The role of trusts in cultural property claims. (2024)

INTRODUCTION

Claims for the restitution of cultural property are often basedupon an assertion that the claimant is the absolute owner of theproperty in question despite its misappropriation by the defendant, orby a person from whom it has been directly or indirectly received. Thisis hardly surprising. Cultural property usually takes the form oftangible personality--in other words, chattels--which may bemisappropriated in a wide range of circ*mstances, including theft,trickery, compulsion, illegal excavation and illegal export, to name buta few. Where the claimant's property is taken in such circ*mstancesand found to be in the possession of the defendant, it is quite naturalthat the claimant should wish to assert absolute ownership of theobject. The argument is likely to be that, while the defendant may haveacquired possession along the way, the claimant's absoluteownership endures and carries with it a better right of possession thanthat of the defendant. This is a function of the well-known common lawprinciple nemo dat quod non habet.

Yet there is an alternative way for the claimant to formulate hisclaim. This is to accept that the defendant has acquired an interest inthe property (beyond possessory title) but to assert that the defendantholds that interest on trust for the claimant. In seeking to define atrust, Underhill and Hayton state: (1)

 A trust is an equitable obligation, binding a person (called a trustee) to deal with property (called trust property) owned and controlled by him as a separate fund, distinct from his own private property, for the benefit of persons (called beneficiaries or, in old cases, cestuis que trust), of whom he may himself be one, and any one of whom may enforce the obligation.

The essence of a trust is, therefore, that ownership of property,(2) which is vested in the trustee, is held by him subject to anobligation to deal with it for the benefit of the beneficial owner(s).

At first blush it may seem that a claim to an interest under atrust is very much inferior to a claim to absolute ownership. In thefirst place, why would the claimant wish to give the defendant thepsychological advantage of conceding that the defendant has acquired anytitle to the property at all? Equitable interests are also morevulnerable to extinction than absolute interests and therefore give theclaimant a weaker, more precarious form of property. This being so, whybother to claim this lesser form of property?

The short answer is that there are at least two situations when theclaimant may have no choice. The first is where, despite having been theoriginal owner of the property, the claimant finds that his legal titlehas been divested or extinguished as a result of some transaction beforehe can recover it from the defendant. This might arise in any number ofways. For example, the property may have been subject to a transactionabroad where the lex situs conferred a good title on the transferee orthe claimant's title may have been extinguished by limitation or bysome legislative act which has vested title to the property in another.In such a case equity may be the claimant's salvation. The law oftrusts may allow him to argue that although his legal ownership has beenlost, the defendant nevertheless holds the property on trust for theclaimant to carry back to him in equity what is rightfully his. Thesecond situation is where the claimant only ever begins with anequitable title. It is difficult to envisage any situation in which sucha claimant will be able to argue that his original equitable interesthas been 'upgraded' to absolute ownership by misappropriation.His best hope is likely to be that his original equitable interest hasnot been divested at all or, if it has, again, that a trust has arisento ensure that he nevertheless remains the beneficial owner of theproperty.

The purpose of this article is to explore in greater detail howsuch arguments might be developed. This enquiry will be undertaken inthree stages. In Part I, we begin with an overview of the law oftransfers of title under English law. This will provide a greaterunderstanding of the circ*mstances in which the claimant may find thathis original legal or equitable title to cultural property has beendivested by a transaction governed by English law. In Part II we thenconsider the circ*mstances in which English law may find that a claimantwhose title has been extinguished may nevertheless be able to claim anequitable interest under a trust arising by operation of law. Thisinvolves wide-ranging and complex issues of law which are in manyrespects uncertain and which are hotly debated by judges, academics andpractitioners. It requires, in particular, some appreciation of the(controversial) role of trusts within the law of unjust enrichment andwithin the law of restitution more generally. Finally, in Part III, weconsider how these principles might apply in claims involving culturalproperty specifically.

It is important to note at the outset that this article considersthe position under English law. Many claims involving themisappropriation of cultural property will have a cross-border elementand will therefore raise questions both as to the jurisdiction ofEnglish courts and choice of law issues. Such matters fall outside thescope of our present enquiry.

I. NATURE AND PERSISTENCE OF THE CLAIMANT'S ORIGINAL TITLE

Identifying the Claimant's Original Interest

As the above introductory remarks make clear, the starting point inany case where the claimant seeks to recover misappropriated culturalproperty is to identify the precise nature of his original proprietaryinterest. Only when this has been correctly identified is it possible tosee, applying the relevant rules on the transfer of title, whether theclaimant's original interest in the property has survived themisappropriation. In this regard, it is vital to have a clearunderstanding of the range of proprietary interests in cultural propertywhich the claimant may have. In the discussion so far we have alreadyreferred to legal and equitable title, absolute and legal ownership andequitable interest. It is convenient to begin by examining theseconcepts in greater detail. Professor Goode states the position withgreat clarity. Of ownership, Goode says:

 Ownership, one of the most elusive concepts of English law, is conventionally defined as the residue of legal rights in an asset remaining in a person, or persons concurrently, after specific rights over the asset have been granted to others. A person in whom such residue of rights is vested is said to have an absolute interest in the asset. By contrast, one who enjoys merely specific rights, e.g. possession under a pledge, lien or other bailment, has only a limited interest. Interest is to be distinguished from title. A person's interest in an asset denotes the quantum of rights over it which he enjoys against other persons, though not necessarily against all persons ... (3)

The common law recognises two distinct forms of title to ownership:legal and possessory title. The first is the 'best' or'paper' title of the true owner. This is the best possibletitle to ownership of the asset in the sense that the claimant has thebest claim to be recognised as the owner. His title will prevail overand be enforceable against all others claiming an adverse titleincluding anyone else in possession. The second (lesser) form of titleis based upon possession. Essentially, the fact of possession gives riseto a legal presumption that the possessor is the owner and law affordshim certain remedies to protect his presumed interest in the goods. Itis for this reason that possession is said to 'count as title'or be a 'root of title'. (4)

Turning to equitable ownership, Goode continues:

 Equitable title to property (whether land or goods) thus involves divided ownership, legal title being in A and beneficial ownership in B. When A holds legal title primarily for the benefit of B, the relationship is that of trustee and beneficiary. But division of ownership may also occur without a trustee relationship, namely when A holds the legal title primarily for his own interest, as in the case of a mortgage. Divided ownership in one form or another is the essence of equitable title. If both legal and beneficial ownership is vested in the same person, there is no scope for equity to operate on the asset, and no separate equitable interest can be said to exist ... As in the case of legal ownership, it is necessary, when discussing ownership in equity, to distinguish interest and title, interest denoting the quantum of the right to the asset, title the strength of that right as against others ... (5)

A claimant with sole legal ownership of property is presumed to bethe beneficial owner and, as Goode observes, in cases of absoluteownership there is no room for a trust. A trust presupposes a divisionof legal or equitable title but where legal and beneficial ownership arevested in the same person, there is no separate equitable interest. Tosimilar effect, in Westdeutsche Landesbank Girozentrale v. IslingtonLBC, Lord Browne-Wilkinson observed: (6)

 A person solely entitled to the full beneficial ownership of money or property, both at law and in equity, does not enjoy an equitable interest in that property. The legal title carries with it all rights. Unless and until there is a separation of the legal and equitable estates, there is no separate equitable title.

To describe die absolute owner as just the legal owner is notinaccurate as the absolute owner necessarily has legal title, but thedescription is ambiguous because it fails to convey that the legal owneris also beneficially entitled. Similarly, references to the beneficialowner may be ambiguous insofar as they fail to distinguish thebeneficial interest of the absolute owner from that of the equitableowner under a trust. To avoid confusion, it is therefore preferable tospeak of: (1) absolute ownership when describing the combined legal andbeneficial interest; (2) legal ownership where it is the legal interestspecifically that is under consideration (whether that of the absoluteowner or trustee); (3) equitable ownership where the relevant interestarises under a trust; and (4) beneficial ownership when the beneficialentitlement, however it arises, is in issue. This is the usage adoptedin this article.

Against this background, when considering the effect of themisappropriation on the claimant's interest, it is important todistinguish between a claimant with absolute ownership of the goods andone with equitable ownership only. The absolute owner's firstconcern will be to see whether his legal ownership has been divested. Ifnot, he will assert it against the defendant. If it has been divested,he will want to see whether he can still claim a beneficial interest inthe object. As there was no trust of the property at the outset, itfollows that the claimant will need to assert that a trust has arisen sothat an equitable interest is created in his favour. The claimant whobegins as equitable owner is in a different position. His first concernwill be to see whether his original equitable interest can be assertedagainst the defendant. If so, all is well. If not, he too will want tosee whether a trust has arisen to vest him with a newly createdequitable interest.

The circ*mstances in which the law may generate new equitableinterests are the subject matter of Part II below. Before coming tothis, we must first consider the basic rules on transfer of title, whichgovern the logically prior question of whether the claimant'soriginal interest has been divested or extinguished in the first place.

The Transfer of Title

The law governing the transfer of title is complex. Any summary ofthe relevant rules must draw on legal and equitable principles fromacross the law of property, trusts and agency, which must cater for aninfinite variety of factual situations. (7) As a result, it is possibleto summarise the law only at the highest level: (8)

1 The cardinal rule is that property passes if and when the partiesintend it to pass. (9) This remains so even if the transaction is insome way defective. Thus, property will still pass where there has beena total failure or absence of consideration, where the transaction isillegal, where one or other of the parties lacks capacity owing tominority or institutional incapacity or where the transaction wasprocured by misrepresentation, undue influence or by exploitation ofweakness.

2. The only circ*mstances in which property will not pass eventhough the parties intended it to is where the transferor'sintention is so seriously impaired that it can be treated as vitiated.(10) Vitiation of intention is exceptional and will arise only in verylimited cases. One such case is where the claimant has made afundamental mistake in respect of the transaction. This is probablylimited to a mistake as to the identity or quantity of the property orthe identity of the recipient. (11) In all other cases the mistakeshould probably be characterised as relating to motive, with the resultthat it is insufficiently serious to vitiate intent. Other cases wheretitle will not pass are where there has been misrepresentation as to afundamental matter and where the transferor's dispositive intentionis the result of compulsion which is so extreme that he has noalternative but to do as the transferee demands. (12) If the transferorhas a choice whether to submit to the demand, this will again go tomotive and will not vitiate his intent.

3. If the owner does not intend that title should pass, it will notdo so. If the claimant is ignorant of the fact that his property hasbeen taken he cannot have intended that ownership should pass. Thus,where property is stolen, title will not pass to the thief. (13)Similarly, if the claimant knows of the transfer, but is powerless toprevent it, he will lack the necessary dispositive intention.

4. Where the defendant receives the claimant's propertyindirectly from a third party, X, whether or not the disposition iseffective to pass title to the defendant will depend upon the precisenature of the claimant's interest, (14) the nature of X'sinterest and powers (15) and the precise interest granted to thedefendant: (16)

(1) The basic rule in transfers of tangible property is nemo datquod non habet, that is to say, no one can give a title they do nothave. Only the legal owner of goods or someone who is authorised or heldout by the true owner as entitled to dispose of them can make adisposition which is effective to pass legal title. (17) This means thata thief cannot transfer ownership of stolen goods. (18) It also meansthat a legal owner whose interest is held on trust cannot transfer aninterest free of the equitable interest (although this is subject to thedoctrine of bona fide purchaser considered below).

(2) Whether a disposition by X of the claimant's legalproperty is effective to pass legal title to the defendant thereforedepends upon whether X has power to transfer such title. Such power mayarise under the law of agency or a recognised exception to the nemo datprinciple. (19) If X does not have the power to transfer legal title, itwill not pass. If he does, it will pass in accordance with the intentionof the parties.

