Resulting trusts

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  • Created by: Hope
  • Created on: 24-05-16 18:00
What kind of trust is a resulting trust?
Not express, it arises for some reason
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What formalities are resulting trust subject to?
No written formality
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What did Martin have to say about them?
"A resulting trust arises where the property has been conveyed to another but the beneficial interest results to the transferor"
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Which case categorised resulting trusts? How many categories are there? Which judge created them?
Vandervell No 2- 2. Megarry J
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What are the categories?
Automatic and presumed intention
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When do automatic resulting trusts arise?
When the transfer of property leaves some or all of the beneficial interest undisposed of
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When do presumed intention resulting trusts arise?
When property is transferred from A to B in circumstances where it is appropriate to presume B has become a trustee of that property
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Can resulting trusts be challenged? How? Authority?
They are a presumption, they can be rebutted - Dyer v Dyer
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What happened in Westdeutsche Landesbank?
Lord BW casts doubt on Megarrys categories
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Did that change the precedent?
No, all his comments were obiter dicta so they aren't binding, but they have been rewarded a lot of respect by lower courts
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What did Lord BW say? How did this contradict Megarry's principle?
That you can't be a trustee unless you are aware that your conscience is bound, which contradicts Megarry's principle that you did not intend to part out and out with your interest
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Did any other judges comment? In what case? What did they say?
Lord Millet commented in Air Jamaica, and said intention is important, but not the intention to retain, but an absence of the intention to give the property away
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When does a resulting trust usually arise under existing law?
Under voluntary payment for a house, and where an express trust is declared not to exhaust a whole beneficial interest
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What are the difficulties with Lord BWs theory?
Its hard to expect lay-people to know that they are conscience bound or know what a beneficial interest is
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What does David Hayton say is the problem with Lord BWs theory?
It doesn't account for situations where the settlor didn't want to keep the property
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How does Graham Virgo describe the dictum?
Confused, and that common intention only applies in a CICT. Also, makes no sense that the intention of the trustee should matter, should be intention of guy creating a trust
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Which case illustrates a problem with Lord BWs theory?
Re Vinogradoff, How can a conscience be bound at age 4?
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When does a resulting trust arise?
Upon a failure of an express trust, surplus of trust property, voluntary transfer of property or purchase in the name of another/joint names
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What are some cases examples of failure of an express trust? Why did they fail?
Vandervell (uncertainty of beneficiary), Re Cochrane's ST (condition of trust had not been met)
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What happens in cases of surplus of the trust fund? Examples?
The transferor retains an interest in the surplus- Re Abbot, Re Gillingham Bus Disaster
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Are there any exceptions to this? Authority?
In some cases, the court presumes that the purpose of the settlor is best fulfilled by allowing the recipient to retain it- Re Andrew's Trust Fund
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What do we presume in a voluntary transfer of property?
A resulting trust for the transferor, but that is easily rebutted
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What happens when the property transferred is land? Why?
Under s60, we don't automatically presume an RT, but the transferor can bring evidence that they didn't want an outright transfer, so on that evidence, an RT may occur
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Which case supports this?
Lohia v Lohia
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What kind of evidence shows that a transferor wanted to keep their interest? Authority?
In Ali v Khan, the transferor continued to live at the property and pay the bills and mortgage
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What happens to the presumption in cases of personal property?
The presumption remains, s60 does nothing
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What happens when A has contributed to the purchase price of a property in Bs sole name or in their joint names? Authority?
A resulting trust will arise in favour of the one who has proven to pay the purchase price. Dyer v Dyer
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What is another case example of this happening?
Abrahams v Trustee in Bankruptcy
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What can rebut this presumption?
Evidence of intention for the money to be a gift or a legal loan
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Example of the money being a gift?
Foakes v Pascoe
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Evidence of the money being a commercial arrangement?
Vajpeyi v Yusaf
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What happens when we don't know the intentions of the transferor?
A resulting trust is presumed
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What presumption can rebut the presumption of a resulting trust in a voluntary conveyance? When can it occur?
Advancement- When a voluntary conveyance is made by a man to his wife, fiance, legit child, or someone he has a relationship of loco parentis with
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What is presumed in these relationships?
A gift
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Is there any criticism of it? What is the status of the law?
In the case of Saher v Hughes it was criticised, the doctrine has legally been abolished in the Equality Act
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What are some case examples of advancement not working because the transferor was female?
Sekhan v Alissa, Bennet v Bennet
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How strict are the courts on allowing these to be rebutted? Example?
Quite lenient - Mc Grath v Wallis- successfully rebutted using comparatively slight evidence
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What is an example of the situations in other commonwealth countries?
In AUS, advancement exists regardless of gender of transferor. In CAN it stops existing once the child becomes an adult
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What is the case concerning its abolition?
The equality act isnt in practice yet, because we cant abolish advancement until we find a way to deal with fraud
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What happens if you want to use a resulting trust illegally? Example?
Equity will not allow you to rely on a presumption which would allow you to get away with fraud- Tinker v Tinker tried to defraud creditors
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What happens if you intend an illegal purpose but don't go through with it? Authorities?
If you chose not to go through with it its all cool - Tribe v Tribe, but if you didn't make the decision, you fully intended to go through with it, we dk - Patel v Merza
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What effect does fraud have on your share? Case?
None, you just can't use fraudulent activity to rebut a presumption- Tinsley v Milligan
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What is the status of the law on this?
LC reviewed it in 2010
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What is a Quistclose trust?
If money is lent on a loan agreement, on condition it is used for a specific purpose, a trust arises over them in favour of the lender?
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Which case do they come from?
Barclays Bank v Quistclose
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Which case clarified it? What did they say?
Twinsectra v Yardley - A Quistclose trust doesn't merely arise for a purpose, the question is, did the parties intend for the money to be a the free disposal of the borrower?
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What formalities are resulting trust subject to?


No written formality

Card 3


What did Martin have to say about them?


Preview of the front of card 3

Card 4


Which case categorised resulting trusts? How many categories are there? Which judge created them?


Preview of the front of card 4

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What are the categories?


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