An analysis of recent devellopments in the law ofResulting Trusts - Copy.ppt

RESULTING TRUSTS

1. Resulting TrustsResulting Trusts
Associate Professor Cameron StewartAssociate Professor Cameron Stewart

2. DefinitionDefinition

A resulting trust is a trust that arises because A resulting trust is a trust that arises because
equity presumes an intention to create a trust. equity presumes an intention to create a trust.

They are often referred to as ‘implied’ trusts, They are often referred to as ‘implied’ trusts,
although they should not be confused with although they should not be confused with
express trusts where an intention to create the express trusts where an intention to create the
trust is implied from wording or surrounding trust is implied from wording or surrounding
circumstances. circumstances.

3. Automatic resulting trustsAutomatic resulting trusts

WestdeutscheWestdeutsche Landesbank Girozentrale v Islington Borough Landesbank Girozentrale v Islington Borough
CouncilCouncil

Resulting trusts which arise when there has been a Resulting trusts which arise when there has been a
failure of an express trust, or, alternatively, where there failure of an express trust, or, alternatively, where there
is a surplus of trust property after a trust has been is a surplus of trust property after a trust has been
terminated. In these situations the remaining trust terminated. In these situations the remaining trust
property is held on resulting trust for the creator of the property is held on resulting trust for the creator of the
trust because it is presumed that the creator intended to trust because it is presumed that the creator intended to
receive any leftover beneficial interest receive any leftover beneficial interest

4. Presumed resulting trust Presumed resulting trust

Resulting trusts which arise because Resulting trusts which arise because
contributions have been made to the purchase contributions have been made to the purchase
of property but the contributor has not been of property but the contributor has not been
given a legal title that is equivalent to that given a legal title that is equivalent to that
contribution. In such a transaction, equity contribution. In such a transaction, equity
presumes that the equivalent legal title is held on presumes that the equivalent legal title is held on
trust for the contributor trust for the contributor

5. An institutional trustAn institutional trust

Any presumption that equity makes about a Any presumption that equity makes about a
person’s intention can be rebutted by evidence person’s intention can be rebutted by evidence
of actual intentionof actual intention

A resulting trust comes into existence from the A resulting trust comes into existence from the
date of the circumstances giving rise to its date of the circumstances giving rise to its
presumption presumption

The resulting trust is a The resulting trust is a property institutionproperty institution like an like an
express trust, rather than a express trust, rather than a remedyremedy

6. An institutional trustAn institutional trust

Rickett and Grantham (2000) at 19:Rickett and Grantham (2000) at 19:

The resulting trust and its foundational The resulting trust and its foundational
presumptions operate as part of the law of presumptions operate as part of the law of
property, simply as a series of default rules property, simply as a series of default rules
locating the beneficial interest in property when locating the beneficial interest in property when
the transfer of the property is itself ambiguous the transfer of the property is itself ambiguous
as to the location of that interest, or ineffective as to the location of that interest, or ineffective
to dispose of that interest to dispose of that interest

7. An institutional trustAn institutional trust

Some scholars, like Chambers (1997), have Some scholars, like Chambers (1997), have
argued that beyond this basic but fundamental argued that beyond this basic but fundamental
role, lies an attempt by equity to prevent or role, lies an attempt by equity to prevent or
reverse unjust enrichment on the part of those reverse unjust enrichment on the part of those
who have received legal title where there was no who have received legal title where there was no
intention for them to obtain a beneficial interest.intention for them to obtain a beneficial interest.

8. Incomplete disposition of a Incomplete disposition of a
beneficial interestbeneficial interest

A resulting trust will be imposed when there has A resulting trust will be imposed when there has
been an incom
­plete disposition of a beneficial
been an incom
­plete disposition of a beneficial
interest in a trust. This can occur when an interest in a trust. This can occur when an
express trust fails, when the purpose of a trust express trust fails, when the purpose of a trust
fails or when a trust surplus exists after fails or when a trust surplus exists after
satisfaction of the purpose of a trust. satisfaction of the purpose of a trust.

9. Failure of an express trustFailure of an express trust

After an express trust fails, equity imposes a After an express trust fails, equity imposes a
resulting trust by presuming an intention on the resulting trust by presuming an intention on the
part of the creator for the trust property to part of the creator for the trust property to
revert back to the creator. revert back to the creator.

