TRUST

In the case of Gateway Worship Center v. David Soon Boon Seo

(2009) 24 M.L.R.G. 1 at 12 -17 SC, it was held that:

“Trust is a concept in equity whereby one person (called ‘the

trustee’) holds the nominal or legal title in property which has

been made available to him by another person (called ‘the

settlor’) for the benefit of some other person (called ‘the

beneficiary’).”

An express trust requires the ‘three certainties’ of intention,

subject matter and objects to be valid. A trust can be express or

implied (resulting or constructive) and, whether it has a public

character, it can be a charitable trust in which case the cy-pre

doctrine can be applied to save the trust from failing.”

“The effect of a completely constituted trust, however, is that,

the beneficiary may enforce it whether or not he has given value.

In his book Equity and the Law of Trusts (5 th edition) at page 87,

Philip Pettit states at page 89 as follows:

‘If the trust is completely constituted, the fact that a cestui que

trust is a volunteer is irrelevant: he is just as much entitled to

enforce the trust as a cestui que trust who has provided

consideration.”’

“A beneficiary under a trust is a volunteer unless either he has

provided valuable consideration in a common law sense, or he

is, as it is said, within the scope of the marriage consideration.

Osborn’s Concise Law Dictionary (8th edition) at page 345

defines a volunteer as a person who is an object of bounty under

a will or settlement as opposed to one who gives valuable

consideration. Therefore, a volunteer under a trust is a

beneficiary who has provided no valuable consideration in

respect of the trust and who is not within the confines of

marriage.”

“A trust is completely constituted when the trust property is

vested in the trustees for the benefit of the beneficiaries. The

classic statement of the law as to what is meant by complete

constitution (or perfect creation) of a trust is to be found in the

judgment of Turner L.J in the leading case of Milroy v. Lord

(1862) 4 De GF & J at 274-275 of the report as follows:

‘….In order to render a voluntary settlement valid and effectual,

the settler must have done everything which, according to the

nature of the property comprised in the settlement, was

necessary to be done in order to transfer the property and render

the settlement binding upon him.’

According to da Rocha and Lodoh’s ‘Ghana Land Law and

Conveyancing’ (2nd edition) at pages 105-106, a trust may be

completely constituted in two ways:

 (a) By the settler conveying the property to the trustees;

or

(b) By the settler declaring himself to be a trustee for

the intended cestui que trust.

Until the property is conveyed to the trustee or the settler

declares himself as a trustee for the intended cestui que

trust, the trust is incompletely constituted

“The effect of an incompletely constituted trust is that, only

beneficiaries who have given value (not volunteers) can enforce

it and the court will only perfect the trust in favour of the one

who has given value, following the maxim: ‘equity considers as

done that which ought to be done’. The position, as stated in Re

Adlard (1964) GH 29 and Ellison v. Ellison (1802) 6 Ves. 656 at

662, is that equity will not perfect an imperfect trust in favour of

a volunteer.”
 “The position is that equity does not assist a volunteer (see

Ellison v. Ellison (1802) 6 Ves. 656 at 662). However, this

position is true only when the trust is incompletely constituted.

Where the trust is completely constituted, it does not matter

whether or not the beneficiary is a volunteer.

RESULTING TRUST

A resulting trust may be explained as where a legitimate or legal

owner of property voluntarily and unequivocally transfers or

otherwise expressly directs the transfer of property to which he

is beneficially entitled to another person without expressly or by

necessary implication declaring such a person a trustee of the

property whereby such a person shall be compelled to hold the

property in trust for the legal owner. Thus in the Supreme Court

case of In Re Koranteng (Decd); Addo v. Koranteng & Others, it

was held that:

“In essence, a resulting trust was a legal presumption made

by the law to the effect that where a person had bought

property in the name of another, that other person would be

deemed to hold the property in trust for the true purchaser.

It was a trust implied by equity in favour of the true

purchaser or his estate upon death. The trust was regarded

as arising from the unexpressed or implied intention of the

true purchaser. Thus for a resulting trust to be established,

there had to be proof that the purchase money for the

disputed property had been advanced by the beneficiary of

the resulting trust. In the instant case, there was no

resulting trust for the defendant’s father because there was

not enough evidence on record to prove, on the balance of

probabilities, that the purchase price paid by the father of

the defendant had been his own money and paid on his own

account. Dyer v. Dyer (1788) 30 ER 42 at 43 cited.

 Per curiam. By asserting the existence of a resulting trust,

the defendant bears the burden of persuasion of the factual

precondition to its existence. He therefore needs to prove that

the purchase price paid by his father …. was his own money and

paid on his own account. On the view of the facts accepted by

the Court of Appeal, which we share, he has failed to do so.”

Also in the case of Dyer v. Dyer (1788) 2 Cox Eq 92 at 93; 30

ER 42 at 43 Eyre CB said that:

“The clear result of all the cases, without a single exception

is that the trust of a legal estate, whether taken in the names

of the purchasers and others jointly, or in the names of

others without that of the purchaser, whether in one name

or several; whether jointly or successive – results to the

man who advances the purchase money …. It is the

established doctrine of a court of equity that this resulting

trust may be rebutted by circumstances in evidence.”

Again in the case of Tamakloe v. Wood Part 5 (2006) 5 M.L.R.

G. 132 at 136, it was held that:

“A resulting trust would have been presumed if it was

unequivocally established that it was the defendant who

advanced the purchase money for a vesting of the legal title

in the house in Garshong, her daughter. Equity would,

then, in the circumstances have regarded Garshong as the

nominal purchaser of the house holding only what is called

the paper title (i.e. the legal title) in the house in the

absence of any evidence of other intention whilst the

equitable interest would be presumed to belong to the

defendant, the mother. But as stated earlier on in this

judgment there was no such proof of the defendant being

the provider of the purchase money”. Per Asiamah, JA

[Pp. 157-158] lines. 45-10

Two types of Resulting Trust

i. Presumed Resulting Trust.

ii. Automatic Resulting Trust.

PRESUMED RESULTING TRUST.

It arises where there is a voluntary transfer of property or

purchase in the name of another.

