S.60 appears in the LPA the part dealing with ‘Conveyances and other Instruments’ running from s.51 to s.75. Due weight must be given to the words used in the sub-section and their context. A literal interpretation of s.60(3), even if that is the right approach, does not to my mind inevitably lead to the result that the presumption has disappeared. “… The point, after all, is one of statutory interpretation. Instead the sub-section says a resulting trust is not to be implied ‘merely by reason of’ a failure to use a time-honoured conveyancing formula. After all the LPA consolidated the fundamental reforms to the way in which land was held and conveyed and is explicit about change where it needs to be. It would have been very easy for the draftsman to have said that the presumption to which the sub-section is addressed is abolished. This may fairly be described as a technicality and the draftsman of the LPA was concerned to clarify the position arising from the repeal of the Statute of Uses. Prior to its abolition, the convention was for a conveyance to include words to the effect that the property was conveyed for the use or benefit of the grantee. “The need for s.60(3) arises from the repeal of the Statute of Uses 1535 confirmed in s.207 and Schedule 7 of the LPA. Recently, in National Crime Agency v Dong EWHC 3116 (Ch), Chief Master Marsh decided that s.60(3) did not affect the presumption of resulting trust, but was merely enacted to deal with technicalities in conveyancing that were no longer needed when the the Statute of Uses 1535 was repealed in 1925. “Since no explanation has been forthcoming for the gratuitous transfer of these properties to PRL, there is nothing to rebut the ordinary presumption of equity that PRL was not intended to acquire a beneficial interest in them.” In Prest v Petrodel Resources Ltd UKSC 34 at, 2 AC 415 at 495, Lord Sumption JSC assumed that the presumption of resulting trust applied to gratuitous transfers of land, but he did not refer to s.60(3): This case establishes that the presumption of a resulting trust on a voluntary conveyance of land has been abolished by s.60(3) Law of Property Act 1925.” “I should also refer to Lohia v Lohia WTLR 101, 113. In Ali v Khan EWCA Civ 974 at, Sir Andrew Morritt V-C said: “On the point whether the effect of the 1925 Act is to abolish the presumption of a resulting trust arising from a voluntary conveyance, I would prefer to express no concluded view, as it is unnecessary to do so for the disposition of this appeal.” His judgment was affirmed by the Court of Appeal, EWCA Civ 1691, but Mummery LJ said at : In Lohia v Lohia (2000) 3 ITELR 117, WTLR 101, Nicholas Strauss QC (sitting as a judge in the Queen’s Bench Division) decided that it meant that the presumption of resulting trust does not apply to gratuitous transfers of land. The effect of that subsection has been debated for years. “In a voluntary conveyance a resulting trust for the grantor shall not be implied merely by reason that the property is not expressed to be conveyed for the use or benefit of the grantee.” This post has been contributed by Professor Robert Chambers, Module Convenor for Equity and trusts.Īccording to s.60(3) of the Law of Property Act 1925:
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