The presumptions of presumed resulting trusts and of advancement are today false and outmoded so that only lip-service is paid to them in establishing where the onus of proof lies.

Resulting trusts date back to before the Statute of Uses 1536.  People would transfer their property to be held for their own use and then declare uses for other people later in order to avoid the burdens arising on death and the rule that real property could not be devised by will.  As this became so common a court would presume that land, which had been transferred to another for no consideration and with no declaration of use, was being held for the use of the transferor.  

A resulting trust arises where a transferee is required by equity to hold property on trust for the transferor (the person who provided the purchase money for the transfer) and although legal title is vested in a trustee, equitable title becomes vested in the settler.  A common feature of all resulting trusts is that the settlor is also the beneficiary as the beneficial interest results i.e. comes back to the transferor.  Although the settlor or testator performs an intentional act of a transfer, he does not create the trustee / beneficiary relationship.  It can be said therefore that in effect a resulting trust is the basis of a claim to recover one’s own property. 

Traditionally it used to be said that there are two situations where these trusts can arise and in Re Vandervell's Trusts (No. 2) [1974] Megarry J. distinguished between automatic and presumed  Presumed resulting trusts arise in the case of transfers to volunteers and are depended on the presumed intention of the transferor, whereas automatic resulting trusts arising on the failure to dispose of all the beneficial interest and are imposed by a operation of law with no regard to intention.  These classifications are no longer favoured and the current view is that all resulting trusts are based on the absence of any intention by the transferor to pass a beneficial interest to the transferee and in the case of transfer to volunteers this absence is reputably presumed.

Resulting Trusts may arise through voluntary conveyance where a voluntary transfer of the legal title of a property to a third party or through a conveyance to transferees who provide none or only part of the purchase price.  This category of purchase money resulting trusts includes cases where the conveyance is made to one party but some or all of the money is provided by another party or where the conveyance is to persons jointly but the purchase price is provided unequally.  Presumed resulting trusts are not actually resulting trusts as they can be rebutted.  It must be proved that a gift was not made.  Issues such as the presumption of advancement and complex questions over the division of ownership of property between spouses or cohabitants and where the contribution may be made to the family in other ways that payment of money then arise.    

 The general principle established in 1788 where Eyre, C.B. stated in Dyer V Dyer (1788) that where there is voluntary conveyance or payment i.e. the presumption is that the equitable title remains in that of the settlor and not with the legal title unless there is the presumption advancement will not be applied to such cases as, if payment is made by way of loan to the person whose name the property is in as the intention is not to vest money as a purchaser but as a lender, and therefore this is not a resulting trust.  

Ways in which presumed resulting trusts can be rebutted include bringing evidence of contrary intention e.g. that it was a gift, through the presumption of advancement, or if the reason for putting the property into the name of another is illegal e.g. tax evasion.  

The presumption of advancement is a presumption working in the opposite direction to that of the presumption of resulting trusts. The presumption of resulting trust does not arise if the provider of the property is the parent or husband of the recipient. In that situation, the presumption of advancement applies, meaning that the court presumes that a gift was intended. This comes form the belief that fathers were considered to be under a moral duty to advance their children in the world and, if a father transferred property to his child, it was presumed that this was in fulfilment of that duty.  Traditionally, the presumption of advancement applied to transfers from fathers and persons standing in loco parentis to the recipient, but did not apply to transfers from mothers. However, it is now recognised that mothers and fathers owe the same duties to their children and are equally likely to intend to give to them. The presumption of advancement does not yet apply to transfers from wives to husbands, but this may be because (a) the issue has not been considered by the courts recently and (b) the situations in which the issue is likely to arise are regulated in most jurisdictions by family property statutes.  

There is a great deal of controversy over what intention is being presumed when the presumption of resulting trust is applied. Some argue that the presumption is of an intention to create a trust.  This is consistent with many cases in which the provider of the property did intend to keep the beneficial ownership for himself. However, others believe that the presumption is that the provider did not intend to make a gift. This other view can also explain these cases, because the provider's intention to keep any portion of the beneficial interest necessarily means that he does not intend to pass that interest to the recipient.  However there are many cases of resulting trust in which the provider did not intend to benefit the recipient and yet could not have intended to retain the beneficial interest, because the provider was unaware of the transfer, incapable of creating a trust or mistaken. There are also cases where the intention to create a trust is unenforceable or simply improbable on the evidence. None of these can be satisfactorily explained by the theory of implied intention to create a trust. In Hodgson v Mark [1971] the plaintiff intended to create a trust of land for herself, which was unenforceable because it was not manifested in writing. The Court of Appeal held it was the lack of intention to give and not the intention to create a trust which gave rise to the resulting trust.

The law remains as stated by Jessel M.R and modern English authorities involving mothers and children have consistently followed Bennett v Bennett.  With the husband / wife cases courts have shifted from outmoded views in relation to where the onus of proof lies however it is evident their views are presumed in certain circumstances.  Husbands can make transfers to their wife a presumption of advancement will exist, likewise when the transfer is made between an engaged couples however not where the property is placed in the name of a mistress nor where a wife puts a property in the name of her husband.  However Anson v Anson [1953] Pearson J. held that a husband could recover that sum from wife as the transaction was not in the nature of advancement.  The presumption of advancement is rebuttable but the onus is on the party seeking to rebut.

When it comes to the rebuttal of presumptions based on illegality Martin states that ‘A solution which discourages illegality and also prevents the unjust enrichment of the transferee is not easy to find.  It is unfortunate the majority decision is based on the old presumptions, which are generally regarded as outmoded’.  The ‘clean hands’ principle considers intention to act illegally, and the illegal act or the intention for this illegal act can not be relied on to avoid responsibilities. 

The court often finds itself twisting around old, out of date presumptions, such as the presumption of advancement, and shifting burdens of proof. The law commission has proposed certain reforms affecting the presumptions and purchase money resulting trusts.  They state that the present governing rules that effect of illegality on contracts and trusts are unnecessarily complex and obscure and may result in unjust decisions and the main proposal for reform in this area is that these technical rules should be replaced and the courts be allowed to use their discretion to decide whether illegality should act as a defence to normal rights and remedies.  

The courts have tried to update and change the law and there has been progress through introducing such legislation as the Law of Property Act 1925 and proposals applying to spouses and engaged couples.  However these proposals do not cover cohabitants which consider the structure of today’s society needs to be resolved.

Bibliography

• Delaney, H. ‘Equity and The Law of Trusts in Ireland’ 3rd Edition, 2003

• Hayton and Marshall ‘Cases and Commentary on the Law of Trusts’,

• Martin, J. E., ‘Modern Equity’, 16th Edition, 2001, Sweet & Maxwell

• Oakley A.J. ‘The Modern Law of Trusts’, 2003,

• Pettit, P., ‘Equity and the Law of Trusts’ 8th Edition, 1997,

• Todd, P., ‘Cases and Materials on Equity and Trusts’, 2nd Edition, 1996, Blackstone press Ltd.

---