Bosanac v Commissioner of Taxation & Anor [2022] HCATrans 133 (16 August 2022)

Last Updated: 16 August 2022

[2022] HCATrans 133

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P9 of 2022

B e t w e e n -

BERNADETTE BOSANAC

Appellant

and

COMMISSIONER OF TAXATION

First Respondent

VLADO BOSANAC

Second Respondent

KIEFEL CJ
GAGELER J
GORDON J
EDELMAN J
GLEESON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 16 AUGUST 2022, AT 10.00 AM

Copyright in the High Court of Australia
MR N.C. HUTLEY, SC: If the Court pleases, I appear with my learned friends, MR J.E. HYNES and MR T.L. BAGLEY, for the appellant. (instructed by Pier Paolo Parisi)

MR J.O. HMELNITSKY, SC: If the Court pleases, your Honours, I appear with my learned friends, MR D.P. HUME and MR J.S. SLACK‑SMITH, for the respondent. (instructed by Australian Government Solicitor)

MR R.A. BLOW: If the Court pleases, I appear for the second respondent. (instructed by Cove Legal)

KIEFEL CJ: Mr Blow, I thought there was just a submitting appearance but you are actually appearing for the second respondent, are you?

MR BLOW: It is, your Honour. I have been on the . . . . . past seven or eight years, with the special leave application there was a factual query which . . . . . assist the Court, if I can, with any questions it might have.

KIEFEL CJ: You have not filed any written submissions.

MR BLOW: No, I felt there was no . . . . . argument for me, your Honours. If I can assist . . . . .

KIEFEL CJ: Yes, I see. Thank you. Yes, Mr Hutley.

MR HUTLEY: If your Honours please. I am sorry that there was an administrative breakdown in supplying our three‑page outline to your Honours. I hope it has come through to you and I hope your Honours have had an opportunity to peruse it, if not would your Honours like an opportunity to peruse it? I know it literally came a few minutes ago, if at all. I should proceed on the basis your Honours have had an opportunity to read it.

KIEFEL CJ: Or we will catch up.

MR HUTLEY: I am sure. Your Honours, the core facts are clearly outlined in the primary judgment at paragraphs 38 to 58 at core appeal book pages 19 to 22:

Mr and Ms Bosanac were married on 3 October 1998. They separated in 2012 or 2013 –

that is at paragraph 38 of the judgment. They are not yet divorced:

On 27 April 2006, Ms Bosanac offered to purchase –

the property the subject of the proceedings, which the various courts have called the Dalkeith property. The offer was for $4.5 million:

On 2 June 2006, $250,000 was withdrawn from a pre‑existing joint loan account in the names of Mr and Ms Bosanac –

to pay the deposit ‑ paragraph 39 of the judgment:

On 24 October 2006, Mr and Ms Bosanac applied for two new joint loans from Westpac –

totalling the sum of $4.5 million – judgment paragraph 40. The security for the loan – and can we ask your Honours to go to the respondents’ further book at page 11. You will see an application for the loans – sorry, your Honours – and at page 11 is identified at, in the second column at about point 6, the security is offered for the loans. Ms Bosanac owned the Hardy Street property. That, your Honours will see from judgment 226 at page 79 of the core appeal book. Mr Bosanac owned units 10, 12 and 13 at 41 Mount Street, and your Honours will see that at the finding at judgment 224 at pages 78 and 79:

On 3 November 2006, the Dalkeith property was transferred into the name of Ms Bosanac as sole registered proprietor –

judgment 49:

A mortgage was registered . . . on 21 November 2006 –

over the Dalkeith Property and other properties. Judgment 53.

KIEFEL CJ: Mr Hutley, at paragraph 44 the trial judge says:

As will become apparent below, the evidence does not disclose the precise ownership of these other properties ‑ ‑ ‑

MR HUTLEY: Yes. There was – I think that was an oversight in his Honour’s judgment because his Honour then goes on to find what the ownership position was in the paragraphs I have just taken your Honours to.

KIEFEL CJ: Would you mind restating those paragraphs? I was taken up with what his Honour said there.

MR HUTLEY: No, no – certainly, your Honour. I will just go back and get my note. Yes, your Honour will find the Hardy Street property is referred to at judgment 226, page 79, and the units at Mount Street are referred to at judgment 224 at pages 78 to 79. And that is conformed ‑ ‑ ‑

KIEFEL CJ: Ms Bosanac owned Hardy Street?

MR HUTLEY: Hardy Street. So, you had a situation where, in effect – which we will come to – that Mr Bosanac put forward some property to support the borrowing. We say, Ms Bosanac put forward to the Hardy Street property and the Dalkeith property to support the borrowing:

Mr and Ms Bosanac moved into the Dalkeith property in late 2006.

That is judgment 55. They resided at the property together until 9 September 2015 – paragraph 56 of the judgment. The only joint assets in evidence were, firstly, joint bank accounts that consisted of a pre‑existing joint loan account – that is judgment 39, page 20 of the core appeal book. Secondly, the new joint loan accounts – in the amount of $3.5 million and $1 million to fund the purchase of the Dalkeith property – an obligation rather than an asset – judgment 49 – and a joint transaction account – which is referred to at judgment 50.

During the marriage, Mr and Ms Bosanac kept their substantial assets in separate names – that is the finding at judgment 57:

Ms Bosanac remains the sole registered proprietor of the Dalkeith property.

Judgment 56. There was no suggestion that the Dalkeith property was registered in the name of Ms Bosanac with a view to avoiding creditors – that is judgment 58.

GORDON J: Is there any suggestion it was required by the bank?

MR HUTLEY: None, none – unlike, of course, in Calverley. There are a few other what might be called secondary facts which I will not take your Honours to, but your Honours will see them at judgments 215 to 220. Subsequent to the purchase of the Dalkeith property, Ms Bosanac permitted Mr Bosanac to use the property as security for his share trading. That is the findings at judgments 215 to 218. Ms Bosanac allowed him to do so:

because ‘he was my husband and I had no reason not to trust him.’

That is a finding of fact as to her state of mind – as to her attitude at 217. Now, that is a relevant finding of fact because our learned friends advance an argument that Mr Bosanac exercised what they described as effective control of the property. In our respectful submission, there is no evidence for that. In fact, the finding that she did it because he was her husband and had no reason not to trust him shows that she did of her own free will, considering that it was in her own interest – because of her trust in her husband, i.e., no compulsion.

Neither Mr nor Ms Bosanac were called to give evidence. There was no direct evidence, thus, of their intention. There was also no contemporaneous records or notes of any intention. There was nothing ‑ ‑ ‑

EDELMAN J: Their subjective intention would not be relevant anyway.

MR HUTLEY: I understand, your Honour, but an expressed or manifested intention – I accept that, your Honour.

GORDON J: It is manifested by the acts and facts you have just taken us through, is it not?

MR HUTLEY: We say it is manifested by the facts that the presumption advancement operates and there is nothing to rebut it. Yes, we say there was nothing of any probative value to answer the question whether in 2006 Mr Bosanac had a definite intention to declare a trust over his contributions and the primary judge accepted this at judgment 222.

The reasons of the Full Court to the contrary of the conclusion of the trial judge, we submit, were erroneous and circular. The court relied on the use of borrowed funds to infer that Mr Bosanac intended to declare a trust. Your Honours see that from the Full Court’s reasoning at paragraphs 21, 22 and 27. Can I take your Honours to the key reasoning before those conclusions by the court? If your Honours could go to the core appeal book at page 99, in paragraph 16 they said:

At a level of generality, the presumption of advancement supplies a reason why a trust should not be automatically presumed in equity, namely that Ms Bosanac was Mr Bonsanac’s wife and on this account Mr Bosanac could have been willing to assume a substantial liability without any beneficial interest. However, the presumption of advancement does not operate to preclude examination of –

what that court calls:

the quality of the particular transaction in connection with which the presumption arises in order to determine whether the evidence as a whole shows the presumption to be inconsistent with what was in fact intended.

Then they go on and say:

For example, the gifting by a husband to his wife of one of a number of houses, owned outright, is –

what the court described as:

qualitatively quite different from borrowing to acquire and gift a house. There is significance in the fact that the transaction in this case involved a substantial borrowing by Mr Bosanac for which he would be liable in circumstances where he had no legal title to the property purchased with those borrowings. The significance is that the nature of the transaction permits an inference as to intention consistent with the inference drawn in Cummins at [71], in the second passage quoted from Professor Scott’s work.

So, in other words, the court said, in effect, because there was a borrowing to effect the advancement, that is a basis to conclude an actual intention to take a beneficial interest. We say it is the advancement which was effected by the borrowing which leads to the arising of the presumption and cannot be the basis for rejecting finding an intention contrary to the presumption. That is what, in effect, the court has held by what we say is stating there is qualitative difference between borrowing and using your own assets, or for that matter, your own cash. We say there is no qualitative difference. There is a difference, but when it comes to the question of quality, the quality speaks to also making an advancement and that is all it speaks to.

EDELMAN J: Does it advance matters at all to speak of the circumstance or the likelihood of an advancement as being a presumption? In other words, in circumstances in which there is a presumption of resulting trust arising from a contribution to a title put in somebody else’s name, what significance is there in talking of advancement as if it were a presumption rather than just a strong circumstance to rebut the presumption of resulting trust?

MR HUTLEY: Because, as a matter of history, it has been elevated by the courts to the position that, in the event of advancement by a husband to a wife to purchase, the presumption of resulting trust does not arise and one has to establish a basis for saying an interest was intended to be maintained by the husband. So, true it is – and there has been – the principle has always been expressed in terms of the presumption of advancement but it has been explained – and I will come to the cases in Martin by Sir Owen Dixon – one sees it as, in effect, the relationship is the basis for negating the presumption of resulting trust, but that has to then – to establish an interest on the part of the husband one has to establish by positive evidence an intent not to give, in effect, to retain an interest.

EDELMAN J: Well, I appreciate there are a lot of cases that talk about this in terms of the presumption. It strikes me as potentially nonsense to talk about the same set of circumstances giving rise to two completely different presumptions in completely different directions and one presumption overturning the other.

MR HUTLEY: I understand. Your Honour, the position is, as this Court said in Nelson v Nelson, four judges adopting the view of Sir William Deane in Calverley, this is a principle which is ancient in the law and it is not for the courts to overturn it.

EDELMAN J: Well, that is the presumption of resulting trust, it is an ancient principle, and the force of the presumption may have declined over the years where the whole of the land in Australia is not held on trust.

MR HUTLEY: Sir William Deane was referring to what he described as the presumption of advancement and that was approved of by four of the members of the Court in Nelson and, in our respectful submission, it would be a – what is sought in the notice of contention is a fundamental departure from law applied by this Court on numerous occasions over the last 100 years.

EDELMAN J: Mr Hutley, I think you misunderstand my question. I am not suggesting that, at this stage, one needs to abolish what is called the presumption of resulting trust.

MR HUTLEY: I am sorry.

EDELMAN J: I am just saying that the language of “presumption” does not seem to make a lot of sense.

MR HUTLEY: It has its difficulties, but its difficulties have never presented problems in determining the questions. It is an historical remnant of another time, but the substance of the principle is clear. It is, perhaps, a convenient shorthand, to speak of it in the terms we all understand in how this Court approaches it.

KIEFEL CJ: Mr Hutley, that raises the question of the amendments sought by the Commissioner ‑ ‑ ‑

MR HUTLEY: Yes.

KIEFEL CJ: ‑ ‑ ‑to the notice of contention. You have dealt with the argument. Do you object to the amendment?

MR HUTLEY: To the amendment, we cannot object because of time. We do say that they need leave ‑ ‑ ‑

KIEFEL CJ: Yes.

MR HUTLEY: ‑ ‑ ‑from this Court to, in effect, re‑open the position of the presumption of advancement between husband and wife. We say leave should not be given – essentially, for the reasons which this Court has expressed – particularly in the judgment of Justice McHugh in Nelson v Nelson, where he says its effects establish legal relations. We have referred you to numerous first instance decisions of recent date where this principle has affected – had real effect – on the position of people’s entitlements to property. If it is to be abolished, can money be abolished retrospectively for all times? It will, inevitably, lead to the change in established legal relations. In our respectful submission, this should not occur, for the reasons said in Nelson.

KIEFEL CJ: Given that approach, the Court will hear argument from both parties and leave the matter to determine the substantive matters.

MR HUTLEY: Thank you, your Honour. I will defer consideration to a point further until the notice of contention. Can I then go ‑ ‑ ‑

GORDON J: While you are interrupted, may I ask a question just about the starting point? You started with the facts and so I was very excited about that. But, then, seemed to move – in answer to Justice Edelman’s question – to, in effect, saying this, and we start from the presumption. If you look at the line of cases, which you are going to take us to, it is at least arguable, I think, that there is a line of authority in this Court – starting in England, really – which says that there is no presumption necessary if the objective facts themselves establish the state of affairs. It is there to fill a gap. Is that not the starting point for your argument? In other words, it does not prevail – the presumption does not prevail – it fills a gap if there is a gap. Here, some other authorities put it, in effect, it places a burden of proof if there is a paucity of evidence. This is not this case, though, is it, on your argument?

