This could arise, for example, where A contracts with B to do something
for the benefit of C. If B were to be considered as holding the benefit on
trust for C, then C could be in a position to claim in trust law against A in
his position as beneficiary of a trust. Implying a trust in this way can be
traced back some time, but the leading case on the point is Les Affreteurs
Reunis SA v Walford.
The courts have been wary of using one area of law to avoid another, so
through cases the scope of the doctrine has been narrowed. Evidence of a
trust does not come from a particular form of wording, but it is necessary
to find an intention. Had this been widely developed, the doctrine of privity
would have eventually been of little significance. However, the courts are
reluctant to imply a trust where none was really envisaged. Whether they
do so in future depends on the readiness of the court to construe a trust out
of a contract. The general trend seems to be against implying a trust, as the
following two cases illustrate.
140 Contract law
Les Affreteurs Reunis SA v Walford (1919)
Walford was a broker who arranged the chartering of ships between the
owners and the hirers. Within the charter was a clause stating that the
owners would pay him 3 per cent commission for his work. When this
was not paid he claimed that the money was held on trust by the
owners, and sued them successfully to obtain payment.Re Schebsman (1943)
Schebsman was due to receive money after working for a company,so
entered into an agreement where he would be paid, or if he died,his
wife and daughter were to receive the money. He did die, and no money
was paid to his family. They sued, but were not successful,the courts
not wanting to create a trust where none had ever been intended by the
parties.Beswick v Beswick (1968)
Mr Beswick sold his business to his nephew and in return was to
receive a sum of money each week, or, on his death, £5 per week to his
widow. After he died she only received one payment, so sued in the
following alternative ways:- on the basis of a trust
- under the Law of Property Act 1925 (see below)
- in her personal capacity as administratrix of her husband’s estate.
The court rejected the first two arguments, but allowed her to succeed
as she was administering the estate. It could be argued that it was