(3) If X is a trustee and disposes of the trust property lawfully,the claimant's equitable interest in the property will beextinguished. If the transfer is a breach of duty the position is morecomplex: (20)

(a) If the transfer by the trustee is without authority it is voidin equity. The precise consequences of this for claimants will vary:

(i) The law prefers a legal interest to an equitable interest withthe result that the holder of an equitable interest is subordinated to abona fide purchaser of the legal interest in good faith without noticeof the equitable interest. Consequently, if X has validly transferredlegal title to the defendant, although the transfer is void in equity,the defendant who is a bona fide purchaser for value without notice willtake free of the claimant's equitable interest. All otherdefendants will be bound by it.

(ii) If, more unusually, the claimant's equitable interestarises under a sub-trust, so that X is a trustee for the claimant not ofthe legal title but of an equitable interest under a head trust,X's disposition will be of an equitable interest in the property.The basic rule for determining competing claims to the same equitableinterest in tangible property is qui prior est tempore potior est jure,or the first in time prevails. The defendant, even if a bona fidepurchaser, will therefore take subject to the claimant's equitableinterest. (21)

(b) If X is a trustee and the disposal was within the scope of hisauthority but was a breach of duty in some way, on his disposal of thechattel ownership of the trust property, legal or equitable, will passto the defendant but the transaction may however be voidable in equityand liable to be set aside. The power to rescind the transfer is a mereequity and binds purchasers for value with notice of the equity andvolunteers with or without notice. However, it does not bind bona fidepurchasers without notice, even if the subject matter of the purchase isequitable only.

5. If legal title passes to the defendant, the transaction maynevertheless be voidable at common law. (22) Contracts may be rescindedfor fraudulent misrepresentation, duress and mental incapacity.Insurance contracts may also be rescinded for non-disclosure andnon-fraudulent misrepresentation. When the claimant rescinds atransaction under which legal ownership has passed, legal titleautomatically reverts to the claimant. (23)

6. In equity, contracts may be rescinded for fraudulent andnon-fraudulent misrepresentation, undue influence, unconscionabledealing and (as indicated above) for breach of fiduciary duty. (24)Gifts may be rescinded in equity for undue influence, misrepresentationand some unilateral mistakes. Rescission in equity cannot accomplish arevesting of the legal title. When the remedy is exercised it creates atrust of the property for the rescinding party. (25)

Drawing the threads together, the claimant with absolute ownershipmay be able to show that his legal title has not passed to the defendantowing to want of any intention that it should do so or because any suchintention was vitiated or because the transfer was effected by a thirdparty who lacked the power to transfer title. Title will however passwhenever such was the claimant's intention or it is transferable byvirtue of any relevant third party power. The same rules apply fordispositions of an equitable owner's equitable interests in thegoods. (26)

If legal or equitable title has passed it is at this point that theclaimant may look to a trust arising by operation of law to protect hisbeneficial interest. As indicated above, one basis upon which a trustmay arise is rescission in equity in respect of a defective legaltransfer, but there are others. It is therefore to the generation ofequitable interests more generally that we now turn.

II. THE CREATION OF EQUITABLE PROPERTY RIGHTS

Trusts come in different shapes and sizes and can be classified indifferent ways. However, one central distinction is between expresstrusts (27) on the one hand and trusts arising by operation of law onthe other hand. It is this second group, which can itself be subdividedinto resulting and constructive trusts, that is likely to be of greatestsignificance in claims involving cultural property.

Over recent years the precise circ*mstances that give rise to bothresulting and constructive trusts have been the subject of intenseacademic debate and controversy. Much of this debate has taken place inthe context of a wider discussion about the role of equity, property andtrusts in the law of restitution. We will come to the precise factsgiving rise to both types of trust shortly but before doing so it isprobably worth setting out, in brief terms, the main schools of thoughtas to the role of the trust as a restitutionary remedy. Someappreciation of these different ideas provides a good grounding for amore detailed consideration of the relevant rules. It may also castlight on the way in which the law may develop in due course.

Unjust Enrichment, Trusts and the Law of Restitution

Much has been written on the law of restitution in recent years. AsVirgo explains:

 The law of restitution is concerned with the award of a generic group of remedies which arise by operation of law and which have one common function, namely to deprive the defendant of a gain rather than to compensate the claimant for loss suffered. These are called the restitutionary remedies. Whilst there is a great deal more to the subject than this remedial aspect, since it is also vital to determine what circ*mstances will trigger the award of restitutionary remedies, it is only because there are a group of remedies which have the common function of depriving defendants of gains that we are able to assert that there is an independent body of law which can be called the law of restitution. (28)

It is now widely recognised that a distinction must be drawnbetween those restitutionary remedies which are awarded to reverse anunjust enrichment to the defendant and those which are awarded toprevent the defendant from profiting from his wrong. Unjust enrichmentis an independent cause of action, like contract and tort, which ariseswherever the defendant has been enriched at the expense of the claimantin recognised circ*mstances of injustice and there is no defenceavailable. (29) The categories of injustice giving rise to a claim, or'unjust factors', can be divided into two groups. (30) First,where the unjust factor means that the claimant's consent to thedefendant's enrichment is impaired, qualified or absent. Thisincludes cases of mistake, duress, undue influence, exploitation ofweakness, incapacity of the individual, failure of basis, (31) ignoranceor powerlessness and a fiduciary's lack of authority. The secondgroup is where there is some other reason why the enrichment is unjust.It includes legal compulsion, necessity, factors concerned withillegality and the unlawful obtaining or conferment of a benefit on apublic body. Restitution for wrongdoing has an entirely differentjuristic basis. Here the aim of any restitutionary remedy is not toreverse an enrichment at the claimant's expense but to strip thedefendant of any ill-gotten gain which he has made as a result of alegal or equitable wrong (e.g. breach of contract, tort, or breach offiduciary duty). (32)

One great question that divides scholars is whether there is, inaddition to restitution for unjust enrichment and restitution forwrongdoing, an independent third strand to the law of restitutiondealing with the vindication of property rights which have beeninterfered with. Virgo, a leading proponent of the latter view, holdsthat restitution to vindicate property rights and restitution for unjustenrichment are distinct:

 Where the claimant has a proprietary interest in property which has been received by the defendant, the claimant may seek to obtain a restitutionary remedy to vindicate that right, regardless of whether it previously existed or has been created by operation of law ... It has often been assumed that, where the claimant seeks to recover property in which he or she has a proprietary interest, the recovery of that property or its proceeds can be justified only by reference to the principle that the defendant has been unjustly enriched at the expense of the claimant. But this is only true to the extent that 'unjust enrichment' is used in a trivial, descriptive sense to indicate that the defendant has property which it is just for him or her to return to the claimant. 'Unjust enrichment' in its substantive sense is completely irrelevant in this context, because the action to vindicate property rights forms part of the law of property and has nothing to do with the principle of reversing the defendant's unjust enrichment. Once it has been shown that the defendant has received or retained property in which the claimant has a proprietary interest, nothing else needs to be proved to establish the claimant's cause of action. If the defendant has the claimant's property he or she should return it, or its value, to the claimant, without the claimant first having to establish that the defendant has been unjustly enriched at his or her expense. (33)

Virgo's view derives authoritative support from the decisionof the House of Lords in Foskett v. McKeown. (34) In this case Murphyhad effected a whole life policy, which was held, together with anymoneys paid thereunder, on trust for his wife and children. He paid fivepremiums, each of 10,220[pounds sterling], before committing suicide.The first two were paid from his own funds, the source of the third wasdisputed and the fourth and fifth were paid from deposits which Murphyheld on trust for the claimants, potential purchasers of plots of landin Portugal. On Murphy's death the insurers paid 1m [poundssterling] to the trustees of the policy. The House of Lords held thatthe trustees held the policy monies on trust for the claimants andMurphy's children rateably according to their respectivecontributions to the premiums paid for the policy. The Court reasonedthat the claimants could trace their money into the premiums, into thepolicy and then into the insurance monies. In coming to this conclusionthe House of Lords drew an important distinction between'following' and 'tracing'. Lord Millett said: (35)

 The process of ascertaining what happened to the plaintiffs' money involves both tracing and following. These are both exercises in locating assets which are or may be taken to represent an asset belonging to the plaintiffs and to which they assert ownership. The processes of following and tracing are, however, distinct. Following is the process of following the same asset as it moves from hand to hand. Tracing is the process of identifying a new asset as the substitute for the old. Where one asset is exchanged for another, a claimant can elect whether to follow the original asset into the hands of the new owner or to trace its value into the new asset in the hands of the same owner. In practice his choice is often dictated by the circ*mstances.

An asset is therefore followed (not traced) where it remains inidentifiable form and moves from person to person. By contrast, tracingis a process which takes place where one asset is substituted foranother. The value inherent in the claimant's original property istraced through the unauthorised substitution into the final exchangeproduct. The 'law of tracing' is best seen as a body of rulesof evidence which the claimant must invoke in order to justify the claimthat a particular asset is 'his', in law or in equity, whenthat asset is the exchange product of his original property. Foskett v.McKeown was itself a claim based upon tracing not following:

 In the present case the plaintiffs do not seek to follow the money any further once it reached the bank or insurance company, since its identity was lost in the hands of the recipient (which in any case obtained an unassailable title as a bona fide purchaser for value without notice of the plaintiffs' beneficial interest). Instead the plaintiffs have chosen at each stage to trace the money into its proceeds, viz, the debt presently due from the bank to the account holder or the debt prospectively and contingently due from the insurance company to the policy holders. (36)

The House of Lords was emphatic that the claim was not based uponunjust enrichment:

 The transmission of a claimant's property rights from one asset to its traceable proceeds is part of our law of property, not of the law of un just enrichment. There is no "unjust factor" to justify restitution (unless "want of title" be one, which makes the point). The claimant succeeds if at all by virtue of his own title, not to reverse unjust enrichment. Property rights are determined by fixed rules and settled principles. They are not discretionary. They do not depend upon ideas of what is "fair, just and reasonable". Such concepts, which in reality mask decisions of legal policy, have no place in the law of property... (37) A plaintiff who brings an action in unjust enrichment must show that the defendant has been enriched at the plaintiff's expense, for he cannot have been unjustly enriched if he has not been enriched at all. But the plaintiff is not concerned to show that the defendant is in receipt of property belonging beneficially to the plaintiff or its traceable proceeds. The fact that the beneficial ownership of the property has passed to the defendant provides no defence; indeed, it is usually the very fact which founds the claim. Conversely, a plaintiff who brings an action like the present must show that the defendant is in receipt of property which belongs beneficially to him or its traceable proceeds, but he need not show that the defendant has been enriched by its receipt. He may, for example, have paid full value for the property, but he is still required to disgorge it if he received it with notice of the plaintiff's interest. (38)

The Court's rejection in Foskett v. McKeown of an analysisbased upon unjust enrichment clearly echoes Virgo's views onproprietary restitution. The case shows that if the claimant can assertbeneficial title to the traceable proceeds of his property in the handsof the defendant, the latter cannot be said to have been enriched at theclaimant's expense because he has not been enriched by receipt ofproperty at all. Any restitutionary remedy awarded in such circ*mstanceswould, in line with Virgo's analysis, be for interference with theclaimant's proprietary interests. This led Goff and Jones toobserve:

 A claim to a benefit received by a defendant may be based upon the claimant's title to property. At one time this text drew a distinction between pure proprietary claims, which belonged to the law of property, and restitutionary proprietary claims which arose by operation of law in order to prevent another's unjust enrichment. However, authoritative decisions suggest that an argument based on this distinction will now almost certainly fail. In particular the House of Lords has now held, in Foskett v McKeown, that all proprietary claims, whether to the original asset or its substitute, form part of the law of property and no part of the law of unjust enrichment. (39)

Although English law on this point must be regarded as settled forthe time being, there remains a strong dissenting school of thoughtthat, contrary to the reasoning of Lord Millett in Foskett v. McKeown,if a claimant is entitled to assert a property right in an unauthorisedsubstitute asset, the true explanation is that the claimant is beingawarded a new proprietary right to reverse (what would otherwise be)unjust enrichment of the defendant at the claimant's expense. (40)Burrows, a leading advocate of this view, put the matter in thefollowing way:

 Virgo's analysis of the tracing cases is that one is concerned with the continuation and vindication of proprietary rights in substitute property and not with unjust enrichment. This is to rely on a fiction of 'persistence'. One is not here concerned with following one's property. There is a difference between following and tracing. One is concerned with the creation of new proprietary rights over property that does not already belong to the claimant but is rather a substitution of property previously owned in equity by the claimant. So, in an unauthorised substitution case, if one is entitled to trace from a pig to a horse to a car, one cannot say, without invoking fiction, that one has proprietary rights in the car merely because one owned the pig that is now represented by the car. The truth is that one's proprietary rights in the pig entitle one to new proprietary rights in the car because the holder of the car has been unjustly enriched at one's expense. (41)

It is important to recognise however that even those scholars whoascribe a wider ambit to the principle of unjust enrichment and arguethat proprietary rights in unauthorised substitutes are a restitutionaryresponse to this principle, generally accept that a claim based uponpre-existing title, a 'pure proprietary claim' to adopt thelanguage of Goff and Jones, is outside the field of unjust enrichment.(42) Burrows, for example, writes:

 ... whether within restitution of an unjust enrichment or restitution for wrongs and whether the restitutionary right is personal or proprietary, the restitutionary right that one is concerned with is a new right created in response to unjust enrichment or wrong. We are therefore not concerned with the protection of pre-existing proprietary rights (other than where that protection is indirectly given through personal restitution in response to unjust enrichments or wrongs). Put another way, we are not concerned with proprietary rights resting on pre-existing title. So we are not concerned with a vindication claim for the return of one's property (for example, for the ejectment from land or for the delivery up of goods or for an order for the transfer of one's equitable property) where that claim rests upon the claimant's pre-existing proprietary right to that property. Therefore the claim, 'That property remains mine and I want it back', is outside the subject matter of this book. This is sometimes referred to as a pure proprietary claim. In contrast, we are concerned with the creation of a new proprietary right--sometimes referred to as a 'restitutionary proprietary claim'--in response to unjust enrichment or ... in response to wrong.

This brings us to an important point. If a claimant (whether anabsolute or equitable owner at the outset) is able to assert acontinuing beneficial interest to cultural property in the hands of thedefendant this is unlikely to be as a remedy for unjust enrichment. Itwould seem to be, instead, a remedy to vindicate the claimant'spre-existing beneficial interest. Admittedly, against this, it might besaid that if the claimant's original legal or equitable title hasbeen lost, then any beneficial interest that he now has must necessarilyhave arisen under a newly imposed trust arising by operation of law, andthat this is a new equitable interest. Indeed, the point is all the moreapparent as far as the absolute owner is concerned because at the outsethe never had any equitable interest in the property at all. How then, sothe argument runs, can it then be said that the claimant is seeking tovindicate any pre-existing title? If his right is indeed a newly createdone, then it is possible that it is as a response to an unjustenrichment.

This argument is redolent (or perhaps a specific manifestation) ofthe question whether an equitable interest under a resulting trust is anewly created interest, which carries beneficial ownership'back' to the transferor, or the residue of thetransferor's beneficial interest once legal title has beentransferred away. As a matter of strict legal theory the first of thesepossibilities seems to be the correct one. An absolute owner cannottransfer away bare legal title while reserving to himself equitableownership. (43) If the transferor wishes to bring about this result hemust dispose of his entire interest in the property, followed by acharge or declaration of trust back by the transferee: as Goodeobserves, equitable interests must be created by way of grant, notexception or reservation. (44) This suggests that the transferor'sinterest under a resulting trust is a newly created interest which"cannot be explained as the inertia of a pre-existing beneficialinterest", (45) This in turn lends weight to the idea that aclaimant whose interest arises under a trust imposed by operation of lawis not vindicating a pre-existing title; and if the claimant'sbeneficial interest is a newly created one, it may very well be that heis in receipt of a restitutionary remedy to reverse an unjustenrichment. (46)

If this argument is pursued to its logical conclusion, however, itmeans that the only claims which can ever be described as based uponpre-existing title, are the claims of an absolute owner based uponenduring legal ownership or that of an equitable owner against thedefendant who has acquired the property subject to the claimant'spre-existing equitable title. Any reliance on a constructive orresulting trust would seem to disqualify the claim from thischaracterisation. This seems too restrictive an approach bearing in mindthat the property to which claimant lays claim is the very propertywhich was taken from him (i.e. it is a case of following not tracingthrough unauthorised substitutions (47)) and that the essence of theclaimant's case is that this property has never ceased to be hisbeneficially. To say that such a claim does not seek to vindicatepre-existing title because it may depend upon a new trust arising looksunduly restrictive.

The final point to make at this stage is a word of warning. Thefact that so much of the discussion about the operation of resulting andconstructive trusts has taken place in the context of the law of unjustenrichment, should not blind us to the fact that, traditionally,equity's reach extends well beyond what would now be categorised ascases of unjust enrichment. Indeed, the imposition of a trust topreserve pre-existing beneficial ownership is one example of this.Another is the use of constructive trusts to capture for the benefit ofthe claimant the fruits of the defendant's wrongdoing. (48) For theclaimant who wants to fashion an equitable proprietary right tomisappropriated cultural property, there is a rich seam of equitablejurisprudence concerning the defendant's wrongdoing which hasnothing to do with the law of unjust enrichment.

With these general observations in mind, we now consider theparticular circ*mstances when a trust imposed by law will arise.

Resulting Trusts

In Westdeutsche Landesbank Girozentrale v. Islington LBC (49) aninvestment bank transferred money to a local authority under an interestrate swap contract which was intended to last ten years. Five years intothe life of the contract a decision of the House of Lords held that anyinterest rate contract entered into by a local authority was void abinitio because it was ultra vires the local authority. Before judgment,the local authority had paid the monies into its general bank accountand dissipated them. The local authority sought to argue that althoughlegal title to the money had passed to the local authority, theyretained an equitable proprietary interest in it so as to engage theCourt's equitable jurisdiction to award compound interest. One ofthe arguments that the bank put forward was that an equitable interestarose in its favour under a resulting trust. Lord Browne-Wilkinson heldthat a resulting trust arises in two sets of circ*mstances: (50)

1. First, where A makes a voluntary payment to B or pays (wholly orin part) for the purchase of property which is vested either in B aloneor in the joint names of A and B, there is a presumption that A did notintend to make a gift to B: the money or property is held on trust for A(if he is the sole provider of the money) or in the case of a jointpurchase by A and B in shares proportionate to their contributions. Itis important to stress that this is only a presumption, which is easilyrebutted either by the counter-presumption of advancement or by directevidence of A's intention to make an outright transfer.

2. The second situation is where A transfers property to B onexpress trusts, but the trusts declared do not exhaust the wholebeneficial interest.

Lord Browne-Wilkinson concluded that the resulting trust argumenttrust must fail:

 Applying these conventional principles of resulting trust to the present case, the bank's claim must fail. There was no transfer of money to the local authority on express trusts: therefore a resulting trust of type (B) above could not arise. As to type (A) above, any presumption of resulting trust is rebutted since it is demonstrated that the bank paid, and the local authority received, the upfront payment with the intention that the moneys so paid should become the absolute property of the local authority. It is true that the parties were under a misapprehension that the payment was made in pursuance of a valid contract. But that does not alter the actual intentions of the parties at the date the payment was made or the moneys were mixed in the bank account.

Where a claimant has gratuitously transferred property to adefendant, there is often evidence as to what he intended regarding thebeneficial interest. He may have intended to make a gift, (51) todeclare a trust, (52) to make a loan, (53) or to abandon his interest inthe property. In such cases the law will give effect to his intentionand no question of a resulting trust arises. A resulting trust isimposed only where property is gratuitously transferred and there isinsufficient evidence to determine what the claimant intended. It is adevice that responds to a lacuna in the evidence. In such cases, the lawmakes a presumption in the claimant's favour about his intention intransferring the property and failure by the defendant to rebut thispresumption leads to the imposition of the trust. The presumptionapplies to a transfer of both legal and equitable property. (54)

Precisely what intention is being presumed is, however, somewhatunclear. One approach is that the presumed intention is an intention notto make a gift. At one point in his speech in Westdeutsche, LordBrowne-Wilkinson spoke of "a presumption that A did not intend tomake a gift to S". (55) Under this approach the resulting trustwould arise in any case other than one where the defendant could showthat the claimant intended to make a gift of the property to him. Thissurely cannot be right because, understood in this way, the trust wouldhave arisen in Westdeutsche itself, which it did not. The secondapproach is that the trust arises in response to the presumed intentionon the part of the transferor that the property will be held on trustfor him. This would provide a very narrow field of operation: the trustwould never arise where there was any evidence that the claimant did notintend the property to be held a trust for himself. This is apparentlythe view of the law taken by Lord Browne-Wilkinson, who also spoke inWestdeutsche of "a presumption of resulting trust". (56)Finally, it is arguable that the resulting trust does not depend uponthe actual (presumed) intention on the part of the transferor at all butupon an absence of any intention on the part of transferor to benefitthe transferee. (57) The 'absence of intent' analysis wouldallow for a trust to be imposed in a wider variety of cases. Inparticular, it provides an explanation for those cases where a trust wasimposed but the claimant did not or cannot have intended property to beheld on trust. (58)

Some who endorse the absence of intent theory have argued that thedoctrine of resulting trusts provides a coherent basis for proprietaryrestitution. Chambers, for instance, has suggested that the situationswhere a transferor is presumed to lack the intention to vest thebeneficial interest in the transferee are those where his intention toenrich the transferee is vitiated and which would found an action inunjust enrichment. (59) In Westdeutsche, however, Lord Browne-Wilkinson(60) rejected any general role for the resulting trust as a vehicle forproprietary restitution. Furthermore, Virgo considers Chambers'argument to be flawed. A central objection to Chambers' analysis isthat it leads to excessive proprietary protection for claimants. Virgowrites: (61)

 Most of the grounds of restitution for the purposes of a claim founded on the defendant's unjust enrichment establish that the claimant's intention to transfer an enrichment to the defendant can be regarded as absent or defective in some way. Birks and Chambers reasoned from this vitiation of intention to conclude that, in many cases of unjust enrichment, the enrichment received by the defendant should be held on resulting trust for the claimant. Where an intention to transfer an enrichment has been vitiated, they conclude that the enrichment received must be held on resulting trust for the claimant who did not intend to benefit the defendant in the circ*mstances. If this is correct it has significant implications by converting a personal liability to restore value to the claimant into a proprietary claim. This would be especially significant where the defendant is insolvent, for then the claimant's claim will rank above the defendant's unsecured creditors. But why should the claimant be given such priority? The biggest weakness with the 'absence of intent' theory of the resulting trust concerns whether the recognition of such a potentially wide doctrine of resulting trust will give claimants excessive proprietary protection. If the defendant is to be considered to hold property on resulting trust whenever the claimant's intention to benefit the defendant is vitiated, it follows that the defendant will hold property on resulting trust in most cases in which the defendant will have been unjustly enriched since much of the law of unjust enrichment turns on the claimant's intention to benefit the defendant being vitiated, for example by mistake or duress.