Automatic Resulting Trusts

Automatic Resulting Trusts are imposed where a settler creates a

trust that fails to dispose of his entire beneficial interest in the

settled property. According to Megarry VC, this kind of a

resulting trust “does not depend on any intentions or

presumptions but is the automatic consequence of the settlor’s

failure to dispose of what is vested in him”.

1. For Voluntary transfer of property,

See: 1. Standing v. Bowing (1885).

2. Re Vindgraddff (1935)

3. Re Muller (1953)
 4. Thavorvn v. BCCI (1985)

II. Purchase in another’s name.

(a) Where “A” purchases personal property in B’s name, there

is a presumed resulting trust in A’s favour: see Fowkes v.

Pascoe (1875); Shephard v. Cartwright (1955); and Crane

v. Davis (1981).

Real property: Where A provides the money for the purchase

of real property (whether freehold or leasehold) and directs that

it should be conveyed or assigned to B or put in B’s name, B is

presumed to hold it on a resulting trust for A. Thus in the

Supreme Court case of In Re Fianko Akotuah (2007-2008)

SCGLR at page 165, it was held that:

“It is settled law in equity that the trust of a legal estate,

whether freehold, copyhold, or leasehold,; whether taken in

the names of the purchasers and others jointly, or in the

name of others without that of the purchaser; whether in

 one name or several; whether jointly or successive, results

to the man who advances the purchase-money. In such

cases, the provider of the purchase-money or the trust

owner in equity is not estopped from averring and proving

that to be the truth of the transaction; neither can they be

estopped from relating the real truth known to them at the

time of making of the statement. In such circumstances, a

person with his own equal and clear knowledge to the

contrary, cannot contend at common law or in terms of

section 26 of the Evidence Act, 1975 (NRCD 323) that the

other party in question has, by his own statement, act or

omission, intentionally and deliberately caused or permitted

another person to believe a thing to be true and to act upon

such belief. Clearly, section 26 does not apply to such

situations.”

See Dyer v. Dyer (1788) and Gross v. French (1975).

Contributions: A resulting trust may arise where A and B both

contribute towards the acquisition or purchasing of any property.

In particular:

 If A and B contribute towards the purchase of property

which is conveyed to B, B holds the legal title on

resulting trust for A, proportionate to his contribution:

see Bull v. Bull (1955); Dewar v. Dewar (1975);

Sekhon v. Alissa (1989); Tinsley v. Milligan (1993);

and Garvin-Mack v. Garvin-Mack (1993).

 If A and B contribute unequally towards the

acquisition of property which is put in their joint

names, there will be a presumed resulting trust with

each party’s equitable interest being proportionate to

his contribution: see Springette v. Defoe (1992) and

Tagoe v. Layea (1993).

  If property is purchased in A’s name by means of a

mortgage and the liability for paying off the mortgage

falls on A and B, a resulting trust will be presumed in

B’s favour in proportion to his liability: see Moate v.

Moate (1948) and Cowcher v. Cowcher (1972).

 A resulting trust will not, however, arise where B’s

contribution to property purchased in A’s name is

merely intended as a loan. See Re Sharpe (1980) and

Clark v. Manjot (1998).

Where A transfers property to B or purchases property in B’s

name, in circumstances where the presumption of advancement

applies, A will be deemed to have intended to make an outright

gift to B, unless there is evidence of a contrary intention. This

presumption arises in three contexts:

(a) Husband to wife: The operation of this presumption

where a husband transfers property to his wife or

 purchases property in her name is illustrated by cases

like, Re Eykyn’s Trusts (1877); Thornley v. Thornley

(1893); Gascoigne v. Gascoigne (1918); and Tinker v.

Tinker (1970). This presumption has, however, never

been extended to a man’s mistress: see Soar v. Foster

(1858); Diwell v. Farnes (1959); and Garvin-Mack v.

Garvin-Mack (1993). See Heseltine v. Heseltine

(1975) and Abrahams v. Trustees of the Property of

Abrahams (1999).

In recent decades, wives have become considerably less

economically dependent on their husbands than they were when

the presumption was conceived. In recognition of this, it has

been suggested in Silver v. Silver (1958) and Pettitt v. Pettitt

(1970) that, although the wife’s presumption has not been

dispensed with, it ought to be accorded less weight than it was in

bygone years.
(b) Father to legitimate (or illegitimate child): The relationship

between a father and his legitimate child has long given rise

to a presumption of advancement: see Lord Grey v. Lady

Grey (1677); Crabb (1834); Re Roberts (1946); and

Shephard v. Cartwright (1955). Note however, that

McGrath v. Wallis (1995) suggests that the courts are now

considerably less inclined to rely on this presumption than

they were in the past.

There is no corresponding presumption as between mother and

child (see Re De Visme (1863); Bennet v. Bennet (1879); and

Ward v. Snelling (1994)); though it was stated in Bennet that ‘in

the case of a mother …. it is easier to prove a gift …. very little

evidence beyond the gift …….., there being very little motive

required to induce a mother to make a gift to her child’.

(c) Persons in loco parentis: Where A assumes the position

of B’s lawful father, A is said to be in loco parentis: see

 Pye (1811). If A transfers property to B or purchases

property in B’s name, a presumption of advancement will

arise in B’s favour. see Ebrand v. Dancer (1680)

(grandfather-grandchild); Re Paradise Motor Co (1968)

(stepfather-stepson); and Beckford v. Beckford (1774)

(father-illegitimate child).

Rebutting the presumptions

Where A transfers property to B or purchases property in B’s

name, the onus of rebutting the presumption of resulting trust

rests with B. He may do so either:

 By proving that the relationship between the parties is one

which raises a presumption of advancement in B’s favour;

or

 By giving evidence of the acts or declarations of either

party or of other circumstances which indicate that A

wished to confer a beneficial interest on B. Such evidence

 was found to exist in cases like Fowkes v. Pascoe (1875);

Standing v. Bowring (1885); Ward v. Snelling (1994); and

Bradbury v. Hoolin (1998).

Conversely, where A transfers property to B or purchases

property in B’s name and the operative presumption is of

advancement, the onus is on A to rebut this presumption. Again,

this may be done by evidence relating to acts and declarations of

the parties or the circumstances surrounding the transfer. Cases

in which this presumption was rebutted include Lord Grey v.

