Anfield Tam (PCLL student)
Trusts & Trustees
Published online: January 2025
Abstract: In China Life Trustees Ltd v China Energy Reserve and Chemical Group Overseas Co Ltd [2024] HKCFA 15, the Hong Kong Court of Final Appeal clarified that a positive intention for the transferor to retain beneficial interest in the transferred assets is not necessary for a Quistclose trust to arise. Rather, it suffices when the parties intended the transferred assets to be used exclusively for a specific purpose, such that it is not at the transferee’s free disposal. This note appraises the decision for disentangling the conceptual nuances between these two types of intention. The Court rightly held that the transferor’s retention of beneficial interest is merely a legal consequence of the restrictive intention, as on a correct reading of the authorities such retention need not be intended for a Quistclose trust to arise.
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