In such cases, a resulting trust will be presumed to arise in favour of the person who has proved to pay the purchase price. Dyer v Dyer is an example.Abrahams v the Trustee in BankruptcyMr and Mrs Abraham were members of a lottery syndicate After the couple had separated, Mrs Abraham continued to pay £1 a week into herlottery syndicate. But also pays her husband’s £1Eventually, the syndicate win over £3 millionShe advanced the money and thus the beneficial interest in the money is hersRebutting the Presumption – Evidence of a Gift or LoanWhere the resulting trust has been presumed, it can be rebutted by evidence that the transfer was intended to be a gift absolute or was for some commercial purpose (i.e. loan); so there may be a legal obligation to pay back the loan but there would be no equitable interest resulting back to the person. Where we do not know the intentions of the transferor, a voluntary transfer is presumed to give rise to a resulting trust. This presumption can sometimes be quite easily rebutted.Fowkes v Pascoe Mrs Baker purchased stock in the names of herself and her step grandson, John
Since she purchased them, there was a presumed resulting trust Held: Court held there was evidence that at the time she purchased the shares, she did intend to make a gift absolute of them to John. Therefore, the presumption of a resulting trust was rebutted. She no longer retained a beneficial interest in all the shares, just halfVajpeyi v YusafShe lent him £10,000 for him to buy a property and rent out. They broke up; she claimed she was entitled to proportionate equity in propertyHeld: Court found the money was intended as loan. They never lived together in the property. She showed no interest in the property. It looked like a commercial arrangement. He had to pay back loan but she had no beneficial interest in the propertyRebutting the Presumption – Presumption of AdvancementThe counter-presumption that will rebut an initial presumption of a resulting trust is the presumption of advancement. (Advancement is presumption of a gift: Robert Chambers)The presumption of advancement says that where a male makes a voluntary conveyance to his wife, his fiancé, a legitimate child, or someone with whom the transferor is in a relationship of loco parentis, then there is a presumption that the transferor has made a gift to the transferee. The idea that men advance property is clearly outdated and discriminatory. However, at the time it was relevant as a woman could not be expected to be in a position to give gifts to her husband or children. These provisions contravene Article 5, 7thProtocol of ECHR – spouses shall enjoy equality of rights.
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- Fall '17
- John Jupp
- Law, Wills and trusts, Trust law, Constructive Trust