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evidence of an intention to make a gift, that presumption remainsunrebutted. The same, he argues, can also be said for mistaken gifts,payments under duress and most failures of consideration. Indeed, it isonly with some admitted artificiality that he manages to exclude from hisanalysis failures of consideration which result from the defendant’s breachof contract. These apart, Birks claims that virtually all cases of commonlaw restitution which involve a direct transfer of wealth from plaintiff todefendant will also give rise to claims in equity under a resulting trust.c.)Swadling’s Views:Swadling (1996) has opposed the Birks/Chambers thesis, arguingthat the resulting trust is displaced by evidence of anyintention contraryto the intention to create a trust – the transferee does not have to provethat the transferor intended to make him a gift.d.)Lord Browne-Wilkinson’s Theory:In the recent case of “Westdeutsche Landesbank v. Islington”,Lord Browne-Wilkinson doubted Megarry J’s classification of ARTs. In thatcase, a bank paid £2.5m to a local authority under an ultra vires swapscontract. The invalidity of the contract meant that the courts treated thepayment as gratuitous. The House of Lords held that any presumption oftrust in favour of the bank was rebutted by proof that the money was paidunder a supposed obligation to make the local authority outright owner.This showed that the bank intended, albeit mistakenly, to make the localauthority owner of the money, rather than trustee.According to him, Megarry J’s theory that ARTs does not depend onintention but operates automatically is not right. He said that both types
Resulting Trusts5of resulting trust are traditionally regarded as examples of trusts givingeffect to the common intention of the parties. A resulting trust is notimposed by law against the intentions of the trustee (as is a constructivetrust) but gives effect to his presumed intention: “If the settlor hasexpressly, or by necessary implication, abandoned any beneficial interestin the trust property, there is in my view no resulting trust; theundisposed-of equitable interest vests in the Crown as bona vacantia”.In other words, Lord Browne-Wilkinson may be saying that theremay be cases where: (1) the facts show that the settlor actually intendedto abandon any interest in the trust property if the trust failed, and (2) hedid not “express” this intention “as a term” of the trust he created, and(3) because of these “collateral” intentions the court treats theundisposed of trust property as bona vacantia. This does not upsetMegarry J’s characterisation, but only modifies it in a very minor way asfollows: the ART is not wholly “intention-independent” in that it may bedisplacedby a settlor’s actual intentions to abandon all interest in thetrust property which might otherwise result to him to the Crown. Thissurely occurs in a vanishingly small fraction of trusts, and it is not clearthat there have ever been any cases of this kind.
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Wills and trusts, Trust law, Settlor, Lord Millett