Report No. 57
3.9. No rebuttal where fraudulent or illegal purpose.-
There is yet a further restriction on the ability to adduce evidence in rebuttal of the presumption. This is that the transferor cannot rebut the presumption by evidence that the transfer was for a fraudulent or illegal purpose and the transferee intended to retain the beneficial interest. Accordingly, where a husband took a lease of land in his wife's name in order to protect the property from creditors, it was held that he could not adduce evidence to show that he did so for the purpose mentioned above.1
It will be found that there were two relevant intentions in the above case.2 The first was the intention of the husband that the house and land should, so far as the beneficial interest was concerned, be and remain his. The second intention was that he put the land and house into his wife's name with a view to protecting it from his creditors in case he should get into financial difficulties. The first intention was not given recognition because of the second.
1. Gascoigne v. Gascoigne, (1918) 1 KB 223 (Intention to defeat creditors).
2. Gascoigne v. Gascoigne, (1918) 1 KB 223.
3.10. In England, the principle applies also where the purpose of the transfer is to defeat revenue laws,-where English or foreign.1 Equity will not assist a person who seeks to contravene revenue laws-whether English or foreign.
1. Emery's Investment Trusts (in re:), 1959 Ch 410: (1959) 1 All ER 577 (Evasion of tax of friendly foreign country).