If a trust fails for illegality, equity looks at the If a trust fails for illegality, equity looks at the
specific circumstances of the case and the specific circumstances of the case and the
particular policy behind the law that had been particular policy behind the law that had been
breached, before determining whether a breached, before determining whether a
resulting trust should be applied: resulting trust should be applied: Nelson v NelsonNelson v Nelson

10. Failure of the purpose of a loanFailure of the purpose of a loan

Quistclose Quistclose trusts trusts

This trust has been classified by Lord Millet in This trust has been classified by Lord Millet in
Twinsectra Ltd v YardleyTwinsectra Ltd v Yardley [2002] 2 AC 164; [2002] 2 AC 164; [2002] [2002]
2 All ER 377, 2 All ER 377, as a resulting trustas a resulting trust

Salvo v New Tel Ltd Salvo v New Tel Ltd [2005] NSWCA 281: the [2005] NSWCA 281: the
majority (Spigelman CJ and Young CJ in Eq) majority (Spigelman CJ and Young CJ in Eq)
favoured an express trust treatmentfavoured an express trust treatment

11. Trust surpluses after satisfaction of Trust surpluses after satisfaction of
the purpose of a trustthe purpose of a trust

A trust surplus might exist after the beneficiaries A trust surplus might exist after the beneficiaries
in a fixed trust have taken all their entitlements in a fixed trust have taken all their entitlements
or have died. In such cases there will be a or have died. In such cases there will be a
resulting trust of the surplus back to the creator resulting trust of the surplus back to the creator
of the trust of the trust

12. Purchase of property in another Purchase of property in another
person’s nameperson’s name

If a purchaser buys property and voluntarily If a purchaser buys property and voluntarily
directs the transfer of the property into the directs the transfer of the property into the
name of another person, equity presumes that name of another person, equity presumes that
the owner holds that property on resulting trust the owner holds that property on resulting trust
for the purchaser:for the purchaser: Napier v Public Trustee (WA) Napier v Public Trustee (WA)

For example, if A purchases property from B, For example, if A purchases property from B,
and directs that B transfer the title into C’s and directs that B transfer the title into C’s
name, equity presumes that C holds the property name, equity presumes that C holds the property
on trust for A. on trust for A.

13. Purchase of property in another Purchase of property in another
person’s nameperson’s name

The presumption applies to both real and The presumption applies to both real and
personal property personal property

Eg Russell v ScottEg Russell v Scott (1936) 55 CLR 440, the (1936) 55 CLR 440, the
presumption of resulting trust applied to a bank presumption of resulting trust applied to a bank
account that was opened by one party in her account that was opened by one party in her
own name and the name of her carer. That own name and the name of her carer. That
presumption was rebutted by evidence of an presumption was rebutted by evidence of an
intention to convey a beneficial interest on the intention to convey a beneficial interest on the
carer carer

14. Purchase of property in another Purchase of property in another
person’s nameperson’s name

The presumption of resulting trust will not arise The presumption of resulting trust will not arise
in cases where the purchase monies have been in cases where the purchase monies have been
provided as a loan. The presumption only provided as a loan. The presumption only
applies when the provider of the monies acts as applies when the provider of the monies acts as
a purchaser or directs that the purchase take a purchaser or directs that the purchase take
place place

15. Contributions to the purchase of Contributions to the purchase of
propertyproperty

In cases where the purchase money is provided In cases where the purchase money is provided
by two or more parties jointly, and the property by two or more parties jointly, and the property
is put into the name of one of the parties, equity is put into the name of one of the parties, equity
will presume a resulting trust in favour of the will presume a resulting trust in favour of the
other party or parties other party or parties

16. Contributions to the purchase of Contributions to the purchase of
propertyproperty

For the presumption of resulting trust to arise, For the presumption of resulting trust to arise,
contributions that are made by the parties must contributions that are made by the parties must
go towards the purchase price of the property. go towards the purchase price of the property.
Importantly, equity determines this by looking at Importantly, equity determines this by looking at
what was provided by the parties at the what was provided by the parties at the date of date of
purchasepurchase

