Sham Trusts

Cambridge Law Journal

Volumn 67, Issue 1, 2008, Pages 176-207

  Conaglen, Matthew ^a  

^a UNIVERSITY OF CAMBRIDGE   (United Kingdom)

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[No Author keywords available]

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EID: 85011526490     PISSN: 00081973     EISSN: 14692139     Source Type: Journal    
DOI: 10.1017/S0008197308000044     Document Type: Article

References (325)

1. In re Watson (1890) 25 Q.B.D. 27, 33 (C.A.).
2. Yorkshire Railway Wagon Co. v. Maclure (1882) 21 Ch.D. 309, 318 (C.A.).
3. See, e.g., S. Bright, “Beyond Sham and into Pretence” (1991) 11 O.J.L.S. 136
4. S. Bright, “Avoiding Tenancy Legislation: Sham and Contracting Out Revisited” [2002] C.L.J. 146
5. B. McFarlane and E. Simpson, “Tackling Avoidance” in J. Getzler (ed.), Rationalizing Property, Equity and Trusts (London 2003) 135
6. M. Pawlowski, “Unlawful contracting out and sham devices” (2006) 10 L. and T. Rev. 147.
7. See, e.g., B. McFarlane and E. Simpson, “Tackling Avoidance” in J. Getzler (ed.), Rationalizing Property, Equity and Trusts (London 2003), 135
8. J. Vella, “Departing from the Legal Substance of Transactions in the Corporate Field: The Ramsay Approach beyond the tax sphere” (2007) 7 J.C.L.S. 243.
9. D.J. Hayton (gen. ed.), Underhill and Hayton's Law Relating to Trusts and Trustees, 17th ed. (London 2007), pp. 78–82
10. J. Mowbray, L. Tucker, N. Le Poidevin, E. Simpson and J. Brightwell, Lewin on Trusts, 18th ed. (London 2008), pp. 92–99.
11. The doctrine is given only scant attention in G. Thomas and A. Hudson, The Law of Trusts (Oxford 2004), pp. 29–30 and 838840.
12. See, e.g., D. Hayton, “When is a Trust not a Trust?” (1992) 1 J.I.T.C.P. 3
13. D. Brownbill, “When is a Sham not a Sham?” (1993) 2 J.I.T.C.P. 13
14. J. Mowbray, “Shams, Pretences, Blackmail and Illusion: Parts I and II” [2000] P.C.B. 28 and 105
15. D. Hayton, “Shams, Piercing Veils, Remedial Constructive Trusts and Tracing” [2004] J.L. Rev. 6
16. D. Harris, “No Such Thing as a Sham Trust” [2004] P.C.B. 95.
17. F.W. Maitland, Equity, 2nd ed. rev. by J. Brunyate (Cambridge 1936), p. 54.
18. National Westminster Bank pic v. Jones [2001] 1 B.C.L.C. 98, at [59] (Ch.D.).
19. [1967] 2 Q.B. 786, 802.
20. See, e.g.,(i) in England, W.T. Ramsay Ltd. v. Inland Revenue Commissioners [1982] A.C. 300, 337
21. Welsh Development Agency v. Export Finance Co. Ltd. [1992] B.C.L.C. 148, 160 and 186 (C.A.)
22. Hitch v. Stone [2001] EWCA Civ 63
23. [2001] S.T.C. 214, at [63]
24. MacNiven v. Westmoreland Investments Ltd. [2001] UKHL 6
25. [2003] 1 A.C. 311, at [4]
26. Shalson v. Russo [2003] EWHC 1637 (Ch), [2005] Ch. 281, at [187]
27. Re Nurkowski [2005] EWHC 336 (Ch)
28. [2005] B.P.I.R. 842, 906
29. A v. A [2007] EWHC 99 (Fam), at [32]
30. Painter v. Hutchison [2007] EWHC 758 (Ch), at [110]
31. (ii) in Australia, Sharrment Pty Ltd. v. Official Trustee in Bankruptcy (1988) 82 A.L.R. 530, 537
32. Associated Alloys Pty Ltd. v. ACN 001 452 106 Pty Ltd [2000] HCA 25 (2000) 202 C.L.R. 588, at [35]
33. Equuscorp Pty Ltd. v. Glengallan Investments Pty Ltd. [2004] HCA 55 (2004) 218 C.L.R. 471, at [46]
34. (iii) in New Zealand, Bateman Television Ltd. v. Coleridge FinanceCo. Ltd. [1969] N.Z.L.R. 794, 821 (C.A.)
