more significant matters that arose from the applicant’s cross-examination included the following –
(a)after the applicant and the respondent divorced in 1984, the respondent fell pregnant to the applicant in 1986 leading to the birth in 1987 of the parties’ fourth child, Ms Z;
(b)in 1986 the applicant purchased T Street, Suburb O;
(c)he denied that in the period between 1986 to 1993 the respondent provided to him her receipts of benefits from Centrelink;
(d)he denied accumulating funds received from the respondent when Centrelink paid those funds to the respondent;
(e)he said he does not observe Islamic law;
(f)he denied that he remained married to the respondent under Islamic law;
(g)he agreed that when the respondent applied for a housing commission apartment in Suburb M she was receiving Centrelink payments;
(h)in 1989 the fifth child to the applicant and respondent was born;
(i)in 1992 the applicant and his second wife paid out the applicant’s sister, each thereby becoming half owners of property at T Street;
(j)he agreed that after the respondent left her accommodation the respondent and the applicant reconciled;
(k)he said that in 1994 the applicant and the respondent sent the children with the respondent to Country J, the applicant paying the airfares;
(l)he denied threatening to hit the respondent;
(m)he agreed that in 1996 he travelled to Country J in order to accompany the respondent and five children back to Australia;
(n)he agreed than upon returning to Australia in 1996 the respondent and her five children moved into the T Street residence with the applicant and his second wife;
(o)the applicant said he did not know whether or not the respondent was receiving Centrelink payments;
(p)he denied taking the respondent’s Centrelink money and banking it at the AD Bank branch in Suburb O;
(q)he said that prior to acquiring the property at E Street he was a transport worker and he and his second wife owned T Street;
(r)he also agreed that prior to acquiring E Street he owed H Bank of Victoria a substantial sum by way of indebtedness under the mortgage over the Suburb O property which he struggled to repay when the interest rate reached in 18% in 1996;
(s)he said that in 1996 the home in T Street was too cramped for two families;
(t)he denied that he and the respondent drove around the streets of Suburb O looking at houses; and
(u)he said he attended the auction of E Street on his own and that the respondent was not present with him.
Of central importance in the determination of this case were the events at and immediately prior to the acquisition of the property at E Street. As was to be expected, Mr Fary conducted a careful and meticulous cross-examination of the applicant on point. The following evidence was given by the applicant –
MR FARY – Okay. [Ms Emerald] says that at the time of the purchase, you agreed with her in conversation that the property would be yours together.
THE INTERPRETER – Initially ..... I told her, like, this property is going to be in my name only because it’s all what I have earned during my life. All the money that I have earned during my life it’s going to be invested in that property. Providing that you and the children or [Ms Emerald] and the children can stay and live in that property for as long as they want without paying any rent. But she insisted and put lots of pressure on me insisting that she wants her name to be in the title besides my name otherwise she wants to live with the children inside that house. I agreed to that. I added her name on the title, and still she only lived in that property for probably five months before she took the children and went and lived in Sydney. This property all the time from the very beginning it was causing me lots of headaches.
MR FARY – Now, you say that she insisted that she be on the title. Is that correct?
THE INTERPRETER – She always insisted that her name should be on the title of that house otherwise it was all the time conditional that she won’t be looking after the children, and all my concerns were my children. I wanted to put the children under one roof. I wanted to receive the best of care. I didn’t want the children to be homeless or be in the street so that when they grow up they won’t be bad people. All my concerns and I was ready to give everything I have for the sake of my children and to have a decent life, and that was the reason I agreed to put her name on the title.
MR FARY – You understood that she was insisting on being an owner?
THE INTERPRETER – Yes. That was – yes. That was her main concern, that she wanted her name to be on the title, to be owning something, and then she thought that she would be – I would be under her control. But my main target was to the welfare of my children and a roof under the house. I wanted the children to be in one place.
MR FARY – Now, just to be clear, [Ms Emerald’s] version of events is that there was no condition put on her request for joint ownership concerning the children.
