Implied trust

Question 1

Resulting Trusts :

Answer 1

Resulting trusts arise in the absence of an express declaration where a person holds legal title in circumstances where they can not be taken to have full equitable ownership.
According to Re Vandervell’s Trusts (no 2) [1974] Ch 269 There are two categories of resulting trusts:

Automatic resulting trust
Presumed resulting trust

“Both types of resulting trust are traditionally regarded as examples of trusts giving effect to the common intention of the parties. A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention”. per Lord Brown Wilkinson Westdeutsche Landesbank Girocentrale v Islington LBC [1996] 2 WLR 802

Question 2

Automatic resulting trust :

Answer 2

An automatic resulting trust will arise where the settlor transfers property to the intended trustee but the trust has failed for some reason. The trustee holds the legal title of the property on trust. The beneficial or equitable ownership is retained by the settlor.

Question 3

Presumed resulting trust :

Answer 3

Presumed resulting trusts arise either from voluntary transfer of the legal estate or by contribution to the purchase price. In these situations it is presumed that the person did not intend to make a gift of the property or money unless there is a clear intention that they did so intend. In such circumstances a resulting trust arises and the transferor or the person making the contribution retains or takes a share in the beneficial interest. However, in some relationships there is a counter presumption that a gift was intended. This is known as the presumption of advancement.

Question 4

Requirements of presumed resulting trust

Answer 4

Voluntary Conveyance :

Outside of land law, where a person transfers property to a third party who does not provide any consideration, there is a presumption of resulting trust, unless the relationship is one which gives rise to the presumption of advancement.
S.60(3) did not prevent a resulting trust being imposed in:
Hodgson v Marks [1971]
However, in the following two cases it was suggested that s.60(3) had a more reaching impact:
Tinsley v Milligan [1993] 3 All ER 65 Case summary

Contribution to purchase price:
contribution to the purchase price will give rise to a presumption of resulting trust meaning the person that makes the contribution will take a share in the equitable ownership of the property in proportion to their contribution :
Dyer v Dyer (1788)
Gissing v Gissing [1971]

Co-habitees:
Where the contribution to the purchase price comes from a cohabiting couple to purchase the family home, the Supreme Court has held that where the property is in joint names there is an intention to hold the property jointly in equity and thus there is no room for a presumption of resulting trust.
The proportion of contribution is therefore irrelevant:
Jones v Kernott [2011]
Stack v Dowden [2007]

Question 5

Illegal Purpose

Answer 5

It is a maxim of equity that he who comes to equity must do so with clean hands; therefore equity will not assist a person who has acted for an illegal purpose. However, if the claimant is not required to plead or rely on the illegal conduct they are still able to claim a resulting trust:

Tinsley v Milligan [1993] 3 All ER 65 Case summary

Lowson v Coombes [1999] 2 WLR 720