Trusts Flashcards
(16 cards)
Summary of history
Trusts are a creation of the law of equity. Counteract the harshness of the common law (metaphor ‘free jazz’).
What are some equitable maxims?
Equity prevents mischief/will not suffer a wrong to be without a remedy;
Equity will not assist a volunteer;
Equity regards as done that which ought to have been done.
What is dual ownership?
E.g. Legal title and beneficial interests.
Equitable property rights are more vulnerable than common law (legal title) property rights.
What is dual nature?
A means of holding property; and
A relationship between trustee & beneficiary.
Explain express trusts certainties (s15 of Trusts Act)
Requires certainty of intention, objects, and subject matter. Can be done informally.
Explain fiduciary duty
Subordinating your interests for someone else’s (relationship of loyalty). There are remedies for breaches of this duty.
Explain manifestation of intention (express trusts)
No particular formalities required as it is usually substance over form (Paul v Constance).
EXCEPT must be written for when created upon settlor’s death and land.
Key difference between intention for gift or for trust
Gift has an intention to transfer title now. Intention to dispose of interest so that a beneficial interest in created (Equity wont rescue a failed gifted).
How are express trusts formally created?
Trust deeds sets out who are trustees, beneficiaries etc.
Explain an express (discretionary) trust
Trustee(s) with discretion to vary who the beneficiaries are; or what beneficiaries’ interests amount to.
Trustees can distribute income or capital.
None of the beneficiaries have vested interest but they still have enough of a proprietary interest.
Explain a resulting trust and the two types (Westdeutsche)
Still intention ocussed however intention is being presumed.
Type one: Purchase of property involving another’s name: resulting trust to settlor based on proportion paid. Intention not to gift presumed, may be rebutted. ‘Springing back’ to the settlor.
E.g. Parents living and paying for a granny flat on the child’s land.
Type two: Predicated on there being a failure, an outcome has not been covered. The law will supply a presumed intention thus a resulting trust arises.
Explain a constructive trust
Not intention focussed. Court exercises classic conscience based equitable jurisdiction.
Explain a ‘contribution based’ constructive trust
Someone can make contributions to a property (commonly after purchase) in such a way that they end up getting beneficial interest even without the legal owner not intending this interest to be recognised.
Gillies v Keogh
Ratio: Objective test
Degree of sacrifice by claimant; (longer relationship = more sacrifice)
Value of contributions vs value of benefits received
Freedom to make own property arrangements.
Lankow v Rose
Ratio: Established a process for de facto partners to claim on partner’s property. Empowered court to impose constructive trusts where de facto partner has contributed to property.
What does Tipping J state de facto partner has to prove?
- Contributions, direct or indirect, to the property in question;
- The expectation of an interest therein;
- That such expectation is a reasonable one;
- That the defendant should reasonably expect to yield the plaintiff an interest
