The decisions in Reid v Castleton-Reid and Tian v Zhang highlight the importance of recording not only transactions, but also the parties’ expectations. Reid v Castleton-Reid relates to the correct characterisation of a $1.7m trading account. Tian v Zhang relates to whether sums advanced represented a dowry or were held on resulting trust. In both cases the judgment of the Court focused on what actually happened to the extent possible given evidential certainty. Each case highlighted the need to record financial arrangements, even within families or relationships. See Tian v Zhang at  where Toogood J found that ” … there is no evidence that [they] discussed, let alone agreed what the financial position between them would be …”
As noted in Reid v Castleton-Reid:
 The starting point then is that a resulting trust would arise in Mr Reid’s favour in relation to the money he transferred into the Trading Account in Mr Castleton-Reid’s name. In the absence of a contrary intention, equity presumes that a party who has paid for property intends to retain beneficial ownership in that property.
As Eyre CB said in Dyer v Dyer:
The clear legal estate … whether taken in the names of the purchasers and others jointly, or in the names of others without that of the purchaser; whether in one name or several; whether jointly or successive, results to the man who advances the purchase-money. This is a general proposition supported by all the cases, and there is nothing to contradict it … It is the established doctrine of a Court of equity, that this resulting trust may be rebutted by circumstances in evidence.
 The presumption of a resulting trust can be displaced by evidence of a contrary intention, such as evidence of a gift, or by the counter presumption of advancement.
In Reid v Castleton-Reid the Court noted at  that:
“… While the evidence is confused, it does not support the conclusion that Mr Reid intended to make an absolute inter vivos gift of the $1,700,000 to Mr Castleton-Reid. Nor do the circumstances of the case support the application of the presumption of advancement. It may well be that Mr Reid intended that on his death, Mr Castleton-Reid would inherit the $1,700,000 (or the then proceeds of the Trading Account), however, with one exception, the money was Mr Reid’s and Mr Castleton-Reid held the moneys in the Trading Account on trust for his father.
In Tian v Zhang there was no dispute regarding sums transferred between Mr Zhang and Ms Tian, the question was whether the advances should be treated as a dowry or a gift. The decision in that case as set out at  was that:
” It follows, therefore, that in the absence of evidence that Mr Zhang had a clearly expressed intention to gift the deposit payments to Ms Tian … the law requires that the funds [advanced to purchase properties] be regarded as having been held … by way of a resulting trust.”
The facts behind each of these cases are very disparate. What is relevant is not the facts as believed by the respective parties, but rather the fundamental premise that a gift is not the default position when funds are advanced without a clear explanation or agreement. The take home message is record the basis for fund transfers in advance of, or contemporaneously, with the transfer.
For further discussion on resulting trusts see Resulting trust arises in contractual vacuum.
- Reid v Castleton-Reid  NZCA 372
- Tian v Zhang  NZHC 2231
- Dyer v Dyer (1788) 2 Cox Eq Cas 92, 30 ER 4 (ExCh) at 43
- Chang v Lee  NZCA 308