Hussey v Palmer
Court of Appeal
Citations:  1 WLR 1286.
The claimant was an elderly widow. Her son and daughter-in-law invited her to live with them in the son’s property. The claimant accepted. She paid £607 to extend the property to include an extra bedroom.
Relationships soured and the claimant left. She claimed that she had loaned the £607 and sought repayment. The county court held that this was a family arrangement, not a binding loan. The claimant then claimed instead that her son held the money on resulting trust for her. The High Court held that no resulting trust arose, because the money had been given as a loan. The claimant appealed.
- Was the claimant the beneficiary of a resulting trust?
The Court of Appeal held in the claimant’s favour. The claimant did not present the money as a gift. Since the parties never made arrangements for the money to be repaid, it was not a loan either. The presumption of resulting trust therefore arose. Given that the son used the money to improve his property, it would be unconscionable for him to retain that benefit without repaying his mother.
The son therefore held his home on resulting trust for himself and the claimant. The claimant possessed a share proportionate to the £607 she had paid.
This Case is Authority For…
The presumption of resulting trust is rebutted by evidence that the money was advanced as a gift or loan. This case indicates that the court will not treat money as a loan unless there is a legally binding loan.
Lord Denning considered that if a resulting trust had not arisen, a constructive trust would exist instead.
Cairns LJ dissented. He thought that the claimant’s contention that they gave the money as a loan was inconsistent with the presumption of resulting trust – even if that loan was not legally enforceable.