Legal Principles and Key Points
- In the case of Re Vinogradoff  W.N. 68, it was held that it was on the recipient of a gift to demonstrate the intention for the donor to provide such a gift. In the absence of evidence proving a gift, the presumption is that the property will be held on resulting trust for the donor’s estate.
Facts of the Case
- C’s grandmother, during her lifetime, transferred £800 worth of a War Loan into the joint names of herself and C, then aged 4. C’s grandmother continued to receive the dividends of the War Loan until her death.
- By her will, C’s grandmother purported to leave her interests in the shares representing the Loan to a third party.
- The executors of the grandmother’s will brought an action to ascertain whether C had any interest in the shares or whether they were rightly left by the terms of the will.
- Farwell J held that C had no beneficial interest as the Loan was held by the joint legal owners on a resulting trust for the grandmother. On her death, it belonged in equity to her estate subject to a resulting trust.
- Did C carry the evidential burden to prove that joint ownership of the Loan was made out as a gift, and on her grandmother’s death C became the sole owner?
Held by the Court of Appeal (Civil Division)
- Finding for C, that in the absence of evidence proving a gift, C held the remaining stock on resulting trust for her grandmother’s estate.
- The Law of Property Act 1925 s20 provides that the appointment of an infant to be a trustee in relation to any settlement or trust shall be voidable. If a minor receives property in circumstances that would create a resulting or constructive trust, he will become a trustee of a property.
- For a resulting trust created by a voluntary transfer, the intention of the donor is paramount. If the donor’s intentions cannot be proven, equity will step in with a resulting trust in the donor’s favour.
- The fundamental idea at work is that the donor did not intend to benefit the donee in any way, despite first appearances from the transaction. The donee receives the property as a volunteer since they provided no consideration for the property. Equity will not assist a volunteer.
- The resulting trust only comes into effect when the transferee becomes aware of the circumstances giving rise to it.
- The court still held the presumption of a resulting trust, even though the granddaughter’s age would suggest her grandmother’s intention was to make a gift. The granddaughter would not become aware of the circumstances creating the resulting trust-and able to act as a trustee in her own right-for over a decade.