Balwant Singh Gill v Jashpal Singh Thind & Ors

An express trust of shares may be created without particular formalities if the words and conduct, viewed in context, show a clear intention to dispose of the shares for beneficiaries. Where shares are acquired without consideration, a resulting trust is presumed in favour of the person who caused them to be registered in the nominee’s name, subject to rebuttal. The court may determine the existence of a trust from the totality of reliable evidence, including inherent probabilities and contemporaneous documents. Forged or unreliable trust documents do not necessarily negate an underlying oral trust. A company member’s register is prima facie evidence of matters authorised to be entered in it, but a person who unilaterally alters the register without sufficient cause may be liable to rectification.

The claimant brought a Part 7 claim concerning the beneficial ownership of shares in Jeeves Estates Ltd, Jeeves Investments Ltd and Simicare Ltd. He also presented a petition under section 994 of the Companies Act 2006 concerning alleged unfair prejudice in relation to Jeeves Estates Ltd.

The defendants alleged that the claimant held shares on trust for their children or, in relation to Jeeves Estates Ltd, for all the claimant’s grandchildren. The claimant denied agreeing to act as trustee and alleged that documents relied on as trust deeds were forgeries. The trial was as to liability only. The central issues were whether express or resulting trusts existed, whether the share registers had been lawfully altered, and whether the section 994 petition succeeded.

1. Outcome. The Part 7 claim and the section 994 petition were dismissed. Further submissions were required concerning the terms of the trust declared over the 100 shares in Jeeves Estates Ltd.
2. For an express trust, the burden lay on the defendants to prove that the claimant’s words and conduct, considered in their surrounding context, demonstrated a clear intention to dispose of the shares so that the alleged beneficiaries acquired beneficial interests. No particular formality was required. The court applied that approach to the evidence concerning the three companies.
3. For a resulting trust, the absence of consideration gave rise to a readily rebuttable presumption that the shares were held for the person who caused them to be registered in the claimant’s name. The alleged forgery of the trust deeds did not itself prevent a resulting trust. The illegality relied on concerned evidence deployed to support the assertion of trust, and did not justify negating the resulting trust.
4. The court found that the JIL and Simicare trust deeds had probably been forged, but concluded on the remaining evidence that the claimant had agreed to hold the shares on trust for the Thind children. Alternatively, the shares were held on resulting trust for Mr and Mrs Thind.
5. The claimant’s 100 shares in JEL were held on express trust for all his grandchildren, although the terms and closing date of the beneficial class required further submissions. The court reached that conclusion narrowly, having regard to the family circumstances, the claimant’s statement that he held the shares for his grandchildren, and the implausibility of an outright gift without corresponding liabilities and responsibilities.
6. Under section 127 of the Companies Act 2006, the register was prima facie evidence that the claimant was the registered shareholder of the JIL and Simicare shares until 2018. The defendant had no right to alter the registers unilaterally. Although section 125 permitted rectification, no order was required because the claimant was an unsuitable trustee and undertakings had been offered by the defendants.

First-instance judgment. The judgment does not state any prior appellate decision.