trusts pt 2

Question 1

4 ways a failure to dispose of a beneficial interest creates a resulting trust

Answer 1

• No trusts declared- vandervell v irc
• Failure of a specific purpose- Barclays v quistclose
• Failure of a trust- re diplock
• Incomplete disposal of the beneficial interest- re Andrews

Question 2

presumption of advancement

Answer 2

• POA is stronger than the presumption of a resulting trust
• Where certain relationships exist, a voluntary transfer is presumed to be by way of gift
• If there is no POA because the transaction isn’t between husband and wife, then the immediate presumption is one of resulting trusts
• Husband and wife relationship- when a husband makes a voluntary transfer of property to his wife, he is presumed to be making an outright gift to her- so no trust arises- Pettitt v Pettitt
• Also covers both parents and people in loco parentis
• May be rebutted by contrary evidence of the transferors intention at the time of the transfer- but this may be hard if the transaction was based on an illegal purpose- Gascoigne v Gascoigne

Question 3

pettitt v pettitt

Answer 3

husband and wife
when a husband makes a voluntary transfer of property to his wife he is presumed to be making an outright gift to her so no trust arises

Question 4

Gascoigne v Gascoigne

Answer 4

• cant rebut POA with contrary evidence of intention if the transaction was based on an illegal purpose

Question 5

constructive trust

Answer 5

• One that comes into being without the need to comply with any formal requirements.
• S53(2) LPA
• Trust that arises as a result of behaviour on the part of the constructive trustee that equity will not tolerate
• Provides the means by which the legal owner of property is compelled to hold it on trust for the beneficiaries
• Trust comes into being at the time of the relevant conduct and is independent of intention- based on wrongdoing
• Applies to fiduciaries making unauthorised profits

Question 6

proprietary estoppel

Answer 6

• Acts as a remedy to right a wrong
• A way of creating a proprietary interest in property in the absence of following the correct formalities
• Representation, reliance and detriment – gillett v holt

Question 7

trusties duties

Answer 7

• invest the fund
• recover debts
• distribute trust property in accordance with the terms of the trust
• protect the trust assets

Question 8

is the trustee responsible for the breach?

Answer 8

• All trustees have a duty to act
• If there is a solicitor it doesn’t reduce the liability of other trustees unless the solicitor is seen as controlling them- head v gould
• A trustee cannot be held liable for breaches of trust that were committed before he took up appointment- re Strahan
• A trustee cannot be held liable for breaches committed after he has retired- unless done to facilitate the breach

Question 9

target holdings v redferns

Answer 9

• there has to be a causal link between the breach and the loss of money in order for the trustees to be held liable

Question 10

can trustees claim relief from liability

Answer 10

• Liability is joint and several
• Retiring trustee can seek indemnity from his co-trustees and/or beneficiaries but will only protect them if theyre of full age and capacity
• If a beneficiary is involved in a breach they can’t then sue later- re somerset
• Beneficiaries can grant a release of liability
• Stat relief
• Express in trust instrument- Armitage v nurse

Question 11

armitage v nurse

Answer 11

• express in trust instrument that they can claim relief from liability

Question 12

limitation period for a beneficiary to claim for a breach

Answer 12

• 6 years after the breach
• or 6 years after their interest falls into possession

Question 13

tracing prob question

Answer 13

• breach of fiduciary duty
• mixed or unmixed? is the prop still identifiable
• cant be inequitable

Question 14

advantages of prop rights

Answer 14

• Doesn’t depend on the solvency of D
• Can claim asset even if its inc in value
• Can claim interest from the date of the receipt of the property, personal is just from date when liability is settled

Question 15

when cant you trace in equity

Answer 15

• innocent volunteer
• equitys darling
• money used to pay debts/improve land

Question 16

requirements for dishonest assistance- royal Brunei

Answer 16

• Trust or fiduciary duty
• Breached
• Stranger assisted- brinks (positive act)
• Stranger has a degree of knowledge- now dishonesty

Question 17

dishonesty

Answer 17

• Royal brunei- was dishonest in the standard of an ordinary person
• Twinsectra- was dishonest and they knew
• Ivey v genting- back to royal brunei- criminal
• Group 7- same but civil

Question 18

requirements for knowing receipt

Answer 18

El Anjou v dollarland holdings
- Disposal of assets in breach of fid duty
- Beneficial reciept by stranger- agip v Jackson- take property under control or possession
- Knowledge the property is traceable to the breach

Question 19

baden 5 levels of knowledge

Answer 19

• Actual knowledge
• Wilfully shutting ones eyes to the obvious
• Wilfully and recklessly failing to make such inquiries as a reasonable man would make
• Knowledge of circs that would indicate facts to honest man
• Knowledge of circs that would put an honest man on inquiry

Question 20

remedies for stranger liability

Answer 20

• knowing receipt- prop or personal- needs a level of knowledge for personal
• dishonest assistant- personal only cuz they dont have property

Question 21

re Strahan

Answer 21

A trustee cannot be held liable for breaches of trust that were committed before he took up appointment