Key cases

Question 1

What are the 5 key facts of Quistclose

Answer 1

1. RR in financial trouble, needed to pay dividend 2. Account was overdrawn so B wouldn’t lend the money 3. Q lent the money fort he specific purpose of paying the dividend 4. Money paid into separate account, B knew circumstances 5. RR went into administration before the dividend was paid.

Question 2

Who gave the leading judgment in Quistclose

Answer 2

Lord Wilberforce

Question 3

What was the judgment in Quistclose

Answer 3

Where money is advanced for a specific purpose, the lender acquires an equitable right to see that it is applied for the primary designated purpose. When purpose carried out, remedy is in debt. When purpose fails, it depends if there was a secondary purpose (repayment). If so, equity will give effect to it.

Question 4

What is the principle of Quistclose

Answer 4

Where money os advanced for a specific purpose which cannot be carried out, the money results back to the lender on resulting trust

Question 5

Which court was Quistclose and what was the split

Answer 5

HoL - unanimous (5 sitting)

Question 6

What case followed Quistclose

Answer 6

Twinsectra

Question 7

What did Millett say in Twinsectra

Answer 7

It is well established that a loan for a specific purpose gives rise to fiduciary obligations on the part of the borrower which equity will enforce

Question 8

Which case extended Quistclose

Answer 8

Re Kayford (Chancery)

Question 9

What was the key difference between Re Kayford and Quistclose

Answer 9

The beneficiaries of the resulting trust were unaware of the trust arrangement.

Question 10

What kind of trust was created in Paul v Constance

Answer 10

An express trust

Question 11

What court was Paul v Constance heard in and what was the split

Answer 11

CoA, unanimous

Question 12

What were the 5 key facts of Paul v Constance

Answer 12

1. Deceased and wife were separated, deceased cohabited with Paul 2. Deceased received damages, paid into a separate account 3. Both paid bingo winnings into account, treated it as joint even though only in his name 4. Deceased said “the money is as much yours as mine” 5. Died intestate, wife inherited all.

Question 13

What were the three key points of the judgment in Paul v Constance

Answer 13

1. Focus on language of everyday “simple” people. 2. Words & actions amounted to express trust even though the word trust wasn’t used - intention was clear. 3. Money was held by deceased beneficially for both of them.

Question 14

What is the principle of Paul v Constance

Answer 14

Certainty of intention can be inferred from course of dealings so as to create an express trust

Question 15

Who gave the leading judgment in Paul v Constance

Answer 15

Scarman LJ

Question 16

What are the 3 key facts in McPhail v Doulton

Answer 16

1. Trust for the benefit of staff, relatives and dependents 2. “The trustees shall apply the income by making grants in such amounts, at such times and on such conditions as they see fit. 3. The trustees had a power to accumulate

Question 17

What were the decisions at trial, CoA and HoL in McPhail v Doulton

Answer 17

TRIAL: It was avalid power, list test used CoA: It was a power, but the list test was wrong, the Gulbenkian test shoudl have been used. HoL: It was a valid trust, the correct test to use was the gulbenkian test.

Question 18

What did Hodson (dissenting) say in McPhail v Doulton

Answer 18

The list test shoudl apply to all trusts - it’s the only way the court can assume control and enforce a trust as per Morice v Bishop of Durham. Powers and trusts are totally different.

Question 19

What did Wilberforce (prevailing) say in McPhail and Doulton

Answer 19

The distinction between trusts and powers is fine and artificial. The donor never intended equality of division between Bs and it’s silly to assume it’s the only way the court can divide the interests, therefore there is no need for list certainty.

Question 20

What was the split of the court in McPhail v Doulton regarding the appropriate certainty test for discretionary trusts.

Answer 20

3:2 in favour of the is/is not test

Question 21

What is the principle of McPhail v Doulton

Answer 21

The test for discretionary trusts is the is/is not test.

