Equity and Trusts

Resulting Trust

Prof: MOHAMMAD MEHMOOD AHMAD

Compiled By: Muhammad Raees Malik

University of London

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Resulting Trust

Structure:

Resulting Trust

i. Def / Nature / Scope

ii. Baseline.

iii. Save property from being “Bona Vacantia”

iv. Employed at last resort

v. Vandervell vs IRC ------- Megarry VC 50% Automatic resulting trust and 50%
presumed resulting trust.

2-Ambits

1. When Resulting Trust arise Types

2. Why Resulting Trust arise Theories

Categories of Resulting Trust:

i. Automatic Resulting Trust – Operation of Law

ii. Presumed intention Resulting Trust.

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When do Resulting Trust Arise:

i. Failed trust Resulting Trust. (automatic Resulting Trust )

ii. Purchase money Resulting Trust .(presumed intention of the transferor)

iii. Voluntary/conveyance Resulting Trust .(presumed intention of the

transferor)

Why do Resulting Trust Arise------------theory of resulting trust.

i. ART-Operation of Law.

ii. PRT-presumed intention of transferor, evidence, presumption.

Difference between constructive trust, resulting trust and common intention.

Positive and negative intent theory.

Prof Brisk and Chamber.

William swaddling articles.

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Presumptions of Resulting Trusts:

i. S-60(3) of LPA

ii. Contrary evidence.

Two ambits.

1. When do Resulting Trust arise-------------2-types of Resulting Trust.

2. Why do Resulting Trust arise? 5 to 6 main acadamics.

Essay or probe in exam.

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Introduction:
Resulting Trust is a type of trust in which rights are held by transferee on trust for the
person who has made initial transfer. The word resulting coms from Latin word
“Resalire” meaning by “to come back or jump back”.

Resulting Trust belong to a category of trust which comes under implied trusts that
is trusts created by operation of law. Resulting Trust may be employed as a last resort
before which the property becomes bona vacantia (vacant property). Resulting trust
is created where a property is not properly disposed-off as stated by Megarry VC.

Lord Reid in Vandervell case stated that in respect of trust, property must belong to
somebody. If it was not belonging to donee it must remain with the donor.

Vandervell vs. IRC: Megarry VC maintained that Resulting Trusts are divided into two
categories.

i. Automatic Resulting Trust

ii. Presumed intention Resulting Trust.

50% of Resulting Trust comes under automatic Resulting Trust and 50% Resulting
Trust falls under presumed intention Resulting Trust.

For a Resulting Trust two questions are raised:

i. When do Resulting Trust arise?

ii. Why do Resulting Trust arise?

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West Deutsche Bank vs Islington: as per Lord Browne Wilkinson, the modern view
is that Resulting Trust arise in two principle context.

i. Failed trust Resulting Trust /automatic Resulting Trust.

ii. Resulting Trust based on intention of transferor. /presumed intention

Resulting Trust.

1. 1st Ambit: When do Resulting Trust arise?

Resulting Trust arise in three situations. /Three types of Resulting Trust.

i. Failed trust Resulting Trust. (automatic Resulting Trust )

ii. Purchase money Resulting Trust .(presumed intention of the

transferor)

iii. Voluntary/conveyance Resulting Trust .(presumed intention of the

transferor).

1.1 Failed trust Resulting Trust /automatic trust Resulting Trust(1st type)
(To identify ART in exam there will be a Death or surplus amount.)

Automatic Resulting Trust arises automatically by the operation of law upon

the failure of intended disposition.

Vandervell vs. IRC and Morice vs Bishop of Durham: the trust failed for the
want of object and court held that property is undisposed off hence Resulting
Trust arose in favor of donor/settlor.

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Barclays Bank vs Quistclose: Resulting Trust on failure of specified purpose”

Re-Gillingham Bus Disaster Fund 1958: a fund was raised to pay funeral
expanses of bus crashed victims. The issue was where the surplus amount
went after satisfying the charitable object, either property go to the people who
gave the money or to the crown as bona vacantia.

