Provincial Equity Finance Limited v Helen Dines (Née Breda)

A claimant seeking a resulting trust must first prove that it provided the purchase money. Only then does the presumption that the recipient did not receive a gift arise. The court will assess the alleged provider’s intention from the account arrangements, contemporaneous documents, accounting treatment and surrounding circumstances. The use of personal accounts for both business and private transactions, without sufficiently certain identification of the company’s money, may prevent a trust arising in the company’s favour. An express declaration of trust may determine beneficial ownership as between the parties, subject to recognised grounds for setting it aside or rectification. However, that issue need not be reached where the claimant fails to prove that it funded the acquisition.

Provincial Equity Finance Limited claimed beneficial ownership of eleven Bournemouth flats registered in Helen Dines’s name, and equitable relief concerning a twelfth flat and £130,000 transferred from an account held in Graham Dines’s name. The company alleged that it had provided the purchase monies and that the properties were therefore held on resulting trust for it. Helen contended that the funds belonged to Graham personally, that she beneficially owned the properties, and that declarations of trust governed four jointly owned properties.

The central issue was whether the company, rather than Graham, provided the purchase monies. The court also considered, contingently, the effect of the declarations of trust and the claim concerning the £130,000.

1. Claim dismissed. The company failed to establish that it provided the purchase monies for any of the twelve properties. Its resulting-trust claim therefore failed. The claim concerning the £130,000 also failed because the funds in the relevant account belonged to Graham personally rather than to the company.
2. The governing principle, stated in Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, is that where A pays wholly or partly for property vested in B, there is a presumption that A did not intend a gift. The company nevertheless bore the burden of proving that it supplied the purchase money, in accordance with Constandas v Lysandrou [2018] EWCA Civ 613 at [31].
3. The evidence did not establish that the funds in any of the three accounts were beneficially owned by the company. The accounts were held in Graham’s name, were used indiscriminately for personal and company transactions, and the accounting treatment did not reliably establish his beneficial intention. The wording of earlier wills and codicils also contemplated that some money in the accounts belonged to Graham, creating uncertainty as to the subject matter of any alleged trust. The circumstances therefore differed materially from Re Kayford Ltd [1975] 1 WLR 279, where the trust fund and beneficial interests were sufficiently certain.
4. As an alternative, if the company had proved that it supplied the purchase monies, a resulting trust would have arisen for it in relation to the four properties registered solely in Helen’s name. In relation to four jointly owned properties, the declarations of trust would have rebutted the presumption. The court referred to Pettitt v Pettitt [1970] AC 777, Goodman v Gallant [1986] Fam 106 and Turton v Turton [1988] Ch 542. Those alternative findings were unnecessary to the result.