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Litigation and Dispute Resolution update: High Court Clarifies the Law Around Presumptions

Nov 16, 2022

On 12 October 2022, the High Court of Australia (HCA) handed down its decision in Bosanac v Commissioner of Taxation [2022] HCA 34. This case considers the application and role of the ‘presumptions’ of resulting trust and advancement in respect of a contribution to the purchase price of a property. The decision serves as a reminder that presumptions of resulting trust and advancement are here to stay, but they are weak.

What are the presumptions?

The first presumption is the presumption of a resulting trust. It is generally accepted that this presumption initially arose in feudal times in England. Its effect is that when person A advances purchase monies for a property and that property is held in the name of person B, it is presumed that person B holds an interest in the property on trust for person A absent evidence of person A’s intention to the contrary.

The other presumption, which can be seen as a carve out of the presumption of a resulting trust, is the ‘presumption of advancement’. The presumption of advancement operates to nullify the presumption of resulting trust in certain classes of relationship. These categories of relationship include husband and wife, or parent and child. As an example, where a husband contributes to the purchase price of a property and the entire property is held in the wife’s name, there is a presumption that no resulting trust was intended to arise.

Background and the Findings of the Federal and Full Federal Court

By way of background, this case concerned the purchase of a property by a husband and wife in 2006. The property was in the wife’s name but the source of funds for the deposit was a joint account and the purchase was otherwise financed by joint borrowings. The property was used as the matrimonial home until about 2013 when Mr and Ms Bosanac split. Mr Bosanac continued to live at the property until September 2015 at which time he moved to a different address. The Commissioner of Taxation, who was a creditor of Mr Bosanac, sought a declaration of a resulting trust one half of the equity in the property was held by Ms Bosanac for Mr Bosanac. The Commissioner relied on the presumption of resulting trust.

At first instance, the Federal Court rejected the Commissioner’s application and found that the presumption of advancement operated in Ms Bosanac’s favour. It found the evidence did not support an inference that Mr Bosanac intended to have an interest in the property.

The Full Federal Court overturned that decision and found that Ms Bosanac held 50% of her interest in the property on trust for Mr Bosanac. This was on the basis that there were facts which tended strongly against the presumption of advancement and in favour of a trust being intended by both Ms and Mr Bosanac. Those facts included:

  • The property was intended for their joint use and for the benefit of them both;
  • The deposit was funded from a joint account; and
  • the subsequent indebtedness was shared between Mr and Ms Bosanac.

See Commissioner of Taxation v Bosanac [2021] FCAFC 158 at [19] – [21].

Commissioner Argued for Abolition of Advancement

An important part of the HCA’s decision related to the Commissioner for Taxation effectively asking the HCA to abolish the presumption of advancement on the basis that: −

  • it has no acceptable rationale;
  • the presumption is anomalous;
  • the presumption is anachronistic; and
  • the presumption is discriminatory.

HCA’s Decision

The Commissioner’s argument was addressed and rejected by 3 of 5 justices (Edelman J and Gordon J did not specifically address the Commissioner’s contentions but in effect rejected them) with the Court unanimously finding that the abolition of any presumptions (which according to the Court are seen as ‘landmarks’ in Australian law) ought not be done judicially.

Despite confirming that the presumptions will not be abolished judicially, the Court unanimously confirmed that each of the presumptions do not carry much weight and are easily displaced by evidence. The Court reinforced that the real inquiry is what the parties’ objective intentions were at the time of the transfer or purchase, taking into account the totality of the circumstances. Only if there is a paucity of evidence from which the objective intention of the parties can be inferred or in circumstances where the evidence is truly equivocal can the presumptions have any work to do.

The Court closely scrutinized the circumstances of the transaction (including the relationship at the time as between Mr and Ms Bosanac, their occupations, and their level of sophistication) and unanimously overturned the Full Federal Court’s decision. It is important to note that the Full Federal Court’s decision was not overturned on the basis that the presumption of advancement applied to this case; rather the HCA found that the circumstances of the transaction did not support an objective intention that was consistent with a declaration of trust in favour of Mr Bosanac.


The takeaway point from this case is that when trying to assess whether an interest in property is held on trust for another person by reason of a contribution to the purchase price for that property, the proper approach is to consider the whole of the circumstances of the subject transaction to derive the objective intention of the parties at the time of the contribution. Only if that analysis is truly uninformative or equivocal will an argument based on the presumptions have any real force or merit.

More information

Understanding interests in property and the presumptions of resulting trust and advancement is complex and is the subject of frequent litigation, if you have any questions involving property transactions and your rights in respect of contributions to the property, then please call Senior Associate Arnie Vijayakumar (avijayakumar@kcllaw.com.au; (03) 8600 0720) or Principal Lawyer and Head of Litigation and Dispute Resolution David Weinberger (dweinberger@kcllaw.com.au; (03) 8600 8872).


This Litigation and Dispute Resolution case note was authored by Arnie Vijayakumar and David Weinberger.

Note: This update is a guide only and is not intended to constitute legal advice.