Resulting Trusts

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Re Vandervell's Trusts (No 2) [1974] (NZ)

Presumed Resulting Trusts:

If both people have provided the money, but the title is held just by B then it will be presumed that A & B will each hold a share in proportion to his or her contribution. Equity presumes in the absence of a contrary intention that the person who provided the money intended to retain the beneficial ownership. Presumed resulting trusts rely on a presumed intention.

Automatic Resulting Trusts:

Arise, independently to the settlors intention, when an express trust does not dispose of the entire beneficial interest. (Equity hates a beneficial vacuum). Here the beneficial interest was not completely disposed of so it went back to the settlor on resulting trust (and he got whacked with a tax liability).

Bateman Television Ltd (in liq) v Bateman [1971] (NZ)

Presumed Resulting Trusts:

Involved two executive of Batemans Ltd, a television hire company. The claimed company cars belonged to them personally. The company had provided the money for the cars, and the two executives had legal title to them. They were not apart of their remuneration They had failed to rebut the presumption that the cars belonged to the company.

The Venture [1908]

Presumed Resulting Trusts:

Two brothers who had jointly purchased a yacht which was put in the name of one of them. When the brother, who's name the yacht was under died, the surviving brother, against the executor of the deceased for a declaration that the yacht was held partly in trust for him was upheld.

Cossey v Bach [1992] (NZ)

Presumed Resulting Trusts:

Married couple had separated, but got back together when he won loto. Out of the winnings they bought a house in both their names. The relationship broke down - who gets the house?

Presumption that she held her half on trust for him. (Convenient starting point). There was no evidence to rebut the presumption.

Re Beckbessinger [1993] (NZ)

Automatic Resulting Trusts:

Express trust failed for uncertainty. Therefore the trust property was held on resulting trust by the trustees for Mr Beckbessinger's residual estate.

Alacoque v Roche [1998] (NZ)

Automatic Resulting Trusts:

A will left her estate to three different bodies. One was a convent which had gone out of existence before she died. the gift could not be rescued by either the Cypress doctrine or s 32.

Therefore, the trust failed and was held on a resulting trust by the trustees again to be distributed as on an intestacy.

Quistclose Resulting Trusts

Lord Millett: Twinsectra: When the lender made the loan for a particular purpose he or she did not intend to part with the entire beneficial interest. The borrower in fact held it on a resulting trust for the lender so that it went back to him or her if it was not applied for the purpose stipulated.

In re Trusts of the Abbott Fund [1900] (UK)

Automatic Resulting Trusts: Undistributed Surplus

Money had been collected for the maintenance of two old ladies who could neither hear nor speak. When they died some money was left over. The court held that the money left over was held on a resulting trust for the contributors to the fund. In the case the contributors could be easily found and ascertained.

Re Stanford, University of Cambridge v AG [1924] (UK)

Automatic Resulting Trusts: Undistributed Surplus

Mr Stanford was a graduate of Cambridge University and left money for the completion and publication of a dictionary. The dictionary was completed and published and there was money left over. The money was for one purpose only so the university could not get it. What was left over was ruled to be held on a resulting trust for Mr Stanford's estate.

Re Gillingham Bus Disaster Fund [1958]

Automatic Resulting Trusts: Undistributed Surplus

Appeals were made for money to care for the injured and for 'worthy causes in memory of the killed'. As it turned out money was not needed to care for the injured because they were covered by the bus company's insurance. The second trust failed because of lack of certainty of objects. Many of the contributors were anonymous but despite this the court held that the money was held on a resulting trust for all those who had contributed. The court said the subscribers to the fund had contributed for a specific purpose, it was no longer possible therefore every person who had contributed had an interest by way of a resulting trust.

