PIRT + Presumption of advancement (POA)

Presumption of advancement is also known as the presumption of gift and this

presumption is only applied when property is transferred or purchased in the following
relationships. Currently in English law the presumption of advancement applies where
husband transferred property to his wife (Moate v Moate), father transfers property to
his children or a person who stands in a position of loco parentis to the child (Re
Paradise Motor Co Ltd). Presumption of advancement will not apply when there is
transfer of property from mother to her child, and this can be seen in the case of
(Sekhon v Alissa), however it the mother is loco parentis to the child then the
presumption would apply (Crown Prosecution Service v Malik).
Lord Upjohn said that presumption of advancement is a wrong terminology because it is
a circumstance of evidence which rebuts the presumption of a resulting trust. This
means that the relationship between the man and wife/child itself is enough evidence for
the presumption of advancement. If the father says that the transfer of property was not
intended to be a gift then he is the one who should provide evidence to rebut that
presumption, if he can’t provide evidence then the property would be considered a gift.
Two ways can be used to understand the relationship between the presumptions. The
presumption of advancement depends upon whether the presumption of resulting trust
exists or not. This acts as a second step exception to the presumption of a resulting
trust and this applies where a person has contributed to purchase something in
someone else’s name. Looking at the formalities issue we will see the importance of
determining the relation between presumptions. The formality requirement say that the
trust made for land must be in writing but the two exceptions are constructive trusts and
resulting trusts. By attaching the presumption of advancement with the presumption of
resulting trust the following reason could be given; when the father produces evidence
to rebut the presumption of advancement, the presumption of resulting trust also falls
back into place, which was not operating previously. The father can now easily rely on
the fact that he had also made contribution while purchasing the property and as a
result show his beneficial interest in the property.
The second way through which the relationship between presumption of advancement
and presumption of resulting trust can be understood if we look at the meaning of
presumption of advancement in the following way. Where the presumption of
advancement applies, there will be no presumption of resulting trust in those cases.
Under this view there are some cases where contribution is made in name of someone
else which can attract the presumption of resulting trust and in other cases resulting
trust do not arise. Using this understanding, when the father provides evidence in order
to rebut the presumption of advancement, it will not be easy to avoid the effect which
the formality statue will have. This is because the father is trying to create an express
trust after he has shown the evidence, hence, no presumption would operate in this
situation and secondly, due to the statutory exception under the formality statue, this will
not allow him to establish the interest under such a trust.
Although the father may not be able to create this informal trust, he might be successful
if he claims that his asset is held under a constructive trust. The father must then prove
that he had relied to the detriment on the trust, hence it would be fraud on part of the
recipient if he/she rejected to honor the trust. It is not easy to tell which of the above
view is correct because the application of the constructive trust analysis would have the
exact same effect of applying the resulting trust analysis. Now we realize the
importance of the statement provided by Lord Diplock in the case of Gissing v Gissing,
where he said that it is important to differentiate between constructive and resulting
trusts when courts are deciding these types of cases.
The presumption of advancement has faced criticism from many people as many say it
promotes gender discrimination between the two sexes. A husband is allowed to make
gift to his wife but the wife is not allowed to do the same and a father is allowed to make
gifts to his child but a mother is not allowed to do the same sounds absurd and
discriminatory in nature. Although, in the cases of Bennet v Bennet and crown
prosecution service v malik, the court did hold that, proving that a mother had the
intention to make a gift was easier to prove when compared to a stranger who was
making a gift, but all this will depend on the rational for the presumption and what it is
meant to be. Given the fact that how assets were distributed in the past, Glister says
that this shows that why fathers and husbands fall under the presumption of
advancement and not wives and mothers. In the counter argument one could say that if
family affection is being reflected through the presumption of advancement, then
mothers also love their children as much as the father do and so they would also want
to make gifts to them. In Pettitt, a majority decision said that this was an outdated
approach belonging to the 19th century. Even recently, in the case of Jones v Kernott,
Lord Upjohn said that “These presumptions or circumstances of evidence are readily
rebutted by comparatively slight evidence”.
In case of Lasker v Lasker, Lord Neuberger suggested that it is possible to apply the
presumption of advancement between a daughter and a mother. In another case of
Antoni v Antoni Lord Scott said that the presumption of advancement will apply
between a child and “parent”. Although this has not happened in UK but in Australia, we
can see that the presumption of advancement applies between mothers to child
(Nelson v Nelson). The Canadian Supreme court in the case of Pecore v Pecore held
that the presumption of advancement will apply between a parent of either sex which
means a mother or father, not both, and children.
There is still confusion regarding the verdicts of the courts that whether the presumption
of advancement is abolished in some cases like wives and husbands only or it has been
abolished completely e.g., when property is transferred from father to his child. Section
199(2) of the equality act 2010 says that presumption will not be abolished in cases
where property is transferred before the commencement of the section. Criticism of
abolishing the presumption of advancement is that the presumption of resulting trust will
now operate in such cases.
In the case of McGrath v Wallis, the father was successfully able to rebut the
presumption of advancement and a trust was established for the father. Two main
reasons were used by the court to rebut the presumption in fathers favor, firstly, naming
the house to his son was explainable because it helped with the mortgage. Secondly,
the fathers’ lawyers were able to show the court a declaration of trust which was made
some time ago but was never enforced, which showed shares in proportion to their
contribution.
Lastly, the court looked at the father’s age which was 63 and he was fit and healthy, his
fitness and age showed no reason for him to gift his home to his son when he clearly
had a long time to live in his home. However, the court did not instantly declare a
resulting trust for the father. What the court did instead was to look at the intention of
both father and son to determine what their share should be and then declare a trust
accordingly in those proportions.
This case shows that sometimes the evidence may not be enough to rebut the
presumption of resulting trusts or presumption of advancement as the court can look
more closely at the parties overall intentions.

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