35. Paintin and Nottingham Ltd. v. Miller Gale and Winter [1971] N.Z.L.R. 164, 168 and 175 (C.A.)
36. Marac Finance Ltd. v. Virtue [1981] 1 N.Z.L.R. 586, 593 (C.A.)
37. Official Assignee v. Wilson [2006] 2 N.Z.L.R. 841, at [52]
38. (iv) in Canada, Minister of National Revenue v. Cameron [1974] S.C.R. 1062, 1068
39. (v) in Jersey, Grupo Torras S.A. v. Al-Sabah [2003] JRC 092, [2004] 1 W.T.L.R. 1, at [54].
40. Snook v. London and West Riding Investments Ltd. [1967] 2 Q.B. 786, 802 (emphasis added).
41. Scott v. Commonwealth Commissioner of Taxation (No. 2) (1966) 40 A.L.J.R. 265, 279 (H.C.A.)
42. Re State Public Services Federation, ex parte Attorney-General for Western Australia (1993) 178 C.L.R. 249, 290
43. Gould v. Gould [1993] F.L.C. 80,423, 80,432.
44. In re Watson (1890) 25 Q.B.D. 27, 33.
45. Snook v. London and West Riding Investments Ltd. [1967] 2 Q.B. 786, 803.
46. Yorkshire Railway Wagon Co. v. Maclure (1882) 21 Ch.D. 309.
47. In re Watson (1890) 25 Q.B.D. 27.
48. [1991] B.C.L.C. 897 (Ch.D.).
49. [1991] J.L.R. 103.
50. [1995] 1 F.L.R. 696 (Ch.D.).
51. [2005] EWHC 2823 (Fam)
52. [2005] 1 F.L.R. 771.
53. [2007] EWHC 758 (Ch).
54. See, e.g., Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
55. [2004] 1 W.T.L.R. 1
56. Shalson v. Russo [2003] EWHC 1637 (Ch)
57. [2005] Ch. 281; A v. A [2007] EWHC 99 (Fam).
58. S. Bright, “Beyond Sham and into Pretence” (1991) 11 O.J.L.S. 136, p. 140.
59. B. McFarlane and E. Simpson, “Tackling Avoidance” in J. Getzler (ed.), Rationalizing Property, Equity and Trusts (London 2003) 135, p. 139.
60. Hadjiloucas v. Crean [1988] 1 W.L.R. 1006, at 1019 (C.A).
61. In re Watson (1890) 25 Q.B.D. 27, 33.
62. Q.B.D., at p. 40.
63. The doctrine which appears to allow courts to ignore terms in agreements where those terms are included in order to evade the operation of a statute out of which the parties cannot contract (see, e.g., Bankway Properties Ltd. v. Pensfold-Dunsford [2001] EWCA Civ 528
64. [2001] 1 W.L.R. 1369, at [43])
65. is not generally relevant in the context of trusts given most trusts legislation is default rather than mandatory in nature, and it has been treated by the House of Lords as distinct from the sham doctrine: MacNiven v. Westmoreland Investments Ltd. [2001] UKHL 6
66. [2003] 1 A.C. 311, at [4].
67. Hence, the questionable legitimacy of that doctrine (see B. McFarlane and E. Simpson, “Tackling Avoidance” in J. Getzler (ed.), Rationalizing Property, Equity and Trusts (London 2003), 135, pp. 150–184) need not be addressed here.
68. See L. Fuller, “Consideration and Form” (1941) 41 Colum. L. Rev. 799, p. 801.
69. See, e.g., Street v. Mountford [1985] 1 A.C. 809, 819
70. Agnew v. Commissioner of Inland Revenue [2001] UKPC 28
71. [2001] 2 A.C. 710, at [32]
72. H.G. Beale (gen. ed.), Chitty on Contracts, 29th. ed. (London 2004), para. [12–046].
73. cf. the view that this is a sham: G. Thomas and A. Hudson, The Law of Trusts (Oxford 2004), p. 33 29.
