RESULTING TRUST

The resulting and constructive trusts are not formed on the basis of the parties' intention, but rather
on the basis of the law.

 A trust which is not in writing and which is founded on the actual intention of the parties,
but which is presumed to be the intention of the parties' state of affairs.

Definition: a situation in which the transferee, on behalf of the transferor or of the individual who
provided the purchasing money for the transfer, is allowed by equity to keep the asset in trust. The
beneficial interest comes back to the transferor or to the party making the payment.

 Wan Naimah v Wan Mohammad Nawawi [1974] As long as the general principle of the
resulting trust is fulfilled, the Court has held that there is no need to have it written down.
 Comes from the state of affairs, not from the actual intention of the parties, but is
presumed.
 Presumed intention instead of actual intention & exists in the absence of the settler's clear
intention.

Situations to derive trusts:

Westdeutsche Landesbank Girocentrale v Islington LBC [1996]

Based on Situation 1, A gives money/property to B, then there is a presumption that B is holding in

trust for A. A purchases but puts it in B's name, therefore there is a resulting trust where B is holding
in trust for A. A and B purchases the property where each contributed 50% but the property is still
under B's name. Hence, there is a resulting trust where B is holding it 50% for himself and the
remaining 50% for A. Just because it is under B's name, that does not make it entirely his where
equity is concerned. Based on Situation 2, where A transfers’ property to B on an express trust but
the trust is declared to be failed because of some kind of issue, for instance, they cannot exhaust the
whole of beneficial interest. An example would be where A has a property and appoints B to be the
trustee in order to distribute it to charity for the blind people in Melaka. After distributing the
money, there is still leftover which makes the trust is NOT exhausted. In this situation, B must give
the money back to A (settlor) because he is now the resulting trustee and B cannot use remaining
money for his own benefits.

1. Automatic resulting trust

 An automatic resulting trust will occur where the settlor transfers property through express
trust to the intended trustee, but for some reason the trust has failed. The trustee retains
the legal title of the trusted land. The settler holds the beneficial / equitable land.
 Morice v Bishop of Durham [1805]  determined by naming beneficiaries which cannot be
defined

2. Presumed resulting trust

 The presumed resulting trusts are either the result of a voluntary transfer of the legal
property or of a donation to the purchase price. It is presumed in these cases that the
person did not wish to make a donation of the property or cash unless there is a strong
intention that they wished to do so. A resulting trust occurs in such circumstances and the
transferor or the person making the donation retains or takes a share in the beneficial
interest.
  Westdeutsche Landesbank Girocentrale v Islington LBC [1996] "... the presumption of the
resulting belief is disproved by evidence of some intention inconsistent with that trust, not
simply by proof of an intention to make a gift."
 Liew Choy Hung v Fork Kian Seng [2000] As husband and wife, the plaintiff and the
defendant lived together, but they were not legally married to each other. Both purchased a
house where the plaintiff paid RM 170,000 + and the defendant paid RM 10,000 + in both of
their joint names. After several years, the plaintiff argued that she was entitled to the house
completely because her arguments were that she paid heavily for the house and that the
defendant made a statement to the plaintiff in 1986, when the house was on auction, saying
that "I have only a very small share of the property, do not let the bank auction the land,
take over my share and redeem the property." The issues were whether the plaintiff and the
defendant kept the house on the resulting trust for each other in this situation and whether
the money paid to the defendant by the plaintiff was an obligation to pay her back as a
result of the trust? They kept the house for each other on a resulting trust proportionate to
how much they contributed to the purchase price. The Court ruled that, since they were
unable to prove if such a conversation took place, they could not find proof of the
conversation. The plaintiff does not, however, own the house entirely. The Court found out
that there are two general laws, the first of which is that they keep half and half of it, with
the exception of one which pays more than the other. Second, at the time of the purchase of
property and not later, the amendment to the 1st general rule has to be addressed.

Resulting trust and Constructive trust

It is difficult to determine in practise whether the facts of the case will be suitable for the application
of constructive or resulting trust, because they are based on different principles.

Takako Sakao v Ng Pek Yuen

The court emphasises that the presumptions in force do not compensate for the need to investigate
the facts of the case in order to decide what the parties really intended.

