Read parsons v mcbain at what point in time does a

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Read Parsons v McBain (At what point in time does a constructive trust arise?) Facts: 2 brothers and 2 wives. 2 brothers declare bankruptcy. Business went bad. A trustee was appointed and this official is vested with all legal title of the bankrupt. The trustee is meant to sell up the assets and distribute them to the creditors. Must check to see if there are any dodgy transfers. In the Bankruptcy Act there is the ‘relationship back period’ of 6 months. Trustee can have it declared void if it was intended to put the assets out of the reach of the creditors. Both transferred their homes to their wives. Trustee in bankruptcy had those respective transfers set aside and had them retrospectively declared void. The wives argued that even so the trustee could not take and distribute 100% of the proceeds from the homes because before the transfers occurred each wife held a 50% equitable interest already. Held: Indeed the wives had a 50% beneficial interest in the homes before the transfers occurred. Therefore their interests were not affected by the voiding of the transfers and were not within the reach of the trustee. The equitable interest passes as soon as the elements are fulfilled. Baumgartner Constructive Trusts Muschinsky v Dodds (1985) 160 CLR 583 Facts: De facto couple who lived together for three years and bought a cottage together. Ms M was supposed to pay the full purchase price of $20 000. Dodds did not have any funds at his disposal. Dodds was expecting a big divorce pay out of 9K. He said that he was going to renovate a run down cottage with the money – which M would use as an arts and crafts business. 4
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Dodds was also going to buy a prefabricated house. He would end up borrowing some money to contribute in about the same amount as M. M and her friends had concerns about putting D’s name on the title. Dodds insisted that his name would have to appear on the legal title. M paid the purchase price and land was transferred to both of them in equal shares. The council did not approve the plan for the prefabricated house. Instead they would renovate and extend the cottage. Did not work out because he did not receive the big payout from the divorce. The cottage was never finished. Relationship ended. M contributed 25k and he spent 2.5K. She sought a declaration from the court that Dodds held his half legal share on trust for her as the sole equitable title holder on the basis of a constructive trust. Gibbs CJ, Brennan and Dawson JJ: No constructive trust. There was a presumption of a resulting trust because there were unequal contributions and title being held jointly and equally. The presumption of a resulting trust was rebutted on grounds that there was evidence of a contrary intent that she intended him to have the equitable interest as a gift. There was not a common intention constructive trust because here Muschinsky is saying that although Dodds is on the title he should not be there.
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