THE INTERPRETER – And why didn’t she live in that property? She used to say day and night that, “I won’t live in that place until you add my name on the title.”
MR FARY – Now, nothing you said to her indicated that she was an owner in name only?
THE INTERPRETER – Well, initially, I didn’t want to add her name on the title. But what forced me to put her name on the title were my children. My children were too little.
MR FARY – Well, can I – I’m going to put to you that your evidence concerning her threats regarding the children is not true.
THE INTERPRETER – She said that to me million times. But initially ..... put her name on the title.
I agree with the construction of that evidence. It is consistent with the legal and beneficial ownership being held jointly by the respondent and the applicant. It is also consistent with the applicant’s concession that he did not seek to exercise absolute ownership of the legal and beneficial control over the property. Had he considered himself the full legal and beneficial owner of the property, he could have ignored the respondent’s movements in or out of the property and her possession of a key was revocable at his will.
REBUTTING ANY PRESUMPTION IN RESPECT OF A RESULTING TRUST
As has already been essayed above, I take the view that the objective evidence reveals the manifestation of an intention by the applicant and the respondent to be equal joint owners of the property.
In my view, the inference properly to be drawn in the circumstances of this case is that the parties’ intended to both legally and beneficially own the property. A resulting trust does not arise. I agree with the constellation of factors on which Mr Fary relied as supportive of circumstances that disclose the parties’ actual intentions. They may be catalogued as follows –
(a)their deliberate decision to record the parties’ ownership jointly;
(b)the fact that the husband and wife were joint borrowers;[133]
(c)the fact that at the time of the purchase the husband and wife had three children together (they had two children together subsequent to their divorce);
(d)the fact that the husband told the wife, and she understood, that she and their children would live in the property;
(e)the fact that the husband and wife remained married under Sharia law (a matter that the husband reluctantly conceded);
(f)the fact that the husband agreed to improve the property at the request of the wife;[134]
(g)the husband’s statement that “he would pay the mortgage for [her]”;[135] and
(h)the fact that the wife had made financial and non-financial contributions to the family unit prior to (and following) the acquisition of the property.
[133] Noting that in Commissioner of Taxation v Bosanac (No 7), the Full Court said: “We consider less probable than not in the circumstances just described that Mr Bosanac would take on a very substantial liability in respect of the Dalkeith Property without at the same time acquiring a corresponding beneficial interest in the Property.” at [21].
[134] Transcript 7 December 2021 T 55 L 5 “Despite adding her name on the title, she continued and she asked to do the renovation of that property, and I did it.”
[135] Transcript 9 December 2021 T 127 L 15.
Gageler J in Bosanac spoke of the duelling presumptions of the resulting trust as against the presumption of advancement. I have used that nomenclature above. It serves to demonstrate that in the circumstances of this case the weak presumption of a resulting trust was not shown and thus there was no warrant to embark upon a consideration of the presumption of advancement.
The claim by the applicant in respect of a resulting trust failed.
UNCONSCIONABLE ASSERTION OF LEGAL RIGHTS
Mr Fary SC contended that it would be unconscionable, within the contemplation of Muschinski v Dodds[136] and Baumgartner v Baumgartner,[137] to grant the applicant the relief he seeks. That was so in circumstances where –
[136] (1985) 160 CLR 583.
[137] (1987) 164 CLR 137.
