- Challinor v Juliet Bellis (2015) (63-65) - Supported Lord Millett's analysis in Twinsectra (2002) if there is no evidence of a trust there is no trust and the arrangement is simply a loan - must be something on which to base a trust and if there is then Lord Millett's view must be adopted. - Re Kayford  - Customers paid for goods from failing company - company put money into a separate account - held that the company itself had declared a trust so it could use money only for provision of goods to the customers - if they used it for any other purposes then the customers would become beneficiaries under a resulting trust of the money paid to the company. - Settlor seems to be the company itself - how can this be a resulting trust if the money does not return to the settlor under the trust - is this a Quistclose trust or just something similar to it? Re EVTR  BCLC 646 - EVTR lent money for the purchase of equipment - money paid out for the equipment but before it could be delivered EVTR became insolvent and the equipment suppliers return the money to EVTR: (1) B provided money to EVTR to purchase equipment which occurred and therefore because the purpose was achieved B was simply a normal creditor; or (2) Money was not only for the purpose of the purchase but for obtaining the equipment which the company could then use - must analyse situation as a whole - on this analysis the purpose would have failed and therefore B would become a beneficiary under a resulting trust of the money lent to EVTR. - Dillon LJ - On Quistclose principles, a resulting trust in favour of the provider of the money arises when money is provided for a particular purpose only, and that purpose fails. In the present case, the purpose for which the £60,000 was provided by the appellant to the company was … buying new equipment. But in any realistic sense of the words that purpose has failed in that the company has never acquired any new equipment, whether the Encore System which was then in mind or anything else. True it is that the £60,000 was paid out by the company with a view to the acquisition of new equipment, but that was only at half-time, and I do not see why the final whistle should be blown at half-time. … There is now, of course, no question of the [money] being applied in the purchase of new equipment for the company, and accordingly, in my judgment, it is now held on a resulting trust for the appellant. 3.3 Examining Lord Wilberforce's reasoning (a) Relationship Of Loan And Trust Usually a trust and a loan are mutually exclusive. Either: B owes money to A, in which case A's remedy is a personal action for debt at common law; or B holds property on trust for A, in which case A's rights and remedies are equitable and proprietary. However, in a Quistclose trust, the two coexist: B owes money to A. If B uses the money for the stated purpose, B owes A a simple debt; if the purpose fails B holds the money on trust for A.
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- Fall '19
- Wills and trusts, Trust law, Primary Trust