MR HUTLEY: No, your Honour. On our argument ‑ ‑ ‑

GORDON J: So, is that your first argument?

MR HUTLEY: Our argument is simply there is a presumption and does – properly, when one goes to the authorities in this Court, in our respectful submission they stand for this. In a circumstance of a relationship of husband and wife, the use by a husband of his assets – be it money or otherwise – to purchase property which is put in the name of his wife, there is – not by reason of that circumstance – a presumption of resulting trust. To establish a trust in his favour, there has to be positive evidence to support it. We say that positive evidence does not lie in the facts which give rise to being the circumstance which gives occasion for considering whether there is an actual intention – namely, the expenditure by the husband of his assets and of his wealth – whether it be assets, moneys, borrowing, or whatever – and the putting of a property in the name of his wife.

GORDON J: But he did not put the property in the name of his wife, here. His wife contracted to purchase the property itself in her own name.

MR HUTLEY: Can I say, I was going to come to that, your Honour. Of course, he did not put it in his own name. His wife entered into the contract of purchase. He merely, in effect, entered into a loan contract to assist with the supplying of the consideration by loans from Westpac. But our learned friends’ position is that, because of his contribution, because of, essentially, his contribution through borrowing and because it is a matrimonial home, the Court should conclude a finding of a positive intention that he intended to obtain a benefit from the interest in the property. That is our learned friends’ case.

EDELMAN J: Well, that would be a standard purchase money contribution resulting trust were it not for the fact, you say shorn of all the jargon, that there is no need in the 21st century to presume a resulting trust in circumstances where you have spousal relationships. That is what it comes down, is it not?

MR HUTLEY: Well, we say that is what the law has been not just in the 21st century, it has been the law for hundreds of years. In fact, we have sent to the Court the first edition of Halsbury’s Laws of England.

EDELMAN J: Well, the law for hundreds of years was husband/wife ‑ ‑ ‑

MR HUTLEY: Husband and wife.

EDELMAN J: ‑ ‑ ‑ rather than wife/husband, partners and so on.

MR HUTLEY: Yes. Well, at the moment I am dealing with husband and wife, and that shortly is our case. We just say that there is nothing about the circumstances of this case at all to lead to the conclusions that the Full Court did which they described as the quality of the occasion to lead to a conclusion – and I will avoid the word rebut presumptions – lead to a conclusion that there is manifested an intention that the husband would take the beneficial interest in the property.

KIEFEL CJ: Sir Harry Gibbs in Calverley v Green said it was not a presumption, the presumption of advancement. Rather, it was the absence of a reason for thinking that a trust arose.

MR HUTLEY: Exactly, and Sir Owen Dixon so expressed it in Martin.

KIEFEL CJ: Yes.

MR HUTLEY: The courts have taken the view – and I will to the cases in a little while – that there needs to be proof of an intention manifested that there be a beneficial interest in the husband in those circumstances. We submit that the Full Court approach by finding that intention manifested in the acts what might broadly be called a gift, that is, supplying of financial support to buy the property, cannot in accordance with proper principle be the basis of, as it were, erecting an intention that the property be held beneficially in part for the husband.

It is what this Court in some of the cases have used the wonderful word is those facts are wholly amphibolous, they tell you they are perfectly consistent with an intention that the wife take the full beneficial interest following the title and there is nothing with them which, as it were, manifests an objective intention that the interest depart from the title.

To return to, if I could, to the Full Court’s reasoning, I took your Honours to paragraph 16, at page 99, the error which the Court said his Honour at first instance committed is set out in paragraph 15 – excluding from consideration, the fact that:

Mr Bosanac assumed a substantial liability without the benefit of acquiring a beneficial interest.

Every case about – and can I continue to use the word “presumption” to avoid having to give a long description? – every case which has dealt with what is called the “presumption of advancement” – every case involved something of value being given or transferred without a corresponding beneficial interest – that is, in effect, the essential characteristic of it. The Full Court added that the fact that the security – and this is at paragraph 21 – that the security for the loan over the Dalkeith property was a mortgage. As they said:

tends strongly against the presumption of advancement applying in this case.

GORDON J: I wondered whether that arose from – and I may be being pedantic – but if one goes to paragraph 19 – at the foot of 19 on the previous page:

We infer from the fact that Ms and Mr Bosanac purchased the property as their matrimonial home –

They seem to be proceeding on the basis that they both bought it.

MR HUTLEY: Yes. In effect – “matrimonial home” is being used here in the sense of where one intends to live, I think.

GORDON J: No, no, my point is that they both purchased it. Legally, that is not right.

MR HUTLEY: Quite.

KIEFEL CJ: Or their Honours could be saying that they purchased it to have the use and benefit of it.

MR HUTLEY: Quite.

KIEFEL CJ: They are talking about the purpose of the transaction being, in a practical sense, to share and enjoy the benefit of the matrimonial home.

MR HUTLEY: With respect, Chief Justice, I think that is what the Full Court – they are taking, as a material fact, as exhibiting the manifestation of a requisite intention is that, objectively, at the time of the acquisition, it was contemplated that the parties would reside there as a matrimonial home but not as – they are not – I do not think the Full Court is building into that assumption, the assumption that “matrimonial home” means, therefore, joint title. That is but a factor which the Full Court is having regard to. We say, that is, again, a wholly ambiguous, amphibolous fact. It tells you nothing, one way or the other, about intent. In other words, it would be no different ‑ ‑ ‑

GORDON J: So – I am sure you will come to this, but does that mean, at the beginning of 22 when they talk about these “fundamental facts” –

MR HUTLEY: Yes.

GORDON J: ‑ ‑ ‑are they identifying three of them – intended the home to be the matrimonial home – the purpose of the loans was to purchase the property?

MR HUTLEY: Yes.

GORDON J: And three ‑ ‑ ‑

MR HUTLEY: The security, I think.

GORDON J: ‑ ‑ ‑the securities for the loans were over properties including the Dalkeith property.

MR HUTLEY: Quite. That is it. We say a loan singularly, together, all are perfectly consistent with an intent to give. Perfectly consistent. Not one of them tends to establish as a fact, i.e. to persuade to a conclusion contrary to that. One could say how could – we say, how could one come to a conclusion one way or the other except by assuming one’s conclusion. Now, I was dealing with 21. They say:

It seems to us that this circumstance –

That is the fact that there is a mortgage over the property, but as we pointed out, there was a mortgage over Mr Bosanac’s properties, there was a mortgage over Ms Bosanac’s own property, and there was a mortgage over the Dalkeith property, and the question is, who has an interest in the Dalkeith property? It tells you nothing to say it was mortgaged to support a loan one way or the other as to whether he was intending – objectively expressing an intention to take an interest, and that is what they say:

It seems to us that this circumstance tends strongly against the presumption of advancement applying in this case. 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.

But people take on loans to make gifts every day of the week.

KIEFEL CJ: Your argument essentially is that the husband simply facilitated a transaction which the wife wished to enter into in her own name.

MR HUTLEY: Every fact is consistent with that.

KIEFEL CJ: Points – with that. In that event, you actually do not need the presumption, do you? I mean, it is just the objective facts, as Justice Gordon alluded to earlier.

MR HUTLEY: Yes, but as long as one does not then say that if one contributes to a property the presumption of resulting trust is the default position.

GORDON J: But the resulting trust is a trust which is a presumption or inference to be drawn in the absence of evidence.

KIEFEL CJ: If the evidence points all in one direction perhaps there is not much room for either presumption.

MR HUTLEY: I am perfectly happy for the evidence to point in one direction. Our learned friends would say the evidence is neutral. We say it does point ‑ ‑ ‑

GORDON J: So, we are having a fight about evidence. We are having a fight about what the objective facts are and the inferences to be drawn about them.

MR HUTLEY: Well, again, I know your Honour will blanch when I use the word “presumption”, but this Court has said there is a structure to this form of analysis. One starts with the fact of a husband providing consideration towards the purchase of an asset. Can I put that?

GORDON J: Well, Cummins describes what is the transaction, which might explain the language used by the Full Court here ‑ ‑ ‑

MR HUTLEY: Yes.

GORDON J: But the transaction here is as the Chief Justice just put to you, a transaction which is one where the husband facilitated the transaction for the wife to enter into her own name to acquire a property. In context – the context being the other facts and matters that you took us through in terms of separate assets and the like.

MR HUTLEY: I am perfectly happy with that approach. It is not an approach which the courts have taken because, as you will see, both at first instance and in the Full Court, the case was debated around the presumption as to advancement. We can approach it on the basis it is just ‑ ‑ ‑

GLEESON J: An advancement.

MR HUTLEY: An advancement. And we say there is absolutely nothing which counter‑indicates what looks like a husband providing financial support to his wife acquiring a property, which reflects the title, is perfectly explicable, and nothing – the fact that he has not – this is a sophisticated individual – has not sought to take title, has not, as it were, said, as a condition of my putting my finances forward, I want to take title – is itself powerful evidence of the fact that this is an advancement. But our learned friend’s position is, and the Full Court’s position was, these facts which I am taking you to and this reasoning which I am taking you to was strong evidence to the contrary. Now ‑ ‑ ‑

KIEFEL CJ: There was no evidence of the contributions made by the husband and wife respectively to the jointly held loan accounts?

MR HUTLEY: None, your Honour.

KIEFEL CJ: Who paid the mortgage?

MR HUTLEY: None, your Honour. Can I – I do not think so. There may have been some evidence about who paid the mortgage, your Honour. Can I have that – it turned out it did not feature in the exercise. Now, that deals with 21. Now, 21 is to be seen in the concept of what I took your Honours to at 16 in the judgment, where there is concept of qualitative difference, which your Honours will see at 99 of the appeal book. Now, that ‑ ‑ ‑

GORDON J: There is nothing really to explain what the quality of the polity is.

MR HUTLEY: Exactly. That was exactly – the qualitative difference. If you give a person $100,000 and you borrow $100,000 and give them $100,000, you sell an asset, or you transfer an asset worth $100,000 to them, we say is no qualitative difference. Their difference in fact –

GORDON J: Is that the difference they are trying to draw? It is:

the gifting by a husband to his wife of one of a number of houses, owned outright –

is different.

MR HUTLEY: We just say, well, no. If you want ‑ ‑ ‑

GORDON J: Well, that is saying that that husband is richer, or?

GLEESON J: Yes.

MR HUTLEY: Can I say, one of the points we make is this seems to – if you can afford to give somebody a rather nice – one of your spare houses in Toorak, that is okay, but if you have to borrow, that is not okay. What about somebody who has got a lot of houses and ‑ ‑ ‑

GORDON J: And chooses to borrow.

MR HUTLEY: ‑ ‑ ‑ he decides, I am better off borrowing that giving the property because capital gains tax on these properties – I have held them along, I am doing well and the property market is going up and interest rates are insignificant.

EDELMAN J: Presumptions of resulting trust do not just apply to houses either.

MR HUTLEY: No, of course.

EDELMAN J: They apply to necklaces, gifts of money, gifts of anything.

MR HUTLEY: Precisely, your Honour. All we are saying is that Full Court is, in effect, drawing what we submit is distinctions which have no substantive contact. There is no economic difference between borrowing money, giving your own cash or transferring your own property. Economically, they would be treated as exactly the same.

So, this concept at 16, which seems to have been the beginning of the, as it were, conclusion from the fact that a husband was prepared to supply money to buy a house in his wife’s name which they were intending to cohabit in manifested a positive intention that he would take an interest, because the mere fact that he chooses to borrow money seemed to be, quote, “qualitatively different” from transferring the property.

GLEESON J: What is the reason the equitable suspicion of the gifts? Is it about tax avoidance?

MR HUTLEY: The resulting trust and – I will probably get this wrong, and I am looking at Justice Edelman in this regard – goes back to the days of uses. In a sense, if there was an enfeoffment without consideration, it was presumed that there would be a resulting trust to the feoffor, essentially, but when it came to between husband and wife and husband to children, the law took the view that love and responsibility supplied consideration.

GLEESON J: I am just trying to understand what the difference in quality might be that would affect the analysis here. So, presumably not wealth, because a wealthy person can borrow money; presumably not – does not say anything about your tendency to generosity. Is it that there would be a transaction that would demonstrate some kind of intention to avoid paying tax?

MR HUTLEY: It is, with all due respect to the Full Court, wholly unexplained. It lies, with respect, in assertion.

KIEFEL CJ: Was it ever alleged that the transaction was made for the purpose of avoiding payment of creditors, including the income tax?

MR HUTLEY: No. There was a positive finding of fact but there was no suggestion that that was its object. So, all there was is the very simple facts – and there we have it. But as we say – and I think much of what I wish to say about this has been brought out – we say the reasoning of the Full Court is wholly circular. It seizes on facts which are wholly neutral and sets up asserted qualitative distinctions to infer a positive intent to take a beneficial interest.

GAGELER J: If you start with the Full Court’s reasoning at paragraph 11, and follow it through, what the Full Court seems to be doing is taking a cue from Cummins and feeling itself relatively free to draw inferences from those relatively weak facts in the circumstances of the matrimonial relationship.

