Cases where a resulting trust can arise
Purchase in the name of another
Where property is purchased in the name of another then there is a presumption that the other person holds it on a resulting trust for the purchaser [Hodgson v Marks]
Trusts of the home may come into this category [Stack v Dowden] [Laskar v Laskar]
Presumption of advancement
There is a presumption that the person making the transfer intends an outright gift (an advancement) in situations e.g. where a husband transfers property to his wife but not vice versa and to advancements by a father (but not a mother) to their children.
However, in Pecore v Pecore the Canadian supreme Court held that they could also apply to an advancement by a mother. the cases also held that the presumption ceases when the child becomes an independent adult.
This could collide with the maxim that equity does not assist a person with unclean hands:
Tinsley v Milligan - A house was put into the name of X so that Y could (fraudulently) claim housing benefit. Y claimed the property was held for her on a resulting trust by virtue of her contributions. Here Y only had to rely on her contributions to the purchase price and so her claim succeeded as her fraud was, as a matter of evidence, irrelevant.
Failure to dispose of the beneficial interest
Re Osaba: a trust was set up to maintain two women and to educate a third. After the death of the first two and the completion of the education of the third the surplus went absolutely to the third.
BUT Re Abbott: a fund to maintain two ladies which had a surplus went to the subscribers to it.
Trusts as security for loans
Barclays Bank Ltd v Quistclose Investments Ltd - Quistclose lent money to a company (Rolls Razor) for the sole purpose of enabling it to pay dividends. The company went into liquidation. Where a loan is made for a specific purpose which fails then a resulting trust may arise for the lender. This gives the lender priority over other creditors.
Re Farepak - the Quistclose principle could not apply because the money had been received by the Farepak agents (not Farepak) and when it was received there was no suggestion that it was to be kept separate from other money. Thus there could be no Quistclose trust as there was, in effect, no trust property.
Templeton Insurance Ltd. v Penningtons - (X) deposited £500,000 with (Y) ‘for the express purpose of completion’ of a property to be acquired by a client. Y used some of the money for other purposes as the actual price was only around £236,000. Y were held liable to return to X that part of the £500,000 not used for the purchase as it was held for X on a resulting trust under the Quistclose principle.
