Case Law: Balwant Singh Gill v Jashpal Singh Thind & Ors Clarifies Principles of Beneficial Ownership and Trust Creation

Citation: [2023] EWCA Civ 1276
Judgment on

Introduction

In the case of Balwant Singh Gill v Jashpal Singh Thind & Ors, the court grappled with issues surrounding beneficial ownership of shares and the creation of a trust. The case provides a clear application of the principles established in Paul v Constance, particularly the requirement for a clear declaration of trust and evidence of an intention to create a trust.

Beneficial Ownership of Shares

The primary dispute in this case revolved around the beneficial ownership of shares in three family companies. Mr Gill claimed sole legal and beneficial ownership of the shares in JIL and Simicare, and one third of the shares in JEL. However, the court found that Mr Gill held the shares in JIL and Simicare on trust for the Thinds’ children, and 100 of the 300 shares in JEL on trust for all his grandchildren.

This finding underscores the principle that legal ownership and beneficial ownership can be separated. While Mr Gill held the legal title to the shares, the court found that the beneficial ownership belonged to his grandchildren. This is a crucial distinction in trust law, as the legal owner holds the property for the benefit of the beneficial owner.

Creation of a Trust

The court’s decision hinged on the application of the principles established in Paul v Constance. According to this case, there must be a clear declaration of trust and evidence of an intention to create a trust. The court considered the words used by Mr Constance, his character, relationship with the plaintiff, and conduct in relevant situations.

In the present case, the court found that there was an express trust of the shares in favour of Mr Gill’s grandchildren. This finding was based on the evidence presented, including the conduct and words of the parties involved. The court’s decision underscores the importance of clear evidence in establishing a trust, particularly in family disputes where the relationships and conduct of the parties can be crucial.

Burden and Standard of Proof

The court also addressed the burden and standard of proof in this case. The judge correctly applied these principles, and his finding was a finding of fact that could only be overturned if it was not open to him. This highlights the high threshold for overturning a judge’s findings of fact on appeal.

In conclusion, the case of Balwant Singh Gill v Jashpal Singh Thind & Ors provides a clear illustration of the principles of beneficial ownership and trust creation. It underscores the importance of clear evidence in establishing a trust, the distinction between legal and beneficial ownership, and the high threshold for overturning a judge’s findings of fact on appeal.

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