MR HUTLEY: But the Court accepted that Cummins had not addressed the presumption issue. Cummins was not concerned with the presumption issue. Cummins, in effect, was dealing with a wholly different circumstance, as it were, really the converse in a situation where there was an intention to defraud creditors lying at the back of the exercise – together with the fact that Mrs Cummins had contributed a greater proportion to the purchase price than Mr Cummins.

The Court said in that, by reference to some statements in Scott on Trust that that – and your Honours know the quotes in paragraphs 70 and 71. Those statements from Scott on Trust – when they are gone through – really trace back to English authority, which is under the various Acts dealing with the settlement of property and are not concerned with the issues we are dealing with here. So, in our respectful submissions, it is not necessary to consider Cummins in the course of this case. It was dealing with a wholly different circumstance.

KIEFEL CJ: It was dealing with the amount of the contribution ‑ ‑ ‑

MR HUTLEY: Quite.

KIEFEL CJ: ‑ ‑ ‑whether or not that told against the ‑ ‑ ‑

MR HUTLEY: Quite, the title. Mrs Cummins had contributed more than Mr Cummins. As we have set out in our submissions, I think, it was accepted, from first instance, that what is called the “presumption of advancement” had nothing to do with the case. So, the Court simply was not concerned with that issue.

KIEFEL CJ: There are hints of it, though, are there not, at paragraph 71, that when one is looking at the traditional matrimonial relationship in modern days ‑ ‑ ‑

MR HUTLEY: Yes.

KIEFEL CJ: ‑ ‑ ‑there are certain inferences that are clearly open where you have each of the parties to the marital relationship contributing to joint expenses and everything being drawn out of the one pool. That would be just evidentiary inference to be drawn.

MR HUTLEY: Quite – particularly when there is a joint title.

KIEFEL CJ: It might accord with modern‑day perceptions.

MR HUTLEY: Particularly when there is a joint title, that may be able to be dealt with ‑ ‑ ‑

KIEFEL CJ: So, to an extent, Cummins at paragraph 71, at least as it commences, might be hinting that there might be a difference of approach to take, but it does not develop it, you are right.

MR HUTLEY: The Court does not advert to any of the statements which have lived in this case for many years or, importantly, to what they said in Nelson, and in Nelson the Court included Justices ‑ ‑ ‑

KIEFEL CJ: Well, again, there is another hint at 68 and 69 that the categories might not be closed and that the presumptions might have a wider operation, but again that is not developed.

MR HUTLEY: I accept that. Now, we say the reasoning of the court – and I have dealt with what we said factually about it – is contrary to the statements of principle in this Court. If your Honours go to Stewart Dawson and Company (Victoria) v Federal Commissioner of Taxation [1933] HCA 4; 48 CLR 683 at 690 ‑ ‑ ‑

EDELMAN J: Which tab is that?

MR HUTLEY: I am sorry, your Honour, it is at volume 3, tab 26. If your Honours go to 690, Sir Owen Dixon referred, at about point 5, dealt with the point really from the bottom of the earlier page over and says – and referred to what was said by Lord Langdale, and then he refers to the judgment of Justice Cussen where he said:

In Davies v National Trustees Executors . . . Cussen J., whose judgment contains what is, perhaps, the best modern statement of the whole doctrine, says:‑ “Where a husband or father (as the case may be) purchases property in the name of his wife or child, and is proved to have paid the purchase‑money in the character of a purchaser, a prima facie but rebuttable presumption arises that the wife or child takes by way of advancement – that is to say, takes beneficially. Evidence may be given to rebut this presumption and to show that the husband or father did not intend the wife or child to take by way of advancement, and on the other hand evidence may, where necessary, be given to support the presumption. If on the whole of the evidence the Court is satisfied that the husband or father did not intend at the time of the purchase that his wife or child should take by way of advancement –

Et cetera. Now, if we could then turn to what was said by the Court in Martin v Martin, your Honours will find that at volume 2 of the ‑ ‑ ‑

KIEFEL CJ: Just before you do, the bottom of page 689 in Stewart Dawson, Justice Dixon refers to Scott v Pauly where Justice Isaacs referred to the so-called “presumption” as being:

but “an inference which the Court of equity in practice drew from the –

relationship.

MR HUTLEY: Yes.

KIEFEL CJ: That is consistent with what Justice Dixon goes on to describe Lord Langdale as saying; it is only evidence of intention.

MR HUTLEY: Yes, I accept that, your Honour. But he then goes on to say that :

the best modern statement –

of that is Justice Cussen, which is not inconsistent with what has fallen from your Honour. The High Court returned to this in Martin v Martin – and I am dealing with the cases which dealt with the position of involving husbands and wife. If one goes to Martin v Martin in the judgment of the Court at page 303 and also, coincidentally, 303 in the book – and if I can take you to the bottom paragraph, said relevantly:

It was of course for Martin to make out positively that his wife did not take the land beneficially but as a trustee for him.

We will come back in a moment. Martin v Martin, actually, the moneys came out of an overdraft account. So, in effect, they were borrowing money, in part:

As she was his wife the fact that he found the purchase money for the land raised no presumption in his favour of a resulting trust as it would or might have done had she been a stranger. The presumption is in her case that the beneficial ownership went with the legal title. It is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose or in other words that the equitable right is not at home with the legal title. Evidence however that the wife was intended to take as a trustee has long been admissible. This struck Mr Ashburner as somewhat strange –

Then that is gone further and he then discusses that. But if we could then go over the page, towards the bottom it says, at about point 8:

His Honour’s judgment, which contains a very clear formulation of the principles involved, makes it entirely a question of fact. The burden of proof is firmly placed upon the person asserting that a trust was intended but the issue depends upon the intention with which the property was purchased by the parent in the name of the child or the husband in the name of the wife or as the case may be. “If on the whole of the evidence the Court is satisfied” said Cussen J. “that the husband or father did not intend at the time of the purchase that his wife or child should take by way of advancement, the rule of law is that there is a resulting trust for the husband or father. Similar rules apply where a transfer or assurance of property is made without consideration by a husband or father to a wife or child. It has been suggested in some cases that the presumption in favour of advancement is stronger in the case of a transfer than it is in the case of a purchase; but although this may be so in some circumstances, I think that no substantial distinction applicable universally can be drawn”.

Then, I think, I can move on. There is a reference there in the next paragraph with what they do with the tax position. The word “amphibolous” is used which is later picked‑up by Justice Deane.

Can I now take your Honours to the Charles Marshall Pty Ltd v
Grimsley? That is in [1956] HCA 28; 95 CLR 353, at 364. That is in volume 2, tab 14, page 177. At page 364 of the CLR and, consequently, page 177 in the book, at the top, then the Court said:

If that person is a stranger –

it actually starts at the bottom, in ways that you would imagine:

the presumption of a resulting trust arises and he holds the property on trust for the purchaser. But if the purchaser is the father of or a person in loco parentis to the legal owner, the presumption arises from the relationship of the parties that the father intended to purchase the property to advance his child and to make the child not only the legal but also the beneficial owner of the property. These presumptions were described as landmarks in the law by Eyre C.B. as far back as 1788 . . . In Sidmouth v. Sidmouth –

They refer to the passage from Lord Langdale that I read before and your Honour, the Chief Justice adverted to. So, sometimes, it is referred to as a “presumption”. Sometimes it is referred to in the way that a . . . . .

GAGELER J: But, by the same judges.

MR HUTLEY: By the same judges. Therefore, I think, in a sense it is used in a shorthand way of having regard to its historic way in which it is developed. I do not think they are intending to change the principle. Although, there has been debate in a number of learned articles – one of which, I think, is in the book – no one has really ever pointed to a case where this debate as to the principle has ever made a decision of any significance in determining the outcome of a case.

GAGELER J: As I understand it, you say that the principle is better stated in Martin v Martin than it is in Charles Marshall.

MR HUTLEY: I can live with either, but Martin v Martin is very clear.

EDELMAN J: One benefit of speaking about a presumption of resulting trust that is rebutted or does not exist in circumstances of spousal relationships rather than two counter‑presumptions is that it might direct attention to questions of the force of the presumption of resulting trust – particularly as, I think, the New South Wales Court of Appeal has said – where we have, in the late 20th century, a presumption that exists based on circumstances that existed in the late Middle Ages and that do not exist anymore. Nelson v Nelson has said that the presumption is something that is with us but there may be a real question as to what force the presumption of resulting trust should have.

MR HUTLEY: The difficulty, with respect, if one speaks in terms of the “force”, then one will become engaged in what is the character of the onus. Is there an onus to prove something? This Court has said there is an onus to prove – as I took your Honour to it a while ago – an actual intention. In one part of Martin v Martin, it was to prove an absence of intention.

KIEFEL CJ: Perhaps you could approach it on the basis that it is an inference which is more readily rebuttable having regard to the facts of the modern day?

MR HUTLEY: Your Honour, the difficulty one runs into is the facts of the modern day become quite problematic – sometimes – because lots of people live – not everybody lives in the same ‑ ‑ ‑

KIEFEL CJ: Quite ‑ ‑ ‑

MR HUTLEY: world in the modern day ‑ ‑ ‑

KIEFEL CJ: I am not saying that there will be universal facts which puts the presumption out of the picture, but there will be known to be some common habits amongst married persons about sharing joint bank accounts and joint expenses ‑ ‑ ‑

MR HUTLEY: I fully appreciate that.

KIEFEL CJ: But that would give way to the evidence in every case, of course.

MR HUTLEY: Quite.

KIEFEL CJ: But common experience would say that this is like many marital relationships.

MR HUTLEY: But one might also say, a decision to place a property in a spouse’s name in circumstances where there is contribution of consideration from the other spouse, we say is a powerful indicator in modern days of an intention that the title lie where it is placed because of the ease and convenience and commonality of spouses taking titles jointly.

EDELMAN J: But you do not even need to go that far, do you?

MR HUTLEY: I do not ‑ ‑ ‑

EDELMAN J: If one is talking about a presumption of resulting trust, and one says, as the Chief Justice points out, that weaker presumptions are more easily rebutted; that if the presumption of resulting trust in today’s age is a weaker presumption, then one does not need to deny the fact that in some relationships there might be a manifested intention to create a trust, in some there might not. But a weaker presumption of resulting trust is not going to apply, generally, in spousal relationships – I think would be the way the proposition would work out.

MR HUTLEY: Yes, as long as one accepts that one has rejected the notion of a presumption of advancement being other than circumstances, a circumstance, which removes a likelihood of a presumption of resulting trust.

GORDON J: Can I ask two – a really basic question? Are we looking for intention to gift to the wife, or are we looking for intention to take and create a trust? Which is it?

MR HUTLEY: The latter. The latter, and that is what the cases say; that is why they direct attention.

KIEFEL CJ: Because you are taking the starting point, the resulting trust presumption, and then you see if there is an exception to it.

MR HUTLEY: You take what you say – usually a resulting trust, relationships – certain relationships, advancements between spouses or parent to child ‑ that presumption does not arise because of that relationship to establish a resulting trust – some of the debate says it should be an actual trust but set that aside – positive evidence is needed. So, that is the logical steps as we see it under the current law, and we say that is wholly appropriate and to depart from it would do what Nelson v Nelson said is for the legislature to do.

GAGELER J: I am not sure that the way you would put it is quite consistent with the way Sir Leo Cussen put it in that passage in Martin v Martin.

MR HUTLEY: I was not seeking to depart from it. I was seeking to – Sir Leo Cussen was dealing with it at what you might call a more holistic basis rather than what is being asked of me, a moment is in effect the steps one would go through to arrive at the end. The important point about it is the presumption of resulting trust does not arise because of the relationship. Thereafter, how one – as it were, how a husband establishes that he is entitled to a beneficial interest is debatable, and you will see that in Brown’s Case in New South Wales which was referred to in some of the articles where the then‑Chief, Chief Justice Gleeson, in the New South Wales Court of Appeal found that you could, as it were, rebut the presumption of advancement – can I use that terminology – by positively proving an absence of intention on the part of the spouse to give. But that required positive evidence ‑ ‑ ‑

EDELMAN J: That is just proof of the creation of a trust.

MR HUTLEY: Well, but your Honour sees the issue as to whether one has to prove positive evidence on the part of the person seeking the beneficial interest on the part of the spouse of an actual intention to have a beneficial interest, or it is sufficient to prove positively that there was no intention, they did not have an intention to give, as it were. In that case, the relevant person – the finding was, as a matter of fact after hearing evidence, that she had not turned her mind at all to the question of title and simply was – it was something that had never crossed her mind so she just had no – it was proved positively that she was basically not turning her mind at all to the question of interest. Now, it was a very peculiar fact ‑ ‑ ‑

GAGELER J: What was the outcome?

MR HUTLEY: It was found that there was a resulting trust in her favour.

GLEESON J: Mr Hutley, there might be an issue about the nature of marital relationships in that Cummins I think there was a statement that the relationship was a typical marital relationship.

MR HUTLEY: Yes.

GLEESON J: Did the case at trial go into the nuances of whether this was very typical or not very typical?

MR HUTLEY: No, your Honour. And, your Honour, as this Court pointed out recently in relation to de facto relationships, “typical relationships” is a very broad spectrum, and one of the modern facts one might – to take up your Honour the Chief Justice’s observation – is what could be described as typical is a very, very broad – covers a very broad series of relations.

