Given the fact that ‘equity is very cautious about giving gifts’,

the word resulting trusts come from “resilare”, which means

reverting back (in French). Resulting trusts are trusts that
arise by operation of law where, due to an evidential gap, the
equitable title reverts back to the original owner.

Three types of resulting trusts can arise: a voluntary

conveyance resulting trust (VCRT); a purchase money
resulting trust (PMRT); and, failed trust resulting trust (FCRT).
The first two heads can collectively be called Presumed
resulting trusts (PRT), and the latter is also called Automatic
resulting trusts (ART)—Re Vandervell (No.2). FACTS

VCRT

In an instance of a person that transfers property to someone

without express/clear intention to make gift, the transferee
will hold it on a resulting trust (for transferor). A resulting
trust is presumed in transferor’s favour (due to lack of
consideration), unless rebutted by evidence (of intention to
transfer property absolutely). VCRT can differ for movable
and immovable property.

For movable property, Farwell J in Revinogradoff held that

the granddaughter was a trustee of the resulting trust. Lloyd J
in Thavorn v BCCI, stated that ‘there was not the slightest
evidence as which I hold that by opening the account in his
name she intended to transfer any beneficial interest to him
during her lifetime’ (a VCRT arose, hence, the nephew was a
trustee of the RT and Mrs. T was a B).
In Arosso v Coutts, the presumption of a RT was held to
operate when transfer of money took place, to a joint
account (opened in name of his nephew and himself). This
presumption was however rebutted by evidence of intention
of a gift.

For immovable property, the law differs prior to 1925 and

after. Prior to 1925, absence of a statement on transfer
documents that land was granted ‘for the absolute use and
benefit’, would automatically give rise to a RT.

This position was changed by s.60(3) of LPA 1925, which says

that a RT for the grantor, in a voluntary conveyance, shall not
be implied eely because the property is not expressed (to be
conveyed) for use or benefit of grantee (in transfer
document.

On a literal interpretation of s.60(3), as preferred by Lord

Browne-Wilkinson, a RT would not automatically arise
because there is absence of express statement (in
conveyance document), in a voluntary conveyance. FACTS
(AGAINST RT)

However, the recent approach has been that s.60(3) has

abolished presumption of RTs. This means that in instances
of voluntary conveyance of land, property will be presumed
as being given for absolute use, unless proved otherwise
(which may require extraordinary evidence)—Nicholass
Strauss QC in Lohia, where some other evidence (than
voluntary conveyance) was needed by the court.
From this, one may say that s.60(3) has created a
presumption of gift in voluntary conveyance of land, which
may be rebutted by proof of strong threshold of evidence
provided by the transferor. This was further clarified recently
by Chief Master Marsh in Dong case: ‘A little interpretation of
s.60(3), even if that is the right approach, does not to my
mind inevitably lead to the result that the presumption has
disappeared…’. FACTS

PMRT
According to Dyer v Dyer there are two situations where
the
PMRT arise.
1 where one persons(A) ( Transferor) pays to third party in
his life, to transfer porperty to B. HERE b is trustee for A.

2. WHERE A and B pays to party C to convey rights to B.

NOW B IS NOW THE TRUSTEE FOR A AND B

Purchase money contribution means money or moneys

worth and this also includes Discounts. LASKAR V LASKAR.

A purchase money resulting trust can arise in favour of a

person that contributes towards payment of purchase price.
Interest under PMRT are directly proportional to purchase
money’s proportion that is contributed (the percentage trust
you get is however much money you contributed).

Movable property:
The Venture case is an illustration of how PMRT work in
movable property (here a yacht). The court held that a RT
arose in A’s favour, to the extent of what he contributed
towards the purchase price.
In Abrahams case, the husband was held to be holding GBP
242K from lottery winnings, for his wife (who contributed to
purchase of national lottery tickets).

In Foskett v McKeown, not RT in favour of beneficiaries was

held to arise by the court as, even if no contribution (of
misappropriated funds—that did not decrease or increase
value of insurance proceeds) was done, the insurance
proceeds would have still been payable.
In Fowkes v Pacoe, there were evidential gap due to which
the PMRT that could have arisen for Sarah Baker, was
rebutted (as there was intention to make a gift). FACTS.

Immovable property

The same rule as with regards to movable property in PMRTs

will apply to immovable property. Lord Reid in Pettitt stated:
‘in absence of evidence to the contrary effect, a contributor
to the purchase price will acquire a beneficial interest in the
project’. There should be contribution to the purchase price,
to give effect to PMRT. With regards to whether such a
contribution was made, certain problems may arise:

USE RELEVANT

1) Contribution towards purchase price:

 Cowcher v cowcher. Ones equitable share is determined
by the share of ones liability to repay the loan. Not by the
value of the money one actually repays.

which will make the percentage of trust proportionate

to the price paid (Tinsley v Milligan). In Midland v Cooke,
the wife’s interest (of 6.47%) through PMRT was
increased by the court through a constructive trust
(which implies the discretion that courts have and that
RT’s principle are strict/narrow). FACTS

2) Contribution towards mortgage repayments: in wood v

waktin
The person who undertook liability for the mortgage
repayments between joint tenants , is to be treated as
having contributed the mortgage money.

