Scott v Pauly (1917) 24 CLR 274 (HC of Australia)

Resulting Trusts – Parent and Child – Property – Gift – Presumption of Advancement

Facts

Before a mother died, she had made a will and she had also purchased some property. She had transferred this property to her daughter. There were several letters that detailed the mother as acquiring this property and further to this, evidence that the daughter had given her mother the rent that was a result of the property while she was still alive. There was subsequently disagreement between the executors and her daughter upon her death regarding the property in question.

Issues

This case concerned whether the daughter held the property as the trustee for her mother or whether it had been a gift. Based on the letters and rent, the judge had held that a resulting trust for the mother was intended, yet on appeal, the judge held that this was in fact this was intended as a gift of beneficial interest to her daughter. The case was appealed to the High Court of Australia on the presumption of advancement.

Held

The High Court of Australia dismissed the appeal. The judge believed that based on the evidence, the transfer of property was intended to be a gift. The issue of her daughter giving rent to her mother while was she alive was viewed as not being unusual or unnatural in the circumstances. Thus, the mother had beneficial interest in the property gifted to the daughter, despite the presumption of advancement normally only arising between father and child.