Matrimonial relations can be extremely complex, where one party lives in one home and another party is able to visit, often for business or other reasons, or perhaps for a personality reason they visit irregularly. Does that become a matrimonial home? Is the other home a matrimonial home? Could be a whole series of complex circumstances speaking to these concepts which our learned friends seek to develop, which are concepts really without any real content. Occasionally, they are used in statutes.

Were it necessary to consider in this Court, Cummins, we would submit that the observations in paragraphs 70 and 71 ought to be reconsidered, but it is not necessary because it is a different case and it is not really – it was not dealing with the problems that the Court has before it today. We have referred, in our written submissions, to the observations of Justice McTiernan in Wirth v Wirth. I will not take your Honours to them. He referred to Finch v Finch in 1808 that the presumption should not be “frittered away” by fine distinctions.

Could I then take your Honours to Calverly v Green? Your Honours will find that at volume 2, tab 12, page 147[1984] HCA 81; , 155 CLR 242. The statement of Justice Deane at 266 – 147 in the book – second paragraph – is apposite. The Chief Justice Gibbs looked at the presumption at page 251 of the Commonwealth Law Reports and 132 of the book. Taking up from the first full paragraph, the facts which led the Chief Justice to conclude that:

The evidence does show that the appellant had no intention to confer a beneficial interest –

were the facts appearing in the last paragraph, and particularly that the reason the appellant succeeded was that he had no intention, and that was manifested by the fact that the presence of the respondents on the title was because of the requirements of the bank, not because of any desire to share beneficial interest with her. That is a good example of proof positive from which one can conclude an actual intention in relation to the title on the part of what might be called the presumed advancing party.

As I said, the reliance of the Full Court on the fact of borrowing seems inconsistent with the approach that the Court took, for example, in Martin, at [1959] HCA 62; 110 CLR 297, at 300, and which is also page 300 of volume 2, behind tab 19, in the book. It is apparent that the purchase price was mostly funded out of the overdraft. If your Honours go on to page 303, in the judgment of the Court, at about 300. Your Honours will see that at about point 8.

GORDON J: Did you say page 303?

MR HUTLEY: Page 300, at about point 8, your Honour. I am going then to 300, your Honour. That was borrowed. The fact that he found the purchase price from borrow, seem to have been treated by the Court as of no significance.

In Stewart v Dawson – again, I will just give your Honours the pages – [1933] HCA 4; 48 CLR 683, at 691-2, volume 3, tab 26, pages 643 to 644. Mr Dawson apparently funded the disposition of the shares to his daughters out of a loan account. As we have taken you to, Chief Justice Gibbs obviously thought more was required than mere borrowing to establish the requisite intention. I have taken your Honours to that.

Your Honours, they are the authorities which I wish to take your Honours to in chief. That is the argument which I wish to advance, in chief, as to why the Full Court erred. I will come to the passages in Nelson in the notice of ‑ ‑ ‑

GORDON J: Can I just ask one question about subsequent conduct?

MR HUTLEY: Yes, your Honour.

GORDON J: In the passage in Calverley v Green that you took us to, if you go to page 252 ‑ ‑ ‑

MR HUTLEY: Can I just turn that up, your Honour?

GORDON J: ‑ ‑ ‑ it really follows on from my questions about what we are actually asking of ourselves ‑ ‑ ‑

MR HUTLEY: Yes, your Honour.

GORDON J: ‑ ‑ ‑in determining ‑ ‑ ‑

MR HUTLEY: At 252, your Honour?

GORDON J: Yes. Chief Justice Gibbs says:

The extent of the beneficial interest of the respective parties must be determined at the time when the property was purchased and the trust created.

Because we are asking ourselves whether or not, as I understand it, there was an intention to create this beneficial interest.

MR HUTLEY: Yes.

GORDON J: The Chief Justice goes on to say that:

The fact that the mortgage debt was repaid . . . is therefore not relevant –

Do you accept that? In other words, there is a temporal question about the creation of the trust and the right question to be asked ‑ ‑ ‑

MR HUTLEY: Quite.

GORDON J: ‑ ‑ ‑and the inquiry giving rise to the idea of this transaction.

MR HUTLEY: Certainly. I would not say, in all circumstances all subsequent evidence might be, by definition, irrelevant. Some may be highly probative.

EDELMAN J: Of what?

MR HUTLEY: Of the ‑ ‑ ‑

EDELMAN J: Either the trust has been created at the time or not.

MR HUTLEY: Quite. It may be evidence from which you would infer there was an intention – all I am saying is, I could conceive evidence of being that. For example, if the husband by right and entitlement – and there are some cases where they held on to the title deeds and used them at will. Now, that would be obviously a subsequent circumstance from which might infer an intention at the time.

EDELMAN J: Yes.

MR HUTLEY: That is why our learned friends wish to say that because my client was prepared to – because she trusted her husband – to use the property to support his subsequent advance. Now, we say that, rather than tending to suggest he had an interest, is powerful evidence that she had the interest, because it is not even suggested in any way that she was under obligation; she just did what spouses do, often using their own property, utilising them to support the endeavours of their spouses. In fact, it is powerful evidence, in our respectful submission, that there was no interest.

That is why I say you cannot, in effect, exclude subsequent evidence. But the mere payment of mortgage payments would be, again, wholly ambiguous for an obvious reason – because the advancement is the borrowing.

GORDON J: In Cummins, I think they at least permit of it at paragraph 65 to 67, as I understand it, being:

evidence of facts as to subsequent dealings . . . may be received –

I do not know whether they are limited to admissions against interest, but I think the way in which they look at it is by working out what the transaction is.

MR HUTLEY: Yes. Could be. I mean, it will be fact‑rich. That is why I said I cannot exclude it, but there is nothing in any of the circumstances here, which are thin, which takes one anywhere.

EDELMAN J: But the qualification is important. The subsequent evidence is only relevant insofar as it is evidence that bears upon what the circumstances were or should be inferred to be at the time of the alleged creation of the trust.

MR HUTLEY: Precisely. Nothing else can matter. Your Honours, that is all I wish to say in chief, unless I can be of further assistance.

KIEFEL CJ: Yes, thank you. The Court might take its morning break, then.

AT 11.15 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.29 AM:

KIEFEL CJ: Yes, Mr Hmelnitsky.

MR HMELNITSKY: Thank you, your Honour. May I start by taking the Court to Cummins, which is in tab 28 of the authorities. It is (2006) 227 CLR 278. I do so, your Honours, for two reasons: one is to, first of all, identify the presumption and how it works, and secondly, your Honours, to identify the very different inference that was drawn in the case of Cummins, that inference being critical to the outcome in Cummins, and also to explain the rationale for the inference that was drawn there.
What emerges particularly from Cummins is, at a high level, this, and may I put it this way before I come to the detail of there reasons? The starting point in this area is that equitable ownership is at home with legal title. That is a prima facie position, it is a position that can be shown to be otherwise through evidence. Where consideration has been provided to acquire property in the name of someone else, ordinarily equity will presume a resulting trust. Again, your Honours, that is said to be a presumption. The purchase money resulting trust may equally be displaced by the evidence in the proceedings.

There are two further considerations in this area. One is that where consideration has been provided by a husband to a wife, or parent to child, to acquire property, the presumption of advancement is attracted. I will come back to that in a moment. But, additionally – and it was seen to be an additional and different inference in Cummins – there is another available inference in those cases where parties to a marriage contribute jointly to the purchase of property. That inference, which was the inference ultimately drawn in Cummins, is that in those circumstances, what the parties intended was not that beneficial ownership be at home with legal title, it was that the parties to the marriage hold that property as equitable joint tenants with the prospect of survivorship. It was that inference as to the parties’ intention in Cummins that was critical to the outcome.

Can I spell all of that out, your Honours, in a little more detail by reference to – starting at paragraph 55 of the Court’s reasons in Cummins, that is at joint book of authorities page 696. The Court was there dealing with the ownership of the Hunters Hill property and not with the question of the question of Mr Cummins’ purpose in severing the joint tenancy and transferring his interest in the house to his wife.

The starting point, as is taken from the reasons of the Chief Justice in Calverley v Green, is that:

where two . . . persons have contributed the purchase money –

et cetera, there is the presumption of – there is the purchase money resulting trust presumption. There is reference there, of course, to the “presumption of advancement”. In the balance of paragraph 55, the Court notes that it:

has not been matched by a presumption –

the other way and that:

The “presumption of advancement”, where it applies, means that the equitable interest is at home with the legal title, because there is no reason for assuming that any trust has arisen.

The footnote there, footnote 81, is to the reasons of Justice Deane in Calverley v Green at page 267 of the Commonwealth Law Report. May I just take the Court to that passage in Calverley v Green to make good this proposition?

EDELMAN J: You might also wish to note that this Court has consistently said for the last five or six years that the expression of an equitable interest being at home with the legal title is not the correct way to understand the way trusts are created.

MR HMELNITSKY: Yes, your Honour, I do appreciate that, but the point here is only to identify what occurs when the – or my point here is only to identify what actually occurs when the so‑called presumption of advancement applies, so I do take your Honour’s point in relation to that.

The reference there is to Calverley v Green at page 267 of the Commonwealth Law Reports. It is tab 12 of the authorities. At page 267 – it is joint book of authorities 148 – Justice Deane deals with the presumption in the way that your Honours see in that first full paragraph on that page:

The third “presumption”, usually called the “presumption of advancement”, is not, if viewed in isolation, strictly a presumption at all. It is simply that there are certain relationships in which equity infers that any benefit which was provided for one party at the cost of the other has been so provided by way of “advancement” –

Then we say to like effect over the page – page 268 of the Commonwealth Law Reports – again the first full paragraph on that page:

The exceptional cases in which equity assumes an intention of “advancement” and thereby precludes a presumption of a resulting trust are defined by reference to recognized categories of relationships –

So that statement of how the presumption – if it is a presumption – operates, is, we submit, the statement of the rule picked up in that passage in paragraph 55 of Cummins; that is, where the presumption applies, there is a fact that is inferred. The fact that is inferred relates to the intention of the transferral ‑ ‑ ‑

GAGELER J: How does that sit with the passage in Martin v Martin referred to, for example, by Justices Mason and Brennan, at page 256 of Calverley v Green?

MR HMELNITSKY: Your Honour, ultimately, one comes back in all of these cases to the question of the intention of the transferor – but whether one is looking at that question through the framework of the question: has a resulting trust been created or is there an exception to the purchase money resulting trust presumption? One is still dealing, in substance, with the question of the intention of the transferor.

GAGELER J: Maybe. But I am just taking up on your point that what Justice Deane said, is the statement of the law. It just does not seem to be the same statement ‑ ‑ ‑

MR HMELNITSKY: No, I do accept that, your Honour.

GAGELER J: ‑ ‑ - that one sees in Martin v Martin, at that earlier passage.

MR HMELNITSKY: I do accept that, your Honour. Yes.

GAGELER J: Maybe we just have to face up to these tensions in the manner in which the principles have been stated.

MR HMELNITSKY: Yes. There are tensions, left and right, really, in this area. It is a difficulty that, in our submission, flows from the fact that there is not – at least in modern times – any particularly identifiable rationale for the rule, however it is expressed.

GLEESON J: What do you mean by “transferor” in this context?

MR HMELNITSKY: For example, in this case, Mr Bosanac – he having provided funds for the purchase of the house.

EDELMAN J: Which rule do you say there is not particularly clear rationale for?

MR HMELNITSKY: The presumption of advancement, your Honour.

EDELMAN J: But you think there is a clear rationale for the presumption of resulting trust?

MR HMELNITSKY: Questions could arise as to the rationale for that presumption also, but they have never been stated to be the same rationales that support the presumption of advancement. At the very least, what the presumption of resulting trust reflects is equities concerned with equality. So, where someone has contributed funds to the purchase of property in someone else’s name, they may be taken to having intended to retain some interest in the property.

GAGELER J: Does the decision of the Full Court here rely in any way on the presumption of a resulting trust? Is the trust found – the resulting trust?

MR HMELNITSKY: No, the Court did not express itself in that way.

GAGELER J: Analytically, what did it find? It inferred an express trust, did it?

MR HMELNITSKY: It inferred that the half of the purchase money for the Dalkeith property had not been intended to be a gift to Ms Bosanac, but that it had been Mr Bosanac’s intention to retain an interest. So, the declaration, ultimately, that was made reflected the Court’s conclusion as to the extent of his interest.

GAGELER J: Yes, but on what basis?

MR HMELNITSKY: Necessarily, on the basis that the property was held on resulting trust for him.

GLEESON J: Again, retaining an interest is not accurate in this context, is it?

MR HMELNITSKY: If the conclusion as to a resulting trust is correct, then we would suggest it is, because ‑ ‑ ‑

EDELMAN J: But it cannot be. Equitable interests are created. They are not retained out of nowhere.

MR HMELNITSKY: Yes. Your Honour, that may be so, that the ultimate conclusion is one that does rest – that the Full Court’s conclusion is one that rests on the conclusion that the intention of Mr Bosanac was to have an interest in the property. The only basis for that seems to be – or could be – that the circumstances gave rise to a resulting trust in his favour.

