In Hodgson v Marks ([1971] 2 All ER 684, CA (Eng)) a lady (Mrs H) made a voluntary transfer of her house to her lodger. It was accepted that they both knew that no gift was intended and that the purpose was simply to prevent the lady’s nephew from ejecting the lodger.
The English Court of Appeal found as a fact that the lodger held the property on trust for Mrs H. This was so first because this was a voluntary transfer and the evidence showed that there was no intention to make a gift. Alternatively, the resulting trust arose because this was an attempt to create an express trust that failed for want of compliance with section 53(1) of the Law of Property Act 1925 (in this respect in the same terms as section 5(1) of Hong Kong’s Conveyancing and Property Ordinance) (Russell LJ at 689).
Alternatively, this was a case of an express trust where compliance with section 53(1) could not be relied upon:
‘Quite plainly Mr Evans could not have placed any reliance on s.53 for that would have been to use the section as an instrument of fraud.’ (Russell LJ at p 689).
Michael Lower