(a)a party seeking equity must do equity;[138]
(b)the respondent made financial contributions towards the property and she made non-financial, direct and indirect contributions by, for example, paying bills and raising the couple’s five children;
(c)had the property not been in both names, the contributions described immediately above would have founded the basis of a constructive trust pursuant to principles espoused in Muschinski v Dodds on the ground that the respondent’s financial and non-financial contributions enabled the applicant to earn money and apply it towards the acquisition and repayment of loans due under the mortgage for the property;
(d)the unifying principle pursuant to which equity will intervene to declare a constructive trust is that it would be unconscionable for one of the parties to the marriage to refuse to recognise the interests of the other in the property;
(e)while living at the property, the respondent said that the applicant insisted that she continued to care for the children of his subsequent marriage to Ms K and so the respondent’s non-financial and indirect contributions as caregiver to up to 10 children allowed the applicant and Ms K to pursue paid employment and save the income they earned;
(f)as the respondent is illiterate and unable to speak anything by basic English, her primary role has been as caregiver whose services have benefitted the applicant and his second wife;
(g)according to Baumgartner v Baumgartner courts should strive for practical equity, which is achieved in the circumstances of this case by recognising legal title as is registered;
(h)the applicant’s assertions that the respondent contributed nothing is unconscionable; and
(i)the applicant could not have operated his business were it not for the respondent’s direct and indirect financial and non-financial contributions.
[138] This equitable maxim is generally attributable to Lord Marshall CJ in Fitzroy v Gwillim (1786) 99 ER 1025 and the decision in Bosanquett v Dashwood [1734] EngR 105.
I have refused the husband’s claim to a resulting trust. Had I been remotely persuaded to entertain it, which I am not, then I would have additionally refused it on the basis that it was unconscionable for the applicant to have the whole beneficial interest in the property in view of the direct and indirect financial and non-financial contributions the respondent provided as have been set out at length above.
AN EQUITY OF CONTRIBUTION
At the outset I record that I reject the applicant’s assertion that he is entitled to an equity of contribution. Several authorities bear upon that component of the case.[139] In this case, the equity of contribution, sometimes called equitable accounting, is inconsistent with the intention of the parties as objectively ascertained when the property was acquired. Here, the parties agreed that each would acquire not only a legal interest but also a beneficial half interest in the property.
[139] Draper v Official Trustee in Bankruptcy [2006] FCAFC 157, Campbell v van der Velde as trustee of the bankrupt estate of Marilyn Anne Rowan; in the matter of Rowan [2019] FCA 1871, Forgeard v Shanahan (1994) 18 Fam LR 281 and W v D [2012] SASCFC 142.
A fundamental problem confronting the applicant with this component of his case, was that he provided next to no particulars or details of his financial contributions so it was well nigh impossible to make any sensible assessment of his assertion that his contributions exceeded those of the respondent. Further, the applicant was met with the same principle of unconscionability if he were to press for his equity of contribution. The most pressing reason disentitling the applicant to any equity of contribution was that the parties’ objectively verifiable intention was that each was to be legally and beneficially entitled to a half interest. The applicant provided no information about his contributions. I refuse any relief in reliance upon the doctrine of equity of contribution.
LACHES
The equitable doctrine of laches is among the oldest, tracing its origins to the early days of the Court of Chancery.[140] In the circumstances of this case, the doctrine would operate so as to cause the court to refuse the equitable relief sought by the applicant on the basis that his delay rendered the grant of relief unjust.[141] Refusal of the equitable relief sought by reason of laches is discretionary in which two issues are relevant,[142] namely –
(a)the length of any delay; and
(b)the nature of the acts done in the interval between the knowledge of the cause of action and the taking of action.
[140] Smith v Clay (1767) 29 ER 743.
[141] Examples include Orr v Ford (1989) 167 CLR 316, CSR Ltd v Amaca Pty Ltd [2016] VSCA 320, Masterton Homes Pty Ltd v LED Builders Pty Ltd (1996) 33 IPR 417 and Fysh v Page (1956) 96 CLR 233.
[142] Fysh v Page (1956) 96 CLR 233.
In this case the applicant and the respondent finally separated in 2004. He took no step to transfer the respondent’s interest in the property to himself until 2017 when he commenced a proceeding in VCAT at a time when the respondent was living at the property. Once the applicant served the VCAT application on her the respondent sought advice about her remedies under the Family Law Act.