Held: The surplus was held to upon a Resulting Trust for the donor and trustee
would just have to put an ad in the paper to find whose those donors were.

Chichester vs Simpson: it was held that upon a failure of trust for charitable
purpose the benefit of trust will be held upon Resulting Trust for the donors.

Re-Trusts of Abbot Fund: there would be an automatic Resulting Trust where

the purpose of the trust had been completed but excess property is leftover.

Cook vs. Hutchinson, Keen and Croome Case: where there exists surplus
in the hands of trustee it can be proved that settlor intended trustee to keep
surplus as a gift; it occurred only where there had been close relationship
between settlor and trustee and relationship be one that led the court to
conclude that gift of surplus was intended.

Simpson vs. Simpson: if a property is given to somebody who is incapable of

acting (mentally insane) then it would be held on Resulting Trust for the donor.

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1.2 Presumed intention Resulting Trust (2nd type):
(conduct, intention and words of settlor)

Presumed intention Resulting Trust is divided into two categories:

i. Voluntary conveyance Resulting Trust.
ii. Purchase money Resulting Trust.

i. Purchase money Resulting Trust:

This type of Resulting Trust arises due to the direct financial

contribution towards the purchase price. For example house was
purchased in “A’s” name but “B” also contributed towards
purchase price. Under purchase money resulting trust “A” holds
share in house proportionate to contribution under Resulting Trust
for “B”. (Balance sheet approach).

Tinsley vs Milligan: Ms. Tinsley and Ms. Milligan equally

contributed towards the purchase price of a house which was
transferred in the name of Ms. Tinsley alone in order to allow
Milligan to claim false social security benefit from the state.

Held: it was held that Miss Milligan was entitled to get 50% of
shares in property under purchase money resulting trust. Since
she made direct financial contribution towards the purchase price.

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 The Venture Case: two brothers contributed towards the
purchase price of yacht while title was conveyed in one’s name
and he died. The deceased estate refused to give any share to
the other brother. The evidence of claimant’s contribution
triggered a trust which could be rebutted by evidence to contrary
which defendant failed to do so. The claimant was entitled to
proportionate share in the property.

Fowler vs. Barron: the fact that the parties had contributed
unequally to the acquisition of their home would not normally be
sufficient to an achieved rebuttal and presumption of Resulting
Trust would apply. (Unequal contribution).

ii. Voluntary conveyance Resulting Trust : (important for exam)

Where “A” makes a gratuitous transfer of inherent property other

than land to “B” and “B” is not a wife or child of “A” then it would
be presumed that “A” intended to retain benefit for himself.

Dummer vs Pitcher: husband transferred some of his stock to

himself and his wife as joint tenants, he later purchased some of
the same stock for both of them as joint tenants.

Presumption of advancement applied to both the transfer and

purchase but Lord Brengham LC said that presumption of
intention to give is considerably stronger for the transfer.
(Authority for voluntary conveyance)

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 Re-Vinogradoff: A trust in favour of grand mother was created
while there was a gratuitous transfer of property from grand
mother to grand daughter and grand daughter was required to
hold property on Resulting Trust for grandmother’s estate.

Farwell J. viewed that the granddaughter did not fall with in the
usual categories of presumption of advancement.

Exceptions:

i. Exception No.1: -60(3) LPA 1925:

The bases taken from statute of bases 1535:

In case of land S-60(3) of LPA 1925 restricts the presumption of Resulting Trust
from arising in settlor’s favour.

Lohia vs. Lohia: (main authority) it was suggested that gratuitous transfer of
land would not be subjected to Resulting Trust presumption following the
operation of S-60(3) LPA 1925.

Ali vs Khan: presumed Resulting Trust was abolished in case of gratuitous

transfer of land by S-60(3) which stated “in VCRT a Resulting Trust for
grantor/transferor shell be implied merely by reason that property is not
expressed to be conveyed for the benefit of grantee”.

