Lecture on Resulting Trusts and Quist-Close Trusts

Overview

• Discussion on failing trust cases, focusing on Quist-Close Trusts.
• Lord Millett described Quist-Close Trust as an orthodox example of a resulting trust.
• Quist-Close trusts involve loans for a specified purpose, restricting the recipient's use, thus imposing fiduciary duties.

Key Characteristics of Quist-Close Trusts

• Loan for a specific purpose.
• Recipient cannot use the money for anything other than the specified purpose.
• Fiduciary obligations enforced by equity.
• Trust ends once the purpose is achieved, reverting to a creditor-debtor relationship.

Case Studies

Prickly Bay Waterside and British American Insurance Co.

• Complex financial transaction.
• Prickly Bay claimed a trust over transferred property in the liquidation scenario.
• Lady Arden stated segregation of funds is a key indicator of Quist-Close Trusts.
• British American Insurance Co. had flexibility with funds, lacked segregation, no trust found.

Juby and Her Majesty's Revenue and Customs (Ray Fairpack)

• Fairpack's savings scheme collapsed, leading to loss of savings for families.
• Arguments for Quist-Close Trust due to customers' monthly contributions.
• No Quist-Close Trust due to lack of fund segregation.

Other Failed Quist-Close Trust Cases

• Bieber and Tethers: Initial trust claim failed when funds became partnership property.
• First City Monument and Zoomax: No trust found due to lack of segregation and free disposal of the bank's funds.
• Bellis and Chaloner: Money in solicitor's client account, no development project, deemed a regular loan.

Resulting Trusts and Apparent Gifts

Presumed Resulting Trusts

• Based on contributions to property or voluntary transfer of property.
• Equity assumes bargains, not gifts.
• Presumption can be rebutted by showing contrary intentions.

Case Example: Lasker and Lasker

• Inferred trust based on commercial context despite familial relationship.

Legal Distinctions

• Land vs. Personal Property: Section 60(3) of the Law of Property Act 1925 affects presumption of resulting trusts in land conveyances.

Court Interpretations

• Loewe and Loewe: Section 60(3) may abolish resulting trust presumption; additional evidence required.
• Alley and Khan: Some agreement that presumption is perhaps abolished.

Conclusion

• Discussion covered failing trust cases, Quist-Close Trusts, and implications on resulting trusts.
• Next focus: Presumed intention resulting trusts and apparent gift cases.