Mr Fary SC pressed but did not develop his submissions to the effect that the applicant was disentitled to any relief in equity by operation of the equitable doctrine of laches. The equitable maxim[143] on which the doctrine has been developed is derived from the decision in Marquis of Cholmondeley v Lord Clinton[144] “equity aids the vigilant, not the indolent” and “delay defeats equities.” That principle underlies limitation periods in statutes. However, equity has long recognised that if a limitation period is prescribed by statute then a person is entitled to the full statutory period before his or her claim becomes unenforceable. Several illustrations of that proposition emerged from the mid 18th century.[145] When a permanent injunction was sought as an aid to a legal right, the making of such an order was not barred until the legal right was barred, although laches may have operated to bar the grant of an interlocutory injunction.[146]
[143] Expressed in Latin “vigilantibus non dormientibus lex succurrit”.
[144] (1820) 37 ER 527.
[145] Eldridge v Knott (1774) 98 ER 1050, Rochdale Canal Co v King (1851) 61 ER 270, Penny v Allen (1857) 44 ER 160, Archbold v Scully (1861) 11 ER 769, Moors v Marriott (1878) 7 Ch D 543, 546, Collins v Rhodes (1881) 20 Ch D 230, In re Maddever; Three Towns Banking Co v Maddever (1884) 27 Ch D 523 and Roe v Birch (1884) 27 Ch D 622.
[146] Birmingham Canal Co v Lloyd (1812) 34 ER 413.
Questions of the application of the doctrine of laches ordinarily arise in circumstances where no limitation period is prescribed for the doing of a particular act by a plaintiff or an applicant. The authorities establish that where the delay is not so egregious as to represent a bar in and of itself, the court should look for evidence of the circumstances that constitute laches, namely acquiescence by the plaintiff or change of position by the defendant and the plaintiff is not usually barred unless that evidence is given.[147]
[147] Pomfret v Windsor (1752) 28 ER 302, 308 and Stone v Godfrey (1854) 43 ER 798.
Cases involving claims to the establishment of a constructive trust must be made with special promptitude.[148]
[148] Townshend v Townshend (1783) 28 ER 1292, 1295.
In this case, Mr Fary SC properly raised before me that the applicant had a particular period within which to commence his claim to assert equitable relief in reliance upon a resulting trust. That was for the simple reason that a limitation period was prescribed by ss 8, 20 and 21 of the Limitations of Actions Act 1958 (Vic). The applicant failed to bring any application to this court within the period prescribed. This application was made beyond the period stipulated in the legislation. That was not, in and of itself, an absolute bar to the applicant applying for equitable relief out of time. However, he needed to show two things. The first was any acquiescence on the applicant’s part. The second was any change in position on the defendant’s part. Of acquiescence, the following has been held –
Acquiescence in this sense does not mean standing by while the violation of a right is in progress, but assent after the plaintiff has become aware of the violation. It is unjust to give the plaintiff a remedy where he has by his conduct done that which might fairly be regarded as equivalent to a waiver of it; or where by his conduct and neglect he has, though not waiving the remedy, put the other party in a position in which it would not be reasonable to place him if the remedy were afterwards to be asserted. In such case lapse of time and delay are most material. Upon these considerations rests the doctrine of laches.[149]
[149] Lindsay Petroleum Co v Hurd (1873) LR 5 PC 221 and Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218.
The authorities make clear that acquiescence depends on knowledge, capacity and freedom, that is to say –
(a)in respect of knowledge, a person cannot be said to acquiesce unless he or she is fully cognisant of his or her right to dispute a claim;[150]
(b)in respect of capacity, there can be no acquiescence if a person is under a disability; and
(c)in respect of freedom, a person does not acquiesce while he or she is subject to such circumstances or undue influence or other pressure as to deprive him or her of the ability to give true consent.[151]
[150] Marker v Marker (1851) 68 ER 389, 395 and La Banque Jacques-Cartier v La Banque d'Epargne de la Cite et du District de Montreal (1887) 13 App Cas 111, 118.
