Bosanac v Commissioner of Taxation

High Court of Australia · 2022

Bosanac v Commissioner of Taxation (2022) 275 CLR 37

A husband stands behind the loans that buy the family home, which goes into his wife's name alone. A creditor of his says he owns half. Does his money alone decide it?

What happened?

Ms Bosanac and Mr Bosanac married in 1998. In 2006 Ms Bosanac offered to buy a house at Dalkeith, in Perth, for $4,500,000, subject to bank approval of a $3,000,000 loan. The $250,000 deposit came from an existing joint loan account in both names, and the balance came from two loans taken in both their names. The bank took mortgages over the Dalkeith house and over three other properties, one of them owned by Mr Bosanac and one by Ms Bosanac. The house was registered in Ms Bosanac's name alone ([1]-[4], Kiefel CJ and Gleeson J).

Mr Bosanac owed money to the Commissioner of Taxation. The Commissioner sought a declaration that Ms Bosanac held half of the house on trust for him, so that it could be reached as an asset of the debtor ([7]). Neither spouse gave evidence ([6]). McKerracher J dismissed the claim; the Full Court of the Federal Court allowed the Commissioner's appeal and made the declaration ([9]-[10]). Ms Bosanac appealed by special leave.

What did the Court decide?

The appeal was allowed. The Full Court's orders were set aside and, in their place, the Commissioner's appeal to the Full Court was dismissed, so there was no trust in Mr Bosanac's favour. Leave to amend the Commissioner's notice of contention was refused ([43]).

Three sets of reasons were delivered, by Kiefel CJ and Gleeson J, by Gageler J, and by Gordon and Edelman JJ, and all three agreed in the orders.

Proposition

What is the principle?

A contribution to the purchase price of property registered in another's name does not by itself establish a resulting trust. The presumption of a resulting trust, and the presumption of advancement that answers it in the recognised relationships, are weak and give way to the parties' intention as it appears from the evidence as a whole. No Justice would abolish the presumption of resulting trust by judicial decision, the Court refused leave to argue for abolition of the presumption of advancement, and all three sets of reasons rejected a further inference that spouses who each contribute to a home registered in one name intend equal shares. Gordon and Edelman JJ framed the inquiry as one into objective intention at the time of the transaction, and said the presumption of a resulting trust does not arise where those facts tend against a trust.

Kiefel CJ and Gleeson J: the presumption "cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence" ([13]). Gageler J: the presumption "will yield to an actual intention to the contrary found on the balance of probabilities as an inference drawn from the totality of the evidence" ([64]), and the presumption and counter-presumption "are here to stay" until reappraised by law reform ([60]). Gordon and Edelman JJ: where the objective facts "tend to establish, even weakly, an objective intention inconsistent with a declaration of trust, then there will be no case for the defendant to meet" ([109]).

Why does this case matter?

The result rested on what the surrounding facts showed, not on anything either spouse said: a history of separate ownership of substantial assets and of using one spouse's property to secure joint loans (Kiefel CJ and Gleeson J, [39]-[40]). A creditor who needs a debtor to have a beneficial interest in a home registered to someone else has to build the case from facts of that kind.

Exam and application relevance

Open with the evidence of intention at the time of the purchase: who contracted, who is registered, who is liable on the finance, how the couple had held their other property. Then say which presumption would apply if the evidence ran out, and what it would produce.

In a problem about a home bought in one spouse's name with money or liability from both, compare the facts with those in Bosanac rather than reasoning from the relationship. Gordon and Edelman JJ treated a spousal relationship as one of the objective facts that "at best it merely reinforces, and is not determinative of, the objective intention of the parties established by the objective facts" ([109]).

Attribute each point to the Justices who made it, because the reasons differ in framing. Kiefel CJ and Gleeson J at [41] assumed without deciding that evidence of later dealings is admissible; Gordon and Edelman JJ said at [113] that subsequent events and conduct are otherwise not admissible.

Check your understanding

1. Mr Bosanac was jointly liable on the loans that paid for the house. Why did that not give him a half interest? 2. How does the way Gordon and Edelman JJ frame the inquiry differ from the way Kiefel CJ and Gleeson J frame it? 3. What did the Court decide about the Commissioner's argument that spouses who each contribute to a matrimonial home should be presumed to intend equal shares, and who gave which reasons?