Oxford BA: Resulting & Constructive Trusts Exam Paper

Alice owns a restaurant business worth £500,000. In 2022, she discovers her accountant, Bob, has been embezzling funds by creating false invoices and diverting £80,000 to his personal account. Bob used £30,000 to purchase shares in TechCorp Ltd, which have now increased in value to £50,000. He spent £25,000 on a luxury holiday with his girlfriend, and the remaining £25,000 remains in his personal bank account, though this account also contains £15,000 of his legitimate earnings. Meanwhile, Alice's business partner, Carol, had promised to contribute £100,000 for a 30% stake in the restaurant. Carol paid the money but Alice has refused to transfer any shares, claiming it was merely a loan. Carol discovers Alice has used £60,000 of this money to purchase a vintage wine collection and £40,000 to renovate her personal kitchen. Advise Alice and Carol on their respective claims.

Critically evaluate the extent to which the decision in FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45 has resolved the theoretical difficulties surrounding the constructive trust as a remedy for breach of fiduciary duty.

David and Emma purchased their family home 'Greenacre' in 2019 for £400,000. The legal title is in David's sole name due to Emma's poor credit history, but Emma contributed £50,000 from her inheritance toward the deposit. They agreed Emma would pay the utility bills and David would handle the mortgage. In 2021, they spent £80,000 renovating the property (David contributed £50,000, Emma £30,000), increasing its value to £550,000. Their relationship deteriorated in 2022. Meanwhile, David's business partner Frank lent David £200,000 in 2020 to invest in cryptocurrency, with David promising to share any profits equally. The investment succeeded spectacularly, generating £800,000 profit, but David has refused to share anything with Frank, claiming it was a gift. Frank discovers David used £100,000 of the profits to purchase 'Blueacre', another property. David has just been declared bankrupt. Advise Emma and Frank on their potential claims, considering the impact of David's bankruptcy.

To what extent do resulting trusts truly reflect the intentions of the parties, or are they merely legal fictions designed to achieve particular policy objectives? Discuss with reference to both purchase money resulting trusts and automatic resulting trusts.