[151] Aylward v Kearney (1814) 2 Ball & B 463, Gregory v Gregory (1815) 35 ER 530 and Roberts v Tunstall (1845) 67 ER 645.
Having regard to my determination that there was no resulting trust in this case, the respondent’s contentions about laches are largely irrelevant. However, if I had been persuaded that some form of equitable relief had been available to the applicant, then I would have found that any such remedy should be refused by reason of his delay in asserting his rights. His delay caused acquiescence on his own part in doing nothing until the VCAT application. By reason of his having done nothing to assert any entitlement to an equitable remedy prior to commencing this proceeding beyond the unsuccessful VCAT application, the respondent has continued to pay the mortgage out of her Centrelink benefits. Put in the language of the 18th century courts of chancery, a court of equity refuses its aid to stale demands where the plaintiff has slept on his rights and acquiesced for a great length of time.[152]
[152] Smith v Clay (1767) 29 ER 743.
In summary therefore –
(a)in my view the applicant’s resulting trust claim failed;
(b)if the applicant had successfully set up some resulting trust claim, then it would have failed by operation of the doctrine of laches; and
(c)the respondent is correctly recorded as a joint proprietor of the property.
LEAVE TO BRING A SPOUSAL MAINTENANCE CLAIM OUT OF TIME
The respondent sought leave under s 44(3) of the Family Law Act to bring an application for spousal maintenance out of time. She earlier obtained a grant of leave by order of Cronin J on 10 October 2017. That was nearing six years ago. However, that decision was overturned on appeal on the basis that Cronin J applied the wrong legal test.[153] The respondent’s application was remitted and it is now before me.
[153] Emerald & Emerald [2018] FamCAFC 217.
In several cases I have examined the legislative requirements of s 44(3) of the Family Law Act as well as the intermediate appellate decisions that have made observations on point. The most accessible repository of my distillation of principle is Panwar v Panwar.[154] Subsequently I examined the issue in Lin v Yew.[155] There I held that a delay of 32 years between the divorce and the application under s 44(3) was not such as to shut out the application because of the hardship an applicant for leave would suffer if leave is refused, which issue is key.
[154] (2020) 63 Fam LR 44.
[155] (2020) 62 Fam LR 244.
The respondent explained her delay. The more important factual matters arising since the divorce in 1984 were set out in Mr Fary’s written submissions, being the following –
97.1 The parties married in 1977 and divorced in 1984: an agreed fact.
97.2 Both the husband and wife identify as Muslim and were married in accordance with Sharia Law: an agreed fact.
97.3 During their legal union in Australia, they produced three children, [Ms W] born […] 1979, [Ms X] born […] 1980, and [Ms Y] born […] 1982: an agreed fact.
97.4 Following the parties’ divorce, the parties remained married under Sharia Law: an agreed fact.
97.5 Following the parties’ Australian divorce order taking effect, the parties did not make any agreement, or seek any orders by consent or of this Court as to property settlement or maintenance: an agreed fact.
97.6 Following the parties’ Australian divorce order taking effect, the parties produced two further children, [Ms Z] born […] 1987 and [Mr R] born […] 1989: an agreed fact.
97.7At no time since the wife has been in Australia, during the marriage or after the marriage, has she engaged in any form of paid employment or undertaken any course of study to provide her with the skills to do so: an agreed fact.
97.8 The wife has a poor command of the English language and is presently unable to engage in paid employment: an agreed fact.
97.9 The parties finally separated in 2004 when the husband told the wife to leave [E Street] and at which time the wife considered the relationship to be finally over.[156]
97.10 Following the wife leaving [E Street], the husband did not pay the wife any funds by way of spousal maintenance: an agreed fact.
97.11 Between 1996 and 2004 the wife came and went from [E Street] to [temporary accommodation] from time to time: an agreed fact.
97.12 The wife returned to live in [E Street] in 2016: an agreed fact.
97.13 Following the wife’s return to [E Street], the husband met the outgoings for [E Street] including the mortgage repayments: an agreed fact.