Hodgson vs Marks: Mrs. Hodgson transferred house to lodge Mr. Evans on

the understanding that she would continue to be beneficial owner. When he
subsequently sold it to purchaser she was declared to have beneficial interest
under a trust and this was binding on purchaser.

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 If the donee can prove that property was transferred as a gift then
presumption of Resulting Trust would not apply. For this a concrete
evidence is required to defeat the presumption of Resulting Trust under the
authority of:

Fowkes vs Pascoe. “Women purchased stock in the name of grandson

presumption of Resulting Trust rebutted since she must have purchased the
shares to give it to him”

Goodman vs Gallant: “there could be no room for the operation of presumption

when the conveyance has been accompanied by a proper purpose and
requirements.

Recent Development(S-60(3)):

In National Crime Agency vs Dong (2017): Chief Marsh decided in obiter that
S-60(3) of LPA-1925 did not effect the presumption of resulting trust but was
merely enacted to deal with technicalities in conveyancing that were no longer
needed after the statute of Uses 1535 was repealed in 1925.

ii. Exception No.2 Voluntary Conveyance Resulting Trust: Presumption of

Advancement:

Presumption of advancement is based on Loco Parents. Presumption of

advancement is when a property is transferred from a man to his children, to
his wife or to someone else with whom he shares a relationship in which
recipient is dependent upon him. A presumption triggered that in such a
situation property has been absolutely transferred that is a gift.

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Father can be replaced by anyone having a fatherly figure. For example
grandfather, parental uncle etc. relationship must be legal and not illegitimate.

Pettitt vs. Pettitt: wife must be legal for presumption of advancement to apply.

Ann Bennet vs Philip Bennet: a father transferred property to child. It was

presumed that property was outright gift.

Tinker vs Tinker: presumption of advancement exists where a property was

transferred from husband to wife.

No presumption of advancement would apply for female that is property

transferred from mother to child will result back and presumption of resulting
trust will apply.

Re Paradise Motors: someone with whom he/she stands in loco parentis then
Presumption of advancement would apply.

i) Presumption of advancement can be rebutted as well:

Warren vs Gurney: it was held that Presumption of advancement can

be rebutted by showing evidence that transferor did not intended the
transfer to be outright.

Sekhon vs Alissa: no Presumption of advancement in case of gift

from mother to child.

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 McGrath vs Wallis: Presumption of advancement can be rebutted as
father had not shown any signs to son of having divested all his interest
in property.

Antoni vs Antoni: Presumption of advancement applied between a

parent and a child.

ii) Presumption of advancement is “set” to be abolished by S-199(1)

of equality act 2010 and authority is Jones vs Kernot.

J. Glister in his article maintained that S-199(1) of Equality act 2010

has not yet been proclaimed in force.

In Australia Presumption of advancement applies both to males and

females as was decided by Nelson vs Nelson, gender discrimination
was abolished.

In Canada mother and father are treated equally for Presumption of

advancement, but Presumption of advancement applies only in favour
of infant children.

Pecore vs Pecore: “an apparent gift to adult children attracted the

presumption of Resulting Trust”.

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 Sarah Greer in her article raised question that whether Presumption
of advancement serves any useful purpose today and whether it
contravenes article 5 of 7th protocol of ECHR by maintaining gender
biasness.

According to Williams Swaddling: Presumption of advancement is

not a true presumption but simply a situation in which Presumption of
Resulting Trust does not apply.

Robert Chamber: argues that Presumption of advancement is a true

exception indeed. Presumption of advancement is true presumption
that the transferor or purchaser intended to make a gift.

Brown vs Brown: (rebuttal of Presumption of advancement)

Mother’s house was sold and proceed used to purchase a house for
her sons. Presumption of advancement applied (to mother in Australia)
but was rebutted because she never thought about the consequences
of transactions and therefore never formed intention to make a gift. She
never formed an intention to create a trust for herself and certainly
never declared a trust. But Resulting Trust responded to the evidence
that no gift was intended.

iii) Illegality & Presumption of Advancement: – (General)

In Tinsley V Milligan, Ms. Milligan was allowed to obtain beneficial

title in false social security benefits from the state and Resulting Trust
arose in her favour despite the fact that she had a malafide intent.

