Resulting Trusts Cases

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Air Jamaica v Charlton [1999] UKPC 20

Facts: A pension scheme operated for employees of Air Jamaica. The scheme was held void for perpetuity

Held: It was held that each individual’s pension fund was a separate trust and each failed with the result that the accumulated contributions were held on resulting trust for the settlors (i.e. the employees and the company)

Chichester Diocesan Fund v Simpson [1944] AC 341

Facts: Money was left on trust for “charitable or benevolent objects”. This trust was void as ‘benevolent objects’ were not necessarily charitable

Held: The money was thus held on resulting trust by the trustees for the residuary beneficiaries

Fowkes v Pascoe (1875) 10 Ch App 343

Facts: Mrs Baker transferred property into the joint names of herself and her daughter-in-law’s son by the daughter-in-law’s second marriage. There was a close relationship between Mrs Baker and her daughter-in-law, which was not diminished when the daughter-in-law remarried. She regarded the children of the second marriage as being members of her family (i.e. like her grandchildren). When Mrs Baker died, the question arose as to whether the son held the property on resulting trust for Mrs Baker’s estate. The court at first instance held that it was held on resulting trust.

Held: However the Court of Appeal held that the presumed resulting trust (transfer without consideration – Type A) had been rebutted on evidence that the transfer was a gift.

  • Circumstances showed Mrs Baker intended to make a gift (this had to be proved by the son)

Gascoigne v Gascoigne [1918] 1 KB 223

Facts: A husband bought property in his wife's name, in order to place it beyond the reach of his creditors. When the couple separated, the husband asked the wife to transfer the property to him.

Held: The court found that the husband could not rely on his own illegal motives to rebut the presumption of advancement; and the property was a gift to the wife.

  • So he had defrauded the creditors (so had acted illegally) and therefore could not rebut the presumption of advancement

In re the Trusts of the Abbott Fund [1900] 2 Ch 326

Facts: Money was raised by public appeals to provide for two elderly deaf ladies, after their own trust fund disappeared.

Held: Following the death of the two ladies, the surplus funds were declared to be held on resulting trust for the donors.

Re Ames Settlement [1946] 1 All ER 689

Facts: £10,000 was settled to a man on the occasion of his marriage. Later, the marriage was annulled (lack of consummation), which had the legal effect of declaring it void ab initio - i.e. as if the marriage had never happened.

Held: The court found that the capital was held on resulting trust for the executors of the settlor's will.

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Re Gillingham Bus Disaster Fund [1958] Ch 300

Facts: Funds were raised for funeral and hospital expenses of marine cadets after a bus drove into them. £6,600 was left over. The money could not be applied cy-pres as it was not an exclusively charitable cause

Held: Instead the money was held on resulting trust for the donors, and ordered an inquiry to identify the donors

Re Osoba [1979] 1 WLR 247

Facts: A house was bequeathed to a widow on trust for the maintenance of herself and her daughter up to university grade. When the daughter finished university her father’s heirs claimed the trust objects were exhausted and the house was held on resulting trust for the residuary beneficiaries

Held: The Court of Appeal held the purpose was a motive for the gift and not a binding gift

Re St Andrew's Lawn Tennis Club Trust [2012] EWHC 1040

Facts: Land was held in trust for an unincorporated association. The trust was void for offending the rule against perpetuities.

Held: Accordingly the land was held by the trustees on resulting trust for the estate of the original settlor

Re Vinogradoff [1935] WN 68

Facts: A woman transferred £800 of War Loan stock into the joint names of herself and her granddaughter. The woman continued to receive the dividends (i.e. income) of the stock.

Held: When the woman died, it was held that, in the absence of evidence proving a gift, the granddaughter held the stock on resulting trust for the woman's estate.

  • Onus on recipient to show a gift, but the presumption is there is a resulting trust

Tinsley v Milligan [1994] 3 WLR 126

Facts: Tinsley and Milligan, who were lovers, bought a house to run as a B&B, which was held in Tinsley's sole name. Milligan was claiming that she was a lodger in the house, and was claiming housing benefit. However, the business was run in partnership. So this was a business situation and not a situation involving a family home. Tinsley claimed that Milligan could not use her illegal acts, in fraudulently claiming benefits, to claim an interest.

Held: The House of Lords held (3-2) that, although an illegal act provided the motive for the arrangement, Milligan was not relying on her illegal act to establish a proprietary interest: her interest in the property arose from her (perfectly legal) contribution to the purchase price.

  • They held that, as both had contributed to the purchase price, the house was held by Tinsley on resulting trust for Tinsley and Milligan, in shares proportional to their contribution to the purchase price and mortgage payments.

Tribe v Tribe [1996] EWCA Civ 20

Facts: Tribe owned shares in a company which operated from some shops, which were leased by Tribe. Fearing that he was personally liable for repairs of the shops, Tribe gave all his shares to his son: this was to place them beyond the reach of his creditors. In the event, Tribe was able to surrender the lease of the unrepaired shops on advantageous terms and no longer needed to keep his property out of the reach of his creditors. His son refused to return the shares, relying on the presumption of advancement, and that a man cannot rely on his own illegal act (i.e. to defraud the creditors).

Held: The Court of Appeal found that the presumption of advancement had been rebutted; and that, as Tribe had carried out no illegal act, his son held the shares on resulting trust for his father.

  • Although he may have tried to act illegally he hadn’t actually done so

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