Lady Grey (1677); Scawin v. Scawin (1841); Warren v. Gurne

(1944); Marshall v. Crutwell (1875); Simpson v. Simpson

(1992); and McGrath v. Wallis (1995).

The rules in Shephard v. Cartwright

Where the evidence adduced to rebut either presumption

consists of acts or declarations, the case of Shephard v.

Cartwright (1955) lays down two rules, namely that:

1. acts/declarations made before or at the time of the transfer

or purchase are admissible either for or against the maker;

while

2. acts/declarations made after the transfer or purchase has

been concluded are admissible in evidence only against the

maker.

Where, in furtherance of some illegal purpose, A purchases

property in B’s name or transfers property to B, the ‘reliance

principle’ comes into play. The effect of this principle depends

on whether the purchase or transfer is one which gives rise to the

presumption of advancement or of resulting trust.

(a) The presumption of advancement

Where A transfers property to B (who happens to be his wife or

child) in pursuance of an illegal purpose (for example, to

defraud a third party), ‘A’ can only rebut the presumption of

advancement in B’s favour by relying on evidence of the illegal

purpose. Cases such as Gascoigne v. Gascoigne (1918); Re

Emery’s Investment (1959); Chettiar v. Chettiar (1962); and

Tinker v. Tinker (1970) have decided that ‘A’ will not be

allowed to adduce evidence of this illegal purpose and, in effect,

will not be able to claim the property beneficially.

The Court of Appeal, however, held in Tribe v. Tribe (1995) that

a father who transferred shares to his son in order to escape

liability under impending litigation could rely on this evidence

to rebut the presumption of advancement where he withdraw

from the illegal purpose before it was carried into effect. This

was affirmed per obiter by Nourse LJ in Eeles v. Williams

(1998).

EFFECTS OF A LEGALLY CONSTITUTED GIFT

In the Supreme Court case of Okai v. Okoe [2003-2004]

SCGLR 393 at page 396, Ampiah JSC said “Every gift when

completed is irrevocable, except gifts between parent and

child which can be recalled or exchanged at any time by the

parent in his or her lifetime, or by his will or dying

declarations”.

(b) The Presumption of resulting trust

Where A has purchased property in B’s name or transferred

property to B (who is not his wife or child), it was held in

Tinsley v. Milligan (1993) that the fact that this was done in

pursuance of an illegal purpose will not deprive A of his

beneficial interest. This is because a presumption of resulting

trust arises in A’s favour which means that he need not adduce

any evidence and so has no need to rely on the illegal purpose to

establish his entitlement. See also Silverwood v. Silverwood

(1997); Lowson v. Combes (1998); and Eeles v. Williams

(1998).

The fact that A can assert his beneficial interest in property

which he puts in B’s name where there is a presumption of

resulting trust but not where there is a presumption of

advancement has led to some criticism of the reliance principle

by academic commentators like Martin and Penner, as well as in

cases such as Siliverwood v. Silverwood (1997) (Nourse LJ) and

Tribe v. Tribe (Judge Weekes). Nourse LJ declared, for instance,

that:

…..it is not easy to understand or to see any public or other

policy or advantage behind a rule which regulates a

claimant’s right to recover solely according to whether the

transfer is to his child or wife …. on the one hand or his

brother, grandchild or anyone else on the other.

Similar sentiments were expressed in the 1999 Law Commission

Consultation Paper on Illegal Transactions, which states that

such arbitrariness is difficult to defend and offers a powerful

argument for reform in this area.

Automatic resulting trusts

As Lord Diplock declared in Vandervell v. IRC (1967), ‘equity

abhors a beneficial vacuum’. Accordingly, where S transfers

property to T under a trust which leaves some or all of the

beneficial interest undisposed of, equity automatically fills the

vacuum by requiring T to hold the outstanding equitable interest

on a resulting trust for S. The main contexts in which such

resulting trusts arise are as follows:

(1) Where property passes to T under an express trust which

is not effectively declared: see Re Keen (1937) and Re

Vandervell (No 2) (1974).

(2) Where an express trust fails because it is subject to a

condition which is not fulfilled: As in Re Ames’

Settlement (1946).

(3) Where a trust fails to dispose of the whole beneficial

interest: Such as where S gives Whitehouse to T on trust

for B for life without stating what will happen when B

 dies. This is often due to bad drafting and, as Harman LJ

remarked in Re Cochrane (1955), ‘a resulting trust is the

last resort to which the law has recourse when the

draftsman has made a blunder’.

(4) The position where a surplus is left in the trust fund after

its purpose h as been fulfilled: In such an event, unless it

is established that the settler/testator intended the trustee

to retain the surplus, two possibilities emerge from the

decided cases:

 In one line of cases, the courts have held that the

beneficiaries were not entitled to the whole fund

absolutely but only to so much of it as was needed for

the specified purpose so that, once the purpose is

fulfilled, there will be a resulting trust of the surplus.

See Re Sanderson’s Trust (1851) (trust fund for the

Abbott Fund (1900) (trust fund for the upkeep of two

 deaf and dumb women). After the deaths of the

beneficiaries, in both cases there was a resulting trust

of the surplus in their respective funds.

 The opposite conclusion was reached in Re Andrew’s

Trust (1905) (trust fund to educate children of

deceased clergymen) and Re Osoba (1979) (trust of

testator’s residuary estate to educate his daughter up to

university level). In these cases, the court regarded the

specified purpose as no more than the motive for the

gift and held that the respective beneficiaries were

absolutely entitled to the trust fund and could claim

the surplus after they had completed their education.

This reasoning was adopted in Davis v. Hardwick

(1999). Here, the people of a village raised a trust

fund to enable a child born in the village to undergo

pioneering liver transplant surgery and there was a

 substantial surplus after treatment was completed. It

was held that the beneficiary was entitled to the fund

absolutely and not only to so much of it as was

required for his treatment.

