TRUSTS Flashcards
1
Q
What did Lord Evershed M.R. state in Re Endacott?
A
Lord Evershed in Re Endacott stated that a PURPOSE TRUST IS INVALID unless CHARITABLE
2
Q
Brightman J (as he was then) in Re Recher’s Will Trusts
A
A trust for non-charitable purposes, as distinct from a trust for individuals, is clearly void because there is no beneficiary
3
Q
Roxburgh J. in Re Astor’s S.T on fundamental ideas of a Trust: that is enforceable in court AND => someone to enforce it
A
A trustee would not be expected to be subject to an equitable obligation unless there was somebody who could enforce a correlative equitable right, and the nature and extent of that could be worked out in proceedings for enforcement
4
Q
Examples of purpose and thus invalid not charitable trusts
A
- (as per MILLETT in The Quistclose Trust: Who Can Enforce it?” (1985)) 2.
5
Q
The beneficiary principle
A
a trust is only valid if there is a beneficiary, CF enforceability principle:trust is valid only if there is someone to enforce it
6
Q
Definition of a Resulting trust
A
*A type of trust *Imposed by law. What does it do? It returns the beneficial ownership in the trust property back to the settlor. When? 1. When settlor of an express trust fails to tell the trustees what to do with the trust property (or part of it). EX1 Tilda sets up a discretionary trust for the benefit of her siblings, but does not say what is to happen to the trust fund once her siblings have died. Her siblings die, and there are assets still held in trust. The trust assets are therefore held on a resulting trust for Tilda (or her estate if Tilda has also died). EX2 A purchaser fails to give a seller agreed consideration in exchange for receiving property. The beneficial interest in the property results back to the seller.
7
Q
The Enforceability Principle
A
⇒ Enforceability principle holds a trust can be valid only if there is someone to enforce it ⇒ Importantly, the enforceability principle can also accommodate some categories of legally valid purpose trust
8
Q
Locus standi
A
the right or capacity to bring an action or to appear in a court.
9
Q
Quote for Beneficiary Principle
A
Grant MR in Morice v Bishop of Durham CF What is a Beneficiary?
10
Q
What is a Beneficiary? 2 types
A
1 EQUITABLE OWNER So when does X have “equitable ownership” of trust property? ⇒ X has equitable ownership of trust property if he has an *immediate claim* to the trust property → X has a claim to the trust property if he can avail himself of the rule in Saunders v Vautier (1841) (i.e. is able to wind up the trust and take the trust property absolutely) 2 HOLDER OF PROPRIETARY INTEREST What is meant by ‘proprietary interest’ is a matter of great contention view1 Nolan: if it is at least possible (ie at least possible up to certain==> wider definition than 1) that the trust property will be paid out to him view2 It it is possible for someone to have a proprietary interest in trust property without having equitable ownership of the property → so you can have a proprietary interest without being able to invoke Saunders v Vautier
11
Q
Case with rule to wind up the trust and take the trust property absolutely
A
Saunders v Vautier (1841)
12
Q
What is a bare trust?
A
A Bare trust is a simple trust, where the beneficiary (or beneficiaries) has an *immediate and absolute right* to both the *capital and income* of the trust. The property is held in the name of the trustee (or trustees), but the trustee has no discretion over the assets held in trust. The trustee of a bare trust is a mere nominee, in whose name the property is held. Except in the case of bare trusts for minors, the trustee has no active duties to perform. The trustee must simply follow the (lawful) instructions of the beneficiary in relation to the assets held in trust. A bare trust can be express or implied.
13
Q
For X for life; remainder to Y and Saunders v Vautier
A
Neither X, Y can do it indepenently but can wind up trust and take property absolutely if acting jointly.
14
Q
Define a Purpose Trust
A
A Purpose Trust does not provide for the trust fund to be given to a person(s) as cash but instead specifies that it is to be spent on delivering a particular purpose
15
Q
What are the 3 categories of legally valid Purpose Trusts?
A
i. Charitable trusts ii. Miscellaneous, non-charitable trusts iii. Re Denley trusts ELSE ⇒ A purpose trust not falling within one of the above categories is legally void (Re Astor’s Settlement Trusts [1952]; Re Shaw’s Will Trust [1957])
16
Q
money was settled to a trustee for various purposes, including maintaining cooperation between nations and preserving the independence and integrity of newspapers. CASE and outcome?