17. Contributions to the purchase of Contributions to the purchase of
propertyproperty

Several types of contribution can be recognised as Several types of contribution can be recognised as
contributions to purchase price. Obviously, direct contributions to purchase price. Obviously, direct
payment of money towards purchase will be payment of money towards purchase will be
included, as will be legal fees, stamp duty and included, as will be legal fees, stamp duty and
incidental costs associated with the costs of incidental costs associated with the costs of
acquisition acquisition

If a party has incurred a mortgage liability to If a party has incurred a mortgage liability to
provide contributions to the purchase price, that provide contributions to the purchase price, that
mortgage liability counts as a contributionmortgage liability counts as a contribution

18. Contributions to the purchase of Contributions to the purchase of
propertyproperty

Because equity looks at contributions that are made Because equity looks at contributions that are made
at the date of purchase, the presumption of at the date of purchase, the presumption of
resulting trust will not arise when payments are resulting trust will not arise when payments are
made towards costs incurred after the property has made towards costs incurred after the property has
been acquired been acquired

Australian courts have refused to recognise Australian courts have refused to recognise
payments of mortgage instalments as contri
­butions
payments of mortgage instalments as contri
­butions
if they are made by a party who incurred no if they are made by a party who incurred no
mortgage liability at the date of purchase mortgage liability at the date of purchase

19. Contributions to the purchase of Contributions to the purchase of
propertyproperty

in England the courts have recognised that some in England the courts have recognised that some
indirect financial contributions, which occur after indirect financial contributions, which occur after
purchase, may be considered in the calculation of the purchase, may be considered in the calculation of the
beneficial interests beneficial interests

In In Midlands Bank v CookeMidlands Bank v Cooke, the Court of Appeal found , the Court of Appeal found
that once some direct financial contribution had been that once some direct financial contribution had been
made it was then open to the court to calculate the made it was then open to the court to calculate the
beneficial interests on the basis of all contributions, beneficial interests on the basis of all contributions,
whether direct or indirect, whether prior to or after whether direct or indirect, whether prior to or after
purchase purchase

20. Contributions to the purchase of Contributions to the purchase of
propertyproperty

Upgrades and maintenance will not be Upgrades and maintenance will not be
considered as contributions unless there was a considered as contributions unless there was a
common intention or agreement between the common intention or agreement between the
parties that is enforceable or gives rise to an parties that is enforceable or gives rise to an
estoppel estoppel

21. The nature of co-ownership in The nature of co-ownership in
resulting trustsresulting trusts

Ordinarily equity’s presumption of resulting Ordinarily equity’s presumption of resulting
trust is based on the co-owners holding their trust is based on the co-owners holding their
shares as tenants in common shares as tenants in common

However, in cases where the parties made equal However, in cases where the parties made equal
contributions, equity presumed that the interests contributions, equity presumed that the interests
were held as joint tenants and not as tenants in were held as joint tenants and not as tenants in
common. common.

22. The nature of co-ownership in The nature of co-ownership in
resulting trustsresulting trusts

Why did equity prefer joint tenancy when the Why did equity prefer joint tenancy when the
contributions were equal? In such circumstances it was contributions were equal? In such circumstances it was
said that ‘equity followed the law’ and the common law said that ‘equity followed the law’ and the common law
always presumed that co-owners took as joint tenants in always presumed that co-owners took as joint tenants in
the absence of an express declaration of tenancy in the absence of an express declaration of tenancy in
common common

Statutory reforms have reversed the common law Statutory reforms have reversed the common law
presumption of joint tenancy in some jurisdictions and presumption of joint tenancy in some jurisdictions and
imposed a presumption of tenancy in common imposed a presumption of tenancy in common

23. The nature of co-ownership in The nature of co-ownership in
resulting trustsresulting trusts

In In Delehunt v Carmody Delehunt v Carmody (1986) 161 CLR 464; 68 (1986) 161 CLR 464; 68
ALR 253, the High Court found that equity still ALR 253, the High Court found that equity still
followed the law in these jurisdictions and, given followed the law in these jurisdictions and, given
that the law had changed, equity would now that the law had changed, equity would now
presume tenancy in common when the parties presume tenancy in common when the parties
make equal contributions to purchase price.make equal contributions to purchase price.

