Resulting trusts

Traditionally it is thought that there are 2 circumstances which give rise to a resulting trust- 1) gratuitous transfer cases 2) incomplete express trusts.

Westdeutsche Landesbank v Islington LBC 1996- Lord Browne Wilkinson- 'under existing law a resulting trust arises in two set of circumstances a) where A makes a voluntary payment to B or pays for the purchase of property which is vested in B alone... and b) where A transfers property to B on express trust, but the trusts declared do not exhaust the whole beneficial interest.' 

Air Jamaica v Charlton 1999- Millet- 'a resulting trust responds to the absense of any intention on his part to pass a beneficial interest in the recipient.'

Reminder on formalities- s53(2) LPA 1925- 'this section does not affect the creation or operation of resulting trusts.' 

Termination of resulting trusts may also occur without formalities (Re Vandervell No 2 1974). 

Also called type A resulting trusts or presumed resulting trusts. 

When do they arise? Also known as apparent gift cases. They give rise to a presumption of a resulting trust. Two situations have been said to give rise to the presumption- i) voluntary transfers of property and ii) contribution to the purchase price of property. The presumption can be rebutted.

i) voluntary transfers of property- presumption of resulting trust- courts are suspicious of gifts with no consideration. 

A distinction is drawn between voluntary transfers of personalty and voluntary transfers of land: S60 of LPA 1925 ss1 and 3. No need to use a particular set of words. 

Lohia v Lohia 2001- Strauss- 'against all this, the countervailing consideration that section 60(3) on this view would change the law with regard to real property alone and therefore would lead to different conclusions in relation to real and personal property in the same situation, does not seem to me to be a factor of sufficient potency to displace the natural construction of the section.' 

Khan v Ali 2002- confused- Morritt- 'Lohia v Lohia establishes that the presumption of a resulting trust on a voluntary conveyance of land has been abolished by s60(3) of LPA 1925.' 

ii) contribution to the purchase price of property- the basic presumption in this context is that where property is purchased in the name of a person, but that person provided only part (if any) of the purchase price, it is presumed that that person holds the property (or part thereof) on resulting trust for the contributor.

The Venture 1908- Farwell- 'When it is once proved that P advanced 550l of the 1050l purchase money for this yacht he thereupon became entitled to 55 105ths. That being the presumption, it was open to the other side to displace that presumption, but it was not incumbent upon P to prove more than that.' 

Pettitt v Pettitt 1970- Reid- 'the traditional view is that in the absence of evidence to the contrary effect, a contributor to the purchase price will acquire a beneficial interest in the property.' Resulting trust when money is paid not after purchase. Beneficial ownership will be proportionate to contribution. 

Fowkes v Pascoe 1875- Mellish- 'there can be no doubt that the question in this case is a question of fact. It cannot be decided simply on the ground of the legal presumption... In my opinion once there is evidence to rebut the presumption, the court is put in the same position as a jury would be, and we cannot give such influence to the presumption in point of law as to oblige the court, if it does come to a satisfactory conclusion in point of fact, that the investment was made for the purpose of making a gift, to say that the evidence of the beneficiary himself is not sufficient to rebut the presumption and so decide against him.' 

Vandervell v IRC 1967- Upjohn- 'in reality the so-called presumption of a resulting trust is no more than a long stop to provide the answer when the relevant facts and circumstances fail to yeild a solution.' 

Recent authority on family home cases (covered more in constructive)-

Carlton v Goodman 2002- Mummery- 'the role in fact played by Anita was a different and lesser one than that of contributor to the purchase price. She facilitated the purchase of the House by lending her name in order to secure the advance from the bank. Her involvement in the purchase was so circumscribed and temporary that it cannot fairly be described as a contribution to the purchase price, entitling her to an enduring beneficial interest in the House.' 

Curley v Parkes 2004- Gibson- 'subsequent payments of the mortgage instalments are not part of the purchase price already paid to the vendor, but are sums paid for discharging the mortgagors obligations under the mortgage. By reason of that principle and the modern reliance upon mortgage finance the importance of the resulting trust has diminished, and instead reliance is generally placed on a constructive trust where an agreement or common intention can be found or inferred from the circumstances.' 

Stack v Dowden 2007- held that where a domestic property was conveyed into the joint names of cohabitants without any declaration of trust, there was a prima facie case that both the legal and beneficial interests in the property were joint and equal. Different when family home as resulting trust no longer really applies. 