74. See, e.g., K. Lewison, The Interpretation ofContracts, 3rd ed. (London, 2004), ch. 3
75. H.G. Beale (gen. ed.), Chitty on Contracts, 29th. ed. (London 2004), para. [12–043].
76. Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 W.L.R. 896, 912 (H.L.)
77. see also Mannai Investment Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749, 767
78. K. Lewison, The Interpretation ofContracts, 3rd ed. (London, 2004), para. [3.11]
79. H. G. Beale (gen. ed.), Chitty on Contracts, 29th. ed. (London 2004), paras. [12–043] and [12–118].
80. Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 W.L.R. 896, 913
81. see also Prenn v. Simmonds [1971] 1 W.L.R. 1381, 1384–1385 (H.L.)
82. Mannai Investment Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749, 772, 775 and 779
83. K. Lewison, The Interpretation of Contracts, 3rd ed. (London, 2004), para. [3.11]
84. H. G. Beale (gen. ed.), Chitty on Contracts, 29th. ed. (London 2004), para. [12–119].
85. James Miller and Partners Ltd. v. Whitworth Street Estates (Manchester) Ltd. [1970] A.C. 583,603, 606, 611 and 614–615
86. L. Schuler A.G. v. Wickman Machine Tool Sales Ltd. [1974] A.C. 235, 252, 260, 261–262, 265–270 and 272
87. K. Lewison, The Interpretation of Contracts, 3rd ed. (London, 2004), para. [3.12]
88. H. G. Beale (gen. ed.), Chitty on Contracts, 29th. ed. (London 2004), para. [12–126].
89. There is an established exception to this rule where the question at issue is the location of a boundary contained in a conveyance which is unclear or ambiguous, but this does not apply to contracts generally: Watcham v. Attorney-General of the East Africa Protectorate [1919] A.C. 533, 537 (P.C.)
90. Ali v. Lane [2006] EWCA Civ 1532, at [25]-[36]
91. Haycocks v. Neville [2007] EWCA Civ 78, at [31].
92. Prenn v. Simmonds [1971] 1 W.L.R. 1381, 1384.
93. Reardon Smith Line Ltd. v. Yngvar Hansen-Tangen [1976] 1 W.L.R. 989, 996 (H.L.)
94. see also Mannai Investment Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749, 775, 779 and 782.
95. J. Mowbray, L. Tucker, N. Le Poidevin, E. Simpson and J. Brightwell, Lewin on Trusts, 18th ed. (London 2008), para. [6–03].
96. See also Vandervell v. Inland Revenue Commissioners [1967] 2 A.C. 291, 312
97. In re Z Trust [1997] C.I.L.R. 248, 257.
98. J. H. Langbein, “The Contractarian Basis of the Law of Trusts” (1995) 105 Yale L.J. 625, pp. 672–675. On the relationship between trusts and contract generally
99. see Langbein, Yale L.J., at pp. 650–669
100. F. W. Maitland, Equity, 2nd ed. rev. by J. Brunyate (Cambridge 1936), p. 54.
101. For discussion of the historical move from a “will theory” of contract to one based on the objective appearance of agreement and the relevance of mistakes, see A. W. B. Simpson, “Innovation in Nineteenth Century Contract Law” (1975) 91 L.Q.R. 247 at pp. 265–269
102. R. Zimmermann, The Law of Obligations (Oxford 1996), ch. 19, esp. at pp. 600–602.
103. D. J. Ibbetson, A Historical Introduction to the Law of Obligations (Oxford 1999), ch. 12.
104. See, e.g., J. Mowbray, L. Tucker, N. Le Poidevin, E. Simpson and J. Brightwell, Lewin on Trusts, 18th ed. (London 2008), para. [6–12]
105. In re Z Trust [1997] C.I.L.R. 248, 257.
106. See, e.g., Commissioners ofInland Revenue v. Raphael [1935] A.C. 96, 134–135
107. Gissing v. Gissing [1971] A.C. 886, 906
108. Rabin v. Gerson Berger Association Ltd. [1986] 1 W.L.R. 526, 531–532, 533, 534, 535 and 539 (C.A.)
109. In re Z Trust [1997] C.I.L.R. 248, 257.
110. A v. A [2007] EWHC 99 (Fam), at [29].
111. S. Bright, “Beyond Sham and into Pretence” (1991) 11 O.J.L.S. 136, p. 140.
112. E. Peel, Treitel's Law ofContract, 12th ed. (London 2007), para. [6–025] (emphasis original)
113. see also J. McGhee (gen. ed.), Snell's Equity, 31st ed. (London 2005), para. [14–02].