24. Rebutting the presumption of Rebutting the presumption of
resulting trust resulting trust

When the presumption of resulting trusts arises, When the presumption of resulting trusts arises,
evidence can be admitted of the actual intention of the evidence can be admitted of the actual intention of the
parties to prove that no such trust was intended parties to prove that no such trust was intended

Intention remains para
­mount in resulting trusts and
Intention remains para
­mount in resulting trusts and
evidence of the circumstances surrounding the transfers evidence of the circumstances surrounding the transfers
is admissible, whether it be written or parol evidence. is admissible, whether it be written or parol evidence.
However, it is important to note that the evidence must However, it is important to note that the evidence must
relate to the intention of the parties at the time that the relate to the intention of the parties at the time that the
interests were created interests were created

25. The presumption of advancementThe presumption of advancement

In some cases equity refuses to presume an intention In some cases equity refuses to presume an intention
to create a resulting trust and instead presumes that to create a resulting trust and instead presumes that
any purchase or contribution was intended to be a any purchase or contribution was intended to be a
gift by way of advancement.gift by way of advancement.

This presumption of advancement only arises in cases This presumption of advancement only arises in cases
where purchase monies or contributions are provided where purchase monies or contributions are provided
by a husband to a wife or by a parent to a child (not by a husband to a wife or by a parent to a child (not
necessarily biological children but someone to whom necessarily biological children but someone to whom
the provider of funds stands in the position of a the provider of funds stands in the position of a
parent). parent).

26. The presumption of advancementThe presumption of advancement

It does not arise in other fiduciary relationships, It does not arise in other fiduciary relationships,
like those between companies and directors: like those between companies and directors:
SCE Building Constructions Pty Ltd (in liq) v Saad SCE Building Constructions Pty Ltd (in liq) v Saad
[2003] NSWSC 796 [2003] NSWSC 796

The effect of a presumption of advancement is The effect of a presumption of advancement is
to override the presumption of resulting trust to override the presumption of resulting trust
with the result that the legal and equitable estates with the result that the legal and equitable estates
will stay where they lie will stay where they lie

27. The presumption of advancementThe presumption of advancement

The presumption of advancement, like the The presumption of advancement, like the
presumption of result
­ing trust, can be rebutted
presumption of result
­ing trust, can be rebutted
by evidence of the intention of the parties by evidence of the intention of the parties at the at the
time of the transfertime of the transfer. If it is shown that there was no . If it is shown that there was no
actual intention to confer a beneficial interest on actual intention to confer a beneficial interest on
the legal title holder the presumption will not be the legal title holder the presumption will not be
effective and the normal presumption of effective and the normal presumption of
resulting trust will apply resulting trust will apply

28. The presumption of advancementThe presumption of advancement

The presumption of advancement arises when a The presumption of advancement arises when a
husband either provides the purchase price or makes husband either provides the purchase price or makes
contributions to the purchase price of property in contributions to the purchase price of property in
which the wife is given a legal interest which the wife is given a legal interest

It does not arise in cases of transfers from a wife to her It does not arise in cases of transfers from a wife to her
husband: husband: March v MarchMarch v March (1945) 62 WN(NSW) 111. In (1945) 62 WN(NSW) 111. In
the past it has been assumed that the husband had a the past it has been assumed that the husband had a
natural duty to provide for his wife (and children) and natural duty to provide for his wife (and children) and
this gave rise to the presumption this gave rise to the presumption

29. The presumption of advancementThe presumption of advancement

In In Scott v PaulyScott v Pauly (1917) 24 CLR 274 at 282, Isaacs J stated (1917) 24 CLR 274 at 282, Isaacs J stated
that the presumption of advancement,that the presumption of advancement,

… … is an inference which the courts of equity in practice drew is an inference which the courts of equity in practice drew
from the mere fact of the purchaser being the father, and the from the mere fact of the purchaser being the father, and the
head of the family, under the primary moral obligation to head of the family, under the primary moral obligation to
provide for the children of the marriage, and in that respect provide for the children of the marriage, and in that respect
differing from the mother.differing from the mother.