GAGELER J: He never had legal title to the property, did he?

MR HMELNITSKY: No, your Honour, he did not, but he need not in order ‑ ‑ ‑

GAGELER J: So what property did he retain an equitable interest in?

MR HMELNITSKY: The language of retention, perhaps, does not assist here, but he did nonetheless contribute substantially to the purchase of the property with the intention – so the Full Court found – of having an interest in the property.

EDELMAN J: That is essentially on the basis that there was a marital relationship.

MR HMELNITSKY: It is on the basis of all of the facts that they identified. The fact of the marital relationship was relevant, and their Honours did refer to Cummins in that regard and to the inference that was drawn in Cummins. That is the matter that I would wish to emphasise here, and it is the reason that I take the Court to Cummins at the very outset, because whatever may be said about the presumption of advancement being attracted in the circumstances of this case, ultimately, my submission is that so also were the very same circumstances that attracted the other inference that was drawn in Cummins.

GORDON J: The difference in Cummins was – is it not? – that they bought the property jointly.

MR HMELNITSKY: Yes, that is true, your Honour. They bought the property jointly, but the conclusion was not that because they had each contributed – to come back to this unhelpful phrase – beneficial ownership was at home with legal title. That was not the reasoning and it was not the conclusion. The reasoning was, based on the perceived probabilities of what was intended between spouses in a modern marriage, that there was an intention that property to which they had contributed jointly was to be held – it was intended to be held as an equitable joint tenancy with a right of survivorship.

Now, in that case it is true that legal title was joint. So, the conclusion that equity reached as to joint ownership was consistent with the way the property was held at law. But equally, and this is the significance of the second of the quotes in paragraph 72 of Cummins, equally the Court saw that same rationale as supporting the same conclusion as to joint equitable ownership in a case where both had contributed, but the property was put in the name of one only.

That is the very circumstance that is described in that second quote from Professor Scott in paragraph 71 of the reasons in Cummins, and that proposition is supported by the identical reasoning in Cummins. Can I make that good by reference to other parts of the reasoning there? I have taken the Court to paragraph 55, may I ask the Court to go to paragraph 299 of the report, which is 698 of the joint book of authorities. At paragraph 60 the Court, bearing in mind that this is a case about joint title, the Court notes:

The dislike by equity of survivorship and of what Deane J described as “the gamble of the tontine” –

The Court there explains why that is so. We draw attention to the quote from Corin v Patton, and again the reasons of Justice Deane that there were two reasons why it was that, generally, equity disliked or disfavoured a conclusion that property was held jointly. Your Honours see them there; I will not read them out, but it is an important point to note in the context of these reasons because ultimately the prospect of survivorship and the intention to hold property jointly with the prospect of survivorship, was a critical step in their Honours drawing a conclusion as to what the intention of Mr and Ms Cummins was at the time they first acquired the property.

Then, your Honours, a couple of pages on, page 301 of the CLR, 700 of the joint book of authorities, there is the passage in paragraph 67 that your Honour Justice Gordon I think has referred to as to the transaction to which attention was directed, but I wanted to emphasise paragraph 68 where their Honours consider what was said in Calverley v Green. I will take your Honours to Calverley v Green in just a moment, but it is important to see what their Honours took from the reasons of Justices Mason and Brennan in Calverley v Green. Halfway through that paragraph the Court said:

Mason and Brennan JJ referred to the statement by Lord Upjohn in Pettitt v Pettitt that, where spouses contribute to the acquisition of a property then, in the absence of contrary evidence, it is to be taken that they intended to be joint beneficial owners.

The reference to Lord Upjohn’s inference in Pettit v Pettit might equally have been a reference to that same inference having been drawn in many other cases in the UK that preceded Pettit v Pettit.

Relevantly, in the sentence that travels over the page, their Honours identified, in our submission, a rationale for that inference being drawn. Again, their Honours are speaking of the reasons of Justices Mason and Brennan in Calverley v Green and the Court said:

Their Honours said that Lord Upjohn’s remarks reflected the notion that both spouses may contribute to the purchase of assets through their marriage “as they often do nowadays” and that they would wish those assets to be enjoyed together for their joint lives and by the survivor when they were separated by death.

Now, if one pauses there, one sees that is a very different inference, or a very different statement of intention than that which is at the heart of the presumption of advancement. Where the presumption of advancement applies, the result is that property is gifted absolutely by one party to the marriage to the other and it is not bilateral.

So where a husband gives an asset to his wife or funds the purchase of an asset by the wife, where the presumption of advancement applies, the end result is a gift – an absolute gift. Where this presumption that is described here applies, one gets the very different outcome in equity which is joint – unusually for equity – ownership with that right of survivorship. The Court then over the page – page 302 of the report – noted that:

However, Mason and Brennan JJ considered such an inference to be appropriate only between parties to a lifetime relationship, being the exclusive union for life undertaken by both spouses to a valid marriage, though defeasible and oftentimes defeated.

So one sees there a snippet, if you like, of the rationale for the inference that is being discussed. It is the fact that it is one that arises both ways, as between husband and wife and wife and husband, in those particular relationships that are exclusive and for life. The Court then, in paragraph 69, said:

It is unnecessary for the purposes of the present case –

as, of course, it was:

to express any concluded view as to the perception –

in relation to marriage, but one sees then, in the second and third sentence, the balance of that paragraph, a proposition that we have sought to emphasise in our written submissions that:

rigidity is not a characteristic of doctrines of equity.

GAGELER J: I am not sure Lord Eldon would have agreed with that.

MR HMELNITSKY: Maybe so, your Honour. Nonetheless, your Honours have seen we do make the submission, of course. It is at the heart of our amended notice of contention that the Court would now do away with the presumption, and we refer to that in that context, if the Court pleases.

Your Honours, it is against the background of all of that that one comes to what the Court said in paragraphs 71 and 72. There are two quotes set out there. I will not read them out; your Honours see them. The point of that first quote is this, that in a marriage:

“It is often a purely accidental circumstance whether money of the husband or wife is actually used to pay the purchase price of property –

That is the first observation. The second observation, dealing with a factual circumstance that is identical with this case, is that:

“Where a husband and wife purchase a matrimonial home, each contributing to the purchase price and title is taken in the name of one of them, it may be inferred that it was intended that each of the spouses should have a one‑half interest in the property, regardless of the amounts contributed by them.” –

Now, again, if one pauses there one sees an inference as to intention very different from the inference that exists where the presumption of advancement circumstances exist.

GORDON J: Can I take that analysis up and just ask you about it? If you took the first quote, is it a fair assessment to say that from the objective facts here you could not describe this as an accidental circumstance? – the facts here?

MR HMELNITSKY: I will come to these facts in a moment, your Honour, but ‑ ‑ ‑

GORDON J: I raise that for your consideration later ‑ ‑ ‑

MR HMELNITSKY: But ‑ ‑ ‑

GORDON J: The second aspect is this. Where you have a:

husband and wife purchase a matrimonial home, each contributing . . . and title is taken in the name . . . it may be inferred –

Et cetera. Again, here, the question is: is that consistent with the facts we have got here?

MR HMELNITSKY: Yes, your Honour ‑ ‑ ‑

GORDON J: You may not need to answer it now. I am happy for you to do it later.

MR HMELNITSKY: ‑ ‑ ‑ no, but may I say this in relation to both of those questions right now, your Honour, that what the Court is doing here in paragraph 71 is identifying a rationale for what is sometimes and was stated by Justices Mason and Brennan in Calverley v Green to be possibly a rule as to this inference being drawn. So, what the Court is doing there is identifying the rationale for drawing the inference; it is not a statement about the facts of that case, and it would exist as a rationale for the inference being drawn here in the absence of evidence either way.

GLEESON J: Paragraph 71 starts by saying that the:

case concerns the traditional matrimonial relationship.

Are you saying that this case concerns the traditional matrimonial relationship?

MR HMELNITSKY: I do, your Honour. Yes. I say that because, were it otherwise and if anything turned on it, either Mr or Ms Bosanac, or indeed the both of them might have given evidence to that effect, but they chose not to.

GORDON J: But you do not need that so much as the facts that presently exist.

MR HMELNITSKY: I do not, no, your Honour. But ultimately one is concerned here with inferences. That was the way that the Full Court approached it, and ultimately I am asking this Court to draw the same inference. In circumstances where the question is one of inference as to the intention of the parties, where that is squarely in issue at trial and there is a basis to infer, as the Full Court did, no intention to gift, then the fact that both Mr and Ms Bosanac, who could have given evidence on the matter, did not, is a reason to ‑ ‑ ‑

GLEESON J: Was a finding made that this was a traditional matrimonial relationship?

MR HMELNITSKY: No, your Honour, no, but what was found were the facts, sparse as they were, that the Court was taken to by our learned friend. Ultimately, our learned friend’s description of those facts we would adopt. We do say they are in many respects amphibolous, to use that word.

KIEFEL CJ: In Cummins the reference to “traditional matrimonial relationship” in paragraph 71, is that really only to identify that it is the same relationship that Justices Mason and Brennan referred to as distinct from the de facto relationship that Calverley v Green was concerned with?

MR HMELNITSKY: Yes, and that would be consistent with what the Court had said at paragraph 69.

KIEFEL CJ: Yes.

EDELMAN J: It may be relevant that Professor Scott, who usually chooses his words very carefully, is speaking about inferences and not presumptions.

MR HMELNITSKY: Yes, your Honour, I do agree with that.

EDELMAN J: So if one were to consider this case as a case about the creation of a trust independently of any presumptions existing one way or the other, do you accept that it would be for the party asserting the existence of a trust to prove that?

MR HMELNITSKY: But for the presumption, yes – well, I am sorry, I do not need the qualification. Yes, because of the presumption. So in a case where the presumption of advancement is attracted, at the very least the burden is cast on, in this case, the Commissioner to demonstrate what Mr Bosanac’s intention was.

EDELMAN J: Unless, of course, the presumption does not apply because of circumstances such as the marital relationship which is, I appreciate, your notice of contention. If this were a case where the presumption did not apply, then the onus would rest upon the party asserting that a trust had been created.

MR HMELNITSKY: Yes, but in that event, your Honour, the Commissioner would have the benefit of the presumption of the resulting trust, so that the burden would then be cast on Ms Bosanac to demonstrate that she did not hold the property on trust for the person who provided half the purchase price.

GORDON J: I do not know about that. It may be that the facts themselves are sufficient to give rise to an inference or a set of inferences to be drawn which says that the compelling facts themselves compel the weakness of the resulting trust is rebutted itself.

MR HMELNITSKY: Your Honour, I do not suggest otherwise than that, ultimately, the question is to be resolved by reference to the evidence. In circumstances where the evidence or the facts that are pointed to by the appellant are, at best, amphibolous on this question – ambiguous on this question – there is a role to play for a consideration of how readily one would draw the inference that the Full Court drew in light of the fact that the very people – indeed, the only people – who could have given evidence about that matter, did not give evidence.

EDELMAN J: Including the very people who needed to prove the existence of a trust ‑ ‑ ‑

MR HMELNITSKY: Yes, that is right.

EDELMAN J: ‑ ‑ ‑if there was no presumption to apply.

MR HMELNITSKY: That is right, your Honour. That is right. I have taken the Court to paragraph 71 and to 72. May I take up your Honour Justice Gleeson’s question again? I think your Honour asked me, originally, about the description of the case as involving the matrimonial home. It seems to be clear enough ‑ ‑ ‑

GLEESON J: The traditional matrimonial relationship.

MR HMELNITSKY: Quite so. Yes. My apologies, your Honour. It is clear enough from the context, in my submission, your Honour, that, really, what the Court is doing there is simply identifying the traditional matrimonial relationship as distinct from a de facto relationship.

GLEESON J: So traditional was surplusage.

MR HMELNITSKY: Yes, your Honour. That appears, particularly, from paragraph 70. That, perhaps, takes up the point I was making in answer to the Chief Justice’s question. I pointed to paragraph 69 but, perhaps, the point is more clearly made in paragraph 70. Nonetheless, your Honours, may I take the Court just a little further on in the reasoning in Cummins?

EDELMAN J: Can I just ask then, if 71 and 72 are not taken to be referring to a presumption, they are talking about inferences to be drawn from the facts, why would one draw any standardised inference arising from the marital relationship given that – I mean, one thing we do know is that almost every marital relationship is different.

MR HMELNITSKY: One may not ‑ ‑ ‑

EDELMAN J: Why would one not just look at the particular circumstances of the particular relationship?

MR HMELNITSKY: Maybe one would, but that would be to say there is no presumption of advancement that assists one way or the other. In other words, that would be a reason to conclude that the presumption of advancement has no role to play.

EDELMAN J: I am sorry, I thought you accepted the point earlier that in 71 and 72, Professor Scott was not talking about a presumption of advancement. He was talking about an inference, not a presumption – an inference to be drawn from the facts of a relationship.

MR HMELNITSKY: Yes. I certainly do submit that, your Honour, so perhaps my answer was at cross‑purposes. I do not think I can say more about it than that.

