Resulting trusts 

A resulting trust returns the beneficial interest to the person who provided the property. It arises by operation of law rather than by expressed intention, and it is not caught by the statutory writing requirements.

The traditional division is between automatic and presumed resulting trusts. The label matters less than the two distinct situations behind it.

Automatic resulting trusts

The beneficial interest is not effectively disposed of, so it returns to the settlor or their estate. This happens where:

• an express trust fails — for uncertainty of objects or of beneficial interests, for want of a beneficiary, or for illegality;
• the trust does not exhaust the beneficial interest, leaving a surplus after the stated purposes are satisfied;
• a condition on which the trust depended is not met.

There is no presumption to rebut here. The interest simply has nowhere else to go, and the trustee holds for the settlor.

Where a fund was contributed by many people for a purpose that fails — a disaster appeal, a dissolved association — the analysis is contested. Resulting trust for contributors, distribution under the terms of the contract of association, and bona vacantia have each been applied, and the answer turns on how the contribution was characterised at the outset.

Presumed resulting trusts

Equity presumes that a person does not intend to give away property for nothing. Two situations:

• Voluntary transfer. A transfers property to B, who gives no consideration. Equity presumes B holds on resulting trust for A. For land the position is affected by statute in several jurisdictions, and the local provision must be checked.
• Purchase in the name of another. A pays the purchase price and the property is conveyed to B, or to A and B jointly. B is presumed to hold on resulting trust for A in proportion to A's contribution, per Calverley v Green (1984) 155 CLR 242.¹

The purchase money resulting trust is the practically important one, and its measure is the contribution to the purchase price at the time of acquisition — not later mortgage repayments, improvements, or contributions to household expenses, which are the province of the constructive trust.

The presumption of advancement

Where the relationship between the parties is one in which the provider would be expected to make provision for the recipient, the presumption of resulting trust is displaced by a counter-presumption that a gift was intended.

The accepted categories in Australia include father to child, and husband to wife. Their modern application is contested: the historical asymmetries — that the presumption traditionally did not run from wife to husband, or from mother to child — sit poorly with contemporary law, and courts have questioned the presumption's continued utility while declining to abolish it. Treat it as a live but weakening presumption, easily rebutted by evidence, and say so rather than stating a confident rule.

Rebuttal

Both presumptions are presumptions of fact, displaced by evidence of actual intention. They matter only where evidence is absent or evenly balanced, which is why they surface most often in disputes long after the event and between family members.

Evidence of intention contemporaneous with the transaction is admissible; later self-serving statements carry little weight. Where the transferor's purpose was illegal — concealing assets from creditors, a spouse, or a revenue authority — the effect on the ability to lead evidence of intention has been a shifting area, and the modern tendency is away from mechanical exclusion and towards asking whether allowing the claim would be inconsistent with the policy of the law it offends.

The relationship with constructive trusts

Both arise by operation of law, and pleadings often run them together, but they answer different questions. The resulting trust responds to who paid, measured at acquisition. The constructive trust responds to what conscience requires, and can take account of contributions and conduct over the whole life of a relationship. Where a purchase money resulting trust gives an answer that does not reflect the parties' subsequent dealings, the constructive trust is the doctrine to reach for.

The presumptions are a fallback, not a starting point. In Bosanac v Commissioner of Taxation (2022) 275 CLR 37² Kiefel CJ and Gleeson J held at [13] that the presumption "cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence". Work from the evidence of intention first; reach for the presumption only where it runs out.

Applying this in a problem question

1. Ask first whether an express trust was intended and whether it failed.
2. For a contribution case, calculate the share of the purchase price at acquisition.
3. Ask whether a presumption of advancement applies, and note its contested modern status.
4. Consider the evidence of actual intention, which displaces any presumption.
5. Consider a constructive trust in the alternative where later conduct matters.

Where the authority sits

Case law, with the property legislation of some jurisdictions modifying the presumption on voluntary transfers of land, and a distinctively Australian body of authority on contributions to jointly acquired homes.