30. The presumption of advancementThe presumption of advancement

In In Calverley v Green Calverley v Green (1984) 155 CLR 242 at 268; (1984) 155 CLR 242 at 268;
(1984) 56 ALR 483 at 501,(1984) 56 ALR 483 at 501, Deane J advocated an Deane J advocated an
adjustment of the doctrine to ‘reflect modern adjustment of the doctrine to ‘reflect modern
conceptions of equality in status and obligations conceptions of equality in status and obligations
of a wife vis-a-vis a husband’. of a wife vis-a-vis a husband’.

31. The presumption of advancementThe presumption of advancement

The presumption can also arise in cases where a The presumption can also arise in cases where a
transfer occurs between a man and his intended wife or transfer occurs between a man and his intended wife or
fiancee: fiancee: Wirth v Wirth Wirth v Wirth (1956) 98 CLR 228; (1956) 98 CLR 228; Bertei v Feher Bertei v Feher
[2000] WASCA 165. Such a transfer is consid
­ered to be
[2000] WASCA 165. Such a transfer is consid
­ered to be
a gift in contemplation of marriage. If the marriage a gift in contemplation of marriage. If the marriage
does not occur the gift should be returned. If the gift is does not occur the gift should be returned. If the gift is
not returned it will be then held on resulting trust: not returned it will be then held on resulting trust:
Jenkins v WynenJenkins v Wynen [1992] 1 Qd R 40 [1992] 1 Qd R 40

32. The presumption of advancementThe presumption of advancement

The presumption of advancement does not arise in de The presumption of advancement does not arise in de
facto rela
­tionships
facto rela
­tionships

Calverley v GreenCalverley v Green (1984) 155 CLR 242 (1984) 155 CLR 242

. Mason and Brennan JJ stated at CLR 260; ALR 495 . Mason and Brennan JJ stated at CLR 260; ALR 495
that:that:

The term ‘de facto husband and wife’ embraces a wide variety The term ‘de facto husband and wife’ embraces a wide variety
of hetero sexual relationships; it is a term obfuscatory of any of hetero sexual relationships; it is a term obfuscatory of any
legal principle except in distinguishing the relationship from legal principle except in distinguishing the relationship from
that of husband and wife. It would be wrong to apply … the that of husband and wife. It would be wrong to apply … the
presumption of advancement …presumption of advancement …

33. The presumption of advancementThe presumption of advancement

There is a presumption of advancement when purchase There is a presumption of advancement when purchase
money is provided by a parent and the legal title is money is provided by a parent and the legal title is
taken by a child taken by a child

The key requirement is that the purchase price be The key requirement is that the purchase price be
provided by someone in provided by someone in loco parentisloco parentis (in the position of a (in the position of a
parent). As such the presump
­tion can also apply to
parent). As such the presump
­tion can also apply to
illegitimate and adopted children, as well as to other illegitimate and adopted children, as well as to other
forms of familial relationship, as long as one party has forms of familial relationship, as long as one party has
acted as the parent for the other acted as the parent for the other

34. The presumption of advancementThe presumption of advancement

Traditionally, it was thought that the Traditionally, it was thought that the
presumption of advance
­ment would only arise
presumption of advance
­ment would only arise
when a father provided funds for the purchase when a father provided funds for the purchase
of property for his children: of property for his children: Scott v Pauly Scott v Pauly (1917) (1917)
24 CLR 274 at 282, per Isaacs J. However, in 24 CLR 274 at 282, per Isaacs J. However, in
more recent cases the presumption has been more recent cases the presumption has been
recognised as arising between a mother and her recognised as arising between a mother and her
children: children: Brown v Brown Brown v Brown (1993) 31 NSWLR 582 (1993) 31 NSWLR 582

35. Gifts and resulting trustsGifts and resulting trusts

Presumptions of resulting trust and of Presumptions of resulting trust and of
advancement can also arise in gifts (voluntary advancement can also arise in gifts (voluntary
transfers of property). For example, if A makes a transfers of property). For example, if A makes a
gift of property to B, a presumption of resulting gift of property to B, a presumption of resulting
trust may arise that B holds the property on trust trust may arise that B holds the property on trust
for A for A