Virgo has made the important point that although there is aresemblance between the circ*mstances in which title to property willnot pass and the recognised 'unjust factors' in a claim forunjust enrichment, these things should not be confused:

 Also, title will not pass to the defendant either where the claimant lacks and intention that title should pass or where the claimant's intention can be treated as vitiated. Such vitiation of intention will only arise in certain exceptional cases. Analysis of the categories of cases in which the claimant's intention is vitiated suggest that they mirror the recognized grounds of restitution within the action founded on unjust enrichment. But it must be emphasized that these categories have a different function in the context of proprietary restitutionary claims and are consequently defined in a different way from the recognized grounds of restitution. For, in this context, we are concerned not with whether the claimant actually intended to benefit the defendant. Rather, we are concerned with whether the claimant actually intended that title should pass. (62)

With regard to Chambers' argument specifically, Virgo hassaid:

(1) The resulting trust has nothing to do with the reversal ofunjust enrichment, save where that principle is used in a descriptivesense. Rather, since the consequence of recognizing that property isheld on resulting trust is that a claimant has an equitable proprietaryinterest, the resulting trust arises in the context of restitutionaryclaims to vindicate property rights. Consequently, the analogy should bemade with the rules on the passing of legal title rather than with theinterpretation of grounds of restitution. That the resulting trust hasnothing to do with the unjust enrichment principle is reflected by thefact that Chambers has real difficulty fitting the traditionalcategories of resulting trusts into the unjust enrichment model. This isbecause there is no clear ground of restitution which justified therecognition of resulting trusts.

(2) ... It should not follow, however, that the resulting trustwill never arise where the claimant's legal intention to benefitthe defendant can be considered to be vitiated. Where legal title toproperty will not pass to the defendant because the nature of thetransfer is such that the claimant's intention to transfer theproperty can be regarded as absent, so too the claimant's intentionthat the defendant should receive the property absolutely should beconsidered to be absent, so that the property is held on resulting trustfor the claimant. The resulting trust will, however, only be relevantwhere legal title has passed to the defendant despite the absence of theclaimant's intention that property should pass... (63)

It can be argued, then, that the resulting trust has a role to playin restitutionary claims to vindicate property rights but not, asChambers asserts, in restitutionary claims for unjust enrichment. Thetrust will arise wherever the claimant did not have the necessaryintention to pass legal title to the defendant, but for whatever reasontitle passes nevertheless. It might be justified either on the basisthat the claimant's want of intention to pass legal title should betaken to encompass a lack of intention to pass the property absolutelyand the defendant will therefore hold the legal title on resulting trustfor the claimant or perhaps on the basis that an intention should beimputed that, in such a case, the property is to be held on trust forthe claimant. This argument is highly persuasive. Viewed thus, theresulting trust operates as a device to protect the claimant'spre-existing beneficial interest in property, even if strictly speakingit involves a new equitable interest being granted back to the defendantrather than retained by the claimant.

Constructive Trusts

English law provides no clear and all-embracing definition of aconstructive trust. (64) The basic idea, however, is that a constructivetrust is one which is imposed on the defendant, rather than by theintention of the parties, (65) in response to unconscionable conduct bythe defendant, such that equity will not allow the defendant to asserthis beneficial interest in the property and deny the beneficial interestof the claimant. (66) The constructive trust differs from the resultingtrust in that, unlike the resulting trust, where the intention of thetransferor is relevant, intention is irrelevant to the constructivetrust and in that the concept of unconscionability is central to thelatter but has no role to play in the law of resulting trusts. Theresulting trust is institutional not remedial in the sense that itarises by operation of law in response to certain defined eventsoccurring rather than as a matter of judicial discretion as a remedywherever the court thinks it just to do so. It is now common todistinguish between two types of constructive trust. (67) First, thereare those trusts which arise by reference to a pre-existing trust orfiduciary relationship which predates any breach of trust or fiduciaryduty by the defendant. The defendant is a true trustee in that equitytreats him as holding property on trust for the claimant. Such trustsarise where the defendant has accepted or assumed the role of trusteeindependently and before any breach of duty. The trustee does notreceive the property in his own right but by a transaction, which is notimpeached, and which is intended to create a trust from the start. Thesecond kind of constructive trust is where the trust arises as aresponse to wrongdoing by the defendant. In some cases equity will makethe defendant personally liable to account to the claimant 'as aconstructive trustee' either in its exclusive jurisdiction (68) orits auxiliary jurisdiction (69) and in some cases equity will alsoimpose a trust on the defendant of specific property in his hands inconsequence of his wrongdoing.

The circ*mstances in which a constructive trust will arise are manyand varied and can be organised in different ways. It is beyond thescope of this article to give a comprehensive description of all suchcases. One broad distinction, however, which echoes the division betweenthe two kinds of trust just mentioned, is to distinguish between thosetrusts which arise in the context of a breach of fiduciary duty andthose which arise where there is no pre-existing fiduciary relationship.(70) It is perfectly possible, maybe even likely, that claims in respectof cultural property will involve transactions by false fiduciaries. Forexample, the property may have been stolen by a corrupt museum employeeor exported on the basis of forged or irregular export documentationissued by a corrupt official. However, in the type of claim underconsideration, the claimant is following his cultural property, notasserting claims in unauthorised substitutes or seeking to assert atrust over bribes or commissions for wrongdoing. Furthermore, thedefendant, into whose hands the property is eventually followed, isunlikely to be a fiduciary of the claimant. Accordingly, we will notexamine cases in this first category here and proceed to consider thesecond type of case, namely where the circ*mstances are such that thelaw will impose a constructive trust over property in the absence of apre-existing fiduciary duty on the part of the defendant. Here, threecategories of case may be of particular relevance. The first is whereproperty has been transferred to the defendant by mistake. The second iswhere the defendant has acquired property by theft or fraud. The thirdsituation is where the transaction under which property passed to theclaimant is rescinded in equity.

Turning first to cases of mistake, it is possible to envisagenumerous circ*mstances where the claimant's legal or equitableproperty may be transferred away on the basis of a transaction which canbe impugned for a mistake of some sort or the other. For example, thismay include a mistake as to what the property really is (say, a caseinvolving a misattribution of a work of art) or as to its true value.There is some authority that in cases of mistaken payments, the law mayimpose a constructive trust on the defendant where it would beunconscionable for the defendant to deny the claimant's beneficialinterest in the money transferred. The authority usually cited in thiscontext is the difficult case of Chase Manhattan Bank N.A. v.Israel-British Bank London Ltd (71) in which a bank had mistakenly madetwo transfers of US$2m instead of one by virtue of a clerical error. Itwas found that the bank knew or should have known of the mistake beforeit subsequently went insolvent. Goulding J. declared the bank aconstructive trustee of the second payment. The trust arose from themoment of receipt.

In Westdeutsche Lord Browne-Wilkinson cast doubt on GouldingJ.'s reasoning. Having identified the concept of unconscionabilityas the touchstone of the trust, he professed himself unable to see howthe bank's conscience could be affected. He continued:

 However, although I do not accept the reasoning of Goulding J., Chase Manhattan may well have been rightly decided. The defendant bank knew of the mistake made by the paying bank within two days of the receipt of the moneys: see at p. 115A. The judge treated this fact as irrelevant (p. 114F) but in my judgment it may well provide a proper foundation for the decision. Although the mere receipt of the moneys, in ignorance of the mistake, gives rise to no trust, the retention of the moneys after the recipient bank learned of the mistake may well have given rise to a constructive trust... (72)

Thus, for Lord Browne-Wilkinson the case may have been correctlydecided, albeit for reasons different from those given by Goulding J.For Lord Browne-Wilkinson once the bank had notice of the mistake, itsconscience was affected and a trust arose. (73)

Chase Manhattan remains a controversial decision. One possiblejustification for it proposed by Virgo (74) is that the claimant'sintention to transfer the money was vitiated by a mistake so fundamental(as to the quantum of property) that ought to have prevented title frompassing but that, as legal title could not be asserted against the bank,a resulting trust arose in favour of the claimant. This attractiveapproach justifies the decision in terms which have nothing to do withunconscionability. However, others (including those who accept theabsence of basis analysis in respect of constructive trusts) disagreethat the case was correctly decided. Lord Millett has written:

 I agree with Lord Browne-Wilkinson that Chase Manhattan Bank N.A. v. Israel-British Bank London Ltd was wrongly decided, but it was wrongly decided, not because the defendant had no notice of the plaintiff's claim before it mixed the money with its own, but because the plaintiff had no proprietary interest for it to have notice of ... The fact that the money was paid by a mistake afforded a ground for restitution. By itself notice of the existence of a ground of restitution is obviously insufficient to found a proprietary remedy; it is merely notice of a personal right to an account and payment. It cannot constitute notice of an adverse property right if there is none. (75)

On the other hand, some commentators, who argue that trusts areimposed as a response to unjust enrichment, have expressed the view thatthe decision, as originally reasoned by Goulding J., is correct. Forexample, Burrows argues that the mistake vitiated the claimant'sconsent to the second payment with the result that there was never atime that the bank was entitled to the enrichment, or because theclaimant had not taken the risk of the bank's insolvency. (76)

The second sub-category of constructive trust to consider is thetrust imposed in the case of theft and fraud. In Westdeutsche LordBrowne-Wilkinson said:

 The argument for a resulting trust was said to be supported by the case of a thief who steals a bag of coins. At law those coins remain traceable only so long as they are kept separate: as soon as they are mixed with other coins or paid into a mixed bank account they cease to be traceable at law. Can it really be the case, it is asked, that in such circ*mstances the thief cannot be required to disgorge the property which, in equity, represents the stolen coins? Moneys can only be traced in equity if there has been at some stage a breach of fiduciary duty, i.e. if either before the theft there was an equitable proprietary interest (e.g. the coins were stolen trust moneys) or such interest arises under a resulting trust at the time of the theft or the mixing of the moneys. Therefore, it is said, a resulting trust must arise either at the time of the theft or when the moneys are subsequently mixed. Unless this is the law, there will be no right to recover the assets representing the stolen moneys once the moneys have become mixed. I agree that the stolen moneys are traceable in equity. But the proprietary interest which equity is enforcing in such circ*mstances arises under a constructive, not a resulting, trust. Although it is difficult to find clear authority for the proposition, when property is obtained by fraud equity imposes a constructive trust on the fraudulent recipient: the property is recoverable and traceable in equity. Thus, an infant who has obtained property by fraud is bound in equity to restore it... (77)

As a matter of strict logic the suggestion that theft gives rise toa constructive trust in favour of the claimant is untenable: a thiefobtains no legal or beneficial title to the stolen property and thus hasno interest to hold on trust for the claimant. (78) Despite this, theapproach has received considerable support. It is, in truth, probably aformula to allow the claimant to take advantage of the more generoustracing rules in equity. (79)

Apart from cases of theft, the question arises as to what types offraudulent conduct will trigger a proprietary response. It has been saidthat:

 the jurisdiction which is invoked here by the appellant is founded altogether on personal fraud. It is a jurisdiction by which a court of equity, proceeding on the ground of fraud, converts the party who has committed it into a trustee for the party who is injured by that fraud. (80)

However, in Halifax Building Society v. Thomas (81) Peter GibsonL.J. said of this:

 But that statement must be read in the context in which it was made, namely the jurisdiction where a secret trust is alleged. It cannot be elevated into a universal principle that wherever there is personal fraud the fraudster will become a trustee for the party injured by the fraud.