3) Contribution on the Intention to never repay. In

Goodman V carlton.
COA denied RT share arising from the joint liability
under a mortgage loan providing most of the purchase
money for a bouse on basis that there was never any
intention on the part either her or the other borrower
that she would ever pay.

In Curley v Parkes, the CA rejected Curley’s claim (of 80%

interest in land), and held that there was no contribution to
purchase price by the payments. Peter Gibson LJ stated:
‘subsequent payments of mortgage installments are not part
of purchase price already paid to vendor but are sums for
discharging the mortgagor’s obligations under the mortgage’.
FACTS (STRICT APPROACH).
However, in Lasker case, contributions towards
mortgage payments did give rise to a RT as the courts
consider a RT as a better tool in giving interests in
properties purchased, for purposes of investment.
FACTS (MORTAGE PAYMENTS WILL SUFFICE)

4) Contribution by qualification for a discount in purchase

price may suffice (Springette v Defoe).

5) Contributions towards cost of repair and renovation

(Drake v Whipp), at time of purchase may suffice to find
a RT that is proportionate to the extent of increase in
value of property is attributable to the contributions
made. It should be noted that such contributions must
be made at time of purchase to give rise to a PMRT,
otherwise a constructive trust may arise.
6) Contributions towards general household expenses will
not give rise to a PMRT (no direct contribution to the
purchase price was held to be made, by the CA in Burns
v Burns.

TRUST OF THE FAMILY HOME.

Stack v dowden.
Lord walker and Baroness affirmed the view of stack.
 In family home trust, PRESUMPTION OF RESULTING
TRUST is not applicable instead the preferred is
common intention constructive trust.

Rebuttals of PRT s See notes also.

1) REBUTTAL OF Presumption of Rt for VCRT and PMRT,

since presumed intention RTs are based on a
presumption, such a trust can be rebutted if contrary
evidence is produced.
2) RE Cochrane , Harman J stated . A RT IS THE LAST
RESORT TO WHICH THE LAW HAS SOURCE. The
presumption will be rebutted by actual evidence of any
intention which is inconsistent with the presumption.

3) Evidence that a gift was intended (Arosso v Coutts): in

Fowkes v Pascoe, the annuities were purchased in
transferee’s name. In Re Young, the funds were taken
out by Colonel from the bank account with wife’s prior
knowledge (which amounted as intention to gift). FACTS

4) Evidence that a loan was intended: Lord Browne-

Wilkinson in Re Sharpe held that Mrs. Johnson’s money
was advanced as a loan, with intention of being repaid.
The court in Vajpeyi v Yijaf held that, as the D was a man
of limited means while C was a wealthy woman (up on
the property ladder), the money was given as a loan.
Also, any share in rental income (for 21 years) had not
 been claimed by C. FACTS (CAN BE ARGUED AS A FACT
SENSITIVE REBUTTAL).

PRESUMPTION OF ADVANCEMENT

A presumption of advancement (PoA) may arise in some

specific cases (like father-child relationship) where there is a
presumption that th transfer was a gift (unless proven
otherwise).

In a father-child relationship, Eversheds J in Re Roberts, held

that a situation where a father makes a payment to his son
(prima facie in absence of contradictory evidence) is taken as
a payment for son’s benefit. B v B case (Canadian) is a similar
proposition, in regards to lottery ticket bought in name of the
12-years old daughter. FACTS

Jessel MR in Bennet, in regards of loco parents, stated that

someone that is not the father of the child may put himself in
position of “loco parentis” to the child, and can make
provisions for the child.

In husband-wife relationships, the 19th century social

understanding of a husband’s obligations (to provide for his
wife) can be seen from Re-Eyken’s Trust case. Such a
presumption has been criticized by HOL in Pettitt, which
acknowledged that such a presumption has been reduced in
significance. Lord Reid suggested that the basis of such a
presumption was the former economic dependence of a wife
on her husband (which, as a social circumstance, has
changed). Lord Diplock held that, as circumstances have
changed, the modern-day decisions should not depend on
presumptions made by earlier generation of judges.
Furthermore, Equality Act 2010 has proposed the
abolishment of such a presumption, but such law has not
taken effect. FACTS (SO STILL POSSIBLE FOR PRESUMPTION
TO ARISE IN HUSBAND-WIFE SITUATIONS).

It should be noted that a PoA will not arise in the following

situations: mother-child (Jessel MR, in Bennet) unless mother
is widow Cps v malik ; wife-husband (HOLs, in Pettitt,
criticising approach of Abrahams case); co-habiting couples.
PENNER CRITICISED THE POA EXORBITANTLY SEXIST. Since
its only applies to mother and husbands and not to mother
and wives.
Glister provides diff reasons for wife child and wife and
mother giving to child or husband .
POA can also be rebutted by evidence showing that the
transferor did not intend the transfer to be outright.
WARREN V GURNEY. ( POA was rebutted . COA held did not
intend .
THE POA is set to be abolished by s199(1) of the equity act
2010that Provide the the presumption of advancement by
which for example are a husband is presumed to be making a
gift to his wife if he transferred property to her or purchase
his property in her name is abolished the section is not
proclaimed in force yet.