A
Re Astor’s Settlement Trusts [1952]: The trust was held not to fall under any of the three categories, so the trust was therefore void 3 are Charitable, Re Denley, Misc Roxberg J said: ‘if the purposes are valid trusts, the settlors have retained no beneficial interest and could not initiate [proceedings].’ One cannot generally have a trust without a beneficiary or, at least a person who can move the court to enforce the trust: ‘This seems to me to be good equity and good sense.’
17
Q
Shaw left money on trust for the creation of a 40 letter alphabet.
A
Re Shaw’s Will Trust [1957]: Purpose trust not in 3 categories ==> invalid
18
Q
What is a Charitable Trust?
A
⇒ A charitable trust is one aimed at exclusively charitable purposes (CA s.1)
19
Q
Examples of VALID MISCELLANEOUS, NON-CHARITABLE PURPOSE TRUSTS
A
i. Constructing and/or maintaining graves and monuments (Re Hooper [1932]) ii. Privately saying masses (Bourne v Keane [1919]) We know that a trust for publicly saying masses will be charitable (as that would advance religion and be for the public benefit), but a trust for privately saying masses cannot be charitable iii. Maintaining particular animals (Re Dean (1889)) A trust for maintaining animals in general tends to be charitable, but a trust for maintaining particular animals is not charitable because of a lack of public benefit – nevertheless, this type of trust can be legally valid as a non-charitable purpose trust iv. Promoting fox-hunting (Re Thompson [1934]) This is presumably defunct now because most forms of fox hunting are now illegal
20
Q
Can a trust for privately saying masses be valid?
A
NO Bourne v Keane [1919]
21
Q
What are RE DENLEY PURPOSE TRUSTS?
A
⇒ Trusts aimed at purposes are valid when there are individuals directly and tangibly benefited by the purpose’s performance (Re Denley [1969]) Facts of Re Denley 1969 trust for the purpose of providing a sports field to be used by the employees of a particular company was held legally valid Goff J : this kind of T is in general outside the mischief of the principle that every trust must have a certain cestui qui trust
22
Q
Define cestui qui trust
A
beneficiary of a trust (simply)
23
Q
A trust fund was created to provide for two deaf and dumb elderly sisters who lacked the means to support themselves. Valid trust?
A
(+) RE ABBOTT FUND TRUSTS [1900] 2 CH 326 Facts: A trust fund was created to provide for two deaf and dumb elderly sisters who lacked the means to support themselves Held: NOT held for the sisters’ absolute benefit, but rather as a trust for the purpose of providing for the sisters; BUT valid as a purpose trust because there were individuals (i.e. the sisters), as in Re Denley, who were directly and tangibly benefitting from the purpose’s performance
24
Q
A discretionary trust for a huge class of beneficiaries comprising “officers and employees or ex-officers and ex-employers of the Company and any relatives or dependants of such persons” Case and valid Trust?
A
McPhail v. Doulton 1971 AC Wilberforce: Valid +
25
What is a chose in action?
Torkington v Magee [1902] 2 KB 427
26
What did MIllet J say in Armitage v Nurse 1998?
If the beneficiaries have no rights enforceable against the trustees there are no trusts
27
Where objects of a power of appointment have no rights to be informed that they are objects - still valid trust?
See per Templeman J. in Re Manisty's Settlement [1974] Ch. 17 at p. 25, where he stated that there was no need to take steps to inform objects of the power who were employees of the settlor's company or relatives of those who were the primary object of the settlor's bounty. Recent DNA advances (showing most Europeans to be descendants of one of six women) make "relatives" a huge class, the word meaning descendants of a common ancestor (whose bones might be dated to 2000 B.C.) as held in Re Baden's Deed Trusts (No 2) [1973] Ch. 9. A discretionary trust for S's relatives (potentially well over 10 million) should be void for administrative unworkability nowadays.
28
Argument for Common Law jurisdictions having same law?
Globalisation contributes to harmonisation. Ex Trust perpetuity rules difference between rules in England and overseas also over English assets which should
29
Hayton's idea in Developing the obligation characteristic of the trust for a redefinition of a trust as... David Hayton Professor of Law, King's College, London University and Acting Justice of the Supreme Court of The Bahamas.