114. Yorkshire Railway Wagon Co. v. Maclure (1882) 21 Ch.D. 309, 318.
115. [2001] EWCA Civ 63
116. [2001] S.T.C. 214, at [63].
117. (1840) 3 Beav. 148, 172–173.
118. J. Palmer, “Dealing with the Emerging Popularity of Sham Trusts” [2007] N.Z.L.Rev. 81, p. 92.
119. D. Hayton and C. Mitchell, Hayton and Marshall's Commentary and Cases on the Law of Trusts and Equitable Remedies, 12th ed. (London 2005), para. [3–01].
120. Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
121. [2004] 1 W.T.L.R. 1, at [53(vi)].
122. Chase Manhattan Equities Ltd. v. Goodman [1991] B.C.L.C. 897, 922.
123. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [59].
124. Snook v. London and West Riding Investments Ltd. [1967] 2 Q.B. 786, 802 (emphasis added).
125. Hitch v. Stone [2001] EWCA Civ 63
126. [2001] S.T.C. 214, at [66].
127. Sharrment Pty Ltd. v. Official Trustee in Bankruptcy (1988) 82 A.L.R. 530, 544.
128. Midland Bank plc v. Wyatt [1995] 1 F.L.R. 696, 698.
129. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [59].
130. 1 B.C.L.C., at para. [46].
131. Snook v. London and West Riding Investments Ltd. [1967] 2 Q.B. 786, 802 and 804.
132. Yorkshire Railway Wagon Co. v. Maclure (1882) 21 Ch.D. 309, 314.
133. Bateman Television Ltd. v. Coleridge Finance Co. Ltd. [1969] N.Z.L.R. 794, 821
134. Paintin and Nottingham Ltd. v. Miller Gale and Winter [1971] N.Z.L.R. 164, 168 and 175
135. Bank ofCredit and Commerce International (Overseas) Ltd. v. Akindele [2001] Ch. 437 at 443, CA
136. Hitch v. Stone [2001] EWCA Civ 63
137. [2001] S.T.C. 214, at [69]
138. Shalson v. Russo [2003] EWHC 1637 (Ch)
139. MacKinnon v. Regent Trust Co. Ltd. [2005] JCA 066
140. [2005] W.T.L.R. 1367, at [19]-[20]
141. Official Assignee v. Wilson [2006] 2 N.Z.L.R. 841, at [52] and [106]
142. A v. A [2007] EWHC 99 (Fam), at [34].
143. Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
144. [2004] 1 W.T.L.R. 1, at [194].
145. 1 W.T.L.R., at para. [197].
146. [2005] EWHC 336 (Ch)
147. [2005] B.P.I.R. 842, 913–914
148. (not challenged on appeal, sub nom. Hill v. Spread Trustee Co. Ltd. [2006] EWCA Civ 542
149. [2007] 1 All E.R. 1106, at [60]).
150. A v. A [2007] EWHC 99 (Fam), at [49] and [86].
151. MacKinnon v. Regent Trust Co. Ltd. [2005] JCA 066
152. [2005] W.T.L.R. 1367, at [19]-[21] and [32].
153. See, e.g., Paul v. Constance [1977] 1 W.L.R. 527 (C.A.)
154. Re Chelsea Cloisters Ltd. (1980) 41 P.and C.R. 98 at 103, 104–105 (C.A.).
155. See, e.g., Walker v. Armstrong (1856) 8 De G.M. and G. 531 (L.JJ.)
156. Wollaston v. Tribe (1869) L.R. 9 Eq. 44 (M.R.)
157. In re Walton's Settlement [1922] 2 Ch. 509
158. Gibbon v. Mitchell [1990] 3 All E.R. 338 (Ch.D.)
159. see also the discussion in Sieff v. Fox [2005] EWHC 1312 (Ch)
160. [2005] 1 W.L.R. 3811, at [94]-[112].