36. Gifts and resulting trustsGifts and resulting trusts

Equity treats gifts of realty differently to gifts of Equity treats gifts of realty differently to gifts of
personalty. Unfortunately the operation of the personalty. Unfortunately the operation of the
presumptions in gifts of land has been made presumptions in gifts of land has been made
problematic because of the operation of the problematic because of the operation of the
Statute of Uses 1535. Prior to that statute, equity Statute of Uses 1535. Prior to that statute, equity
presumed that any interest in land given without presumed that any interest in land given without
con
­sideration to a stranger (meaning someone to
con
­sideration to a stranger (meaning someone to
whom a presumption of advancement would whom a presumption of advancement would
not arise) was held on resulting use not arise) was held on resulting use

37. Gifts and resulting trustsGifts and resulting trusts

After the statute the use was executed and the After the statute the use was executed and the
ownership reverted back to the grantor, leaving the ownership reverted back to the grantor, leaving the
transfer ineffectualtransfer ineffectual

To enable people to make gifts of realty, the courts To enable people to make gifts of realty, the courts
recognised the voluntary transfers if they were recognised the voluntary transfers if they were
expressed to be given ‘unto and to the use of’ the expressed to be given ‘unto and to the use of’ the
strangerstranger

Legislation provides that no presumption of resulting Legislation provides that no presumption of resulting
trust will arise in a voluntary transfer of realty, unless trust will arise in a voluntary transfer of realty, unless
the transferor expresses an intention to create a use or a the transferor expresses an intention to create a use or a
trust: Conveyancing Act 1919 (NSW), s 44 trust: Conveyancing Act 1919 (NSW), s 44

38. Gifts and resulting trustsGifts and resulting trusts

With regards to personalty, if a gift is made to a With regards to personalty, if a gift is made to a
stranger of per
­sonalty which can produce
stranger of per
­sonalty which can produce
income, then a resulting trust will be presumed: income, then a resulting trust will be presumed:
Hendry v E F Hendry Pty Ltd Hendry v E F Hendry Pty Ltd [2003] SASC 157. [2003] SASC 157.
Otherwise, gifts of personalty will not give rise Otherwise, gifts of personalty will not give rise
to a resulting trust. to a resulting trust.

39. Problem Problem

Han and Leia entered into a de facto relationship in Han and Leia entered into a de facto relationship in
1975. In 1976 they had a child named Luke. In 1987 1975. In 1976 they had a child named Luke. In 1987
they purchased a house in Lucastown for $150,000. they purchased a house in Lucastown for $150,000.
The purchase price was paid by Han; the money The purchase price was paid by Han; the money
coming to Han as an inheritance from the estate of coming to Han as an inheritance from the estate of
his late uncle. At the time of purchase, Han decided his late uncle. At the time of purchase, Han decided
to have the property registered in his, Leia’s and to have the property registered in his, Leia’s and
Luke’s names as tenants in common and in equal Luke’s names as tenants in common and in equal
shares. shares.

40. Problem Problem

In 1994, when Luke reached his majority age, In 1994, when Luke reached his majority age,
with the Yavin Bank Ltd in the joint names of with the Yavin Bank Ltd in the joint names of
Han and Luke. Han told Luke that he would be Han and Luke. Han told Luke that he would be
making all the deposits into the account and making all the deposits into the account and
would withdraw from the account whenever it would withdraw from the account whenever it
may become necessary. However, he also said may become necessary. However, he also said
that if anything should ever happen to him (ie that if anything should ever happen to him (ie
Han) the money then in the account would Han) the money then in the account would
belong to Luke.belong to Luke.

41. Problem Problem

Two weeks ago Han and Leia died in a car Two weeks ago Han and Leia died in a car
accident. In his will Han left his entire estate to accident. In his will Han left his entire estate to
Beru, his daughter that he had fathered in 1972 Beru, his daughter that he had fathered in 1972
before he had met Leia. In her will Leia left her before he had met Leia. In her will Leia left her
entire estate to Luke. At the time of their deaths entire estate to Luke. At the time of their deaths
the Lucastown property was worth $300,000, the Lucastown property was worth $300,000,
and the bank account at Yavin Bank Ltd had a and the bank account at Yavin Bank Ltd had a
balance of $5000 balance of $5000

42. Problem Problem

Beru seeks your advice as to whether she has any Beru seeks your advice as to whether she has any
entitlements in the Lucastown property and the entitlements in the Lucastown property and the
bank account, and if not who is entitled and to bank account, and if not who is entitled and to
what extent.what extent.

