Resulting trust: gratuitous transfer to put property out of creditor’s reach

In Yue Shiu Ngam v Zen She Lin ([1999] HKCU 1669) P transferred the title to his flat to D1  (his brother-in-law) for no consideration. This was done to try to prevent a creditor from obtaining a charging order over it. D2 (P’s sister and D1’s wife) knew of the arrangement. D1 tranferred the title to D2 again for no consideration. P was able to obtain declarations that D1 held the property on resulting trust for him and that D2 had no beneficial interest in the property. D2 was ordered to assign the property back to P. The fact that P had entered into the arrangement with a view to defeating creditors was irrelevant since he did not need to plead that purpose; he could rely on the presumption of resulting trust.

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