Resulting trust on account of contributions to property

 Dyer v. Dyer (1788)
The Court states that, irrespective of what the situation is, whoever pays for the property is the
beneficial owner of said property.
 Goh Koon Suan v Heng Gek Kiau [1999]
 If B is not a relative, then he is the trustee to the property
 If B is a relative, then there will be no presumed resulting trust
 However, that depends on how the owner (father) wants otherwise, then he
has to prove it
 The term relative only includes either son or wife and not literally every relative
such as brothers, aunts, uncles, etc

(i) Purchase in the name of another

If A buys a property in the name of B, B is assumed to retain the property in the name of A in the
resulting trust. The equitable title results in A supplying the money for the transaction unless the
presumption can be rebutted by B.
  Dyer v Dyer: The trust of a legal estate results to the man who advances the purchase-
money.
 Bull v Bull: A mother and son purchased a house jointly, which was transmitted alone in the
son's name. They decided after the son's marriage that the mother would occupy two rooms
and the son and his wife would occupy the rest of the house. The court held that both
mother and son are mutually equal tenants. Each is entitled to an undivided share in the
house as equity.
 Savage v Dunningham: Defendant and two Plaintiffs were joint tenants in a flat, of which
Defendant was the true tenant. They shared the rent equally. Without telling Plaintiffs,
Defendant accepted an offer from the landlords to acquire the property. Plaintiffs sought a
declaration that they were the beneficial owner. It was held that the fact that the trio shared
the rent did not create a resulting trust, since rent was payment for the use of the property,
as opposed to the purchase of the capital asset. The relationship between the parties had
not been that of trustee and cestui que trust (beneficiary).

(ii) Voluntary transfer in the name of another

If, without any thought, A willingly transfers his property to B, the resulting trust is assumed to be in
favour of A.

 Hodgson v Marks: As a lodger, one old lady took another man. She developed a great
affection for him and relied on him to handle her affairs. She then handed the house over to
him. The man later sold the property without notice to a bona fide purchaser. The court held
that in equity, the old lady remained the beneficial owner and there was a resulting trust to
protect that interest.
 Re Vinogradoff: Some inventories were transferred by the deceased into the joint names of
herself and her granddaughter. She continued receiving the dividends until she passed away.
It was held that for the benefit of the estate of her grandmother, the granddaughter held
the estate on the resulting trust.

A and B participate in a purchase, the funds or part of them being provided by A but title in the
name of B

 Muschinski v Dodds [1985] Where the property is transferred to two persons on a purchase,
whether they are joint tenants or common tenants, and one of these persons has given the
entire purchase money. For that specific person, the property is presumed to be held in
trust. If an individual contributes a portion of the purchase price, his beneficial interest will
usually be proportionate to the way he contributes.
 Bull v Bull Mother and son purchased a house jointly conveyed in the son's sole name. The
mother occupies 2 rooms when the son gets married, and the son and wife occupy the rest
of the house. The mother and son subsequently had a quarrel that led to the son telling his
mother to avoid occupying the house. The court held that the son holds the house for
himself and for his mother as the legal owner.

Rebutting Resulting Trusts - 2 factors

1. By evidence inconsistent with its application

Loo Hon Kong v Loo Kim Lin [2004]

If the defendant claims that he is the beneficial owner of the second half of the land, he must
provide evidence that he has made the payments for that land, and he must also demonstrate that
there was no resulting trust. Since the defendant failed to provide proof, then the Court held that
there was a resulting trust exist and that the defendant was a resulting trustee and the plaintiff was
the beneficial owner of both the properties.

possible issue: whether the facts provided will suggest that the real buyer really wanted the other
individual to take benefit of it?

2. By the presumption of advancement

In comparison, the presumption works when one person transfers property to another, and there is
a legal presumption that the transfer was intended as an absolute gift. There are certain unique
relationships between the donor and the donee, which displace the presumption of a resulting trust
and otherwise give rise to a presumption. This special relationship gives rise to the donor's moral
duty to provide the donee with assistance.

Father and child (arise)

There is a ‘nature of obligation to provide’ which a father who wishes to take care of his child would make
for the purpose of his maintenance transfers of assets to the child.

Re Roberts (1946)
A father took out a life insurance policy for his son and paid all the premiums. The father was named
as trustee of the policy. After his death, it was argued that the premiums paid could be recovered by
the estate. Held: A father making payment on behalf of his child prima facie is to be taken to be
making and intending an advance in favour of the child.

Mother and Child

Presumption of advancement between mother and child is absent.

Perceived absence of an obligation on the part of the mother to provide for the child, only father has
moral obligation.

Snell’s Equity:
“even aside from the formal presumption, the inference would readily be drawn that a gift/
contribution to the child’s maintenance was intended, even when the child was an adult. It would be
particularly strong where a widowed mother was providing for her child”

Sekhon v Alissa [1989]

Mother’s contribution of $22,500 to her daughter to enable her to purchase a house, and the court
held that there was then a resulting trust in favor of the mother.

Bennett v Bennett [1879]

Minimal evidence may be required to prove a gift from a mother to a child

Nelson v Nelson [1995]

Mother as well as the father have a legal obligation to support their child
Parents are in position to advance the interests of their child in marriage

Husband and Wife

Re Eykyn’s Trusts

If a husband only transfers money or other property to his wife's name, then the presumption is that
it is intended completely at once as a gift or advancement to the wife.
Pettit v Pettit

The significance of the presumption between husband and wife was reduced. The economic
dependency of wives on their husbands was the only logical ground for the presumption and,
considering the changes in social conditions, the strength of the presumption had to be significantly
reduced.