So Penner stated that by abolishing the presumption of

advancementLooks like it actually a step backward into
unreality because the presumption of resulting trust will now
operate in these cases . It must be noted that section 199 2A
clearly stated that the presumption will remain in cases
involving things done before the commencement of this
section this mean that the preceding law will be relevant for
many years after coming into the force of this section. Then
court also had to see the dates of transfers.
In wood v watkin. Coa held that presumption of
advancement could arise even where the donee as an adult
child of the donor and financially independent of their
parent. However its easier for father to rebutt.
PRESUMPTION DID NOT DETERMINE OUTCOMES.
HOWEVER IN ILLegality it did .

RTs and Illegality

As one can say that a PRT arises when a voluntary

conveyance of property or purchase money (entirely or
partially contributed), there can arise an issue of illegality if
the property is transferred to another for an illegal purpose
(like defrauding creditors). A balance needs to be struck
between two equally important, yet contrasting principles:
one that seeks equity’s assistance must come with clean
hands; and, there must not be unjust enrichment or unjust
deprivation of one’s property.

With regards to the first, the “clean hands principle” states

that plaintiffs that themselves have committed a wrong will
not be assisted by equity. With regards to unjust enrichment,
it takes place when someone that is not entitled to a
right/property, at expense of another, is given such a
right/property (if transferee is not allowed to give back the
property to the transferor, he is unjustly enriched).

A reliance principle has been used by courts to reconcile the

two concepts. In Tinsley v Milligan, HOL held that to
determine the effect of any illegality, equitable interests are
to be treated as legal interest (reliance principle is applied).
Under this principle, provided that the plaintiff does not need
to lead or plead evidence of illegality (to prove interest), they
are able to enforce their equitable interest (despite any
illegality in arrangements). This was done at the consequence
of equity assisting a person with un-clean hands (as Milligan’s
fraudulent intention was not required in proving her
interest). Similar disregard to illegality was shown in
Gascoigne v Gascoigne (husband could not rebut PoA due to
his illegality). However Tinsley followed in Collier v collier.

Even where is the father transferred property to his son to

defraud the creditor, the court will allow the father to
adduce the evidence of illegality
From reading Tribe v Tribe, it could be said that a gift will be
presumed in cases of transfer of property from father to son
(where PoA applies). However, the fraudulent activity
(escaping liabilities under commercial agreements) was not
completed, and, the equitable interest was claimed before
the fraud was completed, evidence of illegal purpose was
allowed by the courts due to the repentance of claimant’s
wrongdoing (locus poenitentiae). The court applied the
exception of Place of repentance.

It’s the case of unjust enrichment.

Despite the above, the HOL judgement in Tinsley v Milligan
was overruled in Patel v Mirza recently. While itself being
called as a controversial decision, Patel v Mirza has sorted
out the difficulty that was created by presumption of RT and
advancement. As when, evidence of their own illegality
cannot be relied on by the parties, the presumption could
determine the outcome of cases unfairly. Although its not the
case of Trust but applied with equal force.

(MONEY GIVEN TO BET, To leaks the inside info)

Furthermore, it was stated in Patel that one may claim an

equitable interest with clean hands, and any evidence (even
of illegality) can rebut the presumption of resulting trust or
advancement. Milligan and Tribe were also overruled by
Patel as the fact of relationships becomes unimportant, as
the confusion between a PoRT and PoA is removed.

In my view we should follow Penner suggestion that we

should make general . Rule with some exceptions.
He who comes to equity must come with clean hands unless
he has repented
From the above one may conclude that presumption of RT
and of advancement do not lead to unfair results anymore,
and should be required rarely as courts are more willing
today to decide what the intention, on basis of minimal
evidence of circumstances, of the parties probably was.
Penners view.

Failed Trust RT (FTRT)—Automatic Resulting Trust (ART)

Megarry j in Re vander no 2 label it as ART.
In an instance of an express trust failing, an automatic
resulting trust will arise (by operation of law) in settlor’s
favour and the equitable interest will revert back. When a
trust has not been created (no certainty of intention or trust
is for a private purpose), the transferee will take the property
(absolutely).

Situations where express trust may fail: uncertainty of

subject matter (Palmer v Simmonds); uncertainty of objects
(Re Wright); trust is capricious; trust is administratively
unworkable; trust breached the rule against perpetuities
(charities being an exception); trust for private purpose
(Morice v Bishop); and communication is made to half secret
trustee after the will is made (Re Keen).

For surplus see notes

Fully performed trust leaving the surplus in trustee hands.
Cook c hutchinson father and son. . CROME V CROME .
BROTHERS.
RE FOORD. SISTER. All are blood relations. The trustee can
keep the surplus.

Provided that that trustee show the close the relationship

with settlor.