Dhingra v Dhingra

A trust of personal property may be declared orally or inferred from conduct. No particular form of words is required. Where the property is already held by the settlor, the trust is completely constituted when declared and may be enforced by a volunteer beneficiary. A completely constituted trust is generally irrevocable unless a power of revocation was reserved, subject to recognised exceptions such as fraud, mistake or misapprehension. Trust property cannot be diverted from the beneficiary merely by transferring it into joint names.

The father appealed against an order of Brentford County Court declaring that savings accounts and a National Savings Bond were held on trust for his son. The trial judge inferred from account descriptions, documents and the surrounding circumstances that the father had declared a trust when the first account was opened. The father challenged intention, constitution, certainty of objects, revocation, the effect of the bond being held in joint names, and the evidential assessment. The Court of Appeal considered whether the findings and legal conclusions were sustainable.

1. Appeal dismissed. The Court of Appeal, in a judgment delivered by Mr Justice Lindsay and agreed to by Lord Justice Schiemann, upheld the trial judge’s declaration of trust.
2. A declaration of trust of personalty may be made orally or inferred from conduct. No particular form of words is necessary. The account descriptions stating “Trustee for SS Dhingra”, together with the surrounding evidence, provided ample material from which an intention to declare a trust for the son could be inferred.
3. The three certainties were established. The description of the father as trustee necessarily indicated a beneficiary other than himself, and in context the son was the certain intended beneficiary.
4. The argument based on Warriner v Rogers was rejected. The case had been misunderstood if read as requiring the settlor absolutely to part with the legal interest. A declaration of trust is effective even though the legal estate remains in the declarer, because the beneficial interest passes by declaration. Milroy v Lord made that clear.
5. The trust was completely constituted when declared. Accordingly, the son could enforce it despite being a volunteer. The father had no general power of revocation, and no applicable exception based on fraud, mistake or misapprehension was established.
6. The National Savings Bond remained subject to the trust because it had been purchased with trust money. Registering it in the joint names of father and son could not divest the son of his beneficial entitlement.
7. The trial judge had applied the balance of probabilities and had properly considered the available documents and evidence. The appeal was dismissed with costs, subject to detailed assessment of the respondent’s costs.

1. Court of Appeal (Civil Division): Dhingra v Dhingra, [1999] EWCA Civ 1899. Appeal dismissed with costs.
2. Brentford County Court: Mr Recorder White declared that the relevant accounts and National Savings Bond were held on trust for the son, ordered an account and consequential payment, and dismissed the father’s counterclaim.