5. The position where an unincorporated association

ceases to exist: Where this occurs, the association’s

surplus funds are sometimes dealt with by imposing a

resulting trust in favour of the contributors: see, for

example, Re Printers and Transferrers Society (1899);

Re Hobourn Aero Components etc Fund (1946); Davis

v. Richards and Wallington Industries (1990); and Air

Jamaica v. Charlton (1999).

In other cases, however, the courts have favoured a contractual

approach. The substance of this approach is that the constitution

or other body of rules of an incorporated association constitutes

a contract which binds all its members and it is this contract

which should determine what will happen to the association’s

surplus funds in the event of dissolution. This approach was

adopted with varying results in a host of cases, such as Cunnack

v. Edwards (1896); Re West Sussex Constabulary etc Fund

Trusts (1971); Re Sick and Funeral Society of St John’s Sunday

School, Glolcar (1973); Re Bucks Constabulary Friendly

Society (No. 2) (1979); and Re GKN Bolts and Nuts Club

(1982).

6. The position where money is made available for a stated

purpose but can no longer be applied for that purpose. It

emerges from the cases of Barclays Bank v. Quistclose

Investments (1970); Carreras Rothman v. Freeman

Mathews Treasure (1985); and Re EVTR (1987) that this

will give rise to a resulting trust. The effect of this

‘Quistclose-type’ resulting trust is that the party into

whose hands the money was paid will be obliged to hold

 it on trust for the party who made the money available in

the first place. However, where such a payment is made

without being required to be set apart and applied for a

particular purpose, it will not be subject to a quistclose-

type trust. See Guardian Ocean Cargoes v. Banco do

Brasil (1994).

7. The position where money is paid for a purpose which

turns out to be ultra vires: In the Westdeutsche case, a

bank paid money to a Local Authority (LA) under an

interest swap agreement which was subsequently

declared ultra vires.

The Court of Appeal found the LA liable to make restitution of

these payments which were made for no consideration not only

at law but also in equity; and held that, even though the legal

title to the money had passed to the LA, equitable title remained
in the bank. In effect, the LA held the money on resulting trust

for the bank.

The decision was, however, overturned by the House of Lords

which held that the payments made by the bank under the void

transaction were recoverable at law as money had and received

but not held on resulting trust by the recipient LA. In his

leading judgment, Lord Browne-Wilkinson restated the

traditional, conscience-based role of the trust in English law.

CONSTRUCTIVE TRUST

Sykes v Abbey (1995-96) 1 GLR 18 SC, it was held that:

“Since equity looked upon that as done which ought to be done

or which was agreed to be done, where an obligation arose from

contract, equity would go to the aid of the person entitled to the

benefit of the contract and treat as done what should have been

done in his favour as against the person liable to perform it.

Accordingly, since in the instant case, the facts clearly

established that there was actual agreement between the parties

in respect of the disputed land, in that there was a clear intention

on their part that the plaintiff-wife was to have a beneficial

interest in the land, the legal title of which rested with the

defendant-husband, equity had in the circumstances been created

against the defendant and in the plaintiff’s favour, and the court

had to give effect to it. Accordingly, the absence of

documentary evidence in respect of the agreement to convey the

land on which stood the house in dispute, would not be allowed

to be used by the defendant as a weapon against the plaintiff.

The defendant would accordingly be held to be holding the land

as a trustee upon a trust to give effect to the beneficial interest of

the plaintiff as cestui que trust.”

Also in the case of Bou-Chedid v. Yalley (1976) 2 G.L.R. 259

CA, it was held that:

Per Jiagg J.A. An oral contract for the sale of land coupled with

an admission by the vendor in writing that the full purchase

price had been paid and a promise from the vendor, also in

writing, to execute a conveyance in favour of the purchaser,

creates a constructive trust and equity considers the vendor until

the conveyance is executed, as holding the legal title for the

purchaser. Consequently the vendor cannot deal with the legal

title in a way detrimental to the interests of the purchaser.

The estate that devolved upon the co-defendant after the death of

his wife was that of a legal estate held in constructive trust for

the plaintiff. In the interest of justice, the court must prevent the

co-defendant, a constructive trustee, from taking any action that

deprives the plaintiff of possession of the land in dispute.”

Again, in the case of Re Yalley (Decd); Yalley v. Kells (2001-

2002) SCGLR 762 SC, it was held that:

Held, unanimously dismissing the appeal from the decision of

the Court of Appeal: Where a trustee obtains a renewal of a

lease in his name, he will be held a constructive trustee of the

new lease. The rule is founded on the principle that a trustee,

with certain exceptions, may not either directly or indirectly

make a profit from his fiduciary relationship. In the instant case,

it has not been shown that the right or hope of renewal of the

lease granted to the deceased family member had been

determined by the lessor. On the expiration of the lease after the

death of the deceased, the family member who was holding the

lease did so in respect of the unexpired portion of the lease and

had a duty towards family to renew it on their behalf. The

failure of that member of the family to renew the lease on behalf

of the family under the pretext that the property had been given
to him under a dying declaration or gift from his own mother,

constituted a breach of his fiduciary relationship towards the

family. He therefore held the lease as a constructive trustee.

Keech v. Sanford (1926) Sel Cas King 61; 25 ER 233 and Biss

v. Biss (1903) 2 Ch 40 cited…

Also in the case of Gateway Worship Center v. David Soon

Boon Seo (2009) 24 M.L.R.G. 1 at 12 -17 SC

“A constructive trust arises when, although there is no express

trust affecting specific property, equity considers that the legal

owner should be treated as a trustee for another. This happens,

for instance, when one who is already a trustee takes advantage

of his position to obtain a new legal interest in the property, as

where a trustee of leaseholds takes a new lease in his own name.

The rule applies where a person, although not an express trustee,

is in a fiduciary position….A person receiving property subject

to a trust becomes a constructive trustee if … although he

received it without notice of the trust, he was not a bonafide

purchaser for value without notice of the trust, and yet, after he

had subsequently acquired notice of the trust, he dealt with the

property in a manner inconsistent with the trust.

Also, da Rocha and Lodoh, in Ghana Land Law and

Conveyancing (2nd edition) at pages 105-106 explains

constructive trust at pages 1717-118 as follows:

‘A constructive trust is a trust which arises independently of the

intention of the parties but it is imposed by equity because the

circumstances demand that the person holding the title to the

property should be considered as a trustee. This trust usually

arises by operation of equity where a fiduciary relationship is

not permitted to profit from his position…..”’