43. SolutionSolution

Given that the problem concerns parties who Given that the problem concerns parties who
are deceased, it is not subject to any of the are deceased, it is not subject to any of the
legislative regimes controlling de facto legislative regimes controlling de facto
relationships and must be dealt with using equity relationships and must be dealt with using equity

44. SolutionSolution

Dealing first with the interests in the property at Dealing first with the interests in the property at
Lucastown, Han, Luke and Leia each owned an Lucastown, Han, Luke and Leia each owned an
equivalent tenancy in common equalling one-third of equivalent tenancy in common equalling one-third of
the value of the property. Tenancies in common the value of the property. Tenancies in common
contain no right of survivorship so at law the interests contain no right of survivorship so at law the interests
that will pass through Han’s will to Beru are her father’s that will pass through Han’s will to Beru are her father’s
one-third interest in the house. Similarly Luke will one-third interest in the house. Similarly Luke will
receive Leia’s one-third interest, leaving him with a two-receive Leia’s one-third interest, leaving him with a two-
thirds interest at common law. However, it is open to thirds interest at common law. However, it is open to
equity to adjust the beneficial interests of the parties equity to adjust the beneficial interests of the parties
and whatever interests equity believes were beneficially and whatever interests equity believes were beneficially
owned by Han at the time of his death will pass to owned by Han at the time of his death will pass to
Beru, via Han’s will. Similarly, any beneficial interests Beru, via Han’s will. Similarly, any beneficial interests
held by Leia will pass to Luke, via her will. held by Leia will pass to Luke, via her will.

45. SolutionSolution

Given that Han provided the entirety of the Given that Han provided the entirety of the
purchase price, a presumption of resulting trust purchase price, a presumption of resulting trust
is raised in Han’s favour over both Leia’s one-is raised in Han’s favour over both Leia’s one-
third interest and Luke’s one-third interest third interest and Luke’s one-third interest

There is no pre
­sumption of advancement in
There is no pre
­sumption of advancement in
favour of Leia that will override the favour of Leia that will override the
presumption of resulting trust. She is a de facto presumption of resulting trust. She is a de facto
partner and, as such, no presumption of partner and, as such, no presumption of
advancement can be raised in her favour advancement can be raised in her favour

46. SolutionSolution

There does not appear to be any evidence of There does not appear to be any evidence of
Han’s actual intention to rebut this presump
­
Han’s actual intention to rebut this presump
­
tion. The beneficial interest therefore tion. The beneficial interest therefore
belonged to Han and passes to Beru in his belonged to Han and passes to Beru in his
will will

A presumption of advancement can be A presumption of advancement can be
successfully raised in Luke’s favour successfully raised in Luke’s favour

It matters not that Luke was born out of It matters not that Luke was born out of
wedlock wedlock

Therefore his interest is not held on resulting Therefore his interest is not held on resulting
trust and one-third legal title stays with him trust and one-third legal title stays with him

47. SolutionSolution

In relation to the bank account, it should be In relation to the bank account, it should be
noted that the pre
­sumptions arise over transfers
noted that the pre
­sumptions arise over transfers
of both real and personal property of both real and personal property

The presumptions of resulting trust and The presumptions of resulting trust and
advancement apply to joint bank accounts where advancement apply to joint bank accounts where
one party provides all the funds for that account: one party provides all the funds for that account:
Russell v ScottRussell v Scott (1936) 55 CLR 440 (1936) 55 CLR 440

48. SolutionSolution

The presumption of advancement is obviously The presumption of advancement is obviously
paramount here, given the relationship between paramount here, given the relationship between
Han and Luke. It does not matter that Luke was Han and Luke. It does not matter that Luke was
an adult when the bank account was opened: an adult when the bank account was opened:
Brown v Brown Brown v Brown (1993) 31 NSWLR 582. There is (1993) 31 NSWLR 582. There is
no evidence of actual intention that rebuts the no evidence of actual intention that rebuts the
presumption of advancement. Therefore the presumption of advancement. Therefore the
benefi
­cial interest remains with Luke.
benefi
­cial interest remains with Luke.