?????
30
DO individuals who \*may\* benefit from a Charitable Trust have legal standing to enforce these benefits?
NO Purpose Trust ==\> Charitable Trust are enforced by the Attorney General in the name of the Crown
31
What does certainty mean in terms of a Trust?
Only certain of object that exclusively charitable uses is required. =\> cf Three Certainties 1 Certainty of intention, 2 Certainty of subject matter && 3 Certainty of object.
32
What does cy-pres mean?
as near as possible to the testator's or donor's intentions when these cannot be precisely followed.
33
Rule against perpetuities
requires that future trust interests (that is, interests that do not take effect immediately) must be certain to vest within a defined period of time known as the perpetuity period ELSE void at Common Law BUT potentially savable under Perpetuities and Accumulations Act 2009, the Perpetuities and Accumulations Act 1964 or the Law of Property Act 1925. The Perpetuities and Accumulations Act 2009 also restricted the scope of the rule with effect from 6 April 2010.
34
4 Pemsel cases defining charities
Pemsel's Case 1891, as per Macnaghten Trusts for 1. The relief of poverty 2 advancement of education 3 advancement of religion 4 other purposes beneficial to community
35
Charities Act 2011 s.3
3 Descriptions of purposes (1) A purpose falls within this subsection if it falls within any of the following descriptions of purposes— (a) the prevention or relief of poverty; (b) the advancement of education; (c) the advancement of religion; (d) the advancement of health or the saving of lives; (e) the advancement of citizenship or community development; (f) the advancement of the arts, culture, heritage or science; (g) the advancement of amateur sport; (h) the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity; (i) the advancement of environmental protection or improvement; (j) the relief of those in need because of youth, age, ill-health, disability, financial hardship or other disadvantage; (k) the advancement of animal welfare; (l) the promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire and rescue services or ambulance services; (m) any other purposes— (i) that are not within paragraphs (a) to (l) but are recognised as charitable purposes by virtue of section 5 (recreational and similar trusts, etc.) or under the old law, (ii) that may reasonably be regarded as analogous to, or within the spirit of, any purposes falling within any of paragraphs (a) to (l) or sub-paragraph (i), or (iii) that may reasonably be regarded as analogous to, or within the spirit of, any purposes which have been recognised, under the law relating to charities in England and Wales, as falling within sub-paragraph (ii) or this sub-paragraph.
36
Key Case Morice v Bishop of Durham 1804
legacy given to BoD on trust for "such objects of benevolence and liberality" as he should choose. =\> not exclusively charitable =\> non charitable =\> ==\> Non-Charitable Purpose Trust ==\> void(+)
37
a testator transferred property by his will for ‘such charitable and benevolent institutions in the city of Birmingham as the Lord Mayor should choose’. Charitable Trust?
(+) Re Best 1904
38
A bequest of 200,000 provided for the income to be paid to orthopaedic hospitals, subject to 100 per annum for dinners for trustees when they met on trust business. Charitable Trust?
Re Coxen 1948 dinners merely incidental ==\> charitable (+)
39
unspecified part of a fund was made for charitable purposes (the relief of poverty) and the remainder for a private purpose (the testator’s relatives). Was severance possible?
Yes Salusbury v Denton 1857
40
A testator directed his executors to apply the residue of his estate ‘for such charitable or benevolent objects’ as they might select.
Chichester Diocesan Fund v Simpson [1944] Viscount Simon: ‘It is NOT disputed that the words charitable and benevolent DO NOT ordinarily mean the same thing; they overlap in the sense that each of them, as a matter of legal interpretation, covers some common ground, but also something which is NOT covered by the other. ....inevitably follows that the phrase charitable or benevolent occurring in a will must, in its ordinary context, be regarded as \*too vague\* to give the certainty necessary before such a provision can be supported or enforced. The conjunction or may be sometimes used to join two words whose meaning is the same, but, as the conjunction appears in this will, it seems to me to indicate a variation rather than an identity between the coupled conceptions. =\> charitable git (-) Prima facie, the conjunction, ‘and’ is construed conjunctively but may exceptionally be construed disjunctively in a way similar to the word ‘or’. The construction of the expression will depend ultimately in the context in which the words were used in the trust instrument or will.