Goh Koon Suan v Heng Gek Kiau

Plaintiff purchased a property and registered it under the name of his mistress Defendant. Plaintiff
claimed that he told Defendant to hold it on trust for him. Defendant however claimed that it was an
outright gift for her and refused to transfer the property to Plaintiff. Plaintiff sought a declaration
that Defendant held the property in trust for him absolutely. The court held that since Defendant
was not a wife of Plaintiff, the presumption that arises and should arise would be not one of
advancement in favour of Defendant but rather one of trust in favour of Plaintiff. The onus therefore
shifted to Defendant to rebut the presumption of trust.

Wife and Husband

No presumption of advancement arises from wife to husband

A transfer from the wife to husband does not negative the inference of a resulting trust in favour of
the wife.

Rebutting the presumption of advancement:

 Shephard v Cartwright [1955]

The presumption of advancement may be denied by proof of the actual intention of

the party to provide the purchase money, the effect of which is the resulting trust.

 Ponniah v Sivalingam & Ors [1991]

In relation to shares assigned to the wife and children of the appellant, the
presumption of advancement can be rebutted.

 Sabrina Loo Cheng Suan v Eugene Khoo Oon Jin [1995]

In both their names, Eugene was buying land, his intention was to buy the property
as their matrimonial home.

If applicable, the presumption of advancement will be rebutted by proof that the

parties had purchased a house with equal undivided shares as a marital home.

Evidence: The actual intent of the party to provide the money for the purchase.

 Warren v Gurney [1944]

In the name of one of the daughters, the father bought a home, but later orally
declared that the property was to be enjoyed in equal shares by all his three
daughters.

The declaration was sufficient to rebut the presumption of advancement, and the
fact that the father continued to hold the title deeds.

Proof: No gift was intended

Proof of Illegality to Rebut Presumptions

If A puts property in the name of B in order to achieve an unlawful purpose, can he rebut the
presumption of advancement by proving his real intention?

If the relevant presumption is a resulting trust, can A rely on it although the purpose was unlawful

Tinsley v. Milligan (1994)

With their mutual assets, both parties purchased a home. They both wanted to share beneficial
ownership, but the house was under Miss Tinsley 's name so that Miss Milligan could fraudulently
claim social security benefits because she did not own the house. Subsequently, both of them had an
arrangement and Miss Tinsley moved out of the house based on her legal right to assert ownership
of the land. Miss Milligan, however, made a counterclaim and concluded that there was actually a
declaration that Miss Tinsley kept the house in trust for both of them. Miss Tinsley then argued that
Miss Milligan should not be permitted to create any beneficial interest in the house because of the
fraudulent scheme. Both of them, however, had benefited from the fraudulent scheme.

Held: HOL, it was only appropriate for Miss Milligan to prove that the funds for the purchase of the
property came jointly from both of them, as this would be sufficient to give rise to the resulting trust
in her favour. She did not need to rely on the true intent of the trust to defraud the Social Security
Department. Lord Browne-Wilkinson maintained that it was only because Miss Tinsley tried to lift it
that the illegality arose. Miss Milligan, having proven these facts, had raised a presumption of
resulting faith and there was no evidence to contradict the presumption. The importance of Tinsley's
case was that there is no need to rely on the suspected illegality if an applicant is able to rely on the
presumption of subsequent confidence. The HOL also held that proof of an unlawful intent could not
contradict the presumption of advancement.

Nelson v. Nelson (1995)

For the purchase of a house, a mother (the First Appellant) provided funds and the title was set
under the name of her son (the Second Appellant) and her daughter (the First Respondent). It is
done in this way so that in purchasing another house the mother may enjoy a subsidised finance and
she claimed that for this reason she has no interest in the house under the name of her children. She
demanded the proceeds of the house when the house was then sold to her children and found that
the house was kept in trust for her. Her son, the Second Appellant, supported this. The daughter
then cross-claimed and said that, on the basis of her mother's advancement, she had a beneficial
interest in the land.

Held: The mother-child relationship gives rise to the expectation of change. The inference, however,
is rebutted by proof showing the intention of Mrs Nelson to defraud the Commonwealth by
concealing her interest in the first house in order to receive the subsidised loan. This amounted to
proof of her illegality, but her declaration that a subsequent trust arose is not fatal to this illegality. It
was therefore held that Mrs. Nelson was good and that her children held their shares in their
mother's resulting trust and that her daughter had to pass her share to Mrs. Nelson.