161. See, e.g., Saunders v. Anglia Building Society [1970] A.C. 1004, 1026.
162. See, e.g., Wilson v. Turner (1883) 22 Ch.D. 521 (C.A.)
163. Turner v. Turner [1984] Ch. 100.
164. Shalson v. Russo [2003] EWHC 1637 (Ch), [2005] Ch. 281, at [190]
165. see also Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
166. [2004] 1 W.T.L.R. 1, at [53].
167. Rimer J.'s analysis was endorsed by Munby J. in A v. A [2007] EWHC 99 (Fam), at [34]-[40].
168. J. Palmer, “Dealing with the Emerging Popularity of Sham Trusts” [2007] N.Z.L.Rev. 81, pp. 93–99.
169. Painter v. Hutchison [2007] EWHC 758 (Ch), at [111]-[112] and [115].
170. J. Palmer, “Dealing with the Emerging Popularity of Sham Trusts” [2007] N.Z.L.Rev. 81, p. 97.
171. N.Z.L.Rev.
172. Midland Bank plc v. Wyatt [1995] 1 F.L.R. 696, 699–700.
173. Hitch v. Stone [2001] EWCA Civ 63
174. [2001] S.T.C. 214, at [85].
175. Minwalla v. Minwalla [2005] EWHC 2823 (Fam)
176. [2005] 1 F.L.R. 771, at [54].
177. Hitch v. Stone [2001] EWCA Civ 63
178. [2001] S.T.C. 214, at [69].
179. See also Carman v. Yates [2004] EWHC 3448 (Ch), at [219]
180. A v. A [2007] EWHC 99 (Fam), at [58].
181. See, e.g., Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
182. [2004] 1 W.T.L.R. 1, at [57].
183. W.T.L.R., at para. [58].
184. A v. A [2007] EWHC 99 (Fam), at [52].
185. [1990] 1 Ch. 265, 295 and 293. Such conduct also amounts to fraud for the purpose of determining whether a trustee may rely on an exemption clause contained in the trust instrument: Armitage v. Nurse [1998] Ch. 241, 251 (C.A.). Similarly, on the possibility of suspicion constituting sufficient knowledge for a claim in knowing receipt
186. see Abou-Rahmah v. Abacha [2006] EWCA Civ 1492.
187. [2000] Ch. 86, 103 (C.A.).
188. [1989] 3 All E.R. 618, 626.
189. [2001] 1 B.C.L.C. 98, at [68].
190. A v. A [2007] EWHC 99 (Fam), at [69].
191. Mannai Investment Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749, 778.
192. Similarly, in the context of rectification, the ordinary civil standard of proof applies but convincing proof is required: Swainland Builders Ltd. v. Freehold Properties Ltd. [2002] EWCA Civ 560, at [34].
193. A v. A [2007] EWHC 99 (Fam), at [53].
194. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [46]; see also at paras. [59] and [68].
195. Re H (Minors) [1996] A.C. 563, 586
196. see also Hornal v. Neuberger Products Ltd. [1957] 1 Q.B. 247, 258, 263–264 and 266–267 (C.A.).
197. Hitch v. Stone [2001] EWCA Civ 63
198. [2001] S.T.C. 214, at [65].
199. [1990] 1 A.C. 417, 475
200. see also at p. 469 per Lord Oliver; Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
201. [2004] 1 W.T.L.R. 1, at [194(vi)].
202. Hitch v. Stone [2001] EWCA Civ 63
203. [2001] S.T.C. 214, at [68].
204. A v. A [2007] EWHC 99 (Fam), at [43]
205. see also D. J. Hayton (gen. ed.), Underhill and Hayton's Law Relating to Trusts and Trustees, 17th ed. (London 2007), para. [4.11].
206. Re Nurkowski [2005] EWHC 336 (Ch)
207. [2005] B.P.I.R. 842, 913.
208. Subsequent conduct can also potentially be relevant in proving that, although a transaction was a sham at its inception, the parties have altered the arrangement so that the original transaction now represents their true intentions and is no longer a sham: A v. A [2007] EWHC 99 (Fam), at [45].
209. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [39].
