presumed resulting trust Flashcards
what is a resulting trust
when trust property jumps back to the settlor
what are the key equitable maxims for presumed resulting trusts
3
1) Equity abhors a vaccum - courts will presume a trust where ownership is ambigious -presume it should result back to the settlor
2) equity looks to intent rather than form - courts consider the actual intention behind a transaction
3) he who seeks equity must do equity
when does a presumed resulting trust arise
-when property is transferred without evidence of intention to make a gift
when do resulting trusts arise
2
1) Voluntary Transfers: When A transfers property to B with no express declaration of trust or consideration, and the court presumes that a gift was not intended. -
2) Purchase Money Trusts: When A provides purchase funds for property held in B’s name without the intention of making a gift, giving rise to a presumed trust in A’s favour.
legal rational for resulting trusts
4
1) prevents unintended loss of beneficial ownership
2) Recognised by courts as a mechanism to resolve ambiguities in property ownership.
3) Protects contributors who have made financial contributions towards property but do not hold legal title.
4) Avoids situations where legal title holders might seek to claim absolute ownership unconscionably.
why do presumed resulting trusts arise - according to swadling
- Courts only find presumed resulting trusts when it can be presumed that the positive intention (deliberate intention) of the settlor when transferring the property was that beneficial title must stay with him or her, the entire time,
- this is taken hold in case law
why do presumed resulting trusts arise - peter birks
they arise negatively because the settlor never intended the transferee to benefit.
why do presumed resulting trusts arise - Prof John Mee and James Penner
they arise because the settlor intended the transferee to take the property but only to hold for the settlor him or herself – ie without an express declaration of trust. The settlor doesn’t have to know what a trust is in legal terms, they only need to intend that the transferee does not take the property absolutely
Westdeuchde Landsebank
- refer to sheet
s60(3) LPA 1925
In a voluntary conveyance a resulting trust for the grantor shall not be implied merely by reason that the property is not expressed to be conveyed for the use or benefit of the grantee.’
what does s60(3) LPA mean
- When transferring land, the conveyance has to be in writing
- Property’s transferred to a second person – legal person a and b, no express declaration is made but b will take the land absolutely, this is not an automatic presumption in the courts that the property was intended or the land was intended, to be held only on trust by b or a,
- When transferring land because there are more hoops to jump through, because of the formality requirements, the implication or presumption of a court is that you are intending to transfer it outright, not simply transferring it to another person to hold on trust back for you
- Justification is the greater the formality requirements, the more likely it is on the evidence that you intended a gift and so presumption of trust shouldn’t automatically arise, from the starting position,
prest v petrodel resources
-mr and mrs prest began divorce proceedings
- he was the sole owner of valuable companys
- he transferred most of his wealth (inc 7 properties) to his various companys other than the one they lived in
- mrs prests ought ancilliary relief (under s23 MCA 1973)
- at 1st instance mr prest refused to comply with court orders and disclose his companies financial position
- high court s24(1) MCA conferred a wider jurisdcition to pierce the corporate viel
- made a transfer order to be included is mrs prests ancilliary releif
- sc - due to the circumstances that he started transferring properties on marriage breakdown, like hes anticipating the divorce, is suspicious
- presumed that the properties were held on resulting trust for the benefit of mr priest
- could presume a resulting trust – because the beneficial title is vested in Mr. Prest himself not the companies, they’re deemed as part of his personal estate, therefore the properties are then included in the divorce settlement to the wife
why did the wife get the properties concluded in the divorce settlements in prest v petrodel
- could presume a resulting trust – because the beneficial title is vested in Mr. Prest himself not the companies, they’re deemed as part of his personal estate, therefore the properties are then included in the divorce settlement to the wife
how might the courts rebut the presumption of a resulting trust
1
1) evidence of a gift - presumption can of a resulting trust can be displaced by clear evidence that a gift was intended (as then it was obviously for someone else so doesnt need to result back)
-courts will assess nature of the relationship and other factors
fowkes v pascoe
- A wealthy woman purchased annuities in her name and that of a younger man.
