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Understanding Resulting Trusts in Law

Feb 21, 2025

Lecture Notes: Resulting Trusts and Related Legal Concepts

Overview

  • Continuation of discussion on resulting trusts, focusing on apparent gift-style cases.
  • Key focus on the voluntary transfer of property and the impact of statutory provisions.

Apparent Gift Cases

  • Types of Apparent Gifts:
    • Purchase price type
    • Voluntary transfer of property

Statutory Provisions

  • Law of Property Act 1925, Section 60, Subsection 3:
    • Impact on presumption of resulting trusts in voluntary conveyances.
    • Cases:
      • Lohia and Alley vs. Cannes: Suggested abolition of the presumption in voluntary transfers.
      • Prest (Supreme Court Case): Presumption of resulting trust invoked without reference to Section 60(3).

Key Cases

  • NCA vs. DONG:
    • Transfer of property for no consideration, presumption of resulting trust considered.
    • Chief Master Marsh: Section 60(3) seen as a word-saving device, not abolishing the presumption.
  • Ali and Dink:
    • Confirmation of NCA vs. DONG approach.
  • Vinogradov (1935):
    • Resulting trust in personal property: Voluntary transfer with no motive evidence leads to presumption.

Presumption of Advancement

  • Counter-Presumption of Equity:
    • Arises in specific relationships (e.g. father to child, husband to wife).
    • Historical context: Reflects 19th-century gender norms and dependency assumptions.

Modern Developments

  • Judicial activism in Commonwealth countries addressing gender bias.
    • Nelson vs. Nelson (Australia): Presumption applies equally to mothers and fathers.
    • Close Invoice Finance (UK): Presumption applied from mother to daughter.

Statutory Context

  • Equality Act 2010, Section 199: Abolishment of presumption of advancement (not in force).
  • European Context: Article 5 of Protocol 7 on equality in property rights.

Illegality and Resulting Trusts

  • Maxim "He who comes to equity must come with clean hands"
    • Consideration of evidence of illegality to rebut presumption of advancement.

Key Case

  • Chettiar vs. Chettiar:
    • Lord Denning's stance against introducing evidence of illegal purpose.
  • Law Commission:
    • Recommendations for statutory reform (2010 report not adopted).

Patel vs. Mirza (Supreme Court)

  • New Approach to Illegality:
    • Public policy-driven approach considering integrity of legal system.
    • Moves away from old rules (Reliance Principle, Withdrawal Exception).

Factors Considered

  • Purpose of the law transgressed, public interest, and the range of factors influencing decision.

Conclusion

  • Future Discussions:
    • Upcoming focus on constructive trusts of the family home.
  • Key Takeaway:
    • Current law assesses harm to public policy or legal integrity in permitting claims.