“Like a constructive trust, a resulting trust arises by operation of law, though unlike a constructive trust it gives effect to intention. But it arises whether or not the transferor intended to retain a beneficial interest – he almost always does not – since it responds to the absence of any intention on his part to pass a beneficial interest to the recipient.”

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One of the three certainties required for an express trust is certainty of intention. Lord

Millett however, argues that resulting trusts are not created due to the settlor’s intention to

create a resulting trust and retain a beneficial interest, but rather their lack of intention for

the beneficial interest to be passed to the recipient. It is accepted that both resulting and

constructive trusts arise by operation of law. This means that the parties do not get a

choice as to whether this trust will exist or not. However, in some cases the existence of

this trust will still give way to the parties intentions. This essay will critically discuss Lord

Millett’s statement in Air Jamaica focusing first on his implication that constructive trusts do

not give effect to intention, then addressing his statement that the transferor does not

usually intend to retain a beneficial interest and finally looking at his argument that

resulting trusts give effect to intention as the transferor did not intend for the beneficial

interest to be passed to the recipient.

In his statement, Millett implies that constructive trusts do not give effect to the transferor’s

intention. A constructive trust can arise in many ways, most of which support Millett’s point

of view. There will be a constructive trust if the defendant has knowledge which should

affect their conscience or if they have acted in breach of their fiduciary duty. If this is the

case then the trust will arise regardless of the transferor’s intention. Numerous academics

believe that Millett’s assessment applies to all constructive trusts. For example, Hudson

states that “a constructive trust is imposed regardless of the intentions of the parties

involved”,

and this viewpoint is mimicked by judges such as Lord Browne-Wilkinson.

Alastair Hudson, Equity and Trusts (9th edn, Routledge, 2017)

Westdeutsche Landesbank Girozentrale v Islington LBC [1996] UKHL 12, Lord Browne-

Wilkinson

Despite this, some constructive trusts arise in a way that does give effect to the

transferor’s intention. A constructive trust will arise if the transferor has made a mistake, for

example by conveying the beneficial title to the wrong person or conveying the wrong

property. This ensures that the transferor’s intentions are given effect to as if they have

made a mistake they will not have intended for the property to be transferred to the

recipient. It is implied that their intention is instead to retain beneficial interest which the

creation of a constructive trust enables. Additionally, common intention constructive trusts

give effect to the transferor’s intention. They will arise if the parties had actual or implied

intention for someone to gain beneficial interest. This was demonstrated in Allen v Snyder

in which the court looked into the intentions of the parties to decide whether they should

impose a common intention constructive trust.

This idea was reiterated in McKenzie v

Storer where it was held that the common interests of the parties regarding whether a

party should take beneficial interest should be taken into account, as to not do so would be

unconscionable.

In this case, it was never intended that the defendant should have

beneficial interest so a constructive trust arose to stop them from claiming ownership of

the property, thus giving effect to the intention of the parties. The circumstances in which a

constructive trust can arise are very broad as they include any situation in which the

defendant has acted unconscionably with property which belongs in equity to someone

else. Lord Scott has highlighted this, stating that it would be impossible to list all the

circumstances in which a constructive trust could arise.

Therefore, it is impossible to

make a sweeping statement such as Millett’s that applies to all constructive trusts, as one

cannot know of every situation which will result in a constructive trust.

Allen v Snyder [1977] 2 NSWLR 685

McKenzie v Storer (2007) ACTSC 88

Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, Lord Scott

Millett’s statement argues that the transferor “almost always does not” intend to retain

beneficial interest. There are many ways that an automatic resulting trust can arise and in

some cases this argument is true. An automatic resulting trust will arise if a trust fails for a

lack of certainty of objects. The transferor’s original intention would have been to create an

express trust that would pass the beneficial interest to the recipient. However, if the

transferor has not made it sufficiently clear who the beneficiaries are then the trust will fail

and a resulting trust will arise despite their intention not to retain the beneficial interest.

Furthermore, an automatic resulting trust arises if there is a surplus of property after

performance of the trust. The transferor’s original intention would have been for their

property to be transferred to the beneficiaries for the purpose set out in the trust, not to

retain the beneficial interest. This is demonstrated in cases such as Re Gillingham Bus

Disaster.

As stated by Harman J, generally the settlor “does not expect to see his money

back” showing that the transferor does not intend to retain beneficial interest.

In Air

Jamaica, there was a provision in the trust instrument that expressly stated that no money