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 This case runs contrary to maxim that “he who comes to equity must
come with clean hands”.

Academic Argument:

Whenever something illegal is going on, presumption of Resulting

Trust arise, whereas property was not transferred to father back by his
son in case of Tribe V Tribe because presumption of advancement
was applied in this case. As a result we can say that equity is probably
encouraging fraud & illegality.

Tinsley V Milligan, was over-ruled by Patel vs Mirza “The

presumption should no longer lead to confer results and they should
rarely be needed since courts are now willing to decide what the parties
probably intended based on Minimal circumstantial evidence.”

Same apply to Lohia vs Lohia: Facts: claimant paid money to

defendant under agreement to use inside information to bet on price of
shares in RBS, but did not happen and claimant sued recovery of
money. Agreement was illegal UK-SC held that “there had been a
failure of consideration and so the claimant was entitled to recover
money as restitution of unjust enrichment despite having to rely on
evidence of his own illegality. In order to determine illegality Lord
Sumption introduced multi factorial approach that illegality will be
determined by looking at upon course of dealings and evaluation of
facts.

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2. 2nd Ambit why do RESULTING TRUST arise?

In Re Vandervell (No 2), Megarry VC upheld the view by Lord Upjohn & Lord
Wilberforce in Vandervell V IRC that Resulting Trust arises in two categories as
automatic resulting trust and presumed intention resulting trust.

A failed trust is an example of automatic resulting trust because they do not need any
presumption of declaration of trust and operate automatically when the trust fails.

Penner suggested that automatic resulting trust does not require any manifestations
of intention of transferor. While purchase money resulting trust and voluntary
conveyance resulting are examples of presumed intention resulting trust which
operates on presumption that property was advanced with an intention of retaining an
interest in property thus based on presumed intention of transferor.

It would mean that presumed intention resulting trust may be categorized as an

express trust, but it seems critical to Penner as for him there should not be a resulting
trust in the first place because it was perfectly possible for a settlor to have created a
trust in his favour.

HOL in Vandervell vs IRC was of the view that presumed intention resulting trust
would arise to fill in the evidential gaps and automatic resulting trust would arise by
operation of law; only thing these two types have common in them is the fact that
transferor is the beneficiary of trust.

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Two theories further elaborate upon point when a vacuum comes under
presumed intention resulting trust.

1. Positive Intent Theory (Intent to create trust).

2. Negative Intent Theory (Absence of intent).

1. Positive Intent Theory:

Positive Intent Theory is given by Williams Swaddling and advocated by Lord

Brown Wilkinson.

i. There must be a voluntary conveyance from settlor/transferor to

transferee/beneficiary.

ii. As soon as it is proven that there was a voluntary transfer, the law would
bring in a presumption of resulting trust in favour of transferor.

iii. Presumption is that transferor transfers both legal title and beneficial title to
transferee and then the beneficial title results back to the transferor.

iv. This presumption can be rebutted by any contrary evidences to a resulting

trust such as mistaken contract or transfer etc. (rebuttal).

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2. Negative Intent Theory:

Negative Intent Theory is advocated by Brik & Chamber.

i. There must be a voluntary transfer from transferor to transferee.

ii. As soon as it is proven that there is voluntary transfer, the law will bring in a
presumption of resulting trust in favour of transferor.

iii. The presumption is that transferor just transfer the legal title to transferee &
retained beneficial title from the outset.

iv. This presumption is rebutted through evidence of gift. (Rebuttal)

Westdeutsche Landesbank vs. Islington

Facts: Bank paid local authority 2.5 million pounds under the agreement which was
later declared illegal. Agreement involved that the bank paid money in return to the
services, bank sought to claim recovery of money under resulting trust.

