H was convinced by E, her lodger, to sign the house over to him on the supposed grounds that it would prevent H’s nephew from turning him out. She did so, and E, masquerading as full owner, sold to M. CA held that H had beneficial ownership under a resulting trust (since she had paid for the house and there could be no express trust as this would be void by virtue of s.53(1), unlike a resulting trust which is exempt by virtue of s.53(2)). Since she was in actual occupation and M had failed to make reasonable enquiry, H retained her beneficial ownership.
Russell LJ: “If an attempted express trust fails, that seems to me just the occasion for implication of a resulting trust, whether the failure be due to uncertainty, or perpetuity, or lack of form.” Using a PIRT is somewhat better than CT because the rules of the former allow it to be applied in this kind of situation and it doesn’t undermine s.53 LPA too much since the presumption can and will be rebutted in cases of genuine intent to make a gift. It also helps avoid the suggestion that the courts are moving towards the use of a remedial CT.