Furthermore, in Box and another v. Barclays Bank Plc, (82) FerrisJ. said:

 The observation of Lord Browne-Wilkinson in the Westdeutsche case only assists the plaintiffs if it is to be treated as a general statement of the law applicable to all cases of fraud. In my view it would be wrong so to treat it. It was a general statement of certain underlying principles instanced by examples two of which concerned transactions which are void, not voidable, and the third of which comes from the field of secret trusts where 'fraud' is referred to in a special sense. I do not think that Lord Browne-Wilkinson can be taken to have been laying down a principle applicable to all cases of fraud when he did not deal with the reasoning in the other cases which 1 have mentioned.

Ultimately, it is probably not possible to predict all of thecirc*mstances in which the fraud principle will apply. Each case willhave to be considered on its facts. However, if the defendant hasobtained the claimant's property by means which can be described asfraudulent, dishonest, improper or, more generally, unconscionable, theclaimant may be able to argue that a trust should be imposed.

The third situation of particular interest where a constructivetrust may arise has already been foreshadowed in the discussion on thetransfer of title, namely where title has passed to the defendant butthe claimant is able to rescind the contract. As has already been noted,while rescission at common law revests legal title in the claimant,equity cannot revest legal title. (83) The resultant trust for theclaimant has been described as both a resulting trust (84) and aconstructive trust (85) but it is unlikely that anything turns on this.

III. PRACTICAL APPLICATION OF THE LAW OF TRUST IN CULTURAL PROPERTYCLAIMS

We come now to consider how these principles may assist theclaimant whose cultural property has been misappropriated.

The Position of the Absolute Owner

If the absolute owner of property finds that his legal title hasbeen divested several options are open to him. The first will be torescind the transaction at common law. If this remedy is exercised, itwill not give rise to a trust, but will vest absolute ownership back inthe claimant. We need say no more about it.

The next option is for the claimant to argue that the transactionwhich carried legal ownership away from him gives rise to a presumedresulting trust. Whether this analysis is possible will depend on theprecise facts under consideration. As we have seen one possible approachis to say that if his intention is vitiated for the purposes of atransfer of property, any title which passes at common law will be heldsubject to a resulting trust.

Suppose for example, that the claimant, the owner of a work of art,is induced to give the work to the defendant pursuant to a fundamentalmistake. In a simple case of an oral gift by delivery, there is no needto introduce the concept of a trust. It can be argued that the mistakeprevents property from passing to the defendant at common law, with theresult that the defendant merely acquired possession of the work whilethe claimant remained its owner. Matters may be more complicated,however, if there has been a formal conveyance of the property. Forexample, the gift might be contained in a deed, which vested legal titleto the work in the defendant. Revesting title by rescission at commonlaw may not (86) be possible because of the deed. It is at this pointthat the claimant might pray in aid the doctrine of resulting trusts byarguing that, while legal title has undoubtedly passed to the defendantunder the deed, the claimant's want of intention owing to thefundamental mistake means that the property remains his in equity. Themight be put on the basis that the defendant holds his legal title tothe work on resulting trust for the claimant.

One particular place where a resulting trust analysis might be ofspecial interest is where the defendant derives his title from theoperation of a statute. In this regard, the provisions of the LimitationActs 1939 and 1980 for conversion come to mind. English law neverdeveloped any form of proprietary action by which an owner of goodscould defend and exonerate his interest. Instead, the primary vehiclethrough which interests in goods are protected is the tort ofconversion. Conversion consists of any act of wilful interference,committed without lawful justification, with any chattel in a mannerinconsistent with the right of another, whereby the other is denied theuse and possession of it. The combined effect of sections 2 and 3(1) ofthe Act is that the limitation period for a claim for conversion is sixyears from the date of the tort. Importantly, section 3(2) provides:

 Where any such cause of action has accrued to any person and the period prescribed for bringing that action has expired and he has not during that period recovered possession of the chattel, the title of that person to the chattel shall be extinguished.

Thus, upon expiry of the relevant period the Act not only bars theclaimant's right to sue but also extinguishes his 'title'to the goods. (87)

Against this background, consider the following example. Mr Vogueis now a world-renowned dressmaker to the rich and famous but in the1960s he was just starting out with a few middle-ranking clients. For acouple of years he lodged with Mr Keeper. There is some limitedcorrespondence that Mr Vogue stored some of his early works in boxes inMr Keeper's loft. It also appears that, after a couple of years, MrVogue won a prestigious scholarship to a college of fashion in Paris,packed up his belonging and moved out of Mr Keeper's house in ahurry--but on good terms. It now appears that when Mr Vogue moved out heleft some of his old boxes of dresses in Mr Keeper's loft and thelatter took hold of these and kept them for himself. In the 1980s MrKeeper deposited them with a museum on a long-term loan. When Mr Keeperdied his will left all his estate to his son, Mr Lucky. The estate wasfully administered. Mr Lucky then corresponded with the museum to saythat he was happy for the loan to continue. Mr Lucky then died. Hisexecutors have corresponded with the museum with a view to terminatingthe loan and reclaiming the dresses. Now, out of nowhere, Mr Vogue hasresurfaced and claimed that the dresses belong to him. He says that henever gave them to Mr Keeper and that he remains their true owner.

In this example, it is clear that Mr Keeper acquired a possessorytitle to the dresses, which he was capable of passing by will to hisson, Mr Lucky. (88) The real question, however, is not whether Mr Keeper(and those claiming through or under him) acquired a possessory titlewhich is good against the world except for Mr Vogue (as true owner), butwhether he acquired a title which is good against everyone including MrVogue. In other words: the question is whether Mr Keeper acquired notjust possession but full legal ownership, meaning that Mr Lucky'sexecutors (89) have now inherited a better title to the dresses than MrVogue.

The first port of call for Mr Lucky's executors will be toidentify some transfer of title from Mr Vogue to Mr Keeper. However, inthe absence of such a transfer, they will need to resort to an argumentbased upon limitation. The executors will argue that when Mr Keeper tookpossession of the dresses or at some later point in time, he, or laterMr Lucky, converted the dresses so as to start time running for thepurposes of the Limitation Act 1939 or the Limitation Act 1980 and, uponexpiry of the relevant six-year period, Mr Vogue's title wasextinguished. Mr Vogue's response will surely be, first, to denythat any act of conversion took place, so that time did not begin to runagainst him under the Limitation Act 1939 and second, to argue that thepostponement provisions of section 26 of the 1939 Act should apply here.(90)

One intriguing possibility, however, is whether Mr Vogue might alsoargue, in the alternative, that even if his legal title to the goods hasbeen extinguished under the 1939 Act, he nevertheless has a survivingbeneficial interest in the dresses. Might he argue that a totalextinction of any interest of his interest in the dresses would havedelivered an unfair windfall to Mr Keeper and that a trust arose byoperation of law whereby Mr Keeper held his newly promoted legal titleto the dresses on trust for Mr Vogue? Such a trust, not being dependenton any unconscionability on the part of the defendant, could only reallybe characterised as a resulting trust. It would be a long way removedfrom a trust arising by a gratuitous transfer of property and would beimpossible to justify by reference to any presumed intention that MrVogue intended Mr Keeper to hold the work on trust for him. However, ifthe resulting trust is seen as a trust arising by operation of lawwherever there is an absence of any intention to benefit the defendant,the argument does not look quite so unappealing.

For his part, Mr Lucky's executors will say that anysuggestion of a trust of Mr Keeper's title is hopeless. Oneobjection may be that Mr Keeper's title was only ever a possessorytitle, and, as such, cannot be held on trust. (91) This objection losesits force, however, when it is borne in mind that under the Act MrKeeper acquired a superior legal title to that of Mr Vogue. As betweenthe two of them, the statute effectively converted Mr Keeper into thetrue owner. A more significant objection to the trust argument, however,is that to say that a resulting trust arose every time the statuteextinguished the claimant's title would drive a coach and horsesthrough the Act. The whole purpose of the provision, it will be said, isto clear off the claimant's interest in the goods and quieten titleand this can happen only if the defendant's whole title--legal andbeneficial--is eclipsed.

There is much to be said for this view, which is really a point ofstatutory construction about the meaning of the word 'title'in section 3(2). (92) Yet, it is possible to envisage othercirc*mstances where it might be possible to argue that a resultingtrust, or some similar device, operates to impress a trust on a titleconferred on the defendant by statute.

It is interesting to speculate whether such an argument might bebrought to bear in the notorious case of the Parthenon Sculptures. As iswell known, the Sculptures were removed by Lord Elgin from the Parthenonand other buildings of the Acropolis in Athens in the early nineteenthcentury purportedly pursuant to a firman, a written authorisationgranted on behalf of the Ottoman authorities (although it has been saidthat in removing the Sculptures Lord Elgin exceeded any authority thathe was granted under this transaction). (93) The collection wastransported to England and, in 1816, the British Government paid LordElgin 35,000[pounds sterling], this figure having been determined by aspecial committee of the House of Commons. The collection was vested bystatute in the trustees of the British Museum in perpetuity, under theterms of the Local and Personal Acts 56 George III c.99 of 1816, (94)which provided that, upon payment to Lord Elgin, the sculptures"shall be vested in the Trustees for the time being of the ...British Museum and their successors, in perpetuity". That Greecenow wishes to recover the Sculptures is well known. Equally familiar isthe argument that a statute vesting title in the museum is aninsuperable obstacle to the claim under English law. The statute appearsto confer an incontrovertible title on the trustees irrespective ofwhether Lord Elgin, or indeed any other potential claimant, such as theOttoman Empire or the modern State of Turkey, had prior ownership of theSculptures.

Yet here, again, the law of trusts might provide a powerful counterargument. It might be argued that even if the statute was effective tovest an overriding legal title in the Trustees of the museum, they holdtheir legal title on trust for Greece. If Greece (95) was the absoluteowner of the sculptures when the statute was enacted (96) then, on theface of it, the statute worked a compulsory or mandatory transfer oftitle to which Greece did not consent and/or which it was powerless toprevent. As we have seen, under the rules on the passing of title noproperty passes in cases of ignorance or powerlessness for want of anydispositive intent. Of course, the statute, as an Act of Parliament,prevails over any such principle of private property law but it isarguable that the state of affairs brought about by the Act is similarto the state of affairs produced where, under the rules on the passingof title, property should not pass at all but for whatever reason legaltitle ends up with the defendant. The suggested response to this is aresulting trust. By parity of reasoning, might it then be said that eventhough the Act vested incontrovertible title to the Sculptures in theTrustees of the Museum, their title is held on some form of resultingtrust? (97) As with the example of the Limitation Act 1980, this mightbe presented as an argument about the true meaning of the word'vest' in the Act and this might require the court to adopt apurposive approach when construing the statute and to consider preciselywhat nature of interest was vested and whether it is consistent with theexistence of the suggested trust. It might be said with some force that,unlike with the Limitation Act 1980, where the whole point of section3(2) is to strike out claims based upon stale titles, there is nothingin the policy of Act vesting the Sculptures in the Trustees whichrequires the court to hold that the legal title of the Trustees and thebeneficial interest of Greece cannot co-exist in the Sculptures.