210. Hitch v. Stone [2001] EWCA Civ 63
211. [2001] S.T.C. 214, at [67]
212. see also A v. A [2007] EWHC 99 (Fam), at [17]: “even in the Family Division … [t]he court cannot grant relief merely because the … arrangements appear to be artificial or even ‘dodgy’.”
213. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98. This conclusion did not prevent the arrangements being unwound under the statutory powers contained in s.423 of the Insolvency Act 1986, dealing with transactions in fraud of creditors.
214. In reaching this conclusion, Neuberger J. rejected an argument that the arrangements must have been intended to be genuine because they could not achieve their purpose if they were a sham: if such an argument were accepted, no arrangement would ever constitute a sham: National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [45].
215. R v. Dimsey [2000] Q.B. 744, 773 (C.A.).
216. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [39].
217. Rahman v. Chase Bank (C.I.) Trust Co. Ltd. [1991] J.L.R. 103, 168.
218. J.L.R.
219. Minwalla v. Minwalla [2005] EWHC 2823 (Fam)
220. [2005] 1 F.L.R. 771, at [57].
221. 1 F.L.R., at para. [58].
222. Charman v. Charman [2005] EWCA Civ 1606
223. [2006] 1 W.L.R. 1053, at [12]
224. A v. A [2007] EWHC 99 (Fam), at [72].
225. Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
226. [2004] 1 W.T.L.R. 1, at [510]; see also at para. [166].
227. Shalson v. Russo [2003] EWHC 1637 (Ch)
228. [2005] Ch. 281, at [195] (emphasis original).
229. See, e.g., D. Hayton, “When is a Trust not a Trust?” (1992) 1 J.I.T.C.P. 3, pp. 3–4
230. J. Mowbray, “Shams, Pretences, Blackmail and Illusion: Parts I and II” [2000] P.C.B. 105, pp. 110–111
231. D. Harris, “No Such Thing as a Sham Trust” [2004] P.C.B. 95, p. 98.
232. i.e., one which purports to exclude “the irreducible core of obligations owed by trustees to the beneficiaries … which is fundamental to the concept of a trust”. This ‘irreducible core’ is the “duty of the trustees to perform the trusts honestly and in good faith for the benefit of the beneficiaries”: Armitage v. Nurse [1998] Ch. 241, 253 (C.A.).
233. See, e.g., Midland Bank Trustee (Jersey) Ltd. v. Federated Pension Services Ltd. [1996] P.L.R. 179
234. (described as “a masterly judgment” by Millett L.J. in Armitage v. Nurse [1998] Ch. 241, 254).
235. Lowson v. Coombes [1999] Ch. 373, 378 (C.A.).
236. Tribe v. Tribe [1996] Ch. 107, 116 and 123 (C.A.).
237. Tinsley v. Milligan [1994] 1 A.C. 340, 368 and 375–376
238. Tribe v. Tribe [1996] Ch. 107,124.
239. Tribe v. Tribe [1996] Ch. 107, 121–122, 124 and 132–133.
240. The creditors will ordinarily exercise this right collectively, via a trustee in bankruptcy, but it might also be relevant (especially in sheriff's interpleader proceedings) where an individual creditor is seeking execution of a money judgment against A's assets. For a similar point in the context of freezing orders, see S. Gee, Commercial Injunctions, 5th. ed. (London 2004), paras. [13.007]-[13.028].
241. In modern terms, the third parties will normally rely on statutory powers to set aside the disposition from A to B: see e.g., Insolvency Act 1986, s. 423. Such powers have been available by statute since the Statute of Elizabeth 1571, but the principles of these provisions were said to have formed part of the common law long before then: Cadogan v. Kennett (1776) 2 Cowp. 432, 434
242. Rickards v. Attorney-General (1844) 12 Cl. and Fin. 30, 42 (H.L.).
243. The common law concept is analogous to sham. (For the statutory history, see J. Armour, “Transactions Defrauding Creditors” in J. Armour and H. Bennett, Vulnerable Transactions in Corporate Insolvency (Oxford 2003), ch. 3, esp. at paras. [3.6]-[3.9].)