41
Are organisations set up in England Wales to provide benefits abroad charitable?
No control of High Court s.2 2011 Act?
42
Charity Commission Guidance What is the Charity Commission Guidance PB1 on Public Benefit? 1 (wider tangible benefit == benefit aspect)
1 A purpose must be beneficial && 2 Any detriment or harm from the purpose must not outweigh the benefit
43
Charity Commission Guidance What is the Charity Commission Guidance PB1 on Public Benefit? 2 (narrower benefit == public aspect)
1. benefit the public in general or a sufficient section AND 2 not give rise to more than incidental \*PERSONAL\* benefit. NB Incidental personal benefit is OK
44
What did Evershed MR say in Re Coulthurst 1951 on what constitutes poverty?
Poverty means being short of something Relief gives you what you would o/w not have does not mean Destitution Going short
45
A bequest of £20,000 to trustees was subject to the direction that the income be paid to the widows and orphans of deceased officers and ex-officers of Coutts & Co, as the trustees may decide the most deserving of such assistance, having regard to their financial circumstances.
Re Coulthurst 1951 Trust to benefit widow and orphans of employees and ex employees who "were most deserving of such assistance" relative to the other widows and orphans of employees and ex employees HELD for relief of poverty ==\> charitable (+)
46
Gift for the provision of housing for the working classes. Charitable?
(-) Re Sanders Will Trusts Grounds? group needs to be assumed to be in need of help. What about those in group not in need? Also Re Gwyon 1930 Reverand teenage boys in Farnham since rich could also have benefited ==\> charitable (-)!!!
47
person in special need
Re Cohen 1973 A trust for relatives who were "in special need" ==\> in special need does not necessarily mean poor. BUT ==\> judge was assured trustees would only choose those genuinely poor +\> trust(+) ?? Open to criticism!!
48
A bequest was made on trust ‘for such relations of my said son and daughters as in the opinion of the survivor shall be in needy circumstances’.
KEY Re Scarisbrick 1951 The court was asked whether a trusts for poor persons within a restricted category, the testator’s descendants, not meeting the usual requirement that the benefits be available to a wider section of the community, may be held charitable. Held: Such a trust could be charitable (!!) Distinction between charitable trust and private trust. CT for relief of poverty amongst a particular description of poor people versus PT gift to particular poor persons the relief of poverty among them being motive for gift SEEMS PT but exception granted: Basically for relief of poverty ==\> exception to the general rule in that trusts or gifts for the relief of poverty have been held to be charitable even though they are limited in their application to some aggregate of individuals ascertained as above, and are, therefore, not trusts or gifts for the benefit of the public or a section thereof.
49
Dingle v Turner 1972
Trust to pay pensions to poor employees who were old or disabled The testator left part of his property on charitable trusts for the relief of the poverty of ‘the poor employees’ of a company. The appellant argued that it was not a charitable gift, and that the gift failed. Held: Charitable(+) based on Poor Relations exceptions Approved Re Scarisbrick 1951 case on poor relatives ==\> personal nexus extended to poor employees either too old or disabled. Lord Cross: did not want to overrule poor relations cases because many trusts in existence based on them (=?==\> invalid?) even if personal nexus which is usually not permitted \< it must be accepted that wherever else it may hold sway the Compton rule has no application in the field of trusts for the relief of poverty.’\> Lord Cross
50
Charity Commission Guidance on Public Benefit
\* recognise law accord. to old poverty trusts \* benefit aspect only for charities for relief (sometimes: prevention of) poverty \* can define benefit with reference to descent from one individual, employer relationship, membership of unincorporated association (EX Nottingham Tennis Centre) \* must not be for named individuals even if poor
51
What is the Cy-près doctrine
as near as possible if evident purpose cannot be carried out ==\> can use it to ==\> old purposes replaced by new ones similar and can be carried out in full If general charitable intent && trust impossible to perform ==\> cy-pres (+)
52
general charitable intent ?
Did the Testator intend a general gift and expressed a particular method as a means of carrying gift into effect (imposs to perform==\> cy-pres + ) OR did he intend gift for particular purpose CF Cy-pres
53
What is the Compton rule?