Your Honours, what I wanted to draw particular attention to in paragraph 72 was that the Court, having identified those passages in Professor Scott’s work, then addressed the issue as to – can I put it this way, your Honours – how that sits with equity generally and its dislike of joint tenancy and survivorship. What appears from paragraph 72 is that the Court unanimously were satisfied that that inference and the rationale for that inference was one that – the inference could be drawn and the rationale was consistent with equitable principles generally because in the case of the matrimonial relationship there was an acceptance, emphasised by Justices Mason and Brennan in Calverley v Green, that one could end up with a joint tenancy with the prospect of survivorship.

I put that badly, your Honours, but the point is simply this: that their Honours, having identified those propositions, then align them with the principles that had earlier been described, and they resolve the tension as between that conclusion and the rationale for it and equity’s general dislike of finding joint tenancies with that right of survivorship.

GORDON J: Is that analysis compelled by the facts in this case, that is, in Cummins?

MR HMELNITSKY: In Cummins, yes ‑ ‑ ‑

GORDON J: How does that line of reasoning apply here?

MR HMELNITSKY: To answer the first question, yes. The issue in Cummins was as to the value of Mr Cummins’ interest in the jointly held property when he had transferred that to his wife in 1987. The argument went that because Ms Cummins had paid three times as much towards the purchase price than Mr Cummins had, that the value of the interest that he had assigned to his wife in 1987 was only about 23‑point‑something per cent that represented his contribution.

So the issue was, in circumstances where both had contributed in a substantial way to property that was, in that case, jointly owned at law, the question was, in equity, how was his interest to be measured? The answer was that because of the matrimonial relationship and the expectation that one might have as to a married couple’s intentions in contributing jointly to property, that one would reach the conclusion in equity – notwithstanding equity’s general dislike of survivorship – that in fact in these circumstances, the result was inequitable joint tenancy with that right of survivorship.

Now, as I say, that coincided in that case with the legal title. The point of that second quote in paragraph 72 was to make clear that the Court was not there saying where these circumstances exist, one concludes that the equitable ownership is at home with the legal title. Their point was where these circumstances exist, one may infer that what was intended was an equitable joint tenancy even where property is placed in the name of one only.

GAGELER J: The way in which they expressed the result is really in the first sentence of paragraph 73, is it not, that there is no room for the operation of the doctrine of resulting trust to displace the legal incidence of the registered title.

MR HMELNITSKY: In that case, that is right.

GAGELER J: Which is harking back to paragraph 55 where Calverley v Green is put in play. What is not apparent to me in the reasoning is what, if anything, was made of the presumption of advancement? Was it just common ground that it did not apply in the circumstances of this case?

MR HMELNITSKY: It did not apply because the relevant question was that the – what gave rise to the issue was the contribution by the wife to the husband of more than half of the purchase price. So the trustees could not have said – or Mrs Cummins could not have said that she held the property as to 75 per cent because of the presumption of advancement because wives cannot avail themselves of that presumption.

GAGELER J: That is just implicit in the way in which the issue is framed in paragraph 55.

MR HMELNITSKY: That is right. Yes. Again, your Honours, before I come to the substance of the argument on the contention and the notice of appeal, can I next take the Court to Calverley v Green to make good the proposition that I would have the Court draw from Cummins? Calverley v Green is at tab 12 of the joint book of authorities. I have already taken the Court to page 267 of the CLR for the reference to what Justice Deane had said as to the inference that arises where the presumption of advancement applies. I wanted now to take the reasons of Justices Mason and Brennan. If the Court goes to page 258 of the report – page 139 of the joint book – the Court there deals with the conventional presumption of resulting trust. Over the page – page 259 of the report – the Court describes that presumption – that is, the resulting trust presumption – as the basis presumption. The Court says:

This is the basic presumption, though it may be displaced in appropriate cases by the presumption of advancement or, perhaps, qualified by an inference of the kind espoused by Lord Upjohn in Pettitt v Pettitt.

It is really for that reason that I started with the proposition, your Honours, that the inference that might be justified by the reasoning in Cummins is a different inference than is in play when one applies the presumption of advancement.

The quote there is important – well, perhaps, it does no more than spell out the inference that might be drawn in a way that it then taken up by Justices Mason and Brennan, and then by the Court in Cummins. The Court sees that Lord Upjohn said:

Even if the property be put in the sole name of the wife, I would not myself treat that as a circumstance of evidence enabling the wife to claim an advancement to her –

GORDON J: Do you read the next sentence to understand that we are not seeing it through the resulting trust lens?

MR HMELNITSKY: Yes. So, certainly, the result in – yes, your Honour, I do. That is the answer to your Honour’s question.

So, that inference that is identified there and is attributed to Lord Upjohn, in substance, that is the very inference the Court drew in Cummins. As your Honours saw from Cummins, it was an inference that founded the conclusion that what the parties had intended was joint beneficial ownership with the prospect of survivorship.

I would add this, your Honours, to what I have just said, that it is quite clear also that what the Court – or at least Justices Mason and Brennan saw that inference as being justified or resting on the probability of that being the intention, having regard to the mutual love and affection that exists as between partners to a marriage.

EDELMAN J: Mr Hmelnitsky, why is not the strongest basis for an inference what the parties actually did – in other words, they actually chose to put the property in the name of Ms Bosanac?

MR HMELNITSKY: Because your Honour, that is ultimately a circumstance that can point either way.

EDELMAN J: Not at law, it cannot.

MR HMELNITSKY: No, certainly not at law. But equity will always be concerned, first and foremost, with equality and who has contributed to the purchase of the property.

EDELMAN J: The principles of equity are engrafted onto the legal principles. Your starting point is that the legal principle that title was obtained by Ms Bosanac in her own name, with the assistance of Mr Bosanac. And if equity is going to engraft some principle upon that, it does so by saying, well there was an intention to create a trust.

MR HMELNITSKY: Yes, your Honour. But that is all it is, is the starting point. The legal title is just the starting point.

EDELMAN J: But that is where Cummins ends up as well, is it not? Cummins ends up at exactly that same point, that it was the legal title.

MR HMELNITSKY: Absolutely, and the reason that the decision rested there with equitable ownership being as it were, the same as legal title.

EDELMAN J: There was no equitable ownership in Cummins, there was legal title and equity had nothing to say about it. That is what this Court said in Carter Holt and in Boensch v Pascoe, that where there is legal title that has not got any equitable interest engrafted upon it. Equity has nothing to say about the matter.

MR HMELNITSKY: But, your Honour, in Cummins equity did have this to say, which was that what was intended by the parties was that they should have joint equitable ownership of the property with the right of survivorship.

EDELMAN J: Even though they also have joint legal ownership with the right to survivorship?

MR HMELNITSKY: Exactly. Yes, your Honour. But equally, your Honour – and I am repeating myself perhaps – but that is the significance of that second quote from Professor Scott in paragraph 72, which is to say that the result in equity will be the same even if title is held by just the one of them. If they have each contributed in a substantial way to property, then that is the result. That is the inference that is drawn.

So, your Honours, that brings me to the argument on the notice of contention, and of course the notice of appeal. The relevance of all of this to the notice of appeal is that at the very least the inference that the Court draw in Cummins, the Lord Upjohn inference or the Cummins inference, was available here, is available here, and it was appropriate that the Full Court drew the inference that it did.

As to the notice of contention, the significance is this: as your Honours have seen, we advanced the case on the amended notice of contention that the Court would do away with the presumption altogether. One of the principal reasons for that submission is the discriminatory nature, the anomalous nature of the presumption of advancement applying only husband to wife and not wife to husband.

One of the things that is put against us in relation to that is that that is not a reason to get rid of the presumption altogether, it is in fact a reason to expand it, such that one might have the presumption of advancement working both ways. In a marriage it would apply to transactions wife to husband just as it does husband to wife and it would apply equally in same‑sex marriages and so on.

The difficulty with that, your Honours, is that if in the modern marriage one has the presumption of advancement working both ways, then one ends up with a multiplication of circumstances in which absolute gifts are given by one party to the marriage to the other which, in our submission, runs headlong into the probabilities identified by the Court in Cummins. The rationale for the presumption is gift‑giving – the presumption of advancement is the gift‑giving, the result of it applying ‑ ‑ ‑

EDELMAN J: I am not sure that is right. On another view, the rationale is a lack of an intention to create a trust in those circumstances, that in a marital relationship one does not presume that a transfer is – a transfer, whether of purchase money or of title, is a transfer which was intended to create a trust.

MR HMELNITSKY: Nonetheless, the effect of the presumption where it applies and in those cases where it is determinative, is that there is taken to be a gift and that ‑ ‑ ‑

GLEESON J: And you are saying there should be a resulting trust? You are pinning it in the notice of contention to the absence of any rebuttal of the presumption of a resulting trust.

MR HMELNITSKY: Yes. The answer is yes, your Honour, but may I just say this about the proposition that the difficulties with the presumption of advancement might be resolved by expanding it, and that is that first of all the Court would not expand it absent some identifiable rationale for the rule. If it were to be expanded it would, as I have submitted, run headlong into the reasoning in Cummins where the contribution by parties to a marriage to property jointly is a circumstance that leads to a very different conclusion in equity than what the presumption of advancement leads to because what the inference in Cummins leads to, the Lord Upjohn inference, is an inference that the parties intended to enjoy the property jointly during their lives with the right of survivorship, and that is something that is altogether denied by the presumption of advancement.

EDELMAN J: Mr Hmelnitsky, what is wrong with saying that the rationale for the so-called presumption of advancement is that in relationships that are ones of high trust, confidence and affection, which one would treat the marital relationship as, that the parties do not, upon transfers, intend to create trusts. We are not just dealing with land; we are dealing with any transfer – a necklace at Christmas.

MR HMELNITSKY: Yes, your Honour, but the presumption of – the inference that is drawn in Cummins – may I answer your Honour’s question this way – the inference that is drawn in Cummins is an inference as to how an asset to which parties have jointly contributed is to be held in equity. So, one is not concerned here with the husband who goes and buys a necklace for his wife, necessarily. Circumstances may be different, of course. There may be cases in which a particularly valuable diamond is bought, perhaps, and security given for it. There may be any number of circumstances. All I am really trying to do, at this point, your Honour, is to identify the conflict that arises if one attempts to resolve the problems associated with the presumption of advancement by ‑ ‑ ‑

EDELMAN J: But we are concerned with all of those circumstances because if you are right and the so-called presumption of advancement is abolished, then a resulting trust applies – a presumption of resulting trust will apply – in every case within a marital relationship of a transfer of any asset or of a contribution to the purchase of any asset.

MR HMELNITSKY: Only, on this reasoning, your Honour, to assets to which both parties have contributed. The reasoning is limited to that ‑ ‑ ‑

EDELMAN J: That is pretty common in marital relationships ‑ ‑ ‑

MR HMELNITSKY: Indeed. And ‑ ‑ ‑

EDELMAN J: That is a lot of presumed trusts being created.

MR HMELNITSKY: Your Honour, the question is one of probabilities and what does one choose to serve as a rationale for the way that one goes about finding the facts. How does one go about identifying the inference – the intention? Does one do it with a benefit of a presumption of advancement, namely, a presumption that, probably, husbands intend to make gifts to their wives? Or does one do it consistent with the probabilities that were identified by Justices Mason and Brennan in Calverley and Greene, namely, that in those circumstances, if the wife has contributed in some non-insubstantial way, that what was intended was joint beneficial ownership?

Your Honours, that brings me to the notice of contention. We have, largely, said what we wish to say about that amended notice of contention in our written submissions, but can I just identify a couple of matters? The first, your Honours, is that whatever the original rationale may have been for the presumption of advancement, it no longer holds. We gave reference to Kingdon v Bridges, which is behind tab 49 of the authorities. I might just ask the Court to turn that up. The facts ‑ ‑ ‑

GORDON J: What tab was that, I am sorry?

MR HMELNITSKY: I am sorry, your Honour, it is tab 49 ‑ ‑ ‑

GORDON J: Tab 49, thank you.

MR HMELNITSKY: ‑ ‑ ‑1026 of the joint book of authorities.

GORDON J: Thank you.

MR HMELNITSKY: The facts, relevantly, are these: that A. purchased property and put it in the name of various people, including his wife. He then died, and the question was whether he had an interest in the property that had been put in the name of his wife to the extent of his contribution. The reasoning appears there on page 1026 of the joint book of authorities – identified as paragraph [68]:

It shall be presumed to be intended as an advancement and provision for the wife: the wife cannot be a trustee for the husband: and therefore decreed, that the plaintiff should enjoy the benefit –

Et cetera. That proposition, that a wife cannot be a trustee for the husband is, plainly, no longer a circumstance that would justify a presumption or, indeed, any other proposition in 2022. It may be said that this is an historical foundation for the presumption.

KIEFEL CJ: You are no doubt correct to observe in the outline that it has been said more than once that the rationale for the so‑called “presumption” is not satisfactory. Chief Justice Gibbs, in Calverley v Green, went into that in some detail. Nonetheless, in more than one authority in this Court as well, it has been said it is deeply entrenched.

MR HMELNITSKY: Yes, it is. Equally, I would say this about it, your Honour. It is entrenched but the age of the proposition does not, necessarily, commend it to the Court.

