Resulting trusts notes

Illegality defence- 

Reforms- would apply where a trust has been created or continued in order to conceal beneficiaries interest for a criminal purpose. In more cases a beneficiary would be able to rely on their normal legal right to enforce the trust. However in exceptional circumstances the court would have discretion to deny the beneficiary this right. The court should take into account- the conduct of the parties, the value of the interest at stake, whether refusing the claim would act as a deterrent and the interests of third parties. 

The scope of the rule and case was not defined. 

Argues that there is no single right answer, the finding of an express trust in one Quistclose type situation would not preclude the finding of a resulting trust in another.

The fact the transferor holds security does not automatically make the arrangement a Quistclose one. 

In Quistclose Wilberforce said that 'arrangments of this character for the payment of a persons creditors by a third person, give rise to a relationship of a fiduciary character or trust, in favour, as a primary trust, of the creditors and secondarily if the primary trust fails, of the third person.' 

In most cases A transferring property to B directing that it be held on trust for C will create a simple express trust. 

Result comes from the latin for spring back.

Traditionally resulting trust categories- i) voluntary conveyance resulting trust ii) purchase money resulting trust and iii) failed trust resulting trust. Voluntary conveyance and purchase money dont arise where there is a presumption of advancement. Also dont arise in transfers by wills. Failed trust can arise in all situations. 

Presumption use and abuse- first two types arise because of a presumption. a) true presumptions- facts can be proved. Burden is on the party saying they occured.  b) false presumptions- i) presumptions indicating the burden of proof ii) presumptions describing substantial rules of law iii) presumptions of fact and iv) presumptions are rules of construction. 

Traditional explaination of 'presumed' resulting trusts- a) the type of presumption in presumped resulting trusts- a legal presumption. i) presumption dispositive of the result- is a rule of law which must prevail even though the court might not believe that the fact was in accordance with the presumption. ii) presumption rebutted by contrary evidence- Fowkes v Pascoe. If there is actual evidence to rebut the presumption the court must go on the actual facts. iii) presumption cannot be resorted to where there is no gap in evidence. 

There must be some expression of intention before it can effect any result. 

Has the presumption changed? Non beneficail transfer is suggested as the fact proved by presumption today. 

Presumption of non beneficial transfer- a) gratuitous transfers are apparent gifts b) equity is suspicious of gifts c) equity consequently presumes that apparent gifts are not gifts d) that the presumption of not gift is a presumption of non beneficial transfer and e) that the presumption of non beneficial transfer triggers a trust in favour of the transferor. All are false.

Browne Wilkinson explaination of failed trust resulting trusts- the rule that a transferor accompanied by a declaration of trust that fails to declare effective trusts generates a resulting trust in favour of the transferor is sanctioned by many years of authority. Morice v Bishop of Durham.  Vandervell v IRC- showed that an explanation of the failed trust resulting trust in terms of presumption of intent does not work. 

The presumption in play in presumed resulting trusts is a presumption of law, where proof of evidence of one fact generates proof of a second fact without the need for evidence. 

Equality Act 2010 seeks to abolish presumption of advancement. Passed as gov thought the current operation would breach A5 of the ECHR. Thinks the rule wouldnt breach A5 and abolition is not necessary. 

Presumption- allocates the initial burden of proof about property. Recipient should rebut presumption and establish that they should get property. However if the parties are a particular relationship it is reversed and equity presumes that the transfer was intended as a gift. Then donor has to rebut presumption if they want property back. Initial presumption rarely decides a case. 

Advancement relationships- only applies in one direction and there arent many. s199 appears to assume that some kind of donor obligation is the basis of the presumption. 

A5- prevents discrimination according to gender. Here it discriminates as only applies one way. Gov has assumed that the discriminatory nature would breach. Falls outside A5 as A5 is about spouses and so the parent to child one falls outside. The fiancee also falls outside as it excludes the period proceeding marriage. 

Is the presumption a right under A5? Lord Lester said the presumption was a rule of evidence in court proceedings, and Baroness Royall said that in reality it conferred no practical advantage or disadvantage to either spouse. It is a rebuttable presumption of the existence of a right but isnt a right itself. Ireland has the same presumption of advancement and ratified the protocol in 2001. 

Effects of S199- will not apply in cases involving things done before the commencement of the section so the presumption will be around for a while. The presumption is a device to identify rights and obligations.

Repeal and removal of obligations- nothing in the act says about changes to parental duties.

Law is highly problematic.