 “a. There must be no express intentions of the parties to

create a trust (this is because the intentions of the

parties are totally irrelevant; there being no

requirement for an express trustee as in express trusts,

neither is there a requirement for the parties to be ad

idem as in the law of contract).

b. There must be in existence a fiduciary relationship.

c. The fiduciary relationship must specifically be in the

context of trust such as make the fiduciary a trustee in

equity.”

Also in the case of Soonboon Seo v Gateway Worship Centre

(2009) SCGLR 278 SC at page 282-283, it was held that:

“A volunteer in law is a person who is an object of a bounty

under a will or settlement as opposed to one who gives valuable

consideration. Therefore, a volunteer under a trust is a

beneficiary who has provided no valuable consideration in

respect of the trust and who is not within the confines of

marriage. The significance of a volunteer in the law of trusts is

seen in terms of whether the trust is completely or incompletely

constituted. A trust is completely constituted when the trust

property is vested in the trustees for the benefit of the

beneficiaries. Until the property is conveyed to the trustee or the

settlor declares himself as a trustee for the intended cestui que

trust, the trust is incompletely constituted. The effect of an

incompletely constituted trust is that, only beneficiaries who

have given value (not volunteers) can enforce it and the court

will only perfect the trust in favour of the one who has given

value, following the maxim: “Equity considers as done that

which ought to be done.” Thus equity will not perfect an

imperfect trust in favour of a volunteer. The effect of a

completely constituted trust, however, is that, the beneficiary

may enforce it whether or not he has given value. From the

evidence on record, it is very clear that the philanthropist

completely vested the funds raised in Korea (the subject-matter

of the trust) in the defendant-appellant as trustee, which funds

the defendant-appellant even kept in his own bank account as

the legal owner. The trust in question is, therefore, completely

constituted. Thus, whether or not the second plaintiff church is

a volunteer in equity is irrelevant, the trust having been

completely constituted or perfected. The trust is, therefore,

enforceable by the second plaintiff church. Milroy v Lord

(1862) 4 De GF & J at 274-275; Ellison v Ellison (1802) 6 Ves

656 at 662; Jefferys v Jefferys (1841) Cr & Ph 138; and Re

Adlard [1964] Ch 29 cited.

“An express trust requires the “three certainties” of intention,

subject matter and objects to be valid. A trust can be express or

implied (resulting or constructive) and, where it has a public

character, it can be a charitable trust in which case the cy-pre

doctrine can be applied to save the trust from failing. The facts

of this case do not support the creation of an express trust. The

facts clearly support the creation of a constructive trust (an

implied trust). Consequently, the defendant-appellant held the

funds in question on a constructive trust for the second plaintiff

church. A valid trust had been created and therefore it is

enforceable.

DUTIES OF TRUSTEES

A fiduciary is a person who holds a position of trust in relation

to another and who must, therefore, act for that person’s benefit

such as a solicitor in respect of his client. The trustee is legally

responsible for the management of the whole trust properties in

law and equity. He is again responsible and accountable to all

the beneficiaries respecting the said properties.

In the case of Larbi v. Kuma & Anor. (1987-88) 1 GLR 414 CA,

it was held that:

“The true legal position was that all trustees had to normally join

in the performance of a trust and in general were deemed to have

done so. A trustee who did not act had to disclaim and such a

disclaimer might be by deed or conduct. On the evidence the

only other trustee, apart from B, was G who had not taken any

active part in the affairs of the union, even though the members

had not thought it fit to remove him. The members also had not

met to validly appoint any new trustees. Since from the

inception of the union till 1973, it was only B who had actively

represented the union in all matters affecting the land, by G’s

own conduct and that of the rest of the union members, it could

reasonably be presumed that B had been accepted to act fro the

union in respect of all matters affecting the land. Since G had

failed to act, the duty devolved on the active trustee, namely B.

B therefore was competent to grant a portion of the union’s

leased land to anybody. Windsor Steam Coal Co Ltd. Re (1928)

Ch 609 applied.”

Also in the case of Saaka v Dahali [1984-86] 2 GLR 774 at 784,

CA stated:

“A person in a fiduciary position is not permitted to profit from

his position. The general principle is that whenever there is or

has been a fiduciary relationship, the beneficial owner of an

equitable interest in property may trace it into the hands of

anyone holding the property, except a bonafide purchaser for

value without notice whose title is, as usual, inviolable. Once it

is not a bonafide purchaser for value without notice who has

acquired the land in dispute, the money raised in Korea for the

benefit of the second plaintiff church is traceable in equity to

any hand whatsoever and in any form it, or part thereof, has

been used to acquire. Therefore, whatever has been acquired by

any monies that are proven to be part of the funds from Korea is
deemed to be for the benefit of the church. This is a matter of

law and there was no need for either the circuit court or the

Court of Appeal to make any particular finding in that regard.

Re Biss [1903] 2 Ch 40 and Re Diplock’s Estate [1947] Ch 716

at 744-745 cited.

AA

EQUITY & TRUSTS, LLB YEAR IV.

RESULTING TRUST.

There are certain situations where the courts may

conclusively presume the existence of trust without

having been specifically declared by a settler. Such trusts

may either be resulting or constructive trust.

Matters for discussions.

1. The operation of presumption of resulting trust and

advancement and the rules governing their rebuttal.

2. The circumstances in which resulting trust arise

automatically.

3. The relevance of resulting trust.

A resulting trust may be explained as where a legitimate

or legal owner of property voluntarily and unequivocally

transfers or otherwise expressly directs the transfer of

property to which he is beneficially entitled to another

person without expressly or by necessary implication

declaring such a person a trustee of the property whereby

such a person shall be compelled to hold the property in

trust for the legal owner.

Two types of Resulting Trust.

i. Presumed Resulting Trust.

ii. Automatic Resulting Trust.

PRESUMED RESULTING TRUST.

It arises where there is a voluntary transfer of property or

purchase in the name of another.

Automatic Resulting Trusts.

