CASE Notes Resulting Trusts PDF

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Contents Anderson v McPherson (No 2) [2012] WASC 19..................................................................................................2 Allen v Snyder [1977] 2 NSWLR 685, 689.............................................................................................................2 Calverley v Green (1984) 155 CLR 242, 246 (Gibbs CJ).........................................................................................2 What creates a presumption of resulting trust....................................................................................................2 Martin v Martin (1959) 110 CLR 297, 303 (no presumption of trust)..................................................................2 Trustee v Cummins (2006) 227 CLR 278...............................................................................................................2 Purchase price intention......................................................................................................................................3 Ong v Lottwo (2013) 116 SASR 280, 289 [30]..................................................................................................3 Muschinksi v Dodds (1985) 160 CLR 583, 611–12............................................................................................3 Bloch v Bloch (1981) 180 CLR 390....................................................................................................................3 Evidence admissible to rebut presumption.........................................................................................................3

Resulting Trusts Anderson v McPherson (No 2) [2012] WASC 19 -

Resulting trusts always arise in favour of the settlor: at [95] Resulting trusts have been described either as trusts that ‘jump back’ (resalit) to the settlor, or that ‘result’ from the circumstances – but neither description explains why they arise: at [90]–[95] Some resulting trusts arise because of the settlor’s ‘presumed’ intention – it is presumed in certain circumstances that the settlor intended to create/declare a trust: at [106] Others arise because of the settlor’s lack of intention to benefit the recipient of property – these are often called ‘automatic’ resulting trusts: at [99]–[103]

Allen v Snyder [1977] 2 NSWLR 685, 689 -

‘Any claim to a beneficial interest in real property by a person in whom the legal title is not vested must be based upon a trust’

Calverley v Green (1984) 155 CLR 242, 246 (Gibbs CJ) -

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A contributes the whole purchase price, but legal title is transferred to B, or both A and B – B is presumed to hold his interest on resulting trust for A A and B both contribute to purchase price, but legal title is transferred to B only – B is presumed to hold part of his interest on resulting trust for A, in proportion to A’s contribution A and B contribute unequally to the purchase price (A contributing more), but legal title is transferred to them jointly or in equal shares – B is presumed to hold part of his interest on resulting trust for A, such that A’s total beneficial interest is in proportion to A’s contribution ‘the presumption of advancement, and the presumption of a resulting trust, may be rebutted by evidence of the actual intention of the purchaser[s] at the time of the purchase’: Calverley at 251 ‘Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained … Where there are two purchasers … the intentions of both are material’: Calverley at 251 If the intention is that the parties’ beneficial interests are in proportions different to their legal interests, a trust will arise in those proportions: see Calverley at 251–2, 271

What creates a presumption of resulting trust -

Payment of contract price (to seller) Payment of incidental costs (eg transfer duty): Amit Laundry v Jain [2017] NSWSC 1495 [167] Payment of construction costs, if purchase of land and construction are part of a single ‘transaction’: Trustee of Property of Cummins v Cummins (2006) 227 CLR 278, 301 [67] However, home loan/mortgage repayments do not create a presumption

Martin v Martin (1959) 110 CLR 297, 303 (no presumption of trust) -

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‘It is called a presumption of advancement, but it is rather the absence of any reason for assuming that a trust arose’ Relationship of the parties The presumption applies when an excess contribution is made by husband → wife: Martin at 303 – or parent (including mother, or person in loco parentis) → child (including adult child): Nelson v Nelson (1995) 184 CLR 538, 548–9 It does not apply when an excess contribution is made by wife → husband: Cummins at 298 [55] – or de facto partner → de facto partner: Calverley at 259–60 – or grandparent → grandchild: Calverley at 247 – or parent → child-in-law: Anderson at [143] – or spouse → same-sex spouse

Trustee v Cummins (2006) 227 CLR 278 -

When a married couple purchases a marital home, both contributing to its purchase price, they are presumed to intend equal (and joint) beneficial ownership However, the presumption of advancement still applies when a marital home is purchased: Commissioner of Taxation v Bosanac (No 7) [2021] FCA 249 [196]

Purchase price intention -

presumption of resulting trust will be rebutted where, for example:

Ong v Lottwo (2013) 116 SASR 280, 289 [30] - The beneficiary intended their contribution to be a gift or loan (in whole or part) Muschinksi v Dodds (1985) 160 CLR 583, 611–12 - or otherwise intended the other party to obtain a beneficial interest not in proportion to its contribution - ‘it was not the intention of either [M or D] that D’s equal beneficial interest should be acquired by stages as he contributed towards the planned joint endeavour’: at 611–12 Bloch v Bloch (1981) 180 CLR 390 - The parties intended their beneficial interests to be quantified on some basis other than their contributions to the purchase price – eg in proportion to their contributions (of their own money) to both the purchase price and loan repayments

Evidence admissible to rebut presumption Charles Marshall v Grimsley (1956) 95 CLR 353, 365 - ‘the acts and declarations of the parties before or at the time of the purchase … or so immediately thereafter as to constitute a part of the transaction’ - One party also cannot rely on subsequent unilateral acts as evidence in their favour’ at 366 Trustees of Cummins v Cummins (2006) 227 CLR 278, 200 [65] - ‘whilst evidence of subsequent statements of intention, not being admissions against interest, are inadmissible, evidence of facts as to subsequent dealings and of surrounding circumstances of the transaction may be received Calverley v Green (1984) 155 CLR 242, 270 - But ‘where the subjective intention of a person is relevant, the evidence of that person of his intention at the time of purchase is admissible’ - ‘evidence of the relationship … between the parties will always be admissible: Calverley at 269 Amit Laundry v Jain [2017] NSWSC 1495 [258] - ‘the presumption [of resulting trust] is more easily rebutted in the case of a relative or close friend than it is if the property is vested in a complete stranger’

Vandervell v Inland Revenue Commissioner [1967] 2 AC 291 -

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‘If A intends to give away all his beneficial interest in a piece of property and thinks he has done so but, by some mistake or accident or failure to comply with the requirements of the law, he has failed to do so, either wholly or partially, there will, by operation of law, be a resulting trust for him of the beneficial interest of which he had failed effectually to dispose’: at 313 FACTS - T held shares on trust for V On V’s direction, T transferred the shares to R – in return, R agreed (on V’s request) to give T2 (trustee of different trust for V’s children) an option to purchase the shares in the future V intended that T2 would hold the shares (and hence the option) on trust, for whatever trust either V or T2 later identified: at 315–17 – but neither (at that time) had identified the trust Held – T2 held option on resulting trust for V

Australian Incentive Plan v A-G (Vic) (2012) 44 VR 661, 676 [69] -

A resulting trust will not arise if the settlor intended or provided an alternative destination for the trust property

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If the trust is charitable, a cy près scheme (not a resulting trust) will be applied where: o The charitable purpose is ‘impossible or impracticable’ initially (at the time the trust is created), and the settlor had a ‘general charitable intention’; or o The charitable purpose becomes ‘impossible or impracticable’ subsequently – even if the settlor did not have a general charitable intention

Beggs v Kirkpatrick [1961] VR 764 -

If a voluntary donation is made to an anonymous collection box (or similar), the donor is (generally) taken to intend an ‘out and out’ gift, and not to have a general charitable intention: at 768 If a voluntary donation is made by an identified person, neither an ‘out and out’ gift or a general charitable intention is inferred: at 768

Quistclose Trusts Barclays Bank v Quistclose Investments [1970] AC 567 -

case is authority for the proposition that where money is advanced from A to B, with the … intention that it should not become part of the assets of B, but should be used exclusively for a specific purpose, there will be implied (at least in the absence of an indication of a contrary intention) a stipulation that if the purpose fails the money will be repaid, and the arrangement will give rise to a … trust’ of the money advanced: at 353

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Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62 o

segregation of assets (e.g. of money into a separate bank account) is indicative, but not conclusive, of an intention to create a trust: Korda at 101

Calverley at 258 mortgage payments do not provide an assumption Three certainties of trusts, intention, subject matter, objects. answer plan -

Presumption 33%,33%,33%??

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What it should be 50%, 25%, 25% resulting trust??

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Purchase money resulting trusts o

When property is purchased the person who holds the legal title hold on resulting trust In the proportions intended

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Cummins

Anastacia is holding 25% on trust for her husband? It is joint money and he is not on the title there for resulting trust.

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Is there any rebuttable presumptions?

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Once over the presumptions move on to other items

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Effect of mortgage payments (split is 66/33)

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Effect of child care

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Effect of tending to the property

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Effect of furniture purchase

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Effect of...