Question 22

Baden’s Deed Trusts is a continuation of which case

Answer 22

McPhail v Doulton

Question 23

What was the issue in Baden #2

Answer 23

Whether “relatives” and/or “dependents” was void for uncertainty of objects

Question 24

What did Megaw says about the certainty of the term “relatives” in Baden?

Answer 24

That it’s sufficient taht a substantial number of people would qualify.

Question 25

What did Stamp say about the certainty of the word “relations” in Baden

Answer 25

That there was no uncertainty because it simply means next of kin

Question 26

What are the facts of Re Manisty’s settlement

Answer 26

Trustees had a power to add anyone in the world except for the settlor and his wife as Bs. Issue was whether to power was so wide as to be void for uncertainty

Question 27

what was the judgment in Re Manisty’s and who gave it?

Answer 27

Templeman J (Chancery): As long as the excluded class was certain (ie the Ts could apply is/is not test to that class), the width of a class of beneficiaries will not invalidate the power

Question 28

What is the principle of re Manisty’s

Answer 28

A power cannot be uncertain merely because it is wide in ambit (whereas a trust may be void for administrative unworkability)

Question 29

What shoudl you consider coupling with a re Manisty style solution in a problem question

Answer 29

A letter of wishes

Question 30

What case gave the definition of capriciousness and what is the definition

Answer 30

Re Manisty’s: A capricious power negatives a sensible consideration by the Ts of the exercise of the power”.

Question 31

What were the facts of West Yorks CC

Answer 31

Council was disbanding, excess funds were to be held on trust for “any or all or some of the residents of West Yorkshire”. The class of potential Bs was more than 2.5m

Question 32

What was the judgment in West Yorks CC

Answer 32

The proposed class was so wide as to be administratively unworkable

Question 33

What were the facts of Re Hays

Answer 33

Ts had 21 years to choose Bs (small excluded class), fixed trust in default. Ts named “any person or persons whatsoever or any charity” as Bs.

Question 34

What was the judgment in Re Hay’s

Answer 34

The Ts exercise of thepower was void for excessive exercise of the power.

Question 35

What were the facts in Barlow’s Will Trust

Answer 35

The will allowed friends and family to buy pictures at a reduced price. The issue was whether friends/family were void for uncertainty

Question 36

What was the judgment in re Barlow and who gave it

Answer 36

Browne Wilkinson (Chancery): Family = blood relation (no need to adopt artificial construction). Although there is a range of tests for friendship, it was enough that some people would be able to pass all the tests. The will was not a class gift (which woudl require ALL friends to be established), but a series of individual transactions conditional upon people answering the descriptions friend or family.

Question 37

What are the key facts of Oppenheim

Answer 37

• Discretionary trust for “providing for or assisting in providing for the education of children of employees or former employees of BAR”
• 110,000 employees
• Trust needed to be charitable to be valid (b/c was in perpetuity)
• The issue was whether the purpose was for the PUBLIC BENEFIT

Question 38

What did Simonds say in Oppenheim?

Answer 38

The quality that separates the benefited class from the community at large must not depend on their relationship to another individual.

Allowing employment as a distinguishing factor would be an unhealthy extension of charity law

Question 39

What did macdermott (dissenting) say in Oppenheim

Answer 39

The personal nexus test is artificial and arbitrary.

The trust would have been valid if expressed to bein favour of tobacco workers in X town even though it woudl have benefited fewer people.

Question 40

What is the rule in Oppenheim

Answer 40

A class benefited by a charitable trust must not be defined by heir personal relationship with another person or institution.

Question 41

What are the facts of Dingle v Turner

Answer 41

Trust to pay pensions to poor employees

600 employees

Question 42

Who gav ethe leading judgment in Dingle v Turner and what did he say

Answer 42

Lord Cross: “Poor relations” trusts have always allowed Bs to be defined by personal nexus.

To draw a distinction between different types of poverty trust woudl be illogical

Question 43

What is the principle of Dingle v Turner

Answer 43

Poverty trusts are subject to a more relaxed public benefit test