KIEFEL J: Is another approach, though, to say that these matters, as you have accepted and dealt with on the whole of the evidence, and if, on the whole of evidence in relation to how parties conduct their financial relations within the marital relationship, there is nothing to suggest an intention to advance or an intention to create a trust, that the presumption is just left as a remnant of a weak principle because it just does not have the same foothold in social conditions as it had. That does not mean that you do away with it entirely, not the least because people have made their arrangements on the basis of it.

MR HMELNITSKY: I will come to that, your Honour. Be all that as it may, it nonetheless places the burden. The question is whether the rule to the extent it places the burden on a party – in this case, the Commissioner, who is in no position to know the intention – is that an outcome that is supported by any identifiable rationale? We say that there remains utility in doing away with it for that reason.

KIEFEL J: I think the authorities, at least in this Court, ad eundem, that it has its basis in the particular relationships. Whether they should be broadened is not really a topic that arises here.

MR HMELNITSKY: Your Honour, none of those statements as to the rationale of the rule either explain it or justify it. So, the rule, as it exists – I will call it a rule, but your Honours know I am speaking of the presumption – as it exists, it applies to transfers by a husband to a wife but not a wife to a husband. The explanation for that, if it does rest on probabilities and love and affection, does not - - -

KIEFEL J: An obligation to provide, I think, is more generally accepted, is it not?

MR HMELNITSKY: With respect, no, there is no universal acceptance of that proposition, and there is no rationale that would support a rule that applies husband to wife and wife to husband. So, it may be that in the 1950s the Chief Justice saw that as being some justification for the rule, but that does not either explain or justify the rule in the way it works today. The effect of the rule where it applies, the presumption where it applies, is that casts the onus, and the question is whether or not that is a result that is justified by this rule – justified by these considerations.

EDELMAN J: It casts the onus on the party asserting the existence of a trust to prove the existence of a trust.

MR HMELNITSKY: It casts the onus on the person who is seeking to displace it and ‑ ‑ ‑

GORDON J: To displace the presumption.

MR HMELNITSKY: Yes.

GORDON J: I think this is what I asked Mr Hutley. The question is what we are asking ourselves and I think what you just said one moment ago probably the better answer and that is that it casts the onus on the party seeking to assert the existence of a trust.

MR HMELNITSKY: Yes, your Honour, that is so. Your Honours, I will not say more about the justifications that have been offered in any of the older cases. The explanation for the rule that was given by Chief Justice Gibbs in Calverley v Green is really to a similar effect. So, our submission is that it does not really have a satisfactory rationale, and if it is to operate, as it does operate, in a discriminatory way, that operation of the rule ‑ ‑ ‑

EDELMAN J: Mr Hmelnitsky, is your argument about Kingdon v Bridges that the origins of the so‑called presumption of advancement was in the inability of married women to hold property?

MR HMELNITSKY: We say that is certainly – your Honour, the proposition as it is reported in Kingdon v Bridges may be – it may be a combination of more than one principle, but as it is expressed in the report, it is that a wife cannot be a trustee for the husband. As we put in our written submissions, that may involve a couple of related propositions about husbands and wives, but whatever be the explanation for that, it is just not an explanation that holds today.

I have made the submission, your Honours, as to the discriminatory nature of the rule. It is inconsistent with sections 5 and 6 of the Sex Discrimination Act, and that is for the practical result that it has. It will place the burden, depending on the particular relationship that existed as between the parties. If it is husband to wife, the burden is one way; if it is wife to husband, the burden is the other.

I have said what I wish to say about the difficulty of resolving any of this by way of extending the presumption. As I have submitted, that does run headlong into the reasoning in Cummins. The question that your Honour the Chief Justice raises with me as to people having relied on the rule we have also dealt with in our written submissions, but may I just say a couple of things in addition on that front.

The first is, your Honours, that the presumption of advancement ultimately is evidentiary. It works in the way that I have described. It is not a substantive rule about property. A husband is free to deal with his property and to make gifts to his wife regardless of the existence of the presumption. A husband’s ability to make gifts to his wife is not reduced or limited or constrained one jot by the presumption disappearing.

Secondly, and perhaps for the same reason, what the appellant says in her reply submissions at paragraph 11 as to circumstances of reliance is incorrect. What is put against us in paragraph 11 of the reply submissions, halfway through that paragraph, is this, that:

If a lawyer has told a couple that the effect of those doctrines is to give a wife beneficial and legal title, despite a husband’s contributions, and that is consistent with the intention of the parties, there is no reason to assume that there would be any further documentation.

Now, the difficulty with that is that that is not an example of someone relying on the presumption of advancement. It is the result of someone relying on wrong legal advice because the presumption of advancement does not give beneficial or legal title. It is a presumption, and what is overwhelmingly relevant in this area is the intention of the husband. If the husband’s intention is to make a gift, and that can be demonstrated, it will be a gift. If the intention is not to make a gift, it will not be. So, the notion that people have relied upon the presumption is perhaps a little more apparent than real. Secondly ‑ ‑ ‑

GAGELER J: Mr Hmelnitsky, the effect of your submission would be to expand the presumption of a resulting trust within the matrimonial relationship, would it not?

MR HMELNITSKY: Well, it would be that a resulting trust would arise to give effect to the intention that – I will say a couple of things. Assuming that one instead draws the inference drawn in Cummins, then the result would be – so, if the presumption of advancement goes but one nonetheless draws the inference that is referred to in Cummins, then the result is that assets to which there has been substantial joint contribution are jointly owned in equity. That may or may not always accord with legal title. It did accord with legal title in Cummins.

GAGELER J: Have you actually read the passage in full in Scott on Trusts that is referred to?

MR HMELNITSKY: Yes, your Honour.

GAGELER J: It is very difficult to reconcile with the submission you have made. I mean, in the very same passage one finds a reference to what we would describe as a resulting – as a presumption of advancement.

MR HMELNITSKY: Yes, your Honour. But it is quite clear in my submission from what was drawn from that in Cummins, that the Court was there concerned with identifying joint beneficial ownership with the right of survivorship. That is the basis for the submission, your Honour. The other thing I wish to say about the notion of people having relied on the rule is this. At least since 2006 it has not been possible to rely simply on a presumption of advancement in making a gift to your wife.

That is for the reason that the Court unanimously, in 2006 in Cummins, drew an inference that what was intended was joint beneficial ownership. So, since 2006 at the very least, the husband supposedly relying on the presumption of advancement to make a gift to his wife has been equally – perhaps more so – at peril of the very opposite outcome than a gift, namely, joint beneficial ownership.

So, since at least 2006, that has been the state of affairs. The idea that since then there has been any particular reliance on the presumption in order to order affairs is, as I have submitted, perhaps more apparent than real.

GORDON J: Do you accept that the outcome in Cummins may be read as confined to the facts of that case?

MR HMELNITSKY: No, your Honour, for this reason. The inference could only be drawn in Cummins by recognising the probability of the intention of the parties and by recognising that that was something that was – as the Court said – founded in what Justices Mason and Brennan had said in Calverley v Green and gave effect to that probability.

GORDON J: The order they made – or the inference they drew – gave effect to that probability.

MR HMELNITSKY: That is right. The inference that was drawn there, relevantly, was based on these facts – that there had been a joint contribution by parties to a marriage to an asset. That was used in that case as the matrimonial home. Those facts exist here. Here, there was joint contribution to the Dalkeith property. Mr Bosanac’s contribution was as to half of it. Otherwise, the facts were the same – they were married. The Court, in my submission, would just as readily draw the inference here as was drawn in Cummins – namely, that what was intended by the parties was joint beneficial ownership with the right of survivorship.

GORDON J: Was that the submission you put to the Court of Appeal below – the Full Court below?

MR HMELNITSKY: The submission that was put in the Full Court was that the inference that would be inferred that the – I would have to go back and see how it was put. I was not in the Full Court, your Honour. But the case in the Full Court, as is reflected in the reasons, turned on the inference that could be drawn as to Mr Bosanac’s intention.

It is quite clear from the Full Court’s reasons that they had in mind the inference that had been drawn in Cummins, and that appears particularly from paragraph 16 of the Full Court’s reasons. At the end of paragraph 16 on page 99 of the core appeal book the court said:

The significance is that the nature of the transaction permits an inference as to intention consistent with the inference drawn in Cummins –

In our submission, it is clear that what the court had in mind was an inference exactly of that nature.

GAGELER J: But the inference drawn in Cummins was of no intention to create a trust.

MR HMELNITSKY: Your Honour, what was intended – that may be so, but that was founded upon a presumed intention that the property, acquired by the joint contributions of the parties, would be held in equity as joint tenants with the right of survivorship. So there was, at the heart of the reasoning in Cummins, at least that.

EDELMAN J: In other words, that a trust was created in exactly the same interests as the legal interests. The legal title was held as a joint title with a right to survivorship.

MR HMELNITSKY: Yes.

EDELMAN J: Why would one create a trust with exactly the same effect?

MR HMELNITSKY: The upshot was that there was no reason to disturb the legal title at all because it reflected the interest that was recognised in equity.

EDELMAN J: Yes.

MR HMELNITSKY: I do accept that, your Honour. Yes.

Your Honours, that is what I wish to say about the notice of notice of contention. The notice of appeal I can deal with relatively briefly. The issue in the appeal is relatively more straightforward, and that is: did the Full Court err in drawing the inference that it did that the presumption here had been rebutted? I have already made the point, your Honours, that the question – and this is the matter that the Court has pointed out this morning – that the question for the court was: on all of the evidence before the court, what inference could be drawn as to Mr Bosanac’s intention at the time of the acquisition of the Dalkeith property?

KIEFEL CJ: You refer at outline, paragraph 9, to evidence of subsequent dealings. I take it that is the Full Court’s reference to the share dealings which were done on the basis of the security of the Dalkeith property.

MR HMELNITSKY: Yes, your Honour. Yes. That can only have had relevance to the extent that it shed any light on what the intention had been at the time of its acquisition.

KIEFEL CJ: How does one get to that from the fact of share dealings at a later time?

MR HMELNITSKY: Only this, your Honour, that it is some evidence of an intention on Mr Bosanac’s part to continue to – well, to enjoy the property and indeed the title to the property, because it is the title that facilitated the borrowing.

KIEFEL J: He could only use the Dalkeith property which was held in his wife’s name to provide security for share transactions with his wife’s facilitation – with her consent.

MR HMELNITSKY: Yes, your Honour, I do accept that. I do not suggest that that fact takes matters terribly far, but it is another of these facts that has been described as ambiguous. It does not point affirmatively one way or the other. The title to the house was used to raise a loan for Mr Bosanac’s benefit. It may not point definitely one way or the other but, in circumstances where the question is the intention of the Bosanacs ‑ ‑ ‑

KIEFEL J: But the Full Court may not have used it directly, but it used it to support the inferences it otherwise drew.

MR HMELNITSKY: Yes. We say it was ‑ ‑ ‑

KIEFEL J: How does it support the other factors that the Full Court refers to?

MR HMELNITSKY: Because, taken together, all of the facts provide a basis for an inference. It is one fact which, taken together with the other facts, sparse as they may be, was a foundation for an inference. In circumstances where there was no direct evidence from the Bosanacs – they could have given evidence on this issue but did not – the inference was the more readily drawn.

EDELMAN J: You accept the inference has to be drawn at the time of the transaction?

MR HMELNITSKY: Absolutely. Yes, your Honour.

EDELMAN J: So how do the subsequent events show what was objectively intended at the time of the transaction?

MR HMELNITSKY: Only in a marginal way, your Honour, and only to this extent: that, if it could be seen to be consistent with facts that, together, provided a foundation for the inference, then it was permissible for the court to have regard to them. I do not want to say anything more about that particular fact.

GORDON J: Because it is refinancing. It is not using the borrowings that were drawn down for the purchase.

MR HMELNITSKY: No, absolutely not. That is correct. It was a borrowing against the security of a property that was in Ms Bosanac’s name. Then the proceeds of that borrowing were provided to Mr Bosanac and he used it for his share trading. I cannot say anything more about it than that, your Honour – but that was the circumstance. It is the fact of the title having been used in a way that benefited, it seems, Mr Bosanac, that we say is, at least, consistent with the other matters that the court identified as the basis for the inference.

The other basis for the inference was the fact of the borrowing arrangement. Your Honours, there may well be a difference between the Shah of Iran buying a house and giving it to his wife and someone in a marriage buying a family home and putting it in the wife’s name but then, at the same time, subjecting oneself to many years of loan repayment obligations. We do not suggest there is a rule about it. The Full Court did not express themselves as having identified a rule about it. The position was just this: that, in those circumstances where husband and wife have jointly contributed to property – it is held in the name of one of them – it is to be inferred that there was an intention that they enjoy it jointly.

That is why, we say – this is probably the last thing I really need to say. That is why we say, your Honours, that even without those additional facts – even without the borrowing, and, certainly, without the share trading transaction – if one confines oneself here to those bare facts that were sufficient to found the inference in Cummins, then those same facts – which appear here – equally founded the inference that the Full Court drew as to Mr Bosanac’s intention – and all the more readily so, having regard to the fact that neither of them gave evidence. If the Court pleases.

