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Paper Topic:

EQUITY AND TRUSTS

Title : resulting trust

Answer : In to answer this question it is necessary to determine in the first place what a resulting trust means and when it will arise English law divides trusts principally into four categories : private express trust charitable trust constructive trust and resulting trust . In Re Vandervell 's Trusts (No . 2 , Megarry J . classified resulting trusts into two categories , namely `automatic ' and `presumed `Automatic ' resulting trusts arise where the beneficial interest in respect of the transfer of property remains undisposed of . Such trusts are created in to fill a

gap in ownership . The rational behind of resulting trusts , as indicated above , is that the destination of the beneficial interest has not been dealt with . This type of resulting trusts arises in variety of situations . In Re Ames Settlement a transfer to trustees was made subject to a marriage settlement that turned out to be void . The Court decided that the fund was held on resulting trusts for the settlor 's estate on the ground that the money was paid on a consideration that had failed

There are two common scenarios when a resulting trust will arise . In Re Vandervell 's Trusts (No 2 (1 ) Megarry J identified two types of resulting trust and named them . The first one is a presumed resulting trust , which will arise when there is a voluntary conveyance from A to B or where there is direct financial contribution to the purchase price of the property . The second one is an automatic resulting trust , which will arise when there is a transfer made on trust but this transfer leaves some or all of the interest undisposed of . This will usually occur when a private express trust fails or the transfer is only partially effective . He stated that where A effectually transfers to B any interest in any property , whether legal or equitable , a resulting trusts for A may arise in two distinct classes of case . The first class of case is where the transfer to B is not made on any trust if of course , it appears from the transfer that B is in tended to hold on certain trusts that will be decisive , and the case is not within this category , and similarly if it appears that B is intended to take beneficially . The second class of case is where the transfer to B is made on trust , which leaves some or all of the beneficial interest undisposed . Here B automatically holds on a resulting trust from A to the extent that the beneficial interest has not been carried to him or others

In Westdeutsche Landesbank Girozentrale v Islington London Borough Council the Court held that the basis for all trusts is conscience . Very similar situations were described by Lord Browne-Wilkinson in this case the Court held that Under the existing law a resulting trust arises in two sets of circumstances (A ) where A makes a voluntary payment to B or pays (wholly or in part ) for the purchase of property...

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