Held: Lord Brown Wilkinson held that bank was not entitled to the property because
they made and ought right transfer under a mistake and presumption of resulting
trust would not arise because bank made a transfer in order to make the local
council an ought right owner; it was a contract and not a trust.

In this case Positive Intent Theory presumption was rebutted since it was based on
contract so unjust enrichment was encouraged, but since issue was regarding
contract so contractual remedies will be available to bank under contract law but
have no scope to sue under trust law.

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Criticism:

Positive Intent Theory is often criticized for encouraging unjust enrichment as

rebuttal is very easy to prove.

Chase Manhattan Bank vs. Israel British Bank:

Held: “claimant mistakenly paid defendant two million pounds. Defendant held it on
trust for the paying bank so unjust enrichment doctrine was applied”

Arguments over classification of Resulting Trusts/types of Resulting Trust:

Lord Brown Wilkinson disagreed with Megarry’s classification in Vandervell vs IRC

while he agreed that there were two categories but the deciding line between the two
was not intention. According to him all resulting trust arise because of a presumption
that settlor intended to create a trust for himself. He himself observed that resulting
trust arise because there is a presumption that “A” did not intend to make a gift to “B”
so a resulting trust arise in “A’s” favour.

Alastair Hudson argues that Lord Brown Wilkinson’s theory is flawed primarily
and Wilkinson classification appears to be incomplete since there is no
acknowledgment of automatic resulting trust. This has also blurred a distinction
between constructive trust and resulting trust.

Air Jamaica V Charlton (Criticism of Browne Theory): Lord Millet stated that like
a constructive trust, an automatic resulting trust arises by the operation of law,
although it gives effect to the common intention of the parties involved.

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In von Westenholtz vs. Gregson (2022) the court adopted the Lord Millet’s
Approach in Air Jamica Ltd. vs. Charlton “resulting trusts responded to the absence
of intention to benefit the recipient.”

Lord Browne Wilkinson thought that resulting trust arise in order to give effect to
the intention of the parties and he confused Resulting Trust with common intention
constructive Trust.

Prof Birks thesis on resulting trust is that both types of resulting trust, automatic or
presumed, are based on transferor’s intention i.e. to give away or to retain benefit for
himself.

If the settlor does not intend to transfer the beneficial title to transferee then court will
create a resulting trust in order to prevent unjust enrichment of transferee.

Chamber: According to chambers the presumptions are no longer important except

in cases where relevant evidence is inadmissible because it would reveal an illegal
purpose. In almost every case there is a sufficient circumstantial evidence to allow a
court to decide what parties intended and not a great deal of evidence is required to
rebut the presumption of resulting trust.

Williams Swaddling: (Latest Academic)

i. A new role for resulting trust (1996)

ii. Explaining resulting trust (2008)

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i. Change of Presumption: In old British System, voluntary conveyance was
much practiced. Absence of intent theory supporters termed Positive Intent
Theory as artificial and not practical more over they commented that it is not
possible that both legal title and beneficial title go to the transferee & then
beneficial title reverts back. Presumption was argued to be changed now for
every voluntary conveyance only the legal title passed on to transferee while
beneficial title is retained by transferor as per negative intent theory
supporters. Swaddling very strongly reacted to their change of presumed
resulting trust and was highly critical of it. He maintained that although
presumption is artificial but it is the way it operates. He maintained that
presumption had not changed swaddling proposed positive intent theory
and he criticized negative intent theory. Swaddling further stated that
instead of applying negative intend theory, it is much better to rely on bare
trust instead of resulting trust doctrine.

ii. He also criticized Lord Brown Wilkinson on the point when he stated that
100% resulting trusts arise due to intentions. Swaddling further maintained
that Megarry’s distinction between automatic resulting trust and presumed
intention resulting trust was correct i.e. automatic resulting trust arise by
operation of law and presumed intention resulting trust would arise on the
basis of transferor intention. In automatic resulting trust, no intention of
resulting trust exist as Settlor’s intention is primarily exact opposite to
resulting trust. When settlor gives the property to trustee, he gives it for the
benefit of beneficiary not on the basis that it would be held on resulting trust
for him. The presumption will only apply when there is a broken link or
vacuum that needs to be filled through presumption that is saving property
from being Bona Vacantia. (Hanchett-Stanfor vs AG)

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 iii. Swaddling also criticized Megarry VC in Vandervell V IRC in which she
stated that in cases of automatic resulting trust, beneficial tittle is retained
by the settlor and not returned to the transferor and this title was never lost
by him. Swaddling stated that it is not the case and in automatic resulting
trust, the beneficial tittle is returned to Settlor rather than being retained so
Megarry was wrong in it.