So much for resulting trusts. What arguments may be open to theabsolute owner under the law of constructive trusts? Here, thepossibility of a trust arising as a result of mistake or fraud will beat the forefront of the claimant's mind. The imposition of aconstructive trust on a thief in cases of outright theft is a powerfultool for the claimant. This effectively converts the claimant'sabsolute ownership into equitable title for the purposes of tracing.Provided the claimant's property has not passed through the handsof a bona fide purchaser for value without notice he will be able toassert title against the defendant in whose hands they are located. Atthis stage he might put forward a claim based upon absolute ownershipbut he might equally continue with the language of constructive trustsand assert that the defendant was, like the thief and any successors intitle, a constructive trustee for the claimant under the principle nemodat quod non habet. Aside from cases of theft or surreptitiousabstraction, it is possible to think of any number of hypotheticalexamples where the claimant is persuaded by trickery or fraud to partwith his property either by way of a formal conveyance or simply bydelivery. (98) Either way, the claimant might assert that the conscienceof the transferee is bound and again seek to assert either absoluteownership or a constructive trust against the defendant as the lastpossessor in the chain, applying the nemo dat principle. (99)

The Position of the Equitable Owner

As we have seen, where the claimant starts life with only anequitable ownership, his interest in the goods is much more vulnerableto extinction than that of the absolute or legal owner. Again, the firsttask for the claimant will be to determine whether his equitableinterest has survived the various transactions which may have engulfedit along the way.

The options open to a claimant with an equitable ownership only areinevitably more limited than those which are open to a claimant withabsolute ownership. The doctrine of resulting trusts applies equally totransfers of equitable property as legal property, so this will providesome comfort to an equitable owner whose equitable interest has beentransferred in some way. For example, suppose a trustee holds legaltitle to a valuable collection of artwork on trust for the claimant andthe claimant assigns his interest to the defendant. If his intention isuncertain the law may impose a resulting trust under which the defendantthen holds the equitable interest in the collection on sub-trust for theclaimant.

However, there would seem to be far less scope for the operation ofthe doctrine of constructive trusts based upon unconscionability. Thisis inevitable given that what usually causes the equitable interest tobe extinguished in the first place is that a bona fide purchaser thirdparty has acquired legal title to the trust property. This, being so, itis hardly likely that the law will generate a new equitable interest inthe property under a constructive trust to carry the beneficial titleback to the claimant. So, continuing the example of the collection heldon trust for the claimant, if the trustee of the collection, in breachof trust, transfers legal title to the artwork to the defendant, thequestion is whether the defendant was a bona fide purchaser for valuewithout notice. If not, the defendant will be bound by theclaimant's interest, not under a constructive trust but because,under the rules on the passing of equitable title, the claimant has notlost his original equitable title at all. However, if the defendant issuch a purchaser the claimant's equitable interest will beextinguished and there is plainly no scope for arguing that a new trusthas arisen based on unconscionability.

IV. CONCLUSION

Claimants whose cultural property has been misappropriated willoften base their claims for recovery on full legal and beneficialownership; but in some circ*mstances this will not be possible, eitherbecause legal title has passed to the defendant or because the claimantonly ever had an equitable interest in the property at the outset. Here,the law of trusts can provide a fertile source of argument. The trust isan infinitely malleable device, which arises wherever one person isbound in conscience to hold his interest in property on behalf ofanother. Given the inherent flexibility in the very concept ofunconscionability which lies at the heart of the equitable jurisdiction,the range of arguments that might be developed in cases ofmisappropriation is endless.

Luke Harris, Barrister, 5 Stone Buildings, Lincoln's Inn.

(1) David Hayton, Paul Matthews and Charles Mitchell Underhill andHayton. Law of Trusts and Trustees. (Butterworths Law, 2010) para. 1.1.

(2) While it is common to speak of the trustee as being the legalowner of, or having legal title to the trust property and thebeneficiary as the equitable owner with equitable title, it is importantto recognise that trust property can itself be equitable property. Here,the trustee cannot be the legal owner of the trust property because theproperty exists only in equity. If the trust property is an interestunder a trust the trustee will be the equitable owner of the trustproperty under the head trust, but will hold his equitable interest onsub-trust for his own beneficiary as ultimate equitable and beneficialowner of that interest.

(3) Roy Goode, Commercial Law. 5th edn (Penguin, 2016) para. 2.20.

(4) Legal ownership is not the only legal property interest inchattels. One view is that the limited interest of a bailee withpossession of goods is also a form of limited, legal interest (andindeed the only form of legal interest apart from ownership). Thepossessory title to goods may at any given time, depending on theintention of the possessor, be either title to an absolute (ownership)interest or title to a limited interest of a bailee. By contrast, othersargue that rights of possession also qualify as legal proprietaryinterests in goods: see for example, Norman Palmer, Palmer on Bailment3rd edn (Sweet & Maxwell, 2009), ch. 24, which contains a fulldiscussion of the issue.

(5) Goode, above, note 3, paras 2.34 and 2.36.

(6) [1996] A.C. 669, at 706.

(7) These will involve both bilateral transactions, such as giftsand sales, and multi-party transactions where the parties are ininterconnecting relationships (contractual, fiduciary, agency, bailment,trust etc.).

(8) It is beyond the scope of this article to provide acomprehensive summary of the whole of English law on the transfer oftitle. In seeking to provide a summary of such a large topic there is avery real danger of inaccuracy by omission. It should also be noted thatthis summary is concerned solely with dispositions of legal andequitable ownership. It does not consider dispositions of limitedinterest. It is also assumed that the necessary formalities have beencomplied with.

(9) See Halsbury's Laws, Vol. 77, Mistake, paras 26 and 27,and the cases cited there.

(10) See the discussion by Sir Anthony Mason, 'Exploiting theWeaker Party' in Recovery of Stolen Art ed. Norman Palmer, (Kluwerand Institute of Art and Law, 1998) 109.

(11) Property will not pass and the contract will be void where theproperty owner does not know what he is being alleged to transfer: R v.Davies 1982 All E.R. 513, Johnson v. Simmons Times 25 Nov. 1953, SeePalmer on Bailment above, note 4, para. 35-013.

(12) Cf: Bakwin v. Eire International Trading Company Inc, (2005) 1Arbitration Law Reports and Review 83, per Master Rose.

(13) The principle nemo dat quod non habet provides an alternativeroute to the same conclusion.

(14) Principally, whether it is legal or equitable.

(15) X may have a proprietary title because he is trustee of thelegal or equitable interest in the property for the claimant and/or mayhave possessory title (e.g. as trustee, thief, agent, finder, bailee),or he may have no title at all (e.g. an agent without possession). Hispower to transfer title will depend upon a combined effect of theincidents of his proprietary interest (if any), the general law ofa*gency and statue.

(16) Again, principally whether it is legal or equitable.

(17) The rule receives statutory recognition under s. 21(1) of theSale of Goods Act 1979, which provides: "Subject to this Act, wheregoods are sold by a person who is not their owner, and who does not sellthem under the authority or with the consent of the owner, the buyeracquires no better title to the goods than the seller had, unless theowner of the goods is by his conduct precluded from denying theseller's authority to sell."

(18) The nemo dat principle is a fundamental tenet of the commonlaw and pre-dated the Sale of Goods Act 1897. For example, in Cundy v.Lindsay (1878) 3 App. Cas. 459 at 463-464 Lord Cairns observed:"with regard to the title to personal property ... the purchaser ofa chattel takes the chattel as a general rule subject to what may turnout to be certain infirmities in the title ... If it turns out that thechattel has been stolen by the person who has professed to sell it, thepurchaser will not obtain a title". A non-owning possessor can, ofcourse, transfer bare possessory title.

(19) In the circ*mstances under consideration X has no legal titleto the claimant's property (beyond possibly a bare possessorytitle). Any power to dispose of the claimant's title will ariseunder the general law of agency or by statute. Thus at common law anagent may make dispositions of his principal's property when actingwithin the scope of his actual or ostensible authority and under theso-called doctrine of apparent ownership: see generally Bowlsead &Reynolds on Agency (20lh edn), ch. 8, s. 2. There are also a statutoryattenuation of the nemo dat principle in respect of the following: (1)sale under voidable title within s. 23 of the Sale of Goods Act, (2) adisposition by a mercantile agent within s. 2 of the Factors Act 1889,(3) the consignee's lien under s. 7 of the Factors Act 1889, (4) adisposition by a seller remaining in possession under s. 8 of theFactors Act 1889 and s. 24 of the Sale of Goods Act 1979, (5) transfersby a buyer of a document of title to goods which are subject to aseller's right of lien or stoppage in transit under section 10 ofthe Factors Act 1889 and s. 47 of the Sale of Goods Act 1979, (6) adisposition by a buyer obtaining possession under s. 9 of the FactorsAct 1889 and s. 25 of the Sale of Goods Act 1979 (7) certaindispositions under Part III of the Hire-Purchase Act 1964. Previously,there was a further statutory exception to the nemo dat rule where goodswere sold in market overt according to the usage of the market but thiswas abolished by the Sale of Goods (Amendment) Act 1995, s. 1.

(20) See generally John McGhee, Snell's Equity, 33rd edn,(Sweet & Maxwell, 2015) 10-004. The trustee's power to disposeof trust property lawfully is composed of two elements: an incident ofhis title to the trust assets and any provision which authorises him todeal with the property without committing a breach of trust. As owner ofthe trust property the trustee has the power to dispose of it as anatural incident of his title, not as a result of any principle oftrusts law. However, a trustee who exercises his powers as owner withoutproper authorisation, whether under the general law or under the trustinstrument, commits a breach of trust. A trustee who steps outside ofhis authority to deal with trust assets, but still deals with them, isin breach of duty. The exercise of his power is void.

(21) There are, however, exceptions to this proposition: see L.Tucker et al., Lewin on Trusts, 19th edn (Sweet & Maxwell, 2016)para. 33-014.

(22) Note, however, that s. 23 of the Sale of Goods Act providesthat when the seller of goods has a voidable title to them, but histitle has not been avoided at the time of the sale, the buyer acquires agood title to the goods, provided he buys them in good faith and withoutnotice of the seller's defect of title.

(23) There is an exception to this where legal title has passed asa result of a formal conveyance.

(24) It is noteworthy that there is no jurisdiction in equity toset aside contracts for common mistake or unilateral mistake known tothe other party. A contract can be set aside on the ground of mistakeonly if the mistake is such as to render the contract void at commonlaw.

(25) Until the contract has been rescinded the claimant does nothave an equitable interest in the property but a 'mere equity'to have it set aside. There is some authority that a contract which isinduced by fraudulent misrepresentation so serious as to vitiate theclaimant's intention to transfer property to the defendant shouldbe treated as a nullity from the outset with the result that a trust ofthe property is created from the moment of transfer: see for example,Halley v. Law Society [2003] W.T.L.R. 845. These decisions should betreated with caution on the point. Cf Bakwin v. Eire InternationalTrading Company Inc, Master Rose, above, note 12.

(26) Where the disposition is by his trustee to a bona fidepurchaser for the value without notice of the legal interest it is moreaccurate to say that his title has been extinguished rather than that ithas passed to the purchaser: the purchaser simply takes free of theequitable interest.

(27) An express trust is created when a settlor or testatorintentionally constitutes a trust by declaration of trust, by will or bythe transfer of property to trustees to hold on trust.

(28) Graham Virgo, The Principles of the Law of Restitution, 3rdedn, (Oxford University Press, 2015) p. 3.

(29) See Banque Financiere de la Cite v. Parc (Battersea) Ltd[1999] 1 A.C. 221, 227per Lord Steyn. It was only in the 1991 decisionof the House of Lords in Lipkin Gorman (a firm) v. Karpnale Ltd [1991] 2A.C. 548 that the law finally recognised that relief could be awardedbased upon an independent principle of avoiding unjust enrichment. At aliability stage unjust enrichment is not concerned with the conduct ofthe defendant (although personal liability in equity for knowing orunconscionable receipt of trust property is perhaps an anomalousexception). However, the defendant's state of mind and conduct willbe highly relevant to the question of any defences (e.g. good faithchange of position). The remedy for unjust enrichment is alwaysrestitutionary in nature. By contrast, where the cause of action is awrong (e.g. breach of contract, tort, or breach of fiduciary duty) theremedy might be compensatory or restitutionary.