KIEFEL CJ: Thank you. The Court will adjourn until 2.15 pm.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

KIEFEL CJ: Yes, Mr Hutley.

MR HUTLEY: Thank you, your Honour. Our learned friends sought to deploy the passage, the second passage, from Scott quoted in paragraph 71 from the Cummins decision in differing ways at differing times. At times my learned friend suggested it stood as some form of counter‑presumption to the effect of the marital relationship on the presumption of resulting trust, so, in effect, we now have a kind of presumption of resulting trust, presumption of advancement, some form of presumption arising out of the circumstances identified in that second passage. At other times it was sought to be said to be that fact of itself leads to an inference of the establishment of – my learned friend got to the point of a resulting trust. Seems to be more likely to be an actual trust, but set that aside for the moment.

As paragraph 55 of the judgment in Cummins makes clear, it was not a case of advancement, but it is also important to see this case in its factual context and the matters to which reliance was placed. If I can ask your Honours to go to it shortly, and at paragraph 8 – that is 684 in the book, paragraph 285 in the report, your Honours will see what the case was about, relevantly. The case would concern, in the first instance, a transaction by which Mr Cummins purported to sell – sold to Mrs Cummins – his interest in the property in August 1987. That became referred to as the August 1987 transaction. Then, if one goes over to paragraph 58 – paragraph 56, 57, and 58, but particularly it is 58 – the Court investigated that transaction. For example, they noted that there was evaluation of half-interest at $205,000. And it said:

What was there to conclude in August 1987 that the face of the register did not represent the full state of the ownership . . . was at odds with, and subjected to, the beneficial ownership established by trust law –

And then they said:

No part of the purchase price of $205,250 was paid by Mrs Cummins and the August 1987 transfer was voluntary, as explained earlier in these reasons. However, Mrs Cummins did pay the ad valorem stamp duty . . . There is force in the submission for the Trustees that it is unlikely these steps would have been taken –

Et cetera:

with respect to the Hunters Hill property would have been cast in the way that it was had she believed that she already held approximately a two-thirds beneficial interest.

In other words, she went and paid stamp duty on the value of acquiring a half interest, which was totally contrary to the position she was taking in the hearing, that at the time of acquiring that property in the 1970s she had a two‑thirds interest by reason of her contribution to the purchase price. That then went on, and other facts – particularly from 65 and following – were addressed, particularly at the bottom of paragraph 65:

However, as Malayan Credit illustrates, 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.

So, in other words, they had a subsequent act in this case where Mrs Cummins acted in a way which the Court observed was contrary to any suggestion that she understood she had an interest which departed from that in the title.

One then goes on to 66, and that is when they turn to the question of the transaction, looking back, as they had to, to the acquisition in 1970. If one goes through 67 and 68, you will see part of that transaction which brought into play this situation where it is hard to work out precisely whose contributions they were because there was confusion as to how much was paid by whom towards the construction of the house which came to be built upon the lot.

That is the context in which the Court turned to 68 to consideration of the Calverley v Green position and the Pettit v Pettit questions, and it is in that context it is to be understood they were dealing. I will come to some other cases in a moment, and that is the force of their remarks. Then, that is why at 69, they go on and say:

It is unnecessary for the purposes of the present case to express any concluded view as to the perception by Mason and Brennan JJ of the particular and exclusive significance to be attached to the status of marriage in this field of legal, particularly equitable, discourse. It is enough to note –

Et cetera. So, in other words, rather than taking it up, they felt because of the peculiarities of this situation, they did not have to deal so. Then they refer to Justice Sackville’s dealing with the Family Law Act and the like.

Therefore, that is the context in which one comes to 71 and 72. Can I pass over it? I wish to take your Honours to the Scott on Trust passage which is the one which lies at the heart of our learned friend’s case. One then moves to 72, which said:

That reasoning applies –

and your Honours have been taken to that. Then they say in 73:

In the present litigation, the case for the disinclination of equity to intervene through the doctrines of resulting trusts to displace . . . is strengthened by further regard to the particular circumstances.

Then they go and deal – particular circumstances there, and then they move on in 74 to look at other matters which are particular to the case. So, in other words, this was a case where there was much evidence tending towards a conclusion that the title and the beneficial interest move together and you cannot take from the observation at 71, the second passage, that – or the Court should not be taken from that passage to have inferred that fact alone will have that result. The use of the word “may” in the statement from Scott shows that.

In that regard, can I take you to certain matters in relation to Scott? Your Honours have the relevant chapter of Scott. I have it, too, but I found this other edition. I do not know where it is – your Honours have it, yes. The passage which is referred to is in paragraph 454, at pages – no, I am sorry, not that. I do apologise. At paragraph 443, from page 197 over the top of 198.

KIEFEL CJ: Sorry, where is that in the envelope? I found ‑ ‑ ‑

MR HUTLEY: If your Honour looks at the bottom, there are printed numbers.

KIEFEL CJ: Yes.

MR HUTLEY: Your Honour should see 197. They have these long paragraphs.

KIEFEL CJ: I am sorry. I am looking at tab ‑ ‑ ‑

GLEESON J: This is the material that we received a couple of days ago.

MR HUTLEY: I think so, your Honour. I hope so. It is the fourth edition.

KIEFEL CJ: I have it now. I am sorry, I was looking at the bundle which only had one of the paragraphs in it. I have it now. Thank you.

MR HUTLEY: Your Honours, page 197, your Honour will find. It is in a chapter entitled “Rebutting the Presumption of a Gift to a Relative”. Then, the passage, which was quoted by the court, is at the bottom of 197, over to 198. Your Honours will see the footnote is, firstly, to Rimmer v Rimmer,
[1953] 1 QB 63. Rimmer v Rimmer – that is in the materials at tab 60, page 1299. It was the decision of the Court of Appeal dealing with a married woman’s property – women’s property – at 1882.

GAGELER J: It was just a big discretion, was it not?

MR HUTLEY: Yes. That is what I am coming to, your Honour.

GAGELER J: Yes.

MR HUTLEY: It starts, promisingly, at 1302, page 66. The Master of the Role said:

This appeal is another illustration of the difficulties with which a court is confronted in trying to do justice, as enjoined by the Married Women’s Property Act, 1882, s. 17, between a husband and a wife as regards some item of property when their marriage has unfortunately come to grief.

The passages are then – if everyone goes over to the – I am not going to take your Honours through the detail, but if your Honours goes over to 1307, page 71 in the report, his Lordship said:

I think that in each case the question is, on all the facts of the case, what is the fair and just answer to be given to the question posed, having regard not merely to what occurred at the time when the property was originally purchased but also having regard to the light which the conduct of the husband and the wife throws upon their relationship as contributors to the acquisition of the property which was their joint matrimonial home?

In the judgment of Lord Denning, your Honours will see at page 74 of the report – 1310 of the book – the passage at the bottom of that page in the paragraph ‑ ‑ ‑

GORDON J: What page is that, sorry?

MR HUTLEY: In the report, 74; in the book, 1310.

GORDON J: Thank you.

MR HUTLEY: It says:

It seems to me that when the parties, by their joint efforts, save money to buy a house, which is intended as a continuing provision for them both, then the proper presumption is that the beneficial interest belongs to them both jointly. The property may be bought in the name of the husband alone, or in the name of the wife alone, but nevertheless if it is bought with money saved by their joint efforts, and it is impossible fairly to distinguish between the efforts of one and the other, then the beneficial interest should be presumed to belong to them both jointly.

Then, similar passages I will not take your Honour in the judgment of Lord Justice Romer on 1311 – 75 – at about point 3 to about point 5, and then the last full paragraph in the judgment on page 76 – page 1312 in the book.

GLEESON J: At 73 at about point 5 Lord Justice Denning prefaces that by saying:

In cases when it is clear that the beneficial interest in the matrimonial home, or in the furniture, belongs to one or other absolutely, or it is clear that they intended to hold it in definite shares, the court will give effect to their intention –

MR HUTLEY: Yes. Now, there was a second decision which applied that, which is the second decision referred to, which is Fribance v Fribance. That is reported in (1957) 1 ER 357, volume 4, tab 42, page 972. I do not need to really take your Honours to this other than to note it again was a case ‑ ‑ ‑

GORDON J: It is the same though, is it not, it is the Married Women’s Property Act.

MR HUTLEY: Exactly, and it applied Rimmer v Rimmer. That is the point. But the third decision referred to your Honours will see ‑ ‑ ‑

GORDON J: Well, I know you want to put it to the side but I thought it was actually quite interesting because if you go to 359 what Lord Justice Denning says:

I put, therefore, the question of contract, gift or trust on one side, and apply the law as laid down in Rimmer –

MR HUTLEY: Then to make it pellucidly clear that one really cannot take much from this statement, if one goes then to tab 62 in the materials, Silver v Silver, a decision of the Court of Appeal, reported in (1958) 1 WLR 259. This was a case where there presumption of advancement was raised, which your Honours can see from the commencement of the report. Lord Evershed at 1324 at about point 8 said:

The judge thought that the present case was not covered by Rimmer and to be distinguished from it, and I think rightly. To begin with, in Rimmer’s case the property was in the husband’s name and both had contributed out of their earnings towards it. Here the property was – as were all the preceding items in the series – in the wife’s name. On the other hand, the wife contributed in cash herself nothing.

Then going on at 263, at about point 6:

In cases of this kind where one is concerned with the matrimonial home, there is an obvious temptation to hold that a fair result would be to say that it was a joint enterprise and the two should be jointly entitled; but, if we so concluded in this case, I have come to the conclusion that we should be in effect inventing a case.

So, in other words, where there was a presumption of advancement, they distinguished those cases. So, in other words, in our respectful submission, the passage in Scott is really not supported by the cases relied upon. Those cases were in a statutory context far removed from that which one is dealing with here. The statement in paragraph 71, the reference to it – it commences by saying:

To that may be added the statement in the same work –

It is quite clear that the Court were not here directing their attention to the full implications for a presumption of advancement of anything of this variety. It was, in effect, an obiter remark, and I accept it is an obiter remark of the Full Court in a context where the decision turned not on this, but a whole series of facts which made it perfectly clear that the actual intentions of both parties is that they would jointly hold the property.

So, in our respectful submission, not that it is necessary, but the suggestion put by our learned friends that this Court has set down some adamantine principle through that paragraph is wrong and, were it right, the Court, with respect, should not follow it. We submit the Court is not purporting to do so and that should not be treated as having done so. In any event, such a proposition would be contrary to Wirth v Wirth and Martin v Martin because in each of those cases one was dealing with an acquisition of a matrimonial home. I will not take your Honours back to them, but that is what they were dealing with.

It also, when one thinks a moment about it, if it was true, is somewhat an extraordinary proposition. If a husband pays for the whole purchase price, it apparently is a gift. If the husband pays for 95 per cent of the purchase price and puts in the wife’s – assuming he will always put in the wife’s title – it is a resulting trust as to 50 per cent. If the wife puts in 95 per cent of the purchase price and the husband puts in 5 per cent of the purchase price and it is put in the wife’s name, it is, on our learned friends, a 50/50 split.

That points up that the instantiation of subrules of the variety of our learned friends will only lead to anomalies and unfairness and an ongoing process of trying to divine some sort of matrix of circumstances to achieve sensible results. The principle of advancement has stood for hundreds of years, and does not appear to, despite the protestations of the Commissioner, have created any great inconvenience. It has clearly been relied upon not solely for the purposes of supposed tax avoiders. If there is an intention to in effect avoid the Commissioner, there are lots of provisions in bankruptcy that the Commissioner can deal with to deal with that.

As the cases – and I am not going to take your Honours through them – the first instance cases we have referred to, it is often used, for example, in circumstances where people – say, a husband has died, an elderly woman may not be competent to give evidence and may be confronting disgruntled children – her own children or children of a former marriage or the like – the principle stands and operates in socially advantageous circumstances and, as we have said in our submissions, it has been looked at, as the Court suggested it should be in Nelson v Nelson by at least the South Australian Law Reform Commission. The States have not acted on it. The Court should infer that is for perceived good social policy reasons. In light of the statements by this Court about its fundamental character – I will not take your Honours to the statement of Justice McHugh in Nelson, but he agreed with Justice Deane’s position and gave reasons why it should not be changed, as did Justices Gummow and ‑ ‑ ‑

EDELMAN J: Deane.

MR HUTLEY: Thank you, your Honour. I had a moment – and Justice Toohey, who approved of exactly the same passage of Justice Deane at page 266 of Calverley. Those reasons, in our respectful submission, make it compelling that the Court would not upset that principle. As to the fact alone of the marital home, we would observe and take up your Honour Justice Edelman’s observation; obviously relevantly sophisticated people made a calculated determination to put a valuable piece of property in my client’s name in circumstances where they owned significant assets on their own behalf, and had joint investments of a limited variety such as bank accounts. The overwhelming inference is that Mr Bosanac did not seek to acquire any interest in that property. Those are our submissions in reply, your Honour.

KIEFEL CJ: Yes, thank you. The Court reserves its decision in this matter and adjourns to10 am tomorrow.

AT 2.38 PM THE MATTER WAS ADJOURNED