Balwant Singh Gill v Jashpal Singh Thind & Ors

An alleged oral declaration of trust must demonstrate an intention to create a trust, but it is not subject to a heightened civil standard of proof. The alleged words, or their gist, and their intended meaning are questions of fact. The court may consider the parties’ subjective intentions and subsequent conduct when deciding whether the words and conduct sufficiently clearly show that intention.

The ordinary civil standard is the balance of probabilities. An appellate court will not disturb a trial judge’s factual finding that an oral trust was declared unless the finding was not open to the judge or was rationally insupportable.

Following a family dispute concerning shares in three family companies, Mr Gill claimed beneficial ownership of 100 shares in Jeeves Estates Ltd. Mr and Mrs Thind contended that he held those shares on trust for his grandchildren.

After an 11-day trial, the High Court held that Mr Gill was an express trustee of the shares for all his grandchildren. A consequential judgment applied the class-closing rule so that only the first six grandchildren benefited. The primary judgment was [2022] EWHC 2872 (Ch).

Mr Gill appealed the finding of an express trust. He argued that the evidence did not establish a sufficiently clear intention to create a trust, that he had made a capital investment, and that the judge’s conclusion should be set aside on appeal. The central issue was whether the judge had made an error of law or an impermissible factual finding in upholding the alleged oral declaration of trust.

1. Appeal dismissed. The court unanimously upheld the finding that Mr Gill held the 100 shares in Jeeves Estates Ltd on express trust for his grandchildren.

2. The first of the three certainties requires an intention to create a trust. In the case of an alleged oral declaration, the court must decide, on the balance of probabilities, what was said, or its gist, and whether the words demonstrated that intention. Those are factual questions. Unlike interpretation of a wholly written declaration, evidence of subjective intention and subsequent conduct is admissible. The court explained [1977] 1 WLR 527: its reference to clear evidence did not impose a standard higher than the balance of probabilities. It required words and conduct that sufficiently clearly demonstrated an intention to create a trust.

3. The judge had applied the correct burden and standard of proof. He was entitled to assess the reliable oral evidence, later conduct, documents and plausibility together. The unresolved legal question concerning the date on which the beneficiary class closed did not undermine the factual finding that an oral trust had been declared.

4. The findings that Mr Gill had not made a capital investment and that he had declared a trust were findings of fact. They were not rationally insupportable. An interest-free family loan was not, in this context, necessarily an investment. The judge was entitled to give limited weight to documents suggesting beneficial ownership, including the 2011 option agreement, and to treat Mr Gill’s statement that he held the shares for the grandchildren “for the moment” as an acknowledgement, not a denial, of the trust.

5. The alternative resulting-trust ground did not arise. The respondents’ notice was unnecessary, although the further evidence identified by the respondents supported the trial judge’s conclusion.

• Court of Appeal (Civil Division): Dismissed Mr Gill’s appeal and upheld the declaration that he held 100 shares in Jeeves Estates Ltd on trust for his grandchildren: [2023] EWCA Civ 1276.

• High Court, Chancery Division: Following an 11-day trial, held that Mr Gill held the shares on express trust for all his grandchildren: [2022] EWHC 2872 (Ch). In a consequential judgment, applied the class-closing rule so that the beneficiaries were the first six grandchildren: [2022] EWHC 3651 (Ch).