(30) Andrew Burrows, A Restatement of the English Law of UnjustEnrichment, (Oxford University Press, 2013) s. 3, pp. 30-35. Some of theunjust factors have developed at common law (e.g. failure ofconsideration (i.e. failure of basis)) and some in equity (e.g. undueinfluence). An alternative approach to identifying specific grounds forrestitution in the form of 'unjust factors' would be to lookat whether there was any valid legal basis for the enrichment;restitution would be awarded wherever there was an 'absence ofbasis'. There are differences of academic and judicial opinion asto whether English law should in future adopt a similar approach. Seefor example, Paul McGrath, Commercial Fraud in Civil Practice, 2nd edn,(OUP Oxford, 2014) and Goff and Jones: The Law of Unjust Enrichment, 7thedn, (Sweet & Maxwell Ltd, 9th edn 2016), para. 1-023.

(31) Where the claimant transfers a benefit to the defendantpursuant to a transaction which is subject to a condition, known asbasis, and this condition has not been satisfied, there has been a totalfailure of the basis for the transfer of the benefit. Traditionally thisground for relief was called failure of consideration, but this term ispotentially misleading given the particular meaning of'consideration' in the law of contract. The expression'failure of basis' is now often preferred.

(32) This is as an alternative to any compensatory remedy whichmight otherwise be awarded to compensate the claimant for loss sufferedas a result of the wrong.

(33) Virgo, above, note 28, pp. 11-12.

(34) [2001] 1 A.C. 102.

(35) Ibid., at 127.

(36) Ibid., at 127per Lord Millett.

(37) Ibid.

(38) Ibid, at 129 per Lord Millett.

(39) Goff & Jones. The Law of Restitution, T edn, (Sweet &Maxwell, 2009), 1-011.

(40) For those who argue that a proprietary interest may be grantedto prevent or reverse an unjust enrichment, the challenge is to identifyprecisely when the remedy should issue. A key theme running through muchof the literature is that there should not be 'too much'proprietary restitution lest it undermine the security of receipts undertransactions or unsettle the law of insolvency (the point is made inGoff and Jones above, note 39 at pp. 37-12). Unfortunately, perhaps,there is no consensus among the commentators. Indeed, it has been saidthat there is no theory which can explain when they should be awarded ina way that reconciles the results in all of the cases (Goff and Jones,above, note 39 at pp. 37-24.) However, it is generally accepted that inthe first place the claimant must establish a 'proprietarybase' to his claim. This term was coined by Peter Birks in AnIntroduction to the Law of Restitution, (Oxford University Press UK,1989) revised edn, pp. 375-385; Peter Birks, 'Establishing aProprietary Base' [1995] Restitution Law Review 83. In other words,the claimant previously owned the property in which he now claims anownership or security interest, or else that the defendant acquired thisproperty or enrichment in exchange for property that was previouslyowned by the claimant or something of else of value originating from theclaimant. Some also suggest that awarding a proprietary remedy must notbe inconsistent with the law of insolvency. For example, Andrew Burrowsargues that the law can justifiably create proprietary rights where,analogously to a secured creditor, the unjust enrichment claimant hasnot taken the risk of the defendant's insolvency. Robert Chambersand Peter Birks take a different approach. They suggest that theavailability of proprietary remedies turns on whether the enrichment wasfreely at the defendant's disposal before the claimant's rightto restitution arose. If the right to restitution arises at the timewhen the defendant is enriched (for example in cases in cases ofmistake, duress, undue influence, and immediate failure of basis) then aproprietary remedy is available. On the other hand, if it only ariseslater (for example, on a subsequent failure of basis) then a proprietaryremedy will be awarded only when the asset was never at thedefendant's free disposal owing to some contractual or equitablerestriction.

(41) While Burrows disagrees with the reasoning of the House ofLords in Foskett v. McKeown he supports the result. His analysis is thatthe claimants were awarded a new proprietary right in the insuranceproceeds to reverse unjust enrichment. The unjust factor was'ignorance' (p. 178 fn. 45) or presumably the fiduciary'slack of authority: see Burrows, above, note 30, s. 8.

(42) Burrows says of Virgo: "His supposed third fundamentalprinciple of the law of restitution--'the vindication of propertyrights with which the defendant has interfered '--cuts across, andis partly-absorbed by. his 'reversal of unjust enrichment 'and'prevention of wrongful profit principles "': AndrewBurrows, The Law of Unjust Enrichment, 3rd edn (Oxford University Press,USA, 2011), p. 169. Presumably, that part of Virgo's thirdprinciple which is not absorbed by his other two principles to be thevindication of pre-existing title.

Burrows' willingness to exempt pure proprietary claims fromthe law of unjust enrichment is curious in light of his view theretention of title by the claimant does not preclude the defendant frombeing enriched at the claimant's expense (pp. 194-198). WilliamSwadling has argued that where C retains legal title in propertytransferred to D, there can be no claim by C for unjust enrichmentbecause D has not been enriched at C's expense: Swadling, 'AClaim in Restitution?' [1996] Lloyd's Maritime and CommercialLaw Quarterly 63 (and note a similar idea underpins the reasoning of theHouse of Lords in Foskett v. McKeown). Burrows critcises Swadling'sview on the basis that enrichment in the law of unjust enrichment isassessed factually, not in terms of legal entitlement. But if Burrows iscorrect, why should a claim for unjust enrichment not lie based upon thedefendant's receipt of property to which the claimant has apre-existing title?

(43) Re Bond Worth Ltd [1979] 3 All E.R. 919. WestdeutscheLandesbank Girozentrale v. Islington LBC [1996] A.C. 669, 706per LordBrowne-Wilkinson.

(44) Goode, above, note 3, para. 2.34.

(45) Robert Chambers, 'Resulting Trusts in Canada' (2000)38 Alberta L.R. 379, p. 389 (reprinted (2002) 16 Trust Law International104 and 138). There is an interesting discussion of whether theresulting trusts requires a preceding transfer of property to come intoexistence in Geraint Thomas and Alistair Hudson, The Law of Trusts,2"d edn (Oxford University Press, 2010), 26.08 et seq. It issuggested that it is not at all clear that all forms of resulting trustsdo in fact return property rights to their previous owners and thatinstead there are situations in which it would appear on closer analysisthat no rights ever leave the claimant and "therefore that theresulting trust is. in truth, vindicating the continued presence ofproperty rights in the hands of the defendant". The authors wiselyobserve: "The answer to the question whether or not any propertyrights do in fact return to the claimant is an equivocal and contextualone which demonstrates that some resulting trusts do involve a return ofproperty rights and that others do not.'" With this in mind wemay observe that here, as always, it is important to consider why thequestion being posed actually matters.

(46) Although note the warning below: equity has traditionallyawarded trust-based remedies outside the field of unjust enrichment.

(47) As noted above, 'following' involves following theasset as it moves from hand to hand. At the end of the process it leadsto a claim in respect of the very asset which the claimant lost. Bycontrast, 'tracing' involves tracing value through unlawfulsubstitutions of the claimant's property for other property. Anyproprietary claim in respect of a substitute asset is, of course, aclaim to a different asset from the one which the claimant originallylegal or beneficially owned. The point is that it looks odd to describea claim to an asset that has been followed (not traced) into the handsof the defendant other than as one that vindicates pre-existing titlejust because it depends upon principles of resulting or constructivetrusts.

(48) Restitution for wrongdoing in the current parlance. It will beoften be case the same facts could found both a claim for unjustenrichment and a claim in equity in respect of a civil wrong.

(49) [1996] A.C. 669.

(50) Ibid, at 708. See also Lord Goff at 689.

(51) Where the parties are in a special relationship there issometimes a presumption that the transferor intends to make a gift ofthe property. This rival presumption of advancement ousts thepresumption of resulting trust. The Equality Act 2010, s. 199, abolishesthe presumption of advancement with prospective effect only but thesection has not yet been brought into force.

(52) For example, Chernev v. Neuman [2011] EWHC 2156 (Ch.) at[309]Henderson J.

(53) For example, Blue Sky One Ltd. v. Blue Airways LLC [2009] EWHC3314 (Comm.) at [255][257] per Beatson J. However, the fact that atransaction is one of loan does not necessarily exclude a trust: seeQuitsclose Investments Ltd. v. Rolls Razor Ltd. 11970] A.C. 567,Twinsectra v. Yardley [2002] A.C.I 64.

(54) Vandervell v. IRC (No. 2) 1 Ch. 269, 294 per Megarry J.

(55) [1996] A.C. 669, 708.

(56) Ibid. See also Timely v. Milligan [1994] 1 A.C. 340, 341 perLord Browne-Wilkinson.

(57) Peter Birks, 'Restitution and Resulting Trusts' inStephen Goldstein (ed.), Equity and Contemporaiy LegalDevelopments', (Harry and Michael Sacher Institute for LegislativeResearch and Comparative Law, the Hebrew University of Jerusalem, 1992);Robert Chambers, Resulting Trusts, (OUP Oxford, 1997) esp. pp. 21 and66; P. Millet, 'Restitution and Constructive Trusts' inWilliam R. Cornish et al. (eds). Restitution: Past, Present & Future(Hart Publishing, 1998).

(58) See for example: Air Jamaica Ltd. v. Charlton [1999] 1 W.L.R.1399 where the claimant cannot have intended any trust; Vandervell v.IRC [ 1967] 2 A.C. 291 where the transferor of shares structured thetransaction precisely to avoid retaining any beneficial interest in theshares; Re Vinogradoff [1935] W.N. 68, where the transferor could nothave intended one of the joint transferees to be a trustee because shewas only seven years old; El Ajou v. Dollar Land Holdings Plc (No. 1)[1993] 3 AU E.R. 717 where the company could not have intended a trustto arise over property which was stolen from it.

Interestingly, Graham Virgo has recently changed his view on theproper doctrinal basis for the resulting trust. Previously he wrotethat, while the arguments were finely balanced, the absence of intentanalysis of the resulting trust was preferable: Virgo, The Principles ofthe Law of Restitution, 2nd edn, (Oxford University Press, 2006), p.598. More recently, however, he has denounced the absence of intentiontheory. Speaking of the presumed resulting trust Virgo writes "Thepresumption is preferably analysed as being that, where the claimant hasvoluntarily transferred property to the defendant or paid the purchaseprice for property held by the defendant, the claimant intended theproperty to be held on trust for him or herself;" and, of theautomatic resulting trust, "It is possible, however, to explain therecognition of automatic resulting trusts without referring to eitherpresumed intent or absence of intent. Rather, the automatic resultingtrust should be considered to arise by operation of law imputing anintention that, in the circ*mstances which happened, a trust would bedeclared for the claimant. This imputed intention does not purport toreflect what the claimant did intend, but rather what the claimant wouldobjectively be considered to have intended if thought had been given tothe possibility of the express trust failing"'. Virgo, ThePrinciples of the Law of Restitution, 3rd edn, (Oxford University Press,2015), pp. 583 and 584 respectively. Thus, Virgo now concludes:"the preferable view of the resulting trust is that it does notrespond to an absence of intent, but to a presumed or imputed intentionthat the property should be held on resulting trust for the claimant,and there is no reason why such an intention should be imputed orpresumed simply because the defendant has been unjustly enriched at theexpense of the claimant": Virgo, above note 28, p. 587.

