Reform of Presumed Resulting Trusts

‘The presumption of resulting trusts does no more than call for proof of an intention to confer beneficial ownership’

The presumption of resulting trusts largely operates as a mechanism for allocating the burden of proof when there is a dispute as to intended effect of a transaction on the beneficial ownership of property. As the Australian High Court stated in Russell v Scott: 

‘The presumption of resulting trusts does no more than call for proof of an intention to confer beneficial ownership.’

Thus where the presumption of resulting trust applies a transferee will have to discharge the burden of proof by demonstrating that a gift was intended, whereas if the presumption of advancement applies the transferor will bear the burden of providing that no gift was intended. The presumptions may serve the purpose of protecting vulnerable individuals where property has been transferred, or contributions made, in circumstances where there was very little evidence as to the intended nature of the transaction. However the operation of the presumptions can be criticised on the grounds that they are archaic and anachronistic. The presumptions themselves are based on nineteenth-century concepts of the family. Despite judicial comments that they are often inappropriate to modern situations, that they have lost much of their force, or are easily rebutted, they continue to enshrine outdate paternalistic and chauvinistic values. In the area of matrimonial property the inconsistencies are glaring, for example the presumption of advancement is applied between a husband and wife, but the presumption of resulting trust between a wife and husband.

These difficulties were recognised by the Law Commission in their Report, Family Law: Matrimonial Property. It concluded that the present law was unsatisfactory because:

‘…its application may not result in co-ownership of property even when a married couple desire this. Actual ownership may be held to depend on factors which neither party considered significant at the time of acquisition.

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