Re Hoburn Aero Components Ltd's Air Raid Distress Fund [1946] (UK)

Automatic Resulting Trusts: Unincorporated Associations

A fund was established in WW2 for employees who sustained loss in air raids. The fund was raised by subscriptions. At the end of the war it was held that since this was not a valid charity the money was therefore to be held on resulting trust to go back to the contributors - in proportion to how much they contributed adjusted for any pay outs they received.

Cunnack v Edwards [1896] (UK)

Automatic Resulting Trusts: Unincorporated Associations

A society had been formed to provide annuities for the widows for deceased members. By the time of the litigation all the members and their widows had died. One question for the court was whether the surplus should go to the personal representatives of the members on a resulting trust. The CA said there was no resulting trust. The reason was that each member had given away his money in return for the protection given his widow if he left one. Except for this protection the members had given up and abandoned the money forever.

Re West Sussex Constabulary's Trust [1971] (UK)

Automatic Resulting Trusts: Unincorporated Associations

A fund to provide for widows and orphans.
Income came from several sources. Two police districts were being combined so the trust had to be wound up:

- subscriptions: members had no claim (Cunnack v Edwards) (Hobrum was distinguished because in that case payouts were discretionary not contractual)
- raffles etc: Were found to be out and out gifts. The beneficial interests had been forsaken by the contributors.
- legacies/donations: As these are gifts made for specific people, only for that purpose, and the gifts had failed, the property was held on trust to go back to the donors.

Re Bucks Constabulary Fund (No 2) [1979] (UK)

Automatic Resulting Trusts: Unincorporated Associations

This was another fund for widows and orphans of police officers. Police districts were merging and questions about the distribution of the fund arose. Here the judge decided that the fund should be divided equally among members alive at the date of dissolution. The Crown would be entitled to the property as abandoned property only if there were no living members. The judge criticized the West Sussex case on the grounds the judge had wrongly followed Cunnack v Edwards which turned on a statute that was no longer in force.

Davis v Richards & Wallington Industries Ltd [1990] (UK)

Automatic Resulting Trusts: Unincorporated Associations

Scott J revisited the point and said obiter that a resulting trust is not prevented from arising where the members have they have contracted for.

Baird v Baird [1990] (UK)

Automatic Resulting Trusts: Winding up pension funds

Lordships held that that when one becomes a party to a pension scheme an employee constitutes him or herself both as a beneficiary of the scheme and a settlor. A beneficiary because he or she will eventually get benefits and a settlor because he or she is contributing to the scheme. This means that when the scheme is wound up, if there is a resulting trust the potential beneficiaries may become entitled because they were also settlors.

Davis v Richards & Wallington Industries Ltd [1990] (UK)

Automatic Resulting Trusts: Winding up pension funds

Held that could have a resulting trust of a pension fund. The contractual nature of the members contributions did not necessarily exclude a resulting trust in their favour. This was reiterated in:

Bateman Television Ltd (in liq) v Bateman [1971] (NZ)

Rebutting the presumption of Resulting Trust:
Turner J said that the strength of the initial presumption of a resulting trust may be different in different types of cases and he gave some examples:
1. If a person invests money in the name of himself and his solicitor then the inference would be very strong that it was intended solely for the purpose of a trust and the court would require very strong evidence on the part of the solicitor to prove that it was intended as a gift. The solicitor's own evidence would not be sufficient.
2. A man might make an investment of stock in the name of himself and some other person and even if it was not his wife or child it could be extremely probable that the investment was intended as a gift. In such a case the court would go into the facts and any evidence that showed it was not for the purpose of a trust could be evidence to show it was intended as a gift.

Tribe v Tribe [1996]

The presumption of advancement:

Some relationships are such that a gift must have been intended (eg, Father-Son) and so can overcome the presumption of resulting trust. You cannot bring evidence of illegal or fraudulent purpose to rebut the presumption of trust, or advancement.

The Son tried to rely the presumption of advancement to retain ownership of property his father transferred to him to avoid a liability. The father was able to introduce evidence to the contrary because the illegal purpose for which he transferred the property was not carried out.

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