Resulting Trusts Notes

• 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;

1. Automatic or Gap-filling Resulting trusts.

2. Presumed Resulting Trusts.

1. AUTOMATIC OR GAP-FILLING 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)

2. PRESUMED RESULTING TRUSTS:

• 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).

1. Voluntary Transfer or Conveyance:

• 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...

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