Powell v Compton 1945 Ratio: The court considered the charitable status of a trust ‘for the education of Compton and Powell and Montague children’. Held: It was not charitable. No tr would be charitable where a potential beneficiary would have to show he was related to a persons Existence of personal nexus took out of public into private sphere =\> not public =\> charitable (-)
54
Simonds in Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297
Facts Education of children of employees or ex employees of BAT (110,000 employees) strict application of personal nexus test in definition of sufficient section of public =\> charitable(-) BUT MacDermott dissented
55
Private Trusts and perpetuity period
Must vest w/in perpetuity period which is 125y (s.9 Perpetuities and Accumulations Act 2000) since policy argmt == do not want assets tied up for definite period of time does !=\>apply to charities =\> charities perpetuity period (-)
56
If falls within Advancement of Religion, Relief of Poverty OR Advancement of Education
Rebuttable Presumption of Public Benefit
57
The testatrix left a fund on trust stating that part was for the foundation of a school (a charitable purpose) and the remainder was for the benefit of her relatives (a private purpose).
Salusbury v Denton (1857) 3 K&J 529 Held: Charitable(+) Maxim: relevant part could be identified and severed from rest
58
s.4(3) Public benefit?
No real definition - have to look at Case law before 2011 and Charity Commission (1853) \*Guidance\*
59
Exam Structure
1. Is it a charitable purpose? ==\> CA 2001, s.3(1) 2.is it for public benefit? ==\> 2 stage test 1. Benefit? 2. General public of sufficient section of it (personal must be incidental)
60
A trust which also benefits the rich is charitable?
(-) providing for those who could have afforded the trousers anyway Re Gwyon 1930
61
Trust for poor relations
Re Scarisbrick 1951 Even though relieving poverty of her relations =\> sufficient section general public test(+)==\> personal connection would normally preclude it BUT A gift to my poor relatives (identified poor relatives, then the ones which are mine) CH T (+) vs. "a gift to M and J who are poor" +\> CH T (-) add image
62
Charity Commission Guidance on poor relatives
Must not be named Does not matter if poor Sufficient to meet benefit aspect only (NO public aspect, i.e. personal nexus trusts allowable)
63
the 40 letter alphabet George Bernhard Shaw
charitable (-) (1) Not concerned with teaching or education (2) Considered propaganda =\> Political purposes =\> cannot be charitable
64
Charities for advancement of education
Test needed There are two main aspects to educational merit or value: (1) is the subject capable of being of educational merit or value; (2) is the process such that it delivers educational merit or value?
65
Trust for Francis Bacon Society That FB had written Shakespeare's plays (Anonymous film)
re Hopkins 1965 (+) (1) Subject of educational merit, uncovering the truth of WS works (2) For public benefit
66
Trust for Research Charitable?
McGovern v AG [1982] 1 Subject matter is useful area of study 2 Findings will be disseminated i.e. published (usu +) 3 Benefit for sufficiently section of society
67
Trust for finishing school for Irish people
Re Shaw's WT [1952]Ch 163 Wife of GB Shaw Intrinsic value in public speaking, personal relationships-=\> Charitable(+)
68
Trust for maintaining a collection of pictures, furniture, silver and china
Judge described as a mass of junk Expert evidence suggested that the collection was of low quality: only the chairs were of any value. Lacked coherence. ==\> Educational benefit (-) =\> Charitable (-)
69
Education cannot be for propaganda Case where Students Union (registered as a charity) donation to striking miners and to aid Ethiopian famine
AG v Ross [1986]1 WLR 252 Held: that the union was a charity, therefore: Could only further educational aims of college ==\> Gifts here ultra virus ==\> Not charitable here
70
Oppenheim v Charitable Securities
Employees, former employees of BAT Number of employees \> 100,000 ==\> personal connection (+) ==\> public (-) Simonds: For t to be valid: Possible beneficiaires must not be countable What distinguishes them must not depend on their relation to a specfic individual McDermott dissented:
71
Private school paying students held to be charitable
Re Resch's WT. No-one was expressly excluded but in practice many could afford not to pay Public benefit cannot just be indirect
72
Independent Schools Council v Charities Commission
Required 1 public benefit thru the advancement of education 2 those who may benefit must be sufficiently numerous =\> section of the public Lindley LJ: "I am quite aware that a a trust may be charitable though not confined to the poor but I doubt very much whether a trust would be declared charitable which excluded the poor"
73
Re Coxen [1948] Ch 747
A testator left more than £200,000 for charitable purposes in the field of medicine but he added that {£100 should be spent on a free dinner for the trustees (not charitable) each year}. Could sever out Second part to save Charitable trust. Held: charitable (+)
74
When is a T for education charitable- provide x cases
Guidance: generally beneficial BUT THINK education for pickpockets \* Re Shaw Charitable (-) Research into 40 letter Alphabet \* Re Hopkins Charitable (+) Francis Bacon Shakespeare "has educational merit" == worth studying \* Re Shaw (wife) CH (+) Irish finishing school \* Re Pinion Ch(-) Collection of junk, open to public PB+ BUT not charitable (-) no education merit, \*AG v Ross Ch(-) Su donation to mining strikers, ETH famine in 80s. Such donations not for advancement of education of students (+)
75
Heads of Charity
Descriptions in s3(1) a to m Very broad, not fully formed See Explanatory notes
76
study and dissemination of ethical principles and cultivation of a rational religious sentient\>\> Charity under advancement of religion?