Conclusion:

In order to introduce reforms in their area there are several possible solutions that is
either apply Megarry classification of trust or resort to legislate reforms. Resulting
trusts are in a need of reforms it may be argued that resulting trusts be done away and
presumed intention resulting trusts be made a part of express trust, however it may
not be a reasonable solution.

G.P. Costigan: In his article stated that classification of trust into express, constructive
and resulting trusts is of interest and value, however, analytical examination of this
distinction leads to surprising conclusion.

Maitland: In his article stated that trusts are created by acts of parties or by
operation of law. I do not think that these terms are unexceptional & they are still well
known & useful.

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WHEN & WHY RESULTING TRUST ARISE

PRESUMED RESULTING TRUST AUTOMATIC RESULTING TRUST S

1. Swaddling: 1. Swaddling:
When = whenever there is an Automatic resulting trusts have nothing
ambiguous transfer, i.e. a voluntary to do with presumptions. Any mention of
conveyance from “A” to “B” or a presumptions found in case-law is
contribution in purchase-money by “A” erroneous. They do not arise because
towards property held in the name of “B” “A” retains his interest (Vandervell); if
a presumed resulting trust arises. anything, “A” acquires a new interest!
Why: because of a true evidential They also do not arise for the reasons
presumption that the transferor declared that Chambers attributes to them, i.e.
a trust in his/her own favour all “non-beneficial transfer” proved by
presumed resulting trusts are thus evidence, between the laws knows no
express trusts. such thing as “non-beneficial transfer”.

2. Chambers: 2. Chambers:
when = whenever there is (i) an Automatic resulting Trusts, like
apparent gift (i.e. a voluntary presumed resulting Trusts arise by
conveyance from “A” to “B” or a operation of law because “A” makes a
contribution in purchase-money by “A” non-beneficial transfer. This time though,
towards property held in the name of “B”) the fact that the transfer was non-
AND (ii) there is an absence of beneficial is not presumed. Instead, it is
consideration, a presumed resulting trust proved by evidence. That evidence is in
arises. the fact that “A” had conveyed property
Why= because of a presumption of law to “B” to hold on trust for “C”. All this
that A did not intend to give, i.e. that “A” arises so as to allow the law to prevent
did not intend for “B” (the recipient) to “B’s” unjust enrichment.
benefit from the transfer; the law
presumes that “A” made a non-beneficial 3. Lord Millett:
transfer, and it imposes a Resulting Identical to Chambers (absence of
Trust in “A’s” favor so as to prevent “B” intention to benefit B, provide by