Automatic Resulting Trusts are imposed where a settler

creates a trust that fails to dispose of his entire beneficial

interest in the settled property. According to Megarry

VC, this of resulting trust “does not depend on any

intentions or presumptions but is the automatic

consequence of the settlor’s failure to dispose of what is

vested in him”.
1. Voluntary transfer of property.

See:1. Standing v. Bowing (1885).

2. Re Vindgraddff (1935)

3. Re Muller (1953)

4. Thavorvn v. BCCI (1985)

II. Purchase in another’s name.

(a) Where A purchases personal property in B’s name,

there is a presumed resulting trust in A’s favour: see

Fowkes v. Pascoe (1875); Shephard v. Cartwright

(1955); and Crane v. Davis (1981). Thus in the case

of in Finch v. Finch (1808) 15 Ves. 43

“The law is clear that on the one hand where a man

purchases shares and therefore registered in the name of a

stranger there is a resulting trust in favour of the

purchaser on the other hand, if they are registered in the

name of a child or one to whom the purchaser stood in

loco parentis, there is no such presumption of resulting

trust but a presumption of advancement. Equally it is

clear that the presumption may be rebutted but should not

give way to slight circumstances.”

Real property: Where A provides the money for the

purchase of real property (whether freehold or leasehold)

and directs that it should be conveyed or assigned to B or

put in B’s name, B is presumed to hold it on a resulting

trust for A. Thus in the Supreme Court case of In Re

Fianko Akotuah (2007-2008) SCGLR at page 165, it was

held that:
“Held, unanimously dismissing the appeal from the

judgment of the Court of Appeal: it is settled law in

equity that the trust of a legal estate, whether

freehold, copyhold, or leasehold,; whether taken in

the names of the purchasers and others jointly, or in

the name of others without that of the purchaser;

whether in one name or several; whether jointly or

successive, results to the man who advances the

purchase-money. In such cases, the provider of the

purchase-money or the trust owner in equity is not

estopped from averring and proving that to be the

truth of the transaction; neither can they be estopped

from relating the real truth known to them at the time

of making of the statement. In such circumstances, a

 person with his own equal and clear knowledge to the

contrary, cannot contend at common law or in terms

of section 26 of the Evidence Decree, 1975 (NRCD

323) that the other party in question has, by his own

statement, act or omission, intentionally and

deliberately caused or permitted another person to

believe a thing to be true and to act upon such belief.

Clearly, section 26 does not apply to such situations.”

See Dyer v. Dyer (1788) and Gross v. French (1975).

Thus in the case of In Re Wiredu (Decd) Osei v. Addai

(1982-83) GLR 501, it was held that:

“The trust of a legal estate resulted to the man who

advanced the purchase money. The purchaser should

however seek to establish the trust as soon as possible

 for the presumption was weakened by lapse of time.

After the death of the legal owner the true purchaser

could only establish his claim successfully by parol

evidence of the clearest nature. In deciding where the

preponderance of evidence lay due regard should be

had to the balance of probabilities as well as the

balance of improbabilities.”

Contributions: A resulting trust may arise where A and

B both contribute towards purchasing property. In

particular:

 If A and B contribute towards the purchase of

property which is conveyed to B, B holds the

legal title on resulting trust for A proportionate

to his contribution: see Bull v. Bull (1955);

 Dewar v. Dewar (1975); Sekhon v. Alissa

(1989); Tinsley v. Milligan (1993); and Garvin-

Mack v. Garvin-Mack (1993).

 If A and B contribute unequally towards property

which is put in their joint names, there will be a

presumed resulting trust with each party’s

equitable interest being proportionate to his

contribution: see Springette v. Defoe (1992) and

Tagoe v. Layea (1993).

 If property is purchased in A’s name by means of

a mortgage and the liability for paying off the

mortgage falls on A and B, a resulting trust will

be presumed in B’s favour in proportion to his

 liability: see Moate v. Moate (1948) and

Cowcher v. Cowcher (1972).

 A resulting trust will not, however, arise where

B’s contribution to property purchased in A’s

name is merely intended as a loan. See Re

Sharpe (1980) and Clark v. Manjot (1998).

Where A transfers property to B or purchases property in

B’s name, in circumstances where the presumption of

advancement applies, A will be deemed to have intended

to make an outright gift to B, unless there is evidence of a

contrary intention. This presumption arises in three

contexts:

(a) Husband to wife: The operation of this

presumption where a husband transfers property

 to his wife or purchases property in her name is

illustrated by cases like Re Eykyn’s Trusts

(1877); Thornley v. Thornley (1893); Gascoigne

v. Gascoigne (1918); and Tinker v. Tinker

(1970). This presumption has, however, never

been extended to a man’s mistress: see Soar v.

Foster (1858); Diwell v. Farnes (1959); and

Garvin-Mack v. Garvin-Mack (1993).

Moreover, the presumption into a husband’s

name by his wife. See Heseltine v. Heseltine

(1975) and Abrahams v. Trustees of the Property

of Abrahams (1999).

Thus in the case of Usser & Ors. v. Darko (1977) 1 GLR

476, CA, it was held that:

 “The plaintiff’s vendor, M in whose name the

property was purchased by E, had the legal title to the

property, but she held that title as a bare trustee i.e.

on a resulting trust for the purchaser, E, in whom

resided the beneficial interest. The equitable

presumption of resulting trust was rebuttable by the

equitable presumption of advancement and such

cases were strictly circumscribed. It was applicable

where the purchase was made in the name of a

legitimate or illegitimate child, a grandchild whose

father was dead or in the name of a wife of the

purchaser.”

Also in the case of Berchie Badu v. Berchie Badu (1987)

2 GLR 260 CA, it was held that:

 “Where spouses jointly acquire property but the legal

estate was vested solely in one spouse, the amount of

the share of the other spouse in the beneficial interest

in cases where he had made a direct or identifiable

contribution to the acquisition had to be proportionate

to the payment made. But where the contributing

spouse made indirect or unidentifiable contributions,

although his share then would be less easy to

evaluate, the difficulty in the evaluation did not in

itself justify the application of the maxim equality is

equity.”