NO Re South Place Ethical Society
77
What does advancement of religion mean?
the promotion of spiritual teaching in a wide sense and the maintenance of the doctrines of which this rests and the observances which serve to promote and manifest it - not merely a foundation or cause to which it can be related Keren Kayemeth v IRC 1932!
78
trust for publication of sacred writings of Joanna SOuthcott who claimed she was with child by Holy Ghost and would give birth to new messiah
Thornton v Howe 1862 :( Charity THEN (+) Now would fail on Public Benefit test
79
Church of Scientology
Charity Commission 1999 NO was it for the public benefit?
80
Home for lost dogs charitable?
Re Douglas 1887 YES broad interpretation ##promote feelings of humanity and morality, repress brutality, ..." BUT NOT vivisection as necessary part of medical research National Anti Vivisection Soc v IRC 1948 OR animal refuge which excluded humans not for public benefit ==\> charitable - Re Grove-Grady
81
##political propaganda masquerading as education..."
Re Hopkinson 1949 #is not education....in other words it is not charitable# Vaisey J BUT Re SCowcroft
82
Conservative principles and religious and mental improvement
Re SCowcroft Charity + here purposes presented in the form of education
83
Testators express aspirations formation of informed international public opinion and promotion of greater cooperation in Europe. Charity?
Re Koepplers WIll Trusts 1986 even tho aspirations not charitable gift to furtehr work of an educatoinal project was CH +
84
Use of Student Union funds to cmapign for free school milk. CH+?
Baldry v Feintuck CH (-)
85
National Anti Vivisection Soc v IRC 1948 Charity?
No 1. Vivisection has public benefit 2 object of society required a change in law =\> political purpose necessary (Normand: only applies when change in law was predominant object) CF McGovern v Att Gen 1982 Amnesty International dierct and main object was to secure a change in law ==\> charitable (-) Here "attempting to secure the release of prisoners of conscience" +\> involved putting presure on foreign govs and authorities =\> political + public policy that it could prejudice relatoins which country concerned ==\> CH (-)
86
Advancement of the education of the public in the subject of militairsm and disarmament
Southward v Att Gen 2000 dominant purpose to promote pacifism && challenge Western policies ==\> CH - Variant advancement of conflict resolution or reconcilation CH=
87
Campaigning, advocacy and political activity as incidental powers
are allowed as per Charity COmmission guidelines
88
Ancillary and Non exclusively charitable objects def 3 cases
DEF Subservient, subordinate, ministering (to). OR Designating activities and services that provide essential support to the functioning of a central service or industry; https://www.oed.com/view/Entry/7258?redirectedFrom=ancillary#eid o Re Coxen 1948 provision for annual dinner for trustees (+) o IRC v City of Glasgow Police. Police athletic association and increasing efficiency of Glasgow police force ancillary (-) CH – o Royal College of Surgeons b National Bank 1952. Benefits to medical profession in constition of GMC are ancillary to promotion of public health ancillary + =\> CH +
89
such charitable or public purposes as my TRstee thinks proper
Blair v DUncan 1902 CH - words wide enough to justify disposible an unascertainable part of fund to non-CH objects
90
charitable or benevolent
Chichester Diocesan Fnd 1944 CH - words wide enough to justify disposible an unascertainable part of fund to non-CH objects
91
for benefit of the schools, and charitable institutions, and poor, and other objects of charity, or any other public objects
Re Bennett 1920 Other =\> eiusdem generis =\> or not disjunctive =\> CH gift of the whole +
92
charitable and public OR charitable and deserving OR charitable and beenvolent
Blair v Duncan, Re Sutton Re Best ALL CH + AND has power to draw other word into orbit of charitable
93
eiusdem generis
https://www.oed.com/view/Entry/242690?redirectedFrom=+ejusdem+generis#eid of the same kind ‘Other records’..had to be construed eiusdem generis with ‘ledgers, day books, cash books and account books’ and unsorted bundles of cheques and paying-in slips were not ‘other records’ within the meaning of the Act.
