Resulting Trusts

Resulting Trusts

1. RT arises where property has been transferred to the D

   • a recognised trigger for trust occurs might occur at time of transfer or subsequently
     • property was either transferred to the D or created for the D
   • trust is 'resulting' as the beneficial interest in the property RETURNS / 'results back' in equity to the person who transferred the property in the first place
     • trustee - personally liable to the Ben. for breach of trust where a trust property is transferred to 3rd party - even though they wernt aware of existence of trust

2. Categories of RT

   • 2 categories
     • Presumed RT
       • claimant transfer property to defendant or purchase property is put in D's name
         • C doesnt recieve any consideration for transaction from the D
           • presumed - D holds property on RT for claimant
     • Automatic RT
       • property has been transferred to D to be held on express trust that fails - intially or subsequently
         • property - held on RT for settlor/those entitled to testators residuary estate

3. Theoretical foundation of RT

   • significance of intention
     • COurts distinguished between automatic and presumed RT in Westdeutsche v Islington LBC
       • Lord Browne Wilkinson suggested obiter that all RT should be considered presumed RT
     • Intention of transfer - significant to analysis of RT
       • for a RT to be recognised the transferor should intend property to be held on trust for him in certain circumstances - there are 5 ways
         • Express intention
           • transferor of property expressly intends transferee to hold property on trust for him - trust wont be resulting - will be express trust
         • Inferred intention
           • Where you cant prove express intention - may be able to INFER this itnent
             • intention doesnt need to be expressed formally - can be deduced from evidence
               • Megarry J - Re Vandervells Trust No 2
             • What DID a party intend?
         • Imputed intention
           • where inferred intention involves determining what party DID intend, imputed intention involves determining what a party WOULD intend
           • intention that property should be held on RT may be imputed where you can see that this is what the transferor would intend if they had thought about the consequence of transfer
             • eg: where transaction might fail
             • arises by operation of law
         • Presumed intention
           • legal presumption arises where proving one fact allows another fact to be found withou need to cite any evidence to prove other fact
             • presumed fact can be rebutted by other party if they cite evidence that contradicts it
               • intention is only presumed where theres gap in evidence - 'equity abhors vaccum'
             • fact is presuemd as it reflects common experience - judge agrees it the most likely outcome that can be drawn in abscence of any evidence to prove otherwise
           • similar to imputed itnention - but presumed intention may be rebutted by evidence
         • absence of intention
           • sufficient that transferor didnt intend recipient to benefit from the property
             • Lord Millet - Air Jamacia v Charlton

4. Intention and categories or RT

   • Presumed RT
     • need to be clear about what is being presumed
       • what did the transferor presume to intend?
         • where claimant has voluntarily transferred property to the D - C intended property to be held on trust forhim
           • can be rebutted by recipient of property by citing evidence that transferor didnt intend property to be held on trust
             • eg: showing it intended to be a gift - Chambers view
   • Automatic RT
     • Swaddling - unable to identify legal rationale for this trust
     • ART cant be explained by relying on presumption of intention
       • arises by operation of law where an express trust has failed and no additional facts are required to be proven
         • this is b/c C wont have itnended D to benedit from recipet of the trust proeprty where trust has failed
         • imputes an intention that in the circumstances a trust would be declared for C
           • imputed intention doesnt claim to reflect what claimant did intend but what they would have intended if they had given thought to the express trust failing
             • Re Gillingham Bus Disaster FUnd
               • surplus of fund was held on RT for those who had made donations to it
                 • Held: recongition of an ART doesnt rest on the state of mind of transferor as the transferor doesnt expect the £ to be returned
                   • trust arises where expectation of the transferor that the trust will absorb the fund is for some unforseen reason cheated of fruitation