(59) Chambers, above, note 57, p. 127.

(60) [1996] A.C. 669, 708-9.

(61) Virgo, above, note 28, p. 585.

(62) Virgo, above, note 28, p. 572.

(63) Virgo, The Principles of the Law of Restitution, 2nd edn(Oxford University Press, 2006), pp. 603604. These passages do notappear in the most recent, third, edition of the text. This is,certainly so far as the second paragraph is concerned, consistent withVirgo's more recent repudiation of the absence of intent basis forthe resulting trust. Nevertheless, it is reasonable to suppose thatVirgo might still be prepared accept the resulting trust as thelaw's response to the situation where property has passed to thedefendant but the claimant's legal intention to benefit thedefendant can be considered to be vitiated. Arguably such a caseresembles the situation where an express trust fails, giving rise to apresumed resulting based upon (so Virgo now argues) an imputed ratherthan presumed intention that there should be a trust for the claimant:see note 61 above. By parity of reasoning it might therefore be thoughtthat where property passes but the claimant's legal intention isvitiated the claimant should also be imputed with an intention to createa trust. Admittedly, however, it is not clear whether Virgo wouldactually endorse this analysis. His discussion of the proprietaryeffects of rescission strongly suggests that he would strictly confinethe automatic resulting trust based upon imputed intention to the caseof the failed express trust and that, where such cases arise, his viewis that a resulting trust must be based only on a presumed intention onthe part of the claimant to create a trust: Virgo, above, note 28, pp.587-588. Furthermore, it seems that, even if the claimant's legalintention to transfer property to the defendant might be vitiated, Virgowould still give that intention legal effect in determining whether ornot the presumption of resulting trust arises in the first place and, ifso, whether it has been rebutted.: see Virgo, above, note 28), p. 587.On this approach, it cannot be said that just because theclaimant's intention to transfer legal title has been vitiated,there will necessarily be a presumed resulting trust for the claimant.

(64) Carl Zeiss Stiftung v. Herbert Smith & Co. (No.2) [1969] 2Ch. 276 at 300, CA.

(65) Air Jamaica Ltd. v. Chariton [1999] 1 W.L.R. 1399, 1412 perLord Millett.

(66) For judicial definitions (or descriptions) of the trust see:McGrath, Commercial Fraud in Civil Practice, see above, note 30, para6.11.

(67) See, generally, Lewin on Trusts above, note 21, ch. 7; ParagonFinance plc D.B. Thakerar & Co. [1999] 1 All E.R. 400 at 409b-c,C.A.; Williams v. Central Bank of Nigeria [2014] UKSC 10; [2014] 2W.L.R. 355 at [9]-[l 1], [55], Lewin observes that the distinction ismainly of importance in relation to questions of limitation under theLimitation Act 1980: 7-012.

(68) Liability for knowing receipt of trust property and dishonestassistance in a breach of trust.

(69) To award compensation for fraud at common law.

(70) This categorisation is helpfully suggested by McGrath,Commercial Fraud in Civil Practice, see above, note 30, ch. 6. Into thefirst category McGrath puts: (1) trusts imposed on assets which are heldon express trust for the claimant and which are misappropriated by thetrustee, (2) trusts imposed on assets which are the traceable proceedsof assets held on trust for the claimant, (3) trusts imposed in respectof corporate opportunities and (4) trusts of bribes and secretcommissions. Into the second category, McGrath puts (1) mistakenpayments, (2) fraudulent misrepresentation and rescission, (3) stolenproperty, and (4) unconscionable conduct in commercial ventures.

(71) [1981] Ch. 105.

(72) [1996] A.C. 669, 715.

(73) It is fair to say that Lord Browne-Wilkinson'salternative reasoning has not found much favour with commentators. Inparticular, it leaves open what the status of the money was beforenotification to the bank. It seems odd to say that the bank had absoluteownership of the funds. More importantly, on this alternative reasoningSinclair v. Brougham [1914] A.C. 348 was correctly decided--but the casewas overruled by the House of Lords in Westdeutsche. It has been arguedthat where a person comes into possession of property belonging toanother there may be a duty at common law to identify and seek out theperson who is entitled to possession: see Norman Palmer, 'UnclaimedArt and the Duty of Active Pursuit: Cornelius Gurlitt and the HiddenHoard' (2014) XIX Art Antiquity and Law 41.

(74) Virgo, above, note 28, p. 598.

(75) Sir Peter Millett, 'Restitution and ConstructiveTrusts' in Cornish above, note 57.

(76) Burrows, above, note 42, p. 235-236.

(77) [1996] A.C. 669, 716.

(78) The point is made by Rimer J. in Shalson v. Russo [2005] Ch.81, para. 110. It has been suggested that the thief may hold hispossessory title on trust for the claimant: John Tarrant, 'PropertyRights to Stolen Money' (2005) 32 UWAL Rev. 234; 'Thieves asTrustees: In Defence of the Theft Principle' (2009) 3 Journal ofEquity 170. In response it has been said: "The argument makeslittle sense: the victim already has a better right to possession thanthe thief so the trust achieves nothing; and equity has to date notrecognized trusts of possessory interests--it is quite difficult todefine in practical terms what rights such a trust might generate in thebeneficiary": Michael Bridge et al., The Law of Personal Property,(Sweet & Maxwell, 2013) 15-091, fn. 226. See also the interestingdiscussion on this issue in the context of the Gweagal Shield inElizabeth Pearson, 'Old Wounds and New Endeavours: The Case ForRepatriating the Gweagal Shield From The British Museum' (2016) XXVArt Antiquity and Law 201, 216-220.

(79) The law still insists on a fiduciary relationship before theclaimant is able to trace in equity. If this requirement is strictlyinsisted upon it leads to a counter intuitive state of affairs whereby aclaimant with equitable title only is given greater protection than anabsolute owner because, while the equitable owner can point to a trustof the property giving rise to fiduciary relationship to start thetracing exercise, the absolute owner cannot. Characterising the thief asa constructive trustee gets around this problem. See also Bankers TrustCo. v. Shapira [1980] 1 W.L.R. 1274.

(80) McCormick v. Grogan (1869) L.R. 4 H.L. 82, 87 per LordWestbury.

(81) [1996] Ch. 217.

(82) (1998) The Times, 30 April 1998. See also Rimer J. in Shalsonv. Russo [2005] Ch. 81, para. [111] who said, with regard to LordBrowne-Wilkinson's proposition, "I respectfully regard theauthorities he cites as providing less than full support for it".

(83) Presumably, if the subject matter of the transfer is equitableproperty, there is no requirement to make the defendant a trustee of theequitable interest. Equity can automatically revest equitable title(semble unless the transfer involved a formal conveyance). Cf theposition at common law: see note 19, above.

(84) Lonrho v. Faxed (No. 2) [1992] 1 W.L.R. 1, per Millett J.

(85) El Ajou v. Dollar Land Holdings plc [1993] 3 All E.R. 717, 734per Millett J.

(86) It is not certain whether a deed can be rescinded at commonlaw or just in equity: Dominic O'Sullivan et al, The Law ofRescission, 2nd edn (OUP Oxford, 2008), para. 29.65. This articleassumes rescission is not possible, but this is for the convenience ofthe example only.

(87) If the chattel is outside the jurisdiction of England andWales when time expires under the Act there is an interesting debate tobe had about the extent to which s. 3(2) of the 1980 Act will achieveits stated effect.

(88) An interesting aspect to the case is that Mr Lucky has neverhad possession of the dresses, which were lodged by his father with themuseum before the latter's death. It might be argued that as MrLucky has never had possession he has no possessory title at all.However, if the museum attorned to Mr Lucky in the correspondencebetween them, this would give Mr Lucky constructive possession of thedresses.

(89) When Mr Keeper died his estate (including such title to thedresses as Mr Vogue had) vested in his personal representatives. Asnoted in the text, Mr. Keeper's estate was fully administered. Thismeans, for the purpose of this example, Mr. Keeper's personalrepresentatives can be taken to have formally vested that title in Mr.Lucky. Now that Mr. Lucky has died, his title to the dresses hassimilarly vested in his personal representatives (the executors of hiswill) to administer as one of the assets of his estate. Any claim by oragainst the executors in respect of the dresses must, ordinarily, bebrought against or by the executors as the representatives of the estaterather than the beneficiaries of Mr Lucky's estate who stand toinherit the dresses under his will.

(90) If the facts of the example were changed so that the relevantlimitation provisions were those of the Limitation Act 1980, rather thanthe Limitation Act 1939, Mr Vogue would have the additional argumentthat Mr Keeper's original conversion was (perhaps) an act of theftso as to prevent time from running against him under the specialprovisions of the 1980 Act for theft. In short, these provide that ifthe conversion is a theft or a 'conversion related to a theft'it does not start time running: s. 4(1). The claimant is therefore ableto sue the thief, anyone who re-steals the goods and anyone who commitsa further conversion 'related to the theft'; and the claimantdoes not lose his title after six years. What sets the clock running inthe case of theft is a good faith purchase of the goods.

The Limitation Act 1980, s. 32, contains similar postponementprovisions to those of the Limitation Act 1939, s. 26 (although thereare important differences).

(91) See note 70, above.

(92) Ultimately, it is hard to see how any argument that Mr Vogueremains the beneficial owner of the dresses can be squared with theexpress wording of the Limitation Acts that title to the chattel shallbe extinguished.

(93) See B.F. Cook, The Elgin Marbles (British Museum Publications,1984), Hon. E. Gough Whitlam 'Pericles, Pheidias and theParthenon' (2000) V Art Antiquity and Law 355; William G. Stewart,'The Marbles: Elgin or Parthenon' (2001) VI Art Antiquity andLaw 37.

(94) 'An Act to vest the Elgin Collection of Ancient Marblesand Sculptures in the Trustees of the British Museum'.

(95) It will be readily appreciated that the position of theSculptures gives rise to enormous legal complexity. One very importantpoint, which this potted argument does not address, is that the modernState of Greece did not exist at the time of the relevant events.Greece's right to claim as a successor in title to the originalownership interest in the Sculptures therefore gives rise to issues ofpublic international law which it is beyond the scope of this paper toconsider. This article simply assumes for present purposes that Greececan be identified as the original owner of the Sculptures.

(96) It is important to point out that the satisfaction of thiscondition would depend on the effect of transactions which occurredabroad, for example, the proprietary effect of the firman granted toLord Elgin on Greece's title. Under English law this document mighthave no proprietary effect at all, or it might have vested Lord Elginwith a title which was liable to rescission at common law or in equity.While it is interesting to speculate on these points, crucially, thesematters would not be determined by English law but probably under thelex situs. The present text is specifically addressed at the effect ofan English law statute on any surviving ownership of Greece in England.

(97) It would perhaps be better to say the trust was sui generisrather than a resulting trust.

(98) A claim based upon mistake rather than fraud raises theproblematic issue of whether Chase Manhattan Bank N.A. v. Israel-BritishBank London Ltd, above, note 71, is good law and, if so, whether thetrust constructive imposed for mistake requires the defendant to know ofthe error.

(99) The argument based upon a constructive trust might provide analternative route for arguing that any title conferring on the defendantby statute is held on trust for the claimant. For example, might it beargued that, if the Trustees of the British Museum were or should havebeen aware of any defect in Lord Elgin's title to the ParthenonSculptures, or any impropriety in the manner in which he obtained them,they took their statutory title under the Act on trust for Greece or(applying the approach of Lord Browne-Wilkinson in Chase Manhatten,above, note 71) that their title, though originally absolute, becamethat of a trustee once the relevant facts came to their attention?