HK Courts have found no presumption of advancement arises for relationships such as: • Parent to child’s fiancé / fiancée; • Transfers to a child-in-law; • Transfers between siblings; • Engaged man to fiancée; • See Gallagher, Equity and Trusts in Hong Kong at p.330 at footnotes 103-105 for case examples. 45
Statutory presumption of advancement (marriage engagements) Law Amendment and Reform (Consolidation) Ordinance (Cap.23) Section 25 Gifs between engaged couples (1) A party to an agreement to marry who makes a gif of property to the other party to the agreement on the condition (express or implied) that it shall be returned if the agreement is terminated shall not be prevented from recovering the property by reason only of his having terminated the agreement. (2) The gif of an engagement ring shall be presumed to be an absolute gif; this presumption may be rebutted by proving that the ring was given on condition, express or implied, that it should be returned if the marriage did not take place for any reason. See also Ian Hung Wai v Cheung Sau Kuen  3 HKLRD 458 at paras 19-20 46
SPECIAL SITUATION: ILLEGALITY 47
Importance of presumptions • Presumptions: Ofen flimsy , and unreliable . • But they have very useful in situations dealing with situations where the trust is set up illegal purposes. • Recall the maxim: “ …He who comes to equity must come with clean hands” • So evidence of an illegal purpose cannot be presented to the Court. 48
Illegality & Intention • Therefore, if a party needs to prove the intention behind an illegal transfer (whether it was intended to be a gif or on trust), there would be substantial problems! • The presumptions of advancement and resulting trust have therefore been very helpful to fill in gaps in the evidence caused by illegality. 49
Tinker v Tinker  P 136 • Husband was starting a new business venture. He was worried about creditors in case the business failed. • On advice from his solicitor, the Husband transferred property to his wife, in order to protect it from possible creditors. • The couple divorced: • the husband claimed _____? • the wife claimed _______? 50
Tinker v Tinker  P 136 • Lord Denning MR at 141 The husband “…found himself on the horns of a dilemma in that, as between himself and his wife, he wished to say that the property belonged to him, whereas, as between himself and his creditors, he wished to say that it belonged to her.” • The settlor cannot have it both ways! • The settlor cannot blow hot and cold! • The settlor cannot have his/her cake and eat it too! • Etc. 51
Tinsley v Milligan  1 AC 340 • Stella Tinsley and Kathleen Milligan (the Defendant) purchased a property to live in together and also to operate as a lodging business to help pay for the house. The property was registered in Tinsley’s name only.
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- Summer '17
- Elliot Fung
- Wills and trusts, Trust law, Constructive Trust, Settlor