Provincial Equity Finance Limited v Dines [2023] EWCH 103 Chwas an inheritance claim between the deceased’s children from his first marriage and their stepmother.  On the death of Graham Dines, his children became the controlling shareholders in their father’s company, Provincial Equity Finance Limited ("PEF").  The company brought a claim against Helen Dines, Graham’s second wife, over the ownership of a number of buy to let properties in Bournemouth and some cash transferred from the deceased’s bank account.

A total of 12 properties with a cumulative value in excess of £1m were registered in Helen Dines’ name.  PEF asserted that the properties were held on trust for the company as beneficial owners and sought a declaration to that effect.  They also claimed for equitable compensation over a sum of £130,000 which Mrs Dines transferred from her husband’s bank account, which it was claimed was company money.  It was Helen Dines’ case that the properties were owned by her husband personally or by them jointly and the cash sum was the proceeds of sale of their matrimonial home.

The beneficial ownership claim was founded on the basis that PEF provided the purchase monies for the properties and that they were, therefore, held on resulting trust. The Claimant relied on Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, a leading trusts case concerning the circumstances under which a resulting trust arises.  In that case, it was held that such a trust must be intended, or must be able to be presumed to have been intended. A presumed resulting trust arises when an owner transfers title to another voluntarily and without consideration and the recipient is deemed to hold the property on resulting trust for the original owner. PEF did not assert any claims of a wider constructive trust or on an estoppel basis, meaning that Mr Dines’ intentions in relation to the properties and the disputed funds were not relevant.

The burden of proof fell on PEF to evidence that it was the company which provided the purchase monies rather than Graham Dines personally, therefore establishing that the properties were held on resulting trust for the company. PEF did not, however, have its own bank account and the purchases were effected with funds from accounts in Mr Dines’ name. Whilst it was accepted that the “hopelessly disorganised” but “shrewd” businessman used the same accounts for personal and business expenditure, PEF was unable to establish that it was the company and not Mr Dines personally who had purchased the properties.  Accordingly, both claims brought by the company failed.

In his judgment, Judge Andrew Lenon KC stated: “PEF has failed to establish that it, rather than Graham personally, provided the purchase monies for any of the properties.  The claim to beneficial ownership of the properties based on a resulting trust in its favour must therefore fail.  I appreciate that my decision with regard to the ownership of the properties and the £130,000 may come as a great disappointment to Elliott and Louise, who may feel that it is not the outcome of the case that Graham would have wished for.  If the outcome differs from what Graham would have wished for, that may be seen as a consequence of…Graham's hopeless disorganisation when dealing with paperwork and his failure over many years to organise and document his business finances and transactions with greater rigour.”

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