A case decided in the Federal Court of Australia in March 2021 provides a hint of the types of evidence required to substantiate a legal presumption that could save the family home in bankruptcy if creditors come knocking.
In the case in question, Commissioner of Taxation v Bosanac (No7)  FCA 249, Mr Bosanac and Ms Bosanac were co-signatories on 2 loans which were used to purchase a property in Dalkeith, Western Australia in 2006, and for which they were jointly and severally liable. The couple moved into the property and occupied it as the family home. Ms Bosanac was the only person named in the purchase settlement statement and, after settlement, was the sole registered proprietor.
The Bosanacs lived at the Dalkeith property as a married couple from 2006 until their separation in 2012 or 2013. Mr Bosanac continued to live there after their separation, possibly until 2015 (according to Australian Taxation Office records).
By 2016, the Commissioner of Taxation (the Commissioner) was chasing Mr Bosanac for $9,344,111.89
plus costs and attained a summary judgement. In the March 2021,
the Commissioner sought assistance from the Court to recover part of the judgement sum in the form of Mr Bosanac’s purported interest in the Dalkeith property, which the Commissioner claimed was 50% of the available equity.
There was no suggestion raised that Mr Bosanac arranged to have Ms Bosanac registered as sole proprietor to prevent his equity in the property being realised to pay outstanding liabilities.
So why did the Commissioner come knocking for 50% of the equity in a property for which Ms Bosanac was registered as sole owner, to pay the debts of Mr Bosanac?
The Court examined 3 legal issues at work in this case:
- The presumption of resulting trust
- The presumption of advancement
- Evidence of a contrary intention
Presumption of resulting trust
A presumption of resulting trust may arise in the following situations:
- Someone buys a property in another’s name, or jointly in their own and another’s name, but the other person does not contribute to the cost
- 2 or more people jointly buy a property, but the property is put into one person’s name only
- 2 people buy a property with unequal amounts of money contributed but the property is registered in both names
In the Judgement, McKerracher J explains at 
[i] “A resulting trust arises because it is presumed that the purchaser did not intend to gift their contribution to the other person, absent evidence of a contrary intention.” It is presumed that the purchaser’s benefit is to be held in trust by the other person.
The Commissioner based their case on this presumption.
However, an exception to this presumption arises in certain relationships, for example, married partners.
Presumption of advancement
A presumption of advancement can arise in a marriage where it is presumed that a purchaser’s contribution is intended as a gift to the other party. Ms Bosanac relied upon this presumption for her response. Mr Bosanac did not make submissions in this case but was represented by counsel.
Evidence of intention
Both a presumption of resulting trust and presumption of advancement can be rebutted by evidence of actual intention.
Part of the Commissioner’s case was that the presumption of advancement could not be applied to the matrimonial home, as the purchase of a home is for the equal benefit of both partners who would live in it, and that the intention is that the partners would own the property equally.
McKerracher J stated that the “heart of this dispute” [ii] is:
- Does the presumption of advancement apply to the matrimonial home?
And if so,
- What is the evidence of Mr Bosanac’s intention at the time of purchase?
The Judge concluded that, although outdated with regard to the modern status of men and women and property ownership, the presumption of advancement still applies to married women and to the matrimonial home in Australian law.
The Commissioner was unable to offer sufficient evidence to rebut a presumption of advancement, despite the fact that Mr and Ms Bosanac were co-signatories to loans, and made mortgage payments from a joint account. The Bosanacs each held other valuable assets individually, including properties that were used as security for the loans.
Further, the Commissioner’s assertion that Mr Bosanac wouldn’t have committed jointly and severally to significant loans if he was to have no benefit from it was dismissed as evidence of intention regarding a presumption of resulting trust. In fact, the Judge considered that Mr Bosanac was a “sophisticated businessman” [iii] and would have understood the significance of property title vesting in Ms Bosanac. Therefore, this shed no light on Mr Bosanac’s intention.
The Court dismissed the Commissioner’s application with costs.
Protecting the family home is often front-of-mind when one partner in a relationship undertakes some form of financial risk.
This judgement indicates that married couples may rely upon the protection offered by a presumption of advancement where it is the husband undertaking the risk. The presumption of advancement may not necessarily arise in the reverse circumstance from wife to husband.
However, to take advantage of a presumption of advancement, clear evidence should be established that the husband intends to gift his share in the house to his wife.
Examples of evidence could be a home loan undertaken in the proprietor’s name only, a pattern of mortgage payments from the proprietor’s own bank account, consistent documentation in statements of affairs or a deed which explicitly gifts the property to the wife. And these things should happen well in advance of any suspicion of personal or corporate insolvency.
It appears that the presumption of advancement may apply narrowly to wives. In all cases where protecting the family home is a priority, whatever the family structure, the best course of action is to get expert advice well in advance.