97.14 Between 1984 and the present day the husband has accumulated property, the net value of which he self-reports via his financial statement filed 22 November 2021 to be $2,459,996[157] (although in that document he erroneously attributes 100% ownership of [E Street] to himself).
97.15 The husband presently receives to the exclusion of the wife rental income from [E Street], and further from [AB Street], [Suburb O]: an agreed fact. (The quantum of rental received is in dispute.)
97.16 The wife is presently unemployed and is not eligible for any government benefit payments.[158]
97.17 The wife’s current living expenses, including rent, food, bills and medications total $433 per week. She cannot meet these expenses and they are met by her adult child [Ms Y].[159]
97.18 Despite the wife having a registered interest in [E Street], the husband denies her interest and seeks to prevent the wife from receiving any benefit from her legal interests in that property: an agreed fact.
[156] Wife’s trial affidavit at [72].
[157] Husband’s Financial Statement filed 22 November 2021, item 2, at CB98 ($2,799,198 - $339,202).
[158] Wife’s trial affidavit at [101].
[159] Wife’s trial affidavit at [100].
The respondent’s circumstances are bleak. She has next to no prospects for gainful employment. She suffers medical infirmities that are likely to affect her ability to adequately support herself. In accordance with s 72 of the Family Law Act, she is unable to support herself adequately by reason of her incapacity for gainful employment. In those circumstances the applicant is liable to maintain her to the extent he is reasonably able to do so. He has contended that he is unable to do so. I reject that contention.
It is not an altogether easy task to fully comprehend the applicant’s financial circumstances for the simple reason that he has been derelict in complying with his duty of disclosure about which I wrote in Paviello & Paviello.[160] It is relevant to here set out the parameters of that duty –
[160] [2022] FedCFamC1F 592.
7At its core, ground 1 was concerned with the consequences of the arbitrator’s conclusion about material non-disclosure. The review applicant argued that material non-disclosure “should have been as to the ultimate just and equitable adjustment pursuant to s 79(2) of the Act”. The review applicant contended that rather than doing that, the arbitrator considered that non-disclosure enlivened s 75(2)(o) of the Act. The wife argued that authorities such as Black v Kellner,[161] In the Marriage of Briese,[162] Oriolo v Oriolo,[163] In the Marriage of Weir[164] and others contain stipulations about the correct approach to be adopted when one party has been derelict in his or her compliance with the duty of disclosure. In Bacall & Zagar[165] I surveyed the learning in those authorities between the years 1985 and 2020. It is useful to record some of the conclusions set out in that decision –
[161] (1992) 15 Fam LR 343.
[162] (1985) 10 Fam LR 642.
[163] (1985) 10 Fam LR 665.
[164] (1992) 16 Fam LR 154.
[165] [2020] FamCA 350.
(a)rule 13.04 of the Family Law Rules, in operation in the lead up to the commencement of the arbitration in this case, imposed a duty of disclosure;
(b)that duty can be traced back to 19th century equitable principles;[166]
[166] Flight v Robinson (1844) 50 ER 9.
(c)the duty is owed to the court as well as to the parties to the proceeding;[167]
[167] Waterman v Waterman [2017] FamCAFC 23.
(d)full and frank disclosure of all material facts is a fundamental requirement in financial matters;[168]
[168] Black v Kellner (1992) 15 Fam LR 343, In the Marriage of Giunti (1986) 11 Fam LR 160 and In the Marriage of Mezzacappa (1987) 11 Fam LR 957.
(e)a party to a financial proceeding has a duty to make full disclosure of his or her financial affairs;[169]
[169] In the Marriage of Weir (1992) 16 Fam LR 154.
(f)the duty to disclosure is absolute;[170]
[170] Kannis v Kannis (2002) 30 Fam LR 83.
(g)the duty is crucial to the functioning of courts administering the Family Law Act;[171]
[171] In the Marriage of Morrison (1994) 18 Fam LR 519.