- The court found sufficient evidence that she intended a gift rather than a trust.
- She was much wealthier than him, he was already living with her and she was already providing for him financially.
- Presumption of Advancement: if this were man and child would assume a gift
- as its a female and far down the family tree they dont assume
- courts found evidence of gift as he lived there and she already provided for him financially
case that shows evidence of a gift to rebut the presumption of a resulting trust
fowkes v pacoe
What is the presumption of advancement
- legal presumption that in specific relationships a transfer is only ever intended as a gift.
- This will override the presumption of a resulting trust
- Historically applied to fathers transferring property to children and husbands transferring property to wives. - very gendered concept
crtici of the preumption of advancement
- Gendered presumptions no longer reflect modern financial realities.
- Courts increasingly favour examining actual intentions rather than relying on legal presumptions.
- The Equality Act 2010, s 199 proposes to abolish the presumption, though it is not yet in force.
relationships where the poa applies
1) father to child
2) husband to wife
bennet v bennet 1879
- Father passed away
- Widow and son left to pay his debts
- Naturally this responsibility for paying of those debts fell to the son (date of case)
- Mother wants to help so took out a loan herself, against her personal estate and then loaned, or transferred that money to the son to help him pay of the dead fathers debts
- then there’s the question, of whether the loan, once the debts have been paid of, as theres some left over, was that intended as a gift, the money as a whole for the son to use the money and then if theres any left keep it, or was it transferred on resulting trust
- Wasnt enough evidence to suggest either way so the courts relied on presumptions – that property will be transferred and the excess will bounce back to her personal estate or that the son take it as an outright gift
- At the time if it was a father to his son, the presumption of advancement wouldve almost certainty be invoked – courts wouldve assumed theres no way a father wouldve transferred money and not intended the son to keep the rest of the money – the idea being that fathers provide for there children,
- as it was a mother in this case, the court rejected the presumption of advancement, didnt think she was gifting it to her son, so it was deemed to be a resulting trust
father to child - poa applies
Re Eykyns Trusts
-husband transfers property to wife
-he passes away so exectutors of his will try say no evdience of a gift so it bounces back to his estate and they can use it to pay off debts
- h and w so could envoke poa and said it was intended as a gift
husband to wife - poa does apply
relationships where poa does not apply (historically)
- mother to child
- wife to husband
bennet v bennet
Father passed away
- Widow and son left to pay his debts
- Naturally this responsibility for paying of those debts fell to the son (date of case)
- Mother wants to help so took out a loan herself, against her personal estate and then loaned, or transferred that money to the son to help him pay of the dead fathers debts
- then there’s the question, of whether the loan, once the debts have been paid of, as theres some left over, was that intended as a gift, the money as a whole for the son to use the money and then if theres any left keep it, or was it transferred on resulting trust
- Wasnt enough evidence to suggest either way so the courts relied on presumptions – that property will be transferred and the excess will bounce back to her personal estate or that the son take it as an outright gift
- At the time if it was a father to his son, the presumption of advancement wouldve almost certainty be invoked – courts wouldve assumed theres no way a father wouldve transferred money and not intended the son to keep the rest of the money – the idea being that fathers provide for there children,
- as it was a mother in this case, the court rejected the presumption of advancement, didnt think she was gifting it to her son, so it was deemed to be a resulting trust
abrahams v trustee 2000
wife to husband - poa does not apply
- Transfer from wife to husband, purchased a lottery ticket for the husband, the ticket wins
- Who gets the money – the husband or does the wife have some claim
- On the evidence – hed been contributing to a weekly employers lottery fund and when he was sick she took over
- He paid money weekly into a pot and then lottery tickets will be bought, he gets sick so his wife starts paying the money in his place instead
- Evdience to suggest it was more of a shared thing, he couldnt pay them so she took over
- And then they get the winning ticket
- Who takes the winnings or do they split them
-Here there was enough evidence to say the wifes contribution gives rise to a presumed resulting trust – rather than the husband just taking the winnings absolutely
