Equity and Trusts Law 2 – Notes
Lecture 1 – Resulting Trusts
Lord Browne-Wilkinson in Westdeutsche
Under existing law a resulting trust arises in two sets of circumstances
Where A makes a voluntary payment to B or pays (wholly or in part) for the purchase
of property which is vested either in B alone or in the joint names of A and B. there is
a presumption that A did not intend to make a gift to B: the money or property is
held on trust for A (if he is the sole provider of the money) or in the case of a joint
purchase by A and B in shares proportionate to their contributions. It is important to
stress that this is only a presumption, which presumption is easily rebutted either by
the counter-presumption of advancement or by direct evidence of A's intention to
make an outright transfer: see Underhill and Hayton (supra) p. 317 et seq.;
Vandervell v. I.R.C. [1967] 2 A.C. 291 at 312 et seq.; In re Vandervell (No. 2) [1974]
Ch. 269 at 288 et seq.
Where A transfers property to B on express trusts, but the
trusts declared do not exhaust the whole beneficial interest:
ibid. and Barclays Bank v. Quistclose Investments Ltd. [1970]
A.C. 567.
Megarry J in Re Vandervell’s Trusts (No 2)
Presumed Resulting Trust
o Rebuttable presumption that there is an intention for transferred assets to be
held in trust
Automatic Resulting Trust
o Operates automatically and irrespective of intentions
o Irrebuttable
James Penner’s terminology
ARTs – Automatic Resulting Trusts
PIRTs – Presumed Intention Resulting Trusts
Robert Chambers View
Resulting Trusts as mechanisms to respond to/prevent unjust enrichment
Unlike Meggary J, Lord Browne-Wilkinson and Penner, Chambers sees all RTs as
operating on the same principle
“They do not depend on an implied intention to create a trust, but neither do they
arise completely independently of intention. All resulting trusts come into being
because the provider of property did not intend to benefit the recipient”
Relevant equitable maxims
Equity does not aid a volunteer
Equity does not perfect an imperfect gift
Equity is suspicious of gifts
Recall cases such as Milroy v Lord
Roles of Equity’s Darling
ARTs
Plowman J Vandervell
o “A man does not cease to own property simply by saying ‘I don’t want it.’ If
he tries to give it away the question must always be, has he succeeded in
doing so or not?”
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Lecture 1 – Resulting Trusts
Lord Browne-Wilkinson in Westdeutsche
Under existing law a resulting trust arises in two sets of circumstances
Where A makes a voluntary payment to B or pays (wholly or in part) for the purchase
of property which is vested either in B alone or in the joint names of A and B. there is
a presumption that A did not intend to make a gift to B: the money or property is
held on trust for A (if he is the sole provider of the money) or in the case of a joint
purchase by A and B in shares proportionate to their contributions. It is important to
stress that this is only a presumption, which presumption is easily rebutted either by
the counter-presumption of advancement or by direct evidence of A's intention to
make an outright transfer: see Underhill and Hayton (supra) p. 317 et seq.;
Vandervell v. I.R.C. [1967] 2 A.C. 291 at 312 et seq.; In re Vandervell (No. 2) [1974]
Ch. 269 at 288 et seq.
Where A transfers property to B on express trusts, but the
trusts declared do not exhaust the whole beneficial interest:
ibid. and Barclays Bank v. Quistclose Investments Ltd. [1970]
A.C. 567.
Megarry J in Re Vandervell’s Trusts (No 2)
Presumed Resulting Trust
o Rebuttable presumption that there is an intention for transferred assets to be
held in trust
Automatic Resulting Trust
o Operates automatically and irrespective of intentions
o Irrebuttable
James Penner’s terminology
ARTs – Automatic Resulting Trusts
PIRTs – Presumed Intention Resulting Trusts
Robert Chambers View
Resulting Trusts as mechanisms to respond to/prevent unjust enrichment
Unlike Meggary J, Lord Browne-Wilkinson and Penner, Chambers sees all RTs as
operating on the same principle
“They do not depend on an implied intention to create a trust, but neither do they
arise completely independently of intention. All resulting trusts come into being
because the provider of property did not intend to benefit the recipient”
Relevant equitable maxims
Equity does not aid a volunteer
Equity does not perfect an imperfect gift
Equity is suspicious of gifts
Recall cases such as Milroy v Lord
Roles of Equity’s Darling
ARTs
Plowman J Vandervell
o “A man does not cease to own property simply by saying ‘I don’t want it.’ If
he tries to give it away the question must always be, has he succeeded in
doing so or not?”
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