Laskar v Laskar 2008- Neuberger- it was argued that this case was midway between the cohabitation cases of co-ownership where property is bought for living in, such as the Stack case, and arms length commecial cases of co-ownership where property it bought for development or letting. In the latter sort of case, the reasoning in Stack v Dowden would not be appropriate and the resulting trust presumption still appears to apply. It would not be right to apply the reasoning in S v D to such a case, where the parties primarily purchased the property...

as an investment for rental income and capital appreciation, even where their relationship is a familial one. If, however the presumption in the Stack  case would apply here, then I consider that it would have been rebutted anyway.' 

Jones v Kernott 2011- Lord Walker and Hale- 'the time has come to make it clear, in line with Stack that in the case of purchase of a house in joint names for joint occupation by a married or unmarried couple, where both are responsible for the mortgage, there is no presumption of a resulting trust arising from their having contributed to the deposit in unequal shares. The presumption is that the parties intended by a joint tenancy in both law and in equity. But that presumption can of course be rebutted by evidence of contrary intention, which may more readily be shown where the parties did not share their financial resources.' 

The presumption of advancement- operates as a counter presumption to the presumption of resulting trust that arises in the context of gratuitous transfers. In the context of certain relationships (husband and wife or father and child), equity recognises that the transferor has a moral obligation to support the transferee and so the presumption of resulting trust does not arise. Subject to evidence on the contrary the transferor is presumed to have intended an outright gift. Only applies in one direction and not to mother to child or wife to husband. Contraversial. 

i) English law- Re Roberts 1946- father to child- Evershed- 'it is well established that a father making payments on behalf of his son, and in the absence of contrary evidence, is to be taken to be making and intending an advance in favour of the son and for his benefit.'

Bennet v Bennet 1879- person in loco parentis to a child- Jessel- 'the presumption of gift arises from the moral obligation to give and it is well established that a person, not the father of a child, may put himself in loco parentis and so incur the obligations as if he was the father.' 

Re Eskyns Trusts 1877- husband to wife- Malins- 'The law of this court is perfectly settled that when a husband transfers money or other property to the name of his wife only, then the presumption is that it is intended as a gift or advancement to the wife abosolutely at once, subject to such marital control as he may exercise.' 

Shifts burden- presumption of resulting trust- burden on B to prove otherwise. Presumption of advancement- buden on A to prove otherwise. 

Pettitt v Pettitt 1970- Lord Diplock- 'it would in my view, be an abuse of the legal technique of ascertaining or imputing intention to apply to transactions between the post war generation of married couples 'presumptions' which are based upon inferences of fact which an earlier...

generation of judges drew as to the most likely intention of earlier generations of spouses belonging to the propertied classes of a different social era.' (outdated). 

Lord Upjohn- 'they have been criticised as being out of touch with the realties of today but when properly understood and properly applied to the circumstances of today I remain of the opinion that they remain as useful as ever in solving questions of title... In my opinion today the doctrine of resulting trusts still represents the common sense of the matter and what the parties would have agreed had they thought about it.' 

Lord Reid- 'or that wives economic dependence on their husbands made it necessary as a matter of public policy to give them this advantage. I can see no other reasonable basis for the presumption. These considerations have largely lost their force under present conditions and unless the law has lost all flexibility so that the Courts can no longer adapt to changing conditions, the strength of the presumption must have much dimished. I do not think it would be proper to apply in the present case.' 

Antoni v Antoni- should have applied advancement but didnt. Most recent case. 

Laskar v Lasker- said it could apply between mother and daughter. 

Stack v Dowden 2007- Neuberger- 'the presumption of advancement as between man and wife, which was so important in the 18th and 19th century, have now become so much weakened, although not to the point of disapperance.' 

ii) Equality Act 2010- not in force yet. Wants to abolish presumption. s199 Abolition of the Presumption of Advancement. 

Until the provision comes into force- Harwood v Harwood 1991- Slade- 'the presumption of advancement must be applied with caution in modern social conditions.'

iii) other jurisdictions- 

Nelson v Nelson 1995 Aus- Dawson- 'In a modern society there is no reason to suppose that the probability of a parent intending to transfer a beneficial interest in property to a child is any more the more or less in the case of a mother than in the case of a father.' Applied in mother and child. Contraversial. 

Low Gim Siah v Low Geok Khim 2007 Singapore- 'there is no doubt that many married women are financially independent of their husbands. But there are also many of them who are not...

