The term "resulting" comes from Latin "result RA", meaning to "jump back".
Involves property transferred to another but "jumps back" to the original owner.
Examples and Categories of Resulting Trusts
Example by Lord Brown Wilkinson
Case: Westdeutsche Landesbank v Islington LBC (1996)
Scenario 1: Unknown beneficiaries in a trust lead to property "resulting" back to the settlor.
Scenario 2: Contributors to purchase price of property are entitled to an equitable interest proportionate to their contribution.
Categories
Automatic Resulting Trusts: Occur when there is a failure in identifying owners of equitable interests.
Presumed Resulting Trusts: Property is presumed to pass as a gift in specific relationships, e.g., father-child, husband-wife.
Automatic Resulting Trusts
Failures can occur due to certainty of objects or unmet conditions (precedent/subsequent).
Surplus Property: Generally results back to settlor; exceptions include charitable trusts (cy-près doctrine), beneficiaries winding up the trust (Saunders v Vautier), and distribution among members (Re Bucks).
Quistclose Trusts
Case: Quistclose Investments Ltd case (1970)
Loan with specific purpose creates a resulting trust when purpose is not fulfilled, preventing creditors from accessing funds.
Presumed Resulting Trusts
Based on relationships: father-child (Bennet v Bennet), husband-wife (Tinker v Tinker).
Implications for joint accounts and voluntary gifts (Re Vinogradoff).
Land: Generally requires written contracts but aware of resulting trust possibilities.
Legal Presumptions and Rebuttals
Presumption can be challenged, e.g., misconduct with joint accounts.
In family transfer cases, a resulting trust may be created to prevent tax evasion (Sekhon v Alissa).
Resulting Trusts and Illegality
Historical Approach: Illegality prevents resulting trusts (Gascoigne v Gascoigne).
Modern Approach: Depends on public interest (Patel v Mirza, Tribe v Tribe).
Insolvency Act 1986 (Section 423): Courts can reallocate property to prevent creditor evasion.
Mistake in Resulting Trusts
No resulting trust if the transfer was intended.
Exception: If the recipient knows the transfer was a mistake, a resulting trust can be created.
Exam and Essay Considerations
Problem Question: Distinguish between automatic and presumed resulting trusts.
Essay Question: Consider issues like categorization, sexism in presumed trusts, and implications of illegality (e.g., Patel v Mirza).
Conclusion
Understanding and application of resulting trusts are complex, involving legal principles and case law.