Trusts - intro

Question 1

How does Maitland define a trust?

Answer 1

• “when a person has rights which he is bound to exercise upon behalf of another for the accomplishment of some particular purpose he is said to have those rights in trust”
• the first person is a trustee, the second is the beneficiary

Question 2

How does the case of Westdeutche define a trust?

Answer 2

• once a trust is established, the beneficiary has a proprietary interest in equity

Question 3

What are the key features of the trusts we study?

Answer 3

• legal title in the trustee
• equitable title in the beneficiaries

Question 4

What are the 3 main types of trust?

Answer 4

1. Express trusts
2. Resulting trusts
3. Constructive trusts

Question 5

What is an express trust also known as?

Answer 5

a declaration of trust

Question 6

Which case is authority for an express trust?

Answer 6

Paul v Constance [1977]

“there must be a clear declaration of trust […] there must be clear evidence from what is said or done of an intention to create a trust”

Question 7

Which section of statute discusses express trusts?

what does it say?

Answer 7

s.53(1)(b) LPA 1925

says that an express trust must be manifested in writing

Question 8

What was the role of resulting trusts historically?
- what is their role in modern times?

Answer 8

• main informal trusts
• receding in modern situations

Question 9

In what situations only do resulting trusts apply?

Answer 9

only apply in commercial situations

Question 10

Which resulting trust do we focus on?
- what does it state?

Answer 10

• purchase money resulting trusts
• equity presumes that the owners intended to own land in proportion to what they paid → regardless of who owns the legal title

Question 11

Which case establishes which resulting trust we focus on?
- Quote?
- what does it say about where this trust is inapplicable?

Answer 11

• Pettitt v Pettitt [1970]
• “the property is held for those persons in proportion to the purchase money that they have provided”
• cohabiting couples in the domestic context generally

Question 12

Which case highlights a situation where resulting trusts could be useful?
- Which case complicates this?

Answer 12

• Stack v Dowden [2007]
• when a couple has both an emotional and a commercial partnership
• Marr v Collie [2017]

Question 13

Is there an exact definition of a constructive trust?

Answer 13

No

Question 14

When does it arise?
- which case states this?

Answer 14

• when equity feels like it
• Paragon Finance plc v DB Thakerar & Co [1999]
• “A constructive trust arises […] whenever […] it would be unconscionable for the owner of property […] to assert his own beneficial interest in the property and deny the beneficial interest of another”

Question 15

What does it respond to?

Answer 15

combination of intention and detrimental reliance

Question 16

Which constructive trust do we focus on?
- which situations does it apply to?

Answer 16

• Common intention constructive trust
• the way that property deals with 2 partners who are not spouses and split after co-habiting

Question 17

What are the 4 key cases for this?

Answer 17

1. Gissing v Gissing [1971]
2. Lloyds Bank plc v Rosset [1991]
3. Stack v Dowden [2007]
4. Jones v Kernott [2012]

Question 18

What does the Gissing case state about when a constructive trust is created?
What does it say we need to look at?

Answer 18

• a constructive trust is created over a legal title when “by his words or conduct he [the trustee] has induced the cestui que trust [beneficiary] to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land”
• need to look at the parties’ words and conduct, and objectively infer their intention as to the proportion of title they will hold → this is coupled with acts of detrimental reliance

Question 19

Examples of detrimental reliance?
What does resulting trust say vs constructive trust?

Answer 19

• Detrimental reliance: e.g. the wife pays all the household expenses, school fees etc -> her detriment is not protecting her interest by funding the mortgage
• resulting trust would give the husband all of it (proportionate)
• constructive trust says wait - she contributed too, she has interest

Question 20

What does Lloyds Bank case state?

Answer 20

shows the narrow approach to deducing common intention that focuses solely on financial contributions prior to Stack v Dowden

Question 21

What does the Stack case say?

Answer 21

• we need to look everywhere in the relationship to decide what their intentions were
• “Many more factors than financial contributions may be relevant to divining the parties’ true intentions”

Question 22

Which factors does Stack v Dowden mention can be taken into account when finding common intention?

Answer 22

• discussion about their intentions
• reason why home is acquired in their joint names
• purpose for which home was acquired
• nature of the parties’ relationship
• whether they had children for which they have to provide a home
• how the purchase was financed
• how they arranged their finances (separately or together)

Question 23

What does the Jones case say?

Answer 23

• make it clear that presumed resulting trust does not arise when a couple makes an unequal contribution to the purchase in joint names of a family home
• Where a couple buys a place for cohabitation in joint names without an express declaration of their beneficial interests, the presumption is that equity follows the law and they are joint tenants in law and equity
• The presumption could be displaced by showing
  (a) that the parties had a different common intention at the time when they had acquired the home OR
  (b) that they had later formed a common intention that their respective shares would change
• Common intention is to be deduced objectively from words and conduct