EQUITY & TRUST II:CIRCUMSTANCES OF RESULTING

TRUST

MEMBERS:1) NUR MAHIRAH BT MOHAMAD TAHIR (1120445)2) NURULHASRIAH BT HASSAN BUSERI (1120448)3) HANIS SYAHIRAH BT MOHD ZULKEFLI (1120453)

RESULTING TRUST

0An arrangement whereby one person holds property for the benefit of another, which is implied by a court in certain cases where a person transfers property to another and gives him or her legal title to it but does not intend him or her to have an equitable or beneficial interest in the property.

CIRCUMSTANCES OF RESULTING TRUST

0 In the case of Westdeutsche Landesbank Girozentrale v Islington London Borough Council, Lord Browne-Wilkinson identified two circumstances in which a resulting trust would arise:

.

First circumstance:

Where A makes a voluntary payments to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is sold provider of the money) or in case of a joint property by A and B in shares proportionate to their contribution.

Ali BudiCar

RM100, 000Paid

Used

Holding the property as a

trustee

Beneficiary

or, Ali & Budi shared to pay

the car

0In the case of Bull v Bull:0A mother and the son jointly purchased a

house which was conveyed in the name of the son alone.

0Upon the son marriage, they agreed that mother would occupy two rooms and the rest of the house would be occupied by the son and his wife.

0Held, each is entitled in equity to an undivided share in the house, the share of being in proportion to his or her respective contribution.

Second circumstance

• Where A transfers property to B on express trusts, but the trust declared do not exhaust the whole beneficial interest.

• Both types of resulting trust are traditionally regarded as examples of trusts giving effect to the common intention of the parties.

• A resulting trusts is not imposed by law against the intention of the trustee (as is a constructive trust) but gives effect to his presumed intention.

Land

Trees

• The father give the whole land to his son except for the trees. So as a result the son has to hold the trees on behalf of the father.

REBUTTING RESULTING TRUST

By evidence inconsistent with its application

By the presumption of advancement

1) Inconsistent Evidence0 Need to decide whether the evidence indicate that the

real purchaser in fact wanted the other to take beneficially.

0 It is because the transferor may be intended an outright gift, or transfer the property by way of loan, or other contractual arrangement.

Fowkes v Pascoe0 Mrs Baker bought two sums of stock. One was put in the names

of herself and a young lodger called Mr Pascoe, who she treated like a grandson. The other was in her and her friend’s name. It was argued by the executor, Fowkes, that when Mrs Baker died Pascoe held the stock on resulting trust.

0 Held: James LJ held that although a presumption of a resulting trust applied, it was rebutted on the facts, because plainly Mrs Baker intended to make a gift to Mr Pascoe.

0 Gibbs CJ in the Australian High Court’s decision in the case of Muschinski v Dodds explained the basis on how it to be decided (the evidence to establish the intention of the real purchaser)

0 “….comprise the acts and declarations of the parties before or at the time of purchase….or so thereafter as to constitute a part of the transaction”

2) Presumption of Advancement

Father & Child

Mother & Child

Husband & Wife

Wife & Husband

It arise where certain relationship exist, where the donor or

purchaser is under an obligation recognized in equity to support or

provide for the transferee.

Eg: husband-wife, or in loco parentis ( father-child)

Presumption: the transferor intend to make a gift for the

advancement of the transfree.

a) Father and child0 The presumption is usually stronger. 0 Re Roberts:• a father took an insurance policy on the life of his son and paid

the premiums on it. it was contended after the father’s death that the amount paid by way of premiums ( by the father in his lifetime and by his estate until the son’s death) were recoverable by his estate by means of a lien over the policy moneys.

• The court held that the presumption of advancement prevail and that each premium paid by the father during the lifetime was separate advancement to the son.

b) Mother and child

0The presumption of advancement fade presumption of resulting trust prevail.0Rationale: Mother is not obliged to provide the

child.0Sekhon v Alissa • mother contribute some £22,500 to daughter to

purchase a house. • Held: there was then a resulting trust in favour of

the mother.

c) Husband and wife

0Presumption applies where a husband make a transfer to his wife in the name of the wife.

0Re Eykyn’s Trust, Mallins VC stated“The law …is perfectly settled when a husband transfers money/property into the name of his wife only, then the presumption is, that it is intended as a gift or advancement to the wife absolutely at once,…”

d) Wife and husband

0No presumption of advancement.0Wife husband: not negative the inference of

resulting trust.

1

• By evidence of the actual intention of the party by providing the purchase money

• Sabrina Loo Cheng Suan v Eugene Khoo Onn Jin

2• Where there is evidence to prove that no gift was intended• Warren v Gurney

3• There was illegal purpose• Tinsley v Milligan

REBUTTING THE PRESUMPTION OF ADVANCEMENT

By evidence of the actual intention of the party by providing the purchase money

0 Sabrina Loo Cheng Suan v Eugene Khoo Onn Jin• Doctrine of presumption of advancement is a rebuttable

presumption and can be rebutted• When? If the defendant can show from the act and

circumstances prevailing BEFORE and AT THE TIME of acquisition and transfer of the property

• What? There was common intention between him & the plaintiff that it should be otherwise

1

0 Warren v Gurney• The father purchased a house in the name of the other

daughter but subsequently declared that the property was to be enjoyed by his three daughters in equal shares.

• This declaration and the fact that the father continued to retain the title deeds, were SUFFICIENT to rebut the presumption of advancement.

Where there is evidence to prove that no gift was intended

2

0 Tinsley v Milligan0 T and M carried on a joint business. A property was

acquired with all of the funds needed for the down payment and mortgage instalments coming from the profits of the business. Title to the property went into T’s name alone to facilitate M’s purpose of making fraudulent social security claims. When T and M fell out, T sought an order for possession. M claimed a share under a resulting trust.

0 Issue: whether she could make this claim given the unlawful purpose that led to title being in T’s name.

There was illegal purpose3

0 Lord Browne-Wilkinson said:0 ‘A party to an illegality can recover by virtue of a legal or

equitable property interest if, but only if, he can establish his title without relying on his own illegality. In cases where the presumption of advancement applies, the plaintiff is faced with the presumption of gift and therefore cannot claim under a resulting trust unless and until he has rebutted that presumption of gift: for those purposes the plaintiff does have to rely on the underlying illegality and therefore fails.’

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