Again in the case of Quist v. George (1974) 1 GLR, it was

held that:
 “It was settled that where a husband transferred

property to his wife, the presumption of advancement

was applicable. Therefore the onus of proving that

no such gift was intended would be on the husband.

However, no such presumption would arise when a

wife transferred property in the name of her husband.

Prima facie the husband would be regarded as a

trustee for her wife.”

Again also in the case of Reindorf @ Sacker v. Reindorf

(1974) 2 GLR 38, it was held that:

“Since the properties were purchased in the joint

names of the parties with money provided by the wife

alone, without the wife intending to make a gift to the

 husband of the properties, the husband was in such a

case presumed to be holding the properties in trust for

the evidence of rebutting the presumption a resulting

trust had been created in favour of the wife.”

See also in the case of Benam @ Baah v. Odum (1969)

CA, Nequrye v. Acoltse (1969) CC 51, CA Adv, Ansah-

Add v. Addo; Ansah (2001-02) SCGLR 762.

In recent decades, wives have become considerably less

economically dependent on their husbands than they were

when the presumption was conceived. In recognition of

this, it has been suggested in Silver v. Silver (1958) and

Pettitt v. Pettitt (1970) that, although the wife’s

presumption has not been dispensed with, it ought to be

accorded less weight than it was in bygone years.

(b) Father to legitimate child: The relationship between

a father and his legitimate child has long given rise to

a presumption of advancement: see Lord Grey v.

Lady Grey (1677); Crabb (1834); Re Roberts (1946);

and Shephard v. Cartwright (1955). Note, however,

McGrath v. Wallis (1995) which suggests that the

courts are now considerably less inclined to rely on

this presumption than they were in the past. Thus in

the case of Kwarteng v. Amassah & Ors. (1962) 1

GLR 241 SC, it was held that:

“It is well established law that there is a presumption of

advancement in the case of voluntary conveyance by a

parent to a child which presumption however is

rebuttable. It would also seem to be reasonably clear that

principles applicable in the cases of purchase in the names

of children are equally applicable in the case of a direct

gift.”

There is no corresponding presumption as between

mother and child (see Re De Visme (1863); Bennet v.

Bennet (1879); and Ward v. Snelling (1994)); though it

was stated in Bennet that ‘in the case of a mother …. it is

easier to prove a gift …. very little evidence beyond the

gift is wanted, there being very little motive required to

induce a mother to make a gift to her child’.

(c) Persons in loco parentis: Where A assumes the

position of B’s lawful father, A is said to be in loco

parentis: see Ex p Pye (1811). If A transfers property

to B or purchases property in B’s name, a

 presumption of advancement will arise in B’s favour:

see Ebrand v. Dancer (1680) (grandfather-

grandchild); Re Paradise Motor Co (1968)

(stepfather-stepson); and Beckford v. Beckford

(1774) (father-illegitimate child).

Rebutting the presumptions

Where A transfers property to B or purchases property in

B’s name, the onus of rebutting the presumption of

resulting trust rests with B. He may do so either:

 By proving that the relationship between the parties

is one which raises a presumption of advancement in

B’s favour; or

 By giving evidence of the acts or declarations of

either party or of other circumstances which indicate

 that A wished to confer a beneficial interest on B.

Such evidence was found to exist in cases like

Fowkes v. Pascoe (1875); Standing v. Bowring

(1885); Ward v. Snelling (1994); and Bradbury v.

Hoolin (1998).

The passage in Snell’s Equity (24th ed.) p. 153;

“Both the presumption of a resulting trust and the

presumption of advancement can be rebutted by

evidence of the actual intentions of the purchaser. In

these cases the courts put itself in the position of a

jury, and considers all the circumstances of the case,

so as to arrive at the purchaser’s real intention, it is

only where there are no evidence to contradict it that

 the presumption of a resulting trust, or of

advancement, as the case may be will prevail.”

Thus in the case of Cole v. Cole (1966) GLR 177, it was

held that:

“The house was conveyed to the defendant ostensibly

for his own use but for a purpose which the defendant

failed to carry out. Consequently there was a

resulting trust of the house in favour of the plaintiff.”

Conversely, where A transfers property to B or purchases

property in B’s name and the operative presumption is of

advancement, the onus is on A to rebut this presumption.

Again, this may be done by evidence relating to acts and

declarations of the parties or the circumstances

surrounding the transfer. Cases in which this presumption

was rebutted include Lord Grey v. Lady Grey (1677);

Scawin v. Scawin (1841); Warren v. Gurne (1944);

Marshall v. Crutwell (1875); Simpson v. Simpson (1992);

and McGrath v. Wallis (1995).

The rules in Shephard v. Cartwright

Where the evidence adduced to rebut either presumption

consists of acts or declarations, the case of Shephard v.

Cartwright (1955) lays down two rules, namely that:

1. acts/declarations made before or at the time of the

transfer or purchase are admissible either for or

against the maker; while

2. acts/declarations made after the transfer or purchase

has been concluded are admissible in evidence only

against the maker.

Where, in furtherance of some illegal purpose, A

purchases property in B’s name or transfers property to B,

the ‘reliance principle’ comes into play. The effect of this

principle depends on whether the purchase or transfer is

one which gives rise to the presumption of advancement

or of resulting trust.

(a) The presumption of advancement

Where A transfers property to B (who happens to be his

wife or child) in pursuance of an illegal purpose (for

example, to defraud a third party), A can only rebut the

presumption of advancement in B’s favour by relying on

evidence of the illegal purpose. Cases such as Gascoigne

v. Gascoigne (1918); Re Emery’s Investment (1959);

Chettiar v. Chettiar (1962); and Tinker v. Tinker (1970)

have decided that A will not be allowed to adduce

evidence of this illegal purpose and, in effect, will not be

able to claim the property beneficially.

The Court of Appeal, however, held in Tribe v. Tribe

(1995) that a father who transferred shares to his son in

order to escape liability under impending litigation could

rely on this evidence to rebut the presumption of

advancement where he withdraw from the illegal purpose

before it was carried into effect. This was affirmed per

obiter by Nourse LJ in Eeles v. Williams (1998).