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from being unjustly enriched. Phrased in evidence), but does not rely on unjust
this manner, the presumption is not a enrichment as the basis: instead he
“true presumption”; rather it is merely a relies on the retention idea (Air Jamaica
situation where the law takes over. The Ltd v Charlton) which is criticized by
fact that it isn’t a true presumption does both Swaddling and Chambers.
not invalidate Chamber’s explanation
because, in his view, presumptions are In von Westenholtz vs. Gregson
not as important as some may think, (2022) the court adopted the Lord Millet’s
since in almost all cases (barring Approach in Air Jamica Ltd. vs. Charlton
illegality) there is some direct evidence “resulting trusts responded to the
available. absence of intention to benefit the
Presumptions rarely ever determine the recipient.”
outcome-of a case. All presumed
resulting trusts are trusts arising by
4. Lord Browne-Wilkinson:
operation of law.
Is the only one to believe that automatic
3. Lord Millett:
resulting trusts also arise because of
When: same as Chambers, though he
presumptions? He is obviously wrong,
may alter his view, given Penner’s
but you have to know why. His exact
analysis on how Swaddling’s view is
theory is: automatic resulting trusts are
better according to case law.
no different from other (presumed
Why= Identical to Chambers (absence
intensions of the parties. The idea is that
of intention to benefit “B” established by
automatic resulting trusts arise because
presumption), BUT with one crucial
the law presumes that “A” intends for the
difference, while he does believe that
property to revert back to him in case he
resulting trusts are “restitutionary”, he
intended (express) trust fails. Swaddling
differs from Chambers because he does
shows how this theory is demonstrably
not believe that resulting trusts arise as
incorrect.
a response to unjust enrichment. Lord
Millett relies on the retention
idea/”proprietary arithmetic”: resulting
5. Lords Upjohn and Wilberforce
trusts arise because equity regards “A”
Vandervell V IRC:
as retaining his beneficial interest,
because he did not effectively dispose of

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it. Therefore it remains with him in the Automatic resulting trusts arise because
eyes of equity and the consequence is the equitable interest remains with the
that “B” holds the property on Resulting settlor/ transferor (“retention theory”).
Trust. Load Millett clearly thinks that Swaddling and Chambers both criticize
Chambers theory and the “retention of the retention theory: recall example
the beneficial interest” understanding where “A” (the owner of unified legal
must work together, as is evident from titled) conveys Blackacre to “B”, When
some of his own passages in Air resulting trust is imposed, “A” is give a
Jamaica LTD v Charlton. new equitable interest, he could not have
“retained” anything, rather he acquires a
4. Lord Browne-Wilkinson: new/ different interest.
(Doesn’t believe in the need to To simplify:
distinguish presumed resulting trusts Before trust: “A” has unified legal title.
from automatic resulting trusts, but he After trust: “A” has equitable interest. “A”
also doesn’t expressly abandon the hasn’t retained” anything.
distinction! On presumed resulting trust. Penner says that this criticism is too
He is admittedly very close to what theoretical and technical, and that in the
Swaddling says) past it was possible to “retain” interests
When= Same as Swaddling with resulting uses (see textbook at
Why= because of a presumption that the 5.59).
transferor positively intended to create a
trust (Westdeutsche Landesbank vs
Islington) 6. John Mee:
Presumption = “positive intention” not Argues that automatic resulting trustss
declaration” (Swaddling) Recall arise as a response to the transferor’s
Swaddling’s critique, that an intention to create a trust for somebody,
unexpressed intention is no intention al the law specifying that the beneficiary
all in the eyes of law. This seems to be should be the transferor fails to identify
the only point where he differs from anyone else. His is the only theory that
Swaddling on presumed resulting trust. has a visible normative/prescriptive
5. John Mee: dimension to it.
When= doesn’t express an opinion are
but presumably he would agree with 7. Megarry J In Vandervell No. 2:

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Swaddling that the presumption arises All automatic resulting trusts arise by
whenever there is an ambiguous operation of law independently of the
transfer. settlor’s intensions; automatic resulting
Why= because of a presumption that a trusts are the automatic consequence of
had a positive intention that “B” should the settlor’s failure to dispose of what is
not treat the property as beneficially vested in him. They have nothing to do
his/her own, i.e. an intention that “B” with presumptions.
should hold the property on trust for “A”
(close, but not identical to Lord Browne-
Wilkinson; Mee’s sounder theory lies in
his views on automatic resulting trusts)
6. James Penner:
When= doesn’t express an opinion out
points out that cases are in favour of
Swaddling’s view, i.e. the
Presumption arise whenever there is an
ambiguous transfer there is no need to
additionally prove that there was an
absence of consideration, though this is
almost always going to be part of the
surrounding factual circumstances.
Why= because of a presumption that “A”
had no intention that “B” should treat the
properly as his own.

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