(h)full and frank disclosure of financial matters between the parties is basic to the process of the court and is one of the elements of the Family Law Act;[172]
(i)parties are expected to cooperate in the conduct of the proceeding in order to bring about an early and prompt conclusion with a minimum of expense;[173]
(j)the duty involves full and frank disclosure in a timely manner;[174]
(k)if a party breaches the duty of full and frank disclosure as outlined above, the uppermost limit of what can be ordered to be transferred to one party in a s 79 application is the whole of the ascertained property of the parties;[175]
(l)it is not open to a party who has failed to fulfil the duty of full and frank disclosure to rely on that failure so as to prevent the making of orders against the party in default;[176]
(m)any failure to disclose relevant financial information may lead a court to draw inferences against the person who failed to disclose the relevant financial information;[177]
(n)where there is clear evidence of non-disclosure the court should not be unduly cautious about making findings in favour of the innocent party;[178]
(o)once there is sufficient evidence to support a finding that a party has not made full and frank disclosure, the court has jurisdiction to make orders in relation to unidentified and undisclosed property;[179]
(p)the duty to disclose is absolute and it is beside the point whether the non-disclosure was wilful, accidental, the result of misfeasance or nonfeasance;[180] and
(q)in the case of deliberate non-disclosure, the court is entitled to draw inferences against the non-disclosing party.[181]
[172] In the Marriage of Suiker (1993) 17 Fam LR 236.
[173] In the Marriage of Marinko (1983) 8 Fam LR 849.
[174] In the Marriage of Briese (1985) 10 Fam LR 642, Waterman & Waterman [2017] FamCAFC 23, In the Marriage of Morrison (1994) 18 Fam LR 519 and In the Marriage of Suiker (1993) 17 Fam LR 236.
[175] Monte & Monte [1986] FamCA 1.
[176] In the Marriage of Giunti (1986) 11 Fam LR 160, Black v Kellner (1992) 15 Fam LR 343 and Oriolo v Oriolo (1985) 10 Fam LR 665.
[177] In the Marriage of Stein (1986) 11 Fam LR 353.
[178] In the Marriage of Weir (1992) 16 Fam LR 154 and Monte & Monte [1986] FamCA 1.
[179] Ibid.
[180] Chang v Su (2002) 29 Fam LR 406, In the Marriage of Weir (1992) 16 Fam LR 154 and Kannis v Kannis (2002) 30 Fam LR 83.
[181] In the Marriage of Stein (1986) 11 Fam LR 353, In the Marriage of Mezzacappa (1987) 11 Fam LR 957, In the Marriage of Giunti (1986) 11 Fam LR 160, In the Marriage of Morrison (1994) 18 Fam LR 519 and Barker v Barker (2007) 36 Fam LR 650.
It was not disputed that the applicant has an interest in a house with a garden in Country J, although no attempt was made by the applicant to ascribe a value to it. The combined value of the applicant’s interest in the house in Country J as well as his 50% interest in the property in issue in this case indicated that he has the financial capacity to meet an order for spousal maintenance.
I take the view that the respondent will suffer hardship unless the order for spousal maintenance is made. Presently, she relies on the comfort and generosity of her adult children. I am persuaded that the requisite criteria have been established for the grant of leave to bring a s 78 application out of time. I grant the respondent the leave she seeks.
ORDERS
I make orders in accordance with the respondent’s amended response as appears in the first few pages of these reasons.
COSTS
Any party seeking costs of the trial of this proceeding must file and serve an application for costs together with any affidavit material in support plus written submissions by 4:00pm on 30 April 2023. If there is opposition to any such costs application, then the party opposing must file and serve his or her affidavit in opposition together with written submissions by 4pm on 30 May 2023, together with written submissions. I fix 10am on 2 June 2023 for a short hearing on costs limited to one hour’s duration in total.
I certify that the preceding one hundred and fifty-seven (157) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 27 March 2023
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