Stack v Dowden 2007- Neuberger- 'the presumption of advancement as between man and wife, which was so important in the 18th and 19th century, have now become so much weakened, although not to the point of disapperance.' 

ii) Equality Act 2010- not in force yet. Wants to abolish presumption. s199 Abolition of the Presumption of Advancement. 

Until the provision comes into force- Harwood v Harwood 1991- Slade- 'the presumption of advancement must be applied with caution in modern social conditions.'

iii) other jurisdictions- 

Nelson v Nelson 1995 Aus- Dawson- 'In a modern society there is no reason to suppose that the probability of a parent intending to transfer a beneficial interest in property to a child is any more the more or less in the case of a mother than in the case of a father.' Applied in mother and child. Contraversial. 

Low Gim Siah v Low Geok Khim 2007 Singapore- 'there is no doubt that many married women are financially independent of their husbands. But there are also many of them who are not...

or who choose to be housewives in order to look after their husbands, childrens or homes. Infant children will always be financially dependent on their fathers and mothers. In our view, in the case of such relationships, there is no reason to treat the presumption of advancement as having lost its robustness or diminished in vigour, and there is no reason why it should not be applied to resolve questions of title in absense of any evidence indicating otherwise.' 

Pecore v Pecore 2007 Canada- (any parent and minor child)- 'The advantage of maintaining the presumption of advancement is that they provide a measure of certainty and predictability for individuals who put property in joint accounts or make gratutious transfers. As women now both have the means as well as obligations to support their children, they are no less likely to intend to make gifts to their children than fathers. The presumption of advancement should thus apply equally to fathers and mothers. I am of the opinion that the rebuttable presumption of advancement with regard to gratuitious transfers from parent to child should be preserved but limited in application to transfers by mothers and fathers to minor children.' (I agree with this view, should only be present in hierarchical relationships. This will never become unhierarchical no matter the social age.) 

DPP v B 2009 Ireland- 'to hold otherwise would be to disregard the line of authorities that the doctrine of presumption of advancement in relation to husband and wife and the one sided presumption that a husband who transfers property into the name of his wife intends to make a gift in her favour is an anachronistic concept which no longer applies except in particular and limited circumstances... the presumption has a weakened status.'

Rebutting the presumption- The presumption of resulting trust and the presumption of advancement are presumptions and therefore are concerned with where the onus of evidential proof lies. They can and often are rebutted through evidence. 

Dyer v Dyer 1788- Eyre- 'it is the established doctrine of the court of equity, that this resulting trust may be rebutted by circumstances in evidence. The cases go one step further and prove that the circumstance of one or more of the nominees, being a child or children of the purchaser, is to operate by rebutting the resulting trust, as a circumstance of the evidence.' 

Fowkes v Pascoe 1875- 'And if we are to go on the actual facts and look at the circumstance of this investment, it appears to me utterly impossible, as the Lord Justice has said, to come to any other conclusion than that the first investment was made for the purpose of a gift and not for the purpose of trust.' (woman giving to grandson.) 

Bennet v Bennet 1879- in case of mother, dont need much more to rebut than relationship. Jessel- 'in the case of a mother it is easier to prove a gift than in the case of a stranger, in the case of a mother very little evidence beyond the relationship is wanted, there being very little additional motive required to induce a mother to make a gift to her child.' 

Warren v Gurney 1944- father retained the deeds- 'there was ample evidence to rebut the presumption. There is the fact that the father retained the title deeds from the time of purchase to the time of his death. I think that is a very significant fact because title deeds, as it was said in Coke are 'sinews of the land.' One would have expected the father to have handed them over, either to the plaintiff or her husband, if he had intended the gift.'

Lavelle v Lavelle 2004- behaviour inconsistent with a gift- Phillips- 'the core issue was whether the considerable evidence demostrated in 1997 George had intended to give away his flat. The evidence left no room for the application of the presumption of advancement. After a two day trial in which he heard the witnesses, the judge concluded that George had no such intention.' 

Antoni v Antoni 2007- 'The judge treated Kirk Antoni and Melanie Malone as having to discharge the evidential onus of proving that Dr Antoni had intended them to become beneficial owners of the shares that he had caused to be placed in their names. The reverse was the case...

The presumption of advancement was plainly applicable and required evidence to be adduced by Mrs Lena Antoni establishing that Dr Antoni had not intended for them to become the beneficial owners but had intended them to hold on resulting trust for himself. It would as the judge recognised, have been very difficult for her to do so.' 