244. On the basis of a gratuitous transfer: see, e.g., Tinsley v. Milligan [1994] 1 A.C. 340, 371.
245. Tinsley v. Milligan [1994] 1 A.C. 340, 371
246. Lohia v. Lohia [2001] WTLR 101, 110–112
247. Ali v. Khan [2002] EWCA Civ 974, at [24].
248. As to the continued vitality of the presumption of advancement, see Antoni v. Antoni [2007] UKPC 10, at [20].
249. Tinsley v. Milligan [1994] 1 A.C. 340, 371
250. Silverwood v. Silverwood (1997) 74 P. and C.R. 453, 456 and 457–458 (C.A.).
251. The perverse nature of the difference between this scenario and the one just mentioned has been noted by the courts (see, e.g., Tribe v. Tribe [1996] Ch. 107, 118
252. Silverwood v. Silverwood (1997) 74 P. and C.R. 453, 458
253. Lowson v. Coombes [1999] Ch. 373, 385), but it depends on the operation of the presumption of advancement rather than anything peculiar to sham trusts. See also Law Commission, Illegal Transactions: The Effect ofIllegality on Contracts and Trusts (CP 154 1999), paras. [3.22]-[3.24].
254. Tribe v. Tribe [1996] Ch. 107
255. see also Symes v. Hughes (1870) L.R. 9 Eq. 475, 479 (M.R.).
256. Tribe v. Tribe [1996] Ch. 107, 129
257. see also Lowson v. Coombes [1999] Ch. 373, 385.
258. Tinsley v. Milligan [1994] 1 A.C. 340.
259. A similar observation is made in Law Commission, Illegal Transactions: The Effect of Illegality on Contracts and Trusts (CP 154 1999), para. [3.18].
260. See, e.g., Tinker v. Tinker [1970] P. 136, 142 (C.A.)
261. Vandenberg v. Palmer (1858) 4 K. and J. 204, 215 (V.-C.).
262. Painter v. Hutchison [2007] EWHC 758 (Ch), at [111]-[112] and [115].
263. (1920) 28 C.L.R. 178.
264. Lowson v. Coombes [1999] Ch. 373, 382.
265. Commissioner of StampDuties (Queensland) v. Jolliffe (1920) 28 C.L.R. 178, 192.
266. The majority decision has been followed in Australia, but predominantly for the proposition that in the absence of a clear declaration of trust, one will not be found where it is not clear that there was an intention to create a trust: see, e.g., EquuscorpPty. Ltd. v. Jimenez [2002] SASC 225, at [109]
267. Associated Alloys Pty Ltd. v. ACN 001 452 106 Pty Ltd [2000] HCA 25 (2000) 202 C.L.R. 588, [33]-[35].
268. Painter v. Hutchison [2007] EWHC 758 (Ch), [122]-[128].
269. Mr. Painter did not seek to rebut the presumption of advancement: EWHC, at para. [128(ii)].
270. Saunders v. Anglia Building Society [1970] A.C. 1004, 1026.
271. A.C.; Norwich and Peterborough Building Society v. Steed [1993] Ch. 116, 130 (C.A.).
272. Midland Bank plc v. Wyatt [1995] 1 F.L.R. 696, 707
273. see also Chase Manhattan Equities Ltd. v. Goodman [1991] B.C.L.C. 897.
274. Rahman v. Chase Bank (C.I.) Trust Co. Ltd. [1991] J.L.R. 103, 168
275. see also Minwalla v. Minwalla [2005] EWHC 2823 (Fam)
276. [2005] 1 F.L.R. 771, at [60]
277. Grupo Torras S.A. v. Al-Sabah [2003] JRC 092
278. [2004] 1 W.T.L.R. 1, at [522]
279. Carman v. Yates [2004] EWHC 3448 (Ch), at [173].
280. Yorkshire Railway Wagon Co. v. Maclure (1882) 21 Ch.D. 309, 318.
281. In re Watson (1890) 25 Q.B.D. 27, 40.
282. See, e.g., Shalson v. Russo [2003] EWHC 1637 (Ch)
283. [2005] Ch. 281, at [108]; E. Peel, Treitel's Law ofContract, 12th ed. (London, 2007), paras. [9–075]-[9–083]
284. J. McGhee (gen. ed.), Snell's Equity, 31st ed. (London 2005), para. [13–08].
285. Hitch v. Stone [2001] EWCA Civ 63
286. [2001] S.T.C. 214, at [87]
287. see also Sieff v. Fox [2005] EWHC 1312 (Ch)
288. [2005] 1 W.L.R. 3811, at [78].
