#17124 - Resulting Trusts - Irish Trusts

Resulting trusts are trusts implied by the law on the basis of the intention of the settlor to make the recipient of the property a trustee. The necessary intention is presumed through the operation of a presumption.

“The doctrine of resulting trusts is a remarkably antiquated one.” Mee The Past Present and Future of Resulting Trusts at 223.

These resulting trusts ‘jump back’ to the settlor, so that they are in favour of the settlor himself.

Still not very clear what form of trust this is and as result it needs to be looked at in conjunction with other forms of trusts as well as its historical justification in the world of equity law.

As Hanbury and Martin note, resulting trusts are not subject to the rules which are subject to express trusts and on foot of the Re Gillingham Bus Disaster Fund case that in the case of resulting trusts, the certainty of objects requirment was abolished, due to the fact the objects do not need to be recognised in the first instance.

The rationale of resulting trusts then falls on the fact because the intentions of the testator are ambiguous and lacking clarity, “equity binds the conscience of the trustee” – (Philip Burke City Colleges), laying it upon him to hold the property for the testator.

Megarrry J in Re Vandervell’s Trust, identified a two-fold classification of resulting trusts;

These trusts arise in the context of the creation of an express trust.

these arise when a person is transferring property to trustees, creating a trust and they saved to allocate fully the beneficial interest.

These arise where the property is transferred without consideration lacking the existence of circumstances giving rise to the presumption of advancement and with those a declaration of an express trust.

Re Cochrane: Trust wasn’t drafted well and didn’t indicate who was to get the beneficial interest.

• Court held that there was a resulting trust for the husband and wife to so to speak fill the gap as to whom the beneficial interest belonged too.

In addition, concerning the lack of certainty of objects in these resulting trusts, this is further illustrated in the case of Re Vandervell’s Trust;

• This case Illustrates that an individual set lore most not like the resulting trust.

• Here Vandervell wanted to make a donation to the RCS, to avoid tax he carried out a transaction by instructing his Trust Company to transfer some valuable shares. the dividend was declared, and RCS took the benefit.

• to ensure he would get the shares back he included the option from the Trust Company to buy back the shares for a small sum of money.

• Vandervall had failed to specify the basis on which to Trust Company was to hold the option to purchase and thus it was held that there was a gap in the beneficial interest and so the trustee company held the option to purchase on the resulting trust for Vandervall which meant that he was liable to pay tax on the dividends.

• In summary, the beneficial interest option resulted back the Vandervall.

• Hol, “interest cannot remain in the air; the consequence in law must be that it remains in the settlor”.

Re Gillingham Bus Disaster Fund; case concerns a surplus of funds voluntarily subscribed after a public collection for some worthy cause, did not qualify as a charity.

• Harman J. resulting trust arose because all the voluntary subscribers intended to contribute for the specific purpose of the bus disaster, thus they all held an interest in the automatic resulting trust.

Solutions to the charity scenarios;

• Give the property to the state as ownerless goods. (bona vacantia).

• In Ireland we have section 48 of the Charities Act 1961, which allows funds to be devoted to the nearest charitable purpose where donors cannot be identified after reasonable inquiries even where the initial purpose was not charitable in legal terms.

Issues linked to funds tend to arise also as to the ownership of property upon the dissolution of an unincorporated association, (not a legal person, just a group of people).

Re Bucks Constabulary Widows. If the rules do not expressly govern distribution of property upon dissolution it appears that equal distribution amongst existing members is appropriate.

Mee Commentary: Finds that these gap filling trusts are justified in their existence because there is a crucial difference here as opposed to the presumed resulting trust in the sense that here there is the overall intention that there is expressed intention from the claimant put upon the person whom is to hold the resulting trust. At.223. (2017)

Mee finds there to be no logical justification for these forms of resulting trusts In the modern day especially due to the well formulated common intention constructive trust, leaving the existence of the presumed resulting trust futile. At 223 (2017).

These forms of trusts always were a person makes voluntary transfer forced into property with two another person without consideration, it is presumed that the transferor’s intention was to make the recipient a trustee.

The presumption may also be rebutted through evidence, however, if not then the recipient holds property on resulting trust.

There is no presumption of resulting trust in relation to conveyancing of land on the basis of s.62(3) of the Land Conveyancing Reform Act 2009, Mee notes how the caselaw can be contradictory on the matter however, the general consensus still remains that there is no resulting trust in these cases.

Regarding Joint Bank Accounts; it tends to mix with secret trusts here, and in recent times due to developments this area of joint accounts in resulting trusts possess to be less important.

• Biehler notes how here “this is usually Done in a manner which slows the transfer or depositor alone to retain dominion over the money in the account during his lifetime but which displays the intention that the balance should go to the other party should he survive him” - a lot like joint tenancy and the right of survivorship.

• Lynch v. Burke: This case showed a complexity in the area, is concerned with an aunt who set up a joint bank account with her niece. Only the aunt could use the account in her lifetime, if one passed away it would be paid out to the survivor.

• These cases we're seeing as an attempt to avoid the succession and wills legislation.

• This case overturned the case of Owens v. Greene, to give effect to the intention of the aunt in this matter, to disregard the idea of a resulting trust.

• Biehler states how this case was welcomed by the courts in the sense it had laid to rest the previous complexities in the area.

• Sora O’ Doherty; note how this case provided appealing logic in the sense that it would not allow an intention to be defeated.

• The Judge in this case also give an overall essence of resulting trusts:

  • Since historically the concept of an implied or resulting trust was an invention of equity to defeat the misappropriation of property as a consequence of potentially fraudulent or improvident transactions it would surely be paradoxical if the doctrine was allowed to defeat the clear intention of the donor as found by the trial judge.

• Affirmation of Lynch v. Burke in O’Meara v. Bank of Scotland.

• Woods, 2002 Ir Jur

  • Disapproves of the contractual approach – the presumption of a resulting trust cannot be rebutted by proof on an intention to create a right of survivorship because such a right only exists in respect of a joint tenancy which requires the four unities.

Idea here is that if you pay for the purchase of property that is taken into the ownership of someone else you get a share in the beneficial interest in proportion to your contribution.

Dyer v. Dyer is the leading case in the area, Here the court summed up the doctrine to be a person who puts up the parks his money gets the beneficial interest and it's as simple as that.

• The share again depends on the proportions of the party’s contributions to the purchase price.

The concept of the presumption of result in trust is outdated and quite bad due to the fact that in the absence of any rebutting evidence equity has just presumed that a trust was intended.

The presumption of a resulting trust can be displaced by the presumption of advancement. this arises because of the relationship between the parties where the law presumes that a gift was intended rather than a resulting trust. this can be seen in father and child scenarios, husband and wife scenarios however, not transfers from a wife to a husband as seen in McCabe v. Ulster Bank limited.

• Biehler notes that in Ireland it is difficult to justify the principle due to the fact it inherently benefits the wife as...