essay resulting trusts

what are the 2 categories of resulting trust?

1. automatic RT

2. presumed RT

when does an automatic resulting trust arise?

when an express trust fails

give some examples of cases where an ART occurred

• air jamaica v charlton

• hodgson v marks

when do PRTs occur?

arise on a voluntary transfer of property or contributions to purchase price where there is no evidence of an intention to gift

give an example of a case where a PRT arose

dyer v dyer

PRTs are rebuttable by __________________________

presumption of advancement

what does Virgo argue that RTs should be regarded as?

responding to a positive intention on the part of the transferor of property, albeit an intention that is either presumed or imputed depending on the context in which the RT arises

what did Lord BW suggest, OBITER, in Westdeutsche?

that all RTs should be considered to be PRTs as both types of RT are traditionally regarded as examples of trusts giving effect to the common intention of the parties

a RT is not imposed by law against the intention of the trustee (as is a CT) but gives effect to his presumed intention

how does Virgo counter Lord BW’s argument in Westdeutsche?

• the reference to the parties’ common intention is not correct

• also, if intention is relevant to explain why a RT is recognised, it cannot be the intention of the trustee that applies; the only relevant intention should be that of the transferor, who is effectively in the position of the settlor of the trust

• if intention is presumed, it is not clear what the transferor is presumed to have intended

Virgo: but intention of the transferor IS significant for the proper analysis of RTs -

for a RT to be recognised, the transferor should intend that the property be held on trust for them in certain circumstances

how does Virgo argue that the presumption in relation to PRTs is preferably analysed?

as being that, where C has voluntarily transferred property to D or paid the purchase price for property held by D, C intended the property to be held on trust for themselves

how does Chambers fit the PRT into his theory that all RTs respond to the absence of an intention to benefit D?

by treating the presumption as being that C did not intend the transfer of a property to be an absolute gift to D, rather than a presumption that C intended the property to be held on trust

• BUT Virgo: these are 2 sides of the same coin

Virgo: if lack of intention that D should benefit from the receipt of the property forms the theoretical basis for the recognition of RTs, it follows that _____________________________________________

such a trust might be recognised in any case where C’s intention to benefit D is vitiated

• e.g. where C has transferred property to D by mistake - basically in cases of unjust enrichment

• this would dramatically expand the operation of the RT and have unsettling consequences on the rights of 3rd parties and the security of commercial transactions

the absence-of-intention analysis is only supported by ________________ and is ________________________________________

Lord Millett

inconsistent with the classical analysis of such trusts

RTs and CTs both arise by operation of law rather than express declaration, but what distinction did Lord Millet draw?

CTs: imposed regardless of intention, often to prevent unconscionable retention of property

RTs: give effect to a lack of intention to benefit the transferee

both ARTs and PRTs operate without ___________________________________

the transferee’s agreement - equity ‘springs back’ beneficial interest to the transferor

Lord Millett in Air Jamaica: it is NOT about the transferor positively intending to retain a beneficial interest, but ______________________________________

about the lack of an intention to part with it

where a settlor fails to create an express trust, legal title typically passes to _______, but the settlor will _____________________________________

the trustee

retain the beneficial interest in the property, so that the trustee holds the property on trust for the settlor

how does Virgo counter Lord BW’s assertion in Westdeutsche that the RT arises because of the failure to exhaust C’s beneficial interest in the ET?

this is the assertion of a conclusion rather than an explanation of why the beneficial interest is retained

why does Virgo contend that the assertion that an ART arises on the subsequent failure of an ET cannot be explained by stating the fact that the settlor has retained the beneficial interest?

because the settlor will not have retained any beneficial interest once the trust has been operating effectively

who has been unable to identify a rationale for the recognition of ARTs where an ET has failed?

Swadling

• he contends that such trusts defy legal analysis

why does Swadling argue that ARTs cannot be explained by relying on a presumption of intention to declare a trust?

because this category of RT simply arises by operation of law

how do those who propound the ‘absence of intent to benefit’ explanation of RT explain the ART?

on the basis that C will not have intended D to benefit from the receipt of the trust property where the trust has failed

how does Swadling criticise the ‘absence of intent to benefit’ model?

the theory does not explain why property should be held on RT rather than there simply being a personal liability to restore the value of the property to C

how does Virgo contend that it IS possible to explain ARTs w/o referring to either presumed intent or absence of intent?

• ART arises by operation of law imputing an intention that, in the circs, a trust would be declared for C

• this imputed intention does not purport to reflect what C did intend, by rather what C would objectively be considered to have intended if they had considered the possibility of the ET failing

imputed intention, unlike presumed intention, is _____________

rebuttable

who recognised that the ART responds to an imputed intention?

Harman J in Re Gillingham Bus Disaster Fund