Warren v Gurney

Facts:
In 1929, the appellant, then a spinster, was engaged to be married to her present husband. In
that year her father bought a house, "Fairview," and paid 300 for it. The conveyance was
taken in the name of the appellant though the father retained the title deeds which were still in
his possession at the time of his death, which occurred in 1944. On 6 September 1943, the
father signed a document, headed "my wish" in which he gave directions respecting
"Fairview" to the effect that the property was to be divided between his three daughters. The
appellant claimed to be entitled as the owner of "Fairview" to the possession of the title
deeds. The respondents, executors of the will of the appellant's father, denied that the
appellant was the owner of "Fairview" and contended that she was a trustee of the property
for her father.
(The father purchased a house in the name of one of the daughters but subsequently orally
declared that the property was to be enjoyed by all his three daughters in equal shares.)
Held:

The document headed "my wish" was not admissible in evidence. It was in the nature of
a subsequent declaration by the alleged donor, which was not against his own interest,
and it is clearly established that subsequent declarations by the alleged donor are only
admissible if they are against his interest.

There is the fact that the father retained the title deeds from the time of purchase to the
time of his death. One would have expected the father to have handed them over, either
to the plaintiff or her husband, if he had intended the gift.

The contemporaneous declarations of the alleged donor were sufficient to rebut the
presumption of advancement, even if they stood alone. The plaintiff brother gave
evidence that the father said he had been talking to the plaintiffs husband, Warren.
Father said Warren had said if father bought the house he would pay for the house as he
could. Father required property made in my sister's name, so that there could be no
trouble at a later date, as Warren had to pay for it at a later date. Father said he should
keep the deeds as security.

In Re Vandervells Trust (No. 2)

Facts:
V, the controlling shareholder in V.P. Ltd., set up a trust for his children with the defendant
company as trustee. V transferred 100,000 shares in V.P. Ltd. to the Royal College of
Surgeons to provide 150,000 for a chair of pharmacology. The college granted an option to
the trustee company for the transfer of the shares to that company for 5,000 on request
within five years. V intended the trustee company to hold the option on unspecified trusts,
either for his children or for employees of V.P. Ltd. after the college had received 157,000

net in dividends, the trustee company exercised the option by paying 5,000 out of the funds
of the children's settlement to the college who transferred the 100,000 shares to the trustee
company. The intention of the trustee company and of V (who thereafter procured V.P. Ltd. to
declare dividends on the shares which were added to the funds of the children's settlement)
was that the shares should be held on the trusts of that settlement. The revenue claimed that V
had not divested himself absolutely of his interest in the shares and was liable for surtax on
the dividends on the shares paid to the children's settlement. In order to resolve any doubts V,
by deed of January 19, 1965, transferred to the trustee company all or any right, title or
interest which he had in the option, the shares or the dividends to be held on the trusts of the
children's settlement.
Held:
Justice Meggary divided Resulting Trust (RT) into two categories:
(i) In presumed resulting trust, subject to any provisions in the instrument, the matter is one
of intention, with the rebuttable presumption of a resulting trust applying if the intention
is not made manifest.
(ii) For the second category, there is no mention of any expression of intention in any
instrument, or of any presumption of a resulting trust: the resulting trust takes effect by
operation of law, and so appears to be automatic. (automatic resulting trust)
Presumed resulting trusts arise because of the presumed intention of the transferor of
property. Automatic resulting trusts do not depend on any intention of the parties but arise
where the transferor has not disposed of all the beneficial interest.
The first period
The trouble about the trust so stated was that it was too uncertain. The trusts were not
declared or defined with sufficient precision for the trustees to ascertain who the beneficiaries
were. The option should be held either on trust for his children (as an addition to the
children's settlement) or alternatively on trust for the employees of his products company (see
the particulars declared by the executors). He had not made up his mind which of those
should benefit. It is clear law that a trust (other than a charitable trust) must be for
ascertainable beneficiaries. Seeing that there were no ascertainable beneficiaries, there was a
resulting trust for Mr. Vandervell. But if and when Mr. Vandervell should declare any defined
trusts, the resulting trust would come to an end. During the first period, however, Mr.
Vandervell did not declare any defined trusts. The option was, therefore, held on a resulting
trust for him. He had not divested himself absolutely of the shares. He was therefore, liable to
pay surtax on the dividends.
The Second Period
A valid trust was created at the time of the transfer (shares from the college to defendant
company). It was precisely defined. The shares were to be held on the trusts of the children's
settlement. The evidence of intention is indisputable: (i) The trustee company used the
children's money - 5,000 - with which to acquire the shares. This would be a breach of trust
unless they intended the shares to be an addition to the children's settlement. (ii) The trustee
company wrote to the revenue authorities the letter of November 2, 1961, declaring expressly
that the shares "will henceforth be held by them upon the trusts of the [children's] settlement."

(iii) Thenceforward all the dividends received by the trustees were paid by them to the
children's settlement and treated as part of the funds of the settlement. This was all done with
the full assent of Mr. Vandervell.

A resulting trust for the settlor is born and dies without any writing at all. It comes into
existence whenever there is a gap in the beneficial ownership. It ceases to exist whenever
that gap is filled by someone becoming beneficially entitled. As soon as the gap is filled
by the creation or declaration of a valid trust, the resulting trust comes to an end. In this
case, before the option was exercised, there was a gap in the beneficial ownership. So
there was a resulting trust for Mr. Vandervell. But, as soon as the option was exercised
and the shares registered in the trustees' name, there was created a valid trust of the
shares in favour of the children's settlement. Not being a trust of land, it could be
created without any writing. A trust of personalty can be created without writing. Both
Mr. Vandervell and the trustee company had done everything which needed to be done
to make the settlement of these shares binding on them. So there was a valid trust
The third period
Mr. Vandervell had no interest whatsoever in the shares. The deed of that date operated so as
to transfer all his interest thenceforward to the trustee company to be held by them on trust
for the children.