(b) The Presumption of resulting trust

Where A has purchased property in B’s name or

transferred property to B (who is not his wife or child), it

was held in Tinsley v. Milligan (1993) that the fact that

this was done in pursuance of an illegal purpose will not

deprive A of his beneficial interest. This is because a

presumption of resulting trust arises in A’s favour which

means that he need not adduce any evidence and so has

no need to rely on the illegal purpose to establish his

entitlement. See also Silverwood v. Silverwood (1997);

Lowson v. Combes (1998); and Eeles v. Williams (1998).

The fact that A can assert his beneficial interest in

property which he puts in B’s name where there is a

presumption of resulting trust but not where there is a

presumption of advancement has led to some criticism of

the reliance principle by academic commentators like

Martin and Penner, as well as in cases such as

Siliverwood v. Silverwood (1997) (NOurse LJ) and Tribe

v. Tribe (Judge Weekes). Nourse LJ declared, for

instance, that:

…..it is not easy to understand or to see any public or

other policy or advantage behind a rule which

regulates a claimant’s right to recover solely

according to whether the transfer is to his child or

wife …. on the one hand or his brother, grandchild or

anyone else on the other.

Similar sentiments were expressed in the 1999 Law

Commission Consultation Paper on Illegal Transactions,

which states that such arbitrariness is difficult to defend

and offers a powerful argument for reform in this area.

Automatic resulting trusts

For summary, see table on facing page.

As Lord Diplock declared in Vandervell v. IRC (1967),

‘equity abhors a beneficial vacuum’. Accordingly, where

S transfers property to T under a trust which leaves some

or all of the beneficial interest undisposed of, equity

automatically fills the vacuum by requiring T to hold the

outstanding equitable interest on a resulting trust for S.

The main contexts in which such resulting trusts arise are

as follows:
(5) Where property passes to T under an express trust

which is not effectively declared: see Re Keen

(1937) and Re Vandervell (No 2) (1974).

(6) Where an express trust fails because it is subject to

a condition which is not fulfilled: As in Re Ames’

Settlement (1946).

(7) Where a trust fails to dispose of the whole

beneficial interest: Such as where S gives

Blackacre to T on trust for B for life without

stating what will happen when B dies. This is

often due to bad drafting and, as Harman LJ

remarked in Re Cochrane (1955), ‘a resulting trust

 is the last resort to which the law has recourse

when the draftsman has made a blunder’.

(8) The position where a surplus is left in the trust fund

after its purpose has been fulfilled: In such an

event, unless it is established that the

settler/testator intended the trustee to retain the

surplus, two possibilities emerge from the decided

cases:

 In one line of cases, the courts have held that the

beneficiaries were not entitled to the whole fund

absolutely but only to so much of it as was

needed for the specified purpose so that, once the

purpose is fulfilled, there will be a resulting trust

of the surplus. See Re Sanderson’s Trust (1851)

 (trust fund for the Abbott Fund (1900) (trust fund

for the upkeep of two deaf and dumb women).

After the deaths of the beneficiaries, in both

cases there was a resulting trust of the surplus in

their respective funds.

 The opposite conclusion was reached in Re

Andrew’s Trust (1905) (trust fund to educate

children of deceased clergymen) and Re Osoba

(1979) (trust of testator’s residuary estate to

educate his daughter up to university level). In

these cases, the court regarded the specified

purpose as no more than the motive for the gift

and held that the respective beneficiaries were

absolutely entitled to the trust fund and could

 claim the surplus after they had completed their

education. This reasoning was adopted in Davis

v. Hardwick (1999). Here, the people of a

village raised a trust fund to enable a child born

in the village to undergo pioneering liver

transplant surgery and there was a substantial

surplus after treatment was completed. It was

held that the beneficiary was entitled to the fund

absolutely and not only to so much of it as was

required for his treatment.

5. The position where an unincorporated

association ceases to exist: Where this occurs,

the association’s surplus funds are sometimes

dealt with by imposing a resulting trust in favour

 of the contributors: see, for example, Re Printers

and Transferrers Society (1899); Re Hobourn

Aero Components etc Fund (1946); Davis v.

Richards and Wallington Industries (1990); and

Air Jamaica v. Charlton (1999).

In other cases, however, the courts have favoured a

contractual approach. The substance of this approach is

that the constitution or other body of rules of an

incorporated association constitutes a contract which

binds all its members and it is this contract which should

determine what will happen to the association’s surplus

funds in the event of dissolution. This approach was

adopted with varying results in a host of cases, such as

Cunnack v. Edwards (1896); Re West Sussex

Constabulary etc Fund Trusts (1971); Re Sick and Funeral

Society of St John’s Sunday School, Glolcar (1973); Re

Bucks Constabulary Friendly Society (No. 2) (1979); and

Re GKN Bolts and Nuts Club (1982).

8. The position where money is made available for a

stated purpose but can no longer be applied for that

purpose. It emerges from the cases of Barclays

Bank v. Quistclose Investments (1970); Carreras

Rothman v. Freeman Mathews Treasure (1985);

and Re EVTR (1987) that this will give rise to a

resulting trust. The effect of this ‘Quistclose-type’

resulting trust is that the party into whose hands the

money was paid will be obliged to hold it on trust

 for the party who made the money available in the

first place. However, where such a payment is

made without being required to be set apart and

applied for a particular purpose, it will not be

subject to a quistclose-type trust. See Guardian

Ocean Cargoes v. Banco do Brasil (1994).

9. The position where money is paid for a purpose

which turns out to be ultra vires: In the

Westdeutsche case, a bank paid money to a local

authority (LA) under an interest swap agreement

which was subsequently declared ultra vires.

The Court of Appeal found the LA liable to make

restitution of these payments which were made for no

consideration not only at law but also in equity; and held

that, even though the legal title to the money had passed

to the LA, equitable title remained in the bank. In effect,

the LA held the money on resulting trust for the bank.

The decision was, however, overturned by the House of

Lords which held that the payments made by the bank
under the void transaction were recoverable at law as
money had and received but not held on resulting trust by
the recipient LA. In his leading judgment, Lord Browne-
Wilkinson restated the traditional, conscience-based role
of