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Introduction

The statement compresses thirty years of debate into two sentences, and both need unpacking. The first sentence states the thesis associated with R Chambers and adopted by Lord Millett in Air Jamaica Ltd v Charlton [1999] 1 WLR 1399: the resulting trust responds to the absence of an intention to benefit the recipient, not to any positive intention to create a trust. The second sentence accuses Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 of asserting the contrary and the law of tolerating the inconsistency.

This essay argues for three propositions. First, the absence-based account is correct as a description of when resulting trusts arise, and the older presumption cases support it once the presumptions are recognised as evidential defaults rather than findings of actual intention. Secondly, the alleged contradiction with Westdeutsche is smaller than advertised: what Lord Browne-Wilkinson rejected was not absence-based reasoning but the restitutionary extension of it, and on that rejection he was right. Thirdly, the Quistclose trust, properly analysed through Lord Millett's speech in Twinsectra Ltd v Yardley [2002] UKHL 12, is the absence thesis's hardest test and clearest vindication. The law's results are coherent; what it has been living with is loose language, and the cure is a restatement, not a revolution.

The orthodox map, and what the presumptions actually presume

The resulting trust occupies two territories. The presumed resulting trust arises on a voluntary transfer or purchase in another's name: Re Vinogradoff [1935] WN 68 pressed the presumption to its mechanical extreme, returning the equitable interest to the transferor's estate although the transferee was her four-year-old granddaughter, who can have been intended to take nothing as trustee. The automatic resulting trust arises where an express disposition fails to exhaust the beneficial interest: in Vandervell v IRC [1967] 2 AC 291 the benefit of an option returned to the settlor whose scheme had failed to specify its destination, with expensive fiscal consequences, and Re Vandervell's Trusts (No 2) [1974] Ch 269 shows the same interest expiring once new express trusts caught the property.

Two features of the older law matter for the theoretical question. First, the presumptions are weak evidence, not doctrine masquerading as psychology: Fowkes v Pascoe (1875) LR 10 Ch App 343 rebutted the presumption on the obvious inference that a wealthy woman buying stock in the names of herself and a young man she supported intended a gift, and Shephard v Cartwright [1955] AC 431 polices the evidence by which the rival presumption of advancement may be rebutted. Secondly, in neither territory does the law require, or even usually find, a positive intention to create a trust. The four-year-old in Re Vinogradoff and the inadvertent settlor in Vandervell received resulting trusts nobody had thought of. Any account that grounds the doctrine in actual conveyancing intention must treat the leading cases as mistakes, which is a high price for tidiness.

But Swadling's historical account says the presumption presumes a declared trust

W Swadling, in "Explaining Resulting Trusts" (2008) 124 LQR 72, argues that the presumed resulting trust historically rests on a presumption that the transferor actually declared a trust for himself, so the category is express trust by another name, and the absence thesis misdescribes it; the automatic resulting trust, he contends, has no satisfactory explanation at all.

The history is formidable and the function is against it. A presumption of actual declaration cannot survive Re Vinogradoff, where no sane person would presume a grandmother declared a trust to be performed by an infant, and it cannot explain why the presumption yields to ordinary contextual evidence in Fowkes v Pascoe without any search for a declaration. As to the automatic category, calling it inexplicable concedes the field: a default rule returning unallocated beneficial interest to its source is an explanation, and it is exactly the explanation the absence thesis supplies for both categories at once.

Westdeutsche rejected restitution, not absence

The bank in Westdeutsche sought a resulting trust of payments made under an interest swap later held ultra vires, in order to capture compound interest. P Birks had argued that the resulting trust should respond generally to unjust enrichment, arising whenever a transfer lacked legal basis, and Chambers' monograph Resulting Trusts (OUP 1997) systematised a closely related claim: the trust responds to the transferor's absence of intention to benefit. Lord Browne-Wilkinson rejected the claimed trust, restated the two categories, and grounded all trusts in conscience: the recipient's conscience must be affected by knowledge of the facts said to raise the trust, and the bank's money, paid outright under a supposed contract and dissipated before the invalidity was known, raised none.

Two further moves in the speech show what was, and what was not, being decided. Lord Browne-Wilkinson reinterpreted Chase Manhattan Bank NA v Israel-British Bank (London) Ltd [1981] Ch 105, in which a mistaken double payment had been held on trust, as defensible only from the moment the recipient's conscience was affected by knowledge of the mistake, a reinterpretation that discloses the speech's real concern: trusts must not arise silently, binding recipients and prejudicing their creditors before anyone could know…