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RESULTING TRUST

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nurul aidah

on 11 May 2014

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Transcript of RESULTING TRUST

A resulting trust is an implied trust by operation of law.
It is means to restore or to jump back the equitable interest in property to its original beneficial owner.
The nature is not based on the actual intention of the parties.
However, it comes from the rising of presumed intention.
Prelude
Presumed Resulting Trust
Liu Sau v. Hemmy:
No resulting trust had arisen. The court refused to enforce a resulting trust because would be equal to recognizing an unregistered sub-lease. The judicial commissioner then expressed the view that, even if a resulting trust was established, it could not be enforced. This was because in effect defendant’s administrator was asking the court to enforce an unregistered sub-lease, which if upheld would amount to the court lending its sanction to a proceeding which was in direct contravention of written law and to a proceeding which if sanctioned, would be rebellious of the whole policy of the Registration Enactments in force in the Malay States.
Doctrine of clean hand
"Jang Ok Jung"
Heng Gek Kiau v Goh Koon Suan
Megarry J. in Re Vandervell’s Trusts (No. 2) :
Theoretical Basis of Resulting Trusts: Presumed Resulting Trust and Automatic Resulting Trust
RESULTING TRUST
Afiqah & Aidah
deny any facts which call presumption into operation.
must assist the court by submitted evidences to show that there is a clear intention on behalf of the settlor to give the property to him as a gift.
otherwise, the court will assume that the settlor is entitled to enjoy his equitable right over the transferred property
REBUTTAL - Inconsistent evidence
Presumption of advancement
Rebuttal of the presumption of advancement
Westdeutsche Landesbank Girozentrale v Islington London Borough Council (LBC)
House of Lords sets out two situations:
situation in which a person makes a contribution to the purchase price of property
situation in which the settlor has failed to explain the allocation of equitable interest in the property
Presumed Resulting Trust
Automatic Resulting Trust
It arises when a transfer has been made on express trust, but has not completely disposed the beneficial interest in the trust property.
In this context, the transferee of the property automatically holds it on resulting trust for the transferor to the extent that the beneficial interest has not been disposed of.
It does not depend on any intentions or presumptions of parties, but is the automatic consequence after the failure of the transferor to dispose of the entire of the beneficial interest.

It was suggested :
presumed resulting trust
automatic resulting trust
It arises when a purchase is made in or a transfer is made into the name of another person without any express trust being constituted.
In this situation, there is a presumption that other holds property in question on resulting trust for the real purchaser or the transferor.
For example, when A transfers property to B, in the absence of any other evidence, the law presumes that a resulting trust has been created for A.
Equity presumes that the property belongs to the person who advances the purchase money.
Distinction : Intention
If A gratuitously transfers a property to B, B would be holding the property on resulting trust for A as B is now a trustee.
Voluntary Transfer
1) Voluntary Transfer
2) Purchase in the name of another
3) Joint purchase in the name of another/joint name
beneficial right would be in proportion to the contribution and they are the resulting trustee that holds the car for each other.
So, regardless whether the property is purchased in joint names or in only one of them, the beneficial interest would be in proportion to the contribution
so long as they both participate in that purchase.
Liew Choy Hung V Fork Kian Seng
the court held that if two or more persons purchased property in their joint names and there was no declaration of trusts on which they were to hold the property, they held the property on a resulting trust for each other proportionate to their contributions to the purchase price.
Joint purchase in the name of another/joint name
Purchase in the name of another
Chang Lin v. Chong Swee
granted an unreserved recognition to the application of resulting trusts of land.
(Father – daughter – Husband)
Braddell JC : resulting trusts in the instant case would not infringe the indefeasibility principle, for the system of title by registration was for the protection of those who dealt on the faith of the register and not to enable a person unjustly and unconscientiously to retain the land of others.
The judges unanimously allowed the wife's application.

Contention of parties
CHOONG KWEE SANG V CHOONG KWEE KEONG
(as the executor of the estate of Chan Fook Lin, deceased)
[2009] 1 MLJ 186
Facts of the case :
suit against his mother to recover two properties which were registered in his mother’s name.
The trial judge held that the mother did not hold the properties on trust but that she was the legal and beneficial owner of the properties.
The appellant appealed.
Issue(s) :
Whether the appellant could prove by oral or documentary
evidence
that he purchased the properties with his own money.
Whether the properties which were registered in the deceased’s name were held by her in
trust
for the appellant.
The court satisfied that the appellant had
failed
to prove that it was he who paid for the subject properties.
Though tried, but failed to submit documentary proof of another income.
the appellant’s financial commitments such as deductions for personal and family expenses, payment of car loans, income tax and EPF contributions
the appellant lost his job.
it is impossible for the appellant to purchase the bungalow house.
the appellant’s father retained the title deed and all other documents related to his house.
the question of resulting trust in the appellant’s favour is irrelevant.
At the time of the purchase of the properties by the appellant’s father there was no implied nor express certainty that the appellant had a beneficial interest in the properties.
Even if there was a resulting trust, this can easily be rebutted by evidence.
In session court, the mother previously testified it was her husband (the appellant’s father) who paid the quit rent, outgoings and assessment.
This appeal
dismissed
with costs.
judgment
A transfer from husband to wife is presumed to be by way of advancement. In this situation, the presumption is that the husband intended to make an outright gift of such property.
Unless there are the conflicts:
- The marriage has broken down
- The marriage void ab initio
- Unlawful intention of transferring
No presumption of advancement in the context of wife and husband. It is because, a wife has no ‘natural obligation to provide’ for the husband.

A transfer from a wife to a husband or contribution to the purchase money of property which is registered under the husband’s name, it is still consider as a resulting trust in favour of the wife.
The presumption does not apply in favour of a transferor’s de facto wife.
It is because, in de facto spouses or is called common law spouses, it cannot be assured and assumed to have intended consequences as parties entering a formal marriage or getting legal status of the relationship.
The relationship between a man and his mistress is excluded from this presumption.
However, in certain circumstances, the judge may give the decision on the favour of the mistress to have the property as an outright gift from the man.
Man and his mistress
The
High Court
held that there is
no presumption of advancement
(way of gift) as there is no reason to raise up the presumption.[no relation between the plaintiff (the man) and the defendant (the mistress)].
Conversely, the
Court of Appeal
ruled the
decision in favour of the defendant, the mistress.
It is based on the real intention of the purchaser.
Although the plaintiff provided the purchase price, but he not only registered the property in the defendant’s name, but also permitted her to occupy the house.
The plaintiff allowed the defendant to deal with the house as if she was the beneficial owner. He permitted her to deal with the authorities to have water and electricity supply connected to the house.
The plaintiff not inform the solicitors who attended to the purchase and transfer that the defendant was the mere nominal owner of the house and that he was the true beneficial owner.
The reason provided by the plaintiff for purchasing the house in the defendant’s name.
Full transcript