Resulting Trusts: Overview

[Flash Card 1 of 4]

• resulting trusts: arise automatically / defined circumstances / if S attempts trust but fails / property held resulting trust for S or estate / exceptions: some gifts to charities / financial assistance to buy asset
• resulting trusts over land / can be implied / LPA 1925 s.53(2) : without signed written evidence

Incomplete disposal of beneficial interest

• resulting trust may arise: S transfers property to Ts on trust / not dispose of all or part of equitable interest (declared trusts void or not exhaust trust fund)
• contributors money on trust for purpose / purpose not exhaust fund: partial failure of trust & resulting surplus paid back to contributors Re Trusts of the Abbott Fund
• T left money on trust for W & D's education / W died & D completed education / no resulting trust: surplus belonged to D Re Osoba

Settlor's intention

• resulting trusts developed protective mechanism: prevent S losing property in unforeseen circumstances / resulting trust not depend on S intentions Re Vandervell's Trusts
• resulting trusts not arise automatically / based on S's presumed intention / rebutted by contrary evidence Westdeutsche Landesbank v Islington BC
• resulting trust not based on positive intention of S to retain beneficial interest / rarely S's intention / imposed if beneficial interest undisposed & S not intend to make outright gift to transferee Air Jamaica v Charlton / supported obiter Twinsectra v Yardley

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Resulting Trusts: Overview

[Flash Card 2 of 4]

Charitable institution ceased to exist

• gift to charitable company or unincorporated association apparently ceased: if institution continuing in new form / gift can pass to new body with authorisation from CC / gift will follow the purpose
• cy-prèss / gift applied for purposes as near as possible to original gift / if not: resulting trust
• institution continuing if: original gift construed as trust for purposes carried on by institution / purposes taken over by another body / or assets of original charity taken over by new body & still applied for original purposes Re Faraker
• gift to charitable unincorporated association / trust for purposes of association / if association ceased but purposes are carried on by another body: gift to new body / if purposes not continue: consider cy-prèss Re Vernon's WT
• legacy to charitable company / beneficial gift to company (unless expressly for purpose) / if company ceases before testator's death: legacy will fail & held on resulting trust / unless Re Faraker or cy-prèss applies Re Finger's WT

Charitable trust which cannot be carried out

• initial failure: gift or trust is impossible from the outset (when disposition takes effect) / lifetime gifts: immediately on date of disposition / gifts by will: on testator's death / if general charitable intent: cy-prèss / otherwise resulting trust
• subsequent failure: if gift possible at outset but later becomes impossible / legacy in will which existed at testator's death but ceased before distributed / or partially used but surplus once purpose achieved / no general charitable intent needed for cy-prèss
• if initial failure: courts or CC / try to deal with property as S or T wished / consider wording of gift or trust / broader intention Biscoe v Jackson / cy-prèss not apply: if intention benefit specific named body Re Good's WT / named body never existed: cy-prèss applied as fictitious name suggested charitable purpose Re Harwood / 9 animal welfare bodies but 1 never existed / cy-prèss applicable: kindred objects / general charitable intent Re Satterthwaite's WT
• named body existed when will made but ceased before death / cy-prèss applied: general charitable intent indicated by circumstances Re Finger's WT / approach doubted Re Spence's WT

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Resulting Trusts: Overview

[Flash Card 3 of 4]

Presumptions of resulting trust

• presumption of resulting trust: voluntary transfer / X transfers property to Y / Y gives no consideration / presumption X intended Y to hold property on resulting trust for X Re Vinogradoff
• presumption rebuttable: evidence transferor intended gift to transferee / burden of proof on transferee
• presumption unlikely to apply if property realty / LPA 1925 s.60(3) : no presumption of resulting trust in voluntary transfer of land / possible presumption can apply to realty Lohia v Lohia / obiter: Lohia v Lohia abolished presumption resulting trust for voluntary transfers of land / court need consider transferor's intention Ali v Khan
• presumption of resulting trust: X provides purchase money for property purchased in name of Y / Y holds resulting trsut for X Abrahams v Trustee in Bankruptcy of Abrahams / bank account: no evidence of intention to benefit (which would have rebutted presumption) Thavorn v Bank of Credit & Commerce International
• presumption of resulting trust / payment must be part of purchase price (not legal fees or stamp duty) / at initial purchase / payment of mortgage instalments & other outgoings after purchase insufficient Curley v Parkes
• courts moving away from using resulting trusts to determine cohabitees rights Stack v Dowden / constructive trusts allow more flexibility to determine respective shares in property
• resulting trusts important / where property was investment rather than home Laskar v Laskar
• voluntary transfer personalty from X to Y: presumption Y holds legal title on resulting trust for X / rebutted: evidence X intended to make gift to Y (Y outright ownership)
• X provides purchase money for property in name of Y: presumption Y holds legal title on resulting trust for X / rebutted: evidence X intended to make gift to Y (Y outright ownership)
• X & Y provide purchase money for property in name of Z: presumption Z holds legal title on resulting trust for X & Y in proportion to their contributions / family homes likely constructive trusts / rebutted: X & Y intended to make gift to Z (Z outright ownership)

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Resulting Trusts: Overview

[Flash Card 4 of 4]

Presumption of advancement

• presumption of resulting trust / replaced by presumption gift was intended (presumption of advancement)
• presumption of advancement applies: father making voluntary transfer or purchasing property in name of child / person who is in loco parentis of child / husband making voluntary transfer or purchasing property in name of wife or fiancee
• traditional view : no presumption of advancement from mother to child / may apply Laskar v Laskar / presumption applied mother for daughter Sekhon v Alissa
• presumption of advancement weak / case of adult children McGrath v Wallis / husband & wife: bygone age Pettitt v Pettitt
• Equality Act 2010 s.199 : abolishes presumption of advancement for dispositions / not in force yet / advancement rare

Rebutting the presumptions

• presumptions / aid determine parties' intentions / absence evidence of actual intentions / strength of evidence to rebut / depend on strength of presumption / must relate to acts & statements at time of transaction Shephard v Cartwright
• advancement weak / slight evidence rebuts / bank account joint names convenience not gift Marshal v Crutwell / raise cash Ali v Khan / retained deeds Warren v Gurney / insufficient: regret purchasing house for another Loosemore v McDonnell

Illegality

• X put property into Y's name / further illegal purpose not gift / X rely on presumption of resulting trust to recover property in future / can rely : if C not have to produce evidence of illegal purpose to prove case (reliance principle) Tinsley v Milligan / illegal purpose not relevant to issue Lowson v Coombes
• presumption of advancement cannot be rebutted by evidence of illegal purpose Gascoigne v Gascoigne / difference in relevance illegality unfair outcomes Tribe v Tribe

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