Why the presumption matters: illegality and 'clean hands' maxim- the presumption matters because it can have a very real effect on property entitlement. The presumption affects the sorts of arguments made and the amount of evidence needed to be put forward by the claimant or defendant to prove their entitlement to the property. The role of the presumption of advancement is particularly interesting where a claimant with 'unclean hands' wants to rely on an illegal purpose to rebut the presumption. 

i) ex turpi causa non oritur action (not action can arise from a sordid origin)- 

Muckleston v Brown 1801- Eldon- 'if the defendant does not admit the trust but demurs, the plaintiff stating he had been guilty of fraud upon the law, to evade, to disappoint, the provision of the legislature to which he is bound to submit, and coming to equity to be relieved against his own act, the defence being dishonest, between the two species of dishonesty the Court would not act, but would say 'let the estate lie where it falls.' 

ii) illegal purposes and the presumption of resulting trust- 'he who comes to equity must do so with clean hands.'

Tinker v Tinker 1970- Denning- 'the presumption is that it was conveyed to her for her own use, and he does not rebut the presumption by saying that he only did it to defeat his creditors. I think that it belongs to her.' Presumption used even when inconsistent with husbands intention. Could rebut as it was an illegality. 

ii) illegal purposes and the presumption of resulting trust- 'he who comes to equity must do so with clean hands.'

Tinker v Tinker 1970- Denning- 'the presumption is that it was conveyed to her for her own use, and he does not rebut the presumption by saying that he only did it to defeat his creditors. I think that it belongs to her.' Presumption used even when inconsistent with husbands intention. Could rebut as it was an illegality. 

Tinsley v Milligan 1993 HoL- rejected public conscience test. Could be upheld, not necessary to rely on the illegality to make the claim. 

Jauncey- 'the ultimate question in this appeal is whether the respondent in claiming the existence of the resulting trust in her favour is seeking to enforce unperformed provisions of an unlawful transaction or whether she is simply relying on an equitable proprietary interest that she has already acquired under such transaction.' 

Browne Wilkinson- 'where the presumption of resulting trust applies, the plaintiff does not have to rely on the illegality. Therefore, unlike the case where the presumption of resulting trust applies, in order to establish any claim the plaintiff has himself lead evidence sufficient to rebut the....

presumption of a gift, and in so doing will normally have to plead, and give evidence of the underlying illegal purpose.' 

Goff (dissenting) relied on traditional principles- 'Is it really said that criminals such as these or their personal representatives, are entitled to invoke the assistance of a court of equity in order to establish an equitable interest in property? (Gave examples of terrorists or gangs buying houses.) I find it difficult to see how it is possible to distinguish between degrees of iniquity. At all events, I cannot think that the harsh consequences which will arise from the application of the established principle in a case such as the present provide a satisfactory basis for the developing law in a manner which will open the door to far more unmeritous cases, especially as the proposed development in the law seems to be contrary to the established principle underlying the authorities.' 

Silverwood v Silverwood 1997- Nourse- 'it is easy to understand the public policy behind a rule that the court will not lend its aid to someone who founds his cause of action on an illegal act. It is easy to see the advantages of the more flexible approach which was favoured by the majority in this court in Tinsley v Milligan. It is not at all easy either to understand or see any public policy or advantage behind a rule which regulates the claimants right of recovery solely according...

to whether the other party to the transaction be his wife, child or finacee on the one hand or his brother, grandchild or anyone else on the other.'

Stowe: The Unruly Horse has Bolted- 'availability of relief depends entirely on a fact which is completely irrelevant from a policy perspective (whether there is a presumption of advancement in relation to the person to whom the property is transferred) and is in no way related to the seriousness of the underlying illegality.' 

The Illegality Defence- The Law Commission 2010- 'the result of the reliance principle depends not on the merits of the case, but on obscure legal presumptions which are often outdated and discriminatory.'

iii) locus poenitentiae- clean hands relaxed, illegal purposes not carried out?

Tribe v Tribe 1995- Millet- 'the transferor can lead evidence of the illegal purpose whenever it is necessary for him to do so provided that he has withdraw before the transaction before the illegal purpose has been wholly or partly carried into effect.' (scope not clear.)

Nelson v Nelson 1995 Aus- rejected Tinsley v Milligan and favoured a more flexible approach.

Woman purchased property in name of her children to get housing benefit. Was permitted to rebut presumption of advancement through evidence of illegal purpose but was obliged to repay the money she obtained illegally to be afforded equitable relief.