289. Carman v. Yates [2004] EWHC 3448 (Ch), at [173]; see also at para. [246].
290. EWHC, at para. [174].
291. See, e.g., Insolvency Act 1986, s. 423(2).
292. Foskett v. McKeown [2001] 1 A.C. 102, 109.
293. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [60].
294. Hitch v. Stone [2001] EWCA Civ 63
295. [2001] S.T.C. 214, at [87].
296. S.T.C.
297. See, e.g., Quennell v. Maltby [1979] 1 W.L.R. 318, 323 (C.A.)
298. Britannia Building Society v. Earl [1990] 1 W.L.R. 422, 428 (C.A.).
299. Mallott v. Wilson [1903] 2 Ch. 494, 501
300. see also Re Parsons [1943] 1 Ch. 12, 15–16 (C.A.)
301. Re Stratton's Disclaimer [1958] 1 Ch. 42, 54 (C.A.). The effect of the disclaimer is that the intended trustee never owes any duties to the beneficiaries, but the settlor ends up holding on trust after the disclaimer causes the property to revert to him or her.
302. Carman v. Yates [2004] EWHC 3448 (Ch), at [219].
303. National Westminster Bank plc v. Jones [2001] 1 B.C.L.C. 98, at [60].
304. 1 B.C.L.C.
305. Carman v. Yates [2004] EWHC 3448 (Ch), at [220].
306. The remedy in an estoppel claim is at the court's discretion: see Gillett v. Holt [2001] Ch. 210, 235 (C.A.)
307. Jennings v. Rice [2002] EWCA Civ 159
308. [2003] 1 F.C.R. 501, at [22]-[36] and [43]-[56]
309. Cobbe v. Yeoman s Row Management Ltd. [2006] EWCA Civ 1139
310. [2006] 1 W.L.R. 2964, at [120].
311. However, like all equitable discretionary remedies, this discretion is exercised according to settled principles, rather than in an unconstrained manner: Warman International Ltd. v. Dwyer (1995) 182 C.L.R. 544, 559
312. Ultraframe (U.K.) Ltd. v. Fielding [2005] EWHC 1638 (Ch), at [1579]
313. J. McGhee (gen. ed.), Snell s Equity, 31st ed. (London 2005), paras. [7–129] and [12–04].
314. For commentary on the factors that courts take into account in deciding on the appropriate remedy in estoppel claims, see S. Gardner, “The Remedial Discretion in Proprietary Estoppel” (1999) 115 L.Q.R. 438
315. S. Gardner, “The Remedial Discretion in Proprietary Estoppel - Again” (2006) 122 L.Q.R. 492.
316. This has now been made explicitly clear by statute for registered land (Land Registration Act 2002, s. 116,), but it was the better view as regards proprietary estoppel in any event: see R. J. Smith, “How Proprietary is Proprietary Estoppel?” in F. D. Rose (ed.), Consensus Ad Idem (London 1996), 235
317. C. Harpum, Megarry and Wade s Law ofReal Property, 6th ed. (London 2000), paras. [13–028]-[13.032]
318. Law Commission, Land Registration for the Twenty-First Century, Law Com No. 271 (London 2001), para. [5.30]
319. Birmingham Midshires Mortgage Services Ltd. v. Sabherwal (1999) 80 P. and C.R. 256, 263 (C.A.).
320. D. Fox, “Equities to Rescind and Interests under Resulting Trusts” [2000] C.L.J. 444, 446
321. R. Nolan, “Dispositions involving fiduciaries: the equity to rescind and the resulting trust” in P. B. H. Birks and F. D. Rose (eds.), Restitution and Equity (London 2000), 119, pp. 126–139
322. R. P. Meagher, J. D. Heydon and M. J. Leeming, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 4th ed. (Sydney 2002), para. [4–145]
323. J. McGhee (gen. ed.), Snell s Equity, 31st ed. (London 2005), para. [13–19].
324. For the principles as to priority between competing equities, see, e.g., R. P. Meagher, J. D. Heydon and M. J. Leeming, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 4th ed. (Sydney 2002), ch. 8
325. J. McGhee (gen. ed.), Snell's Equity, 31st ed. (London 2005), ch. 4.