94
What are basic requirements valid trust?
1. There must be intention to create a trust. 2. There must be certainty as to the property forming the subject matter of the trust. 3. The trust must have identifiable human beneficiaries. 4. The correct formalities must be observed. 5. The trust must not infringe the rule against perpetuity or the rule against inalienability. 6. The trust must not be designed to defraud creditors.
95
A Trust is imperative which means...
which means that the trustee is under a duty to hold the trust property for the beneficiary and to deal with and protect it in accordance with the terms of the trust instrument.
96
3 Certainties defined in which case by whom.
Knight v. Knight (1840) Lord Langdale.
97
What are the 3 certainties?
1) Certainty of words – the words must be construed so that on the whole they must be construed as imperative; ‘Equity looks at the intent not the form’. Look at itnentio of testator/Settlor by conduct or words used, to create a trust. Since the 1950s, the courts have been more willing to conclude that there was intention to create a trust, rather than hold that the trust is void. \_Compare\_ Precatory Intent 2) Certainty of subject – the subject matter (the property) must be certain; 3) Certainty of object – the objects or persons to have the benefit of the trust must be certain
98
Testator ‘to be absolutely at her disposal in any way she may think best for the benefit of herself and her family’.
Lambe v Eames (1871) 6 ch App 597 Precatory =\>Trust (-) Absolute gift to the widow, so she was free to dispose of it as she chose
99
Testator I give, devise and bequeath all my real and personal estate and effects whatsoever and wheresoever unto and to the absolute use of my wife Harriet Smith, her executors, administrators and assigns, in full confidence that she will do what is right as to the disposal thereof between my children, either in her lifetime or by will after her decease’
Re: Adams and the Kensington Vestry (1884) Absolute gift(+) Trust(-) Cotton LJ: “some of the older authorities (pre-1871) went a great deal too far in holding that some particular words appearing in a will were sufficient to create a trust … what we have to look at is the whole of the will which we have to construe”
100
‘in equal shares to my brothers and sisters for the benefit of themselves and their respective families’.
Re: Hill [1923] Again Gift(+) Why?
101
3 cases precatory language +\> imperative (-) =\> Trust(-)
Re: Adams and the Kensington Vestry (1884) Re: Hill [1923] Lambe v Eames (1871) 6 ch App 597
102
Precatory words in full confidence that she will make such use of it as I would have made myself and that at her death she will devise it to such one or more of my nieces as she may think fit.’ ‘……….. in default of any disposition by her thereof by her will I hereby direct that all my estate and property acquired by her under this my will shall at her death be equally divided among the surviving said nieces.’ BUT TRust (=)
Comiskey v. Bowring - Hanbury [1905] AC84 a trust was construed because the {\_whole context\_} indicated this as being the testator’s true intention.
103
Mr Constance and Miss Paul lived together. He gave her authority to draw on a bank account in his name. Money he received as compensation for an injury suffered at work was put into the account as well as bingo winnings. Mr Constance told Miss Paul on numerous occasions that the money was as much hers as his. Case and Trust(+)?
Paul v. Constance [1977] There was a trust in Miss Paul’s favour. The unsophisticated nature of Miss Paul and Mr Constance and the nature of their relationship all went to support the view that the money was as much hers as his. {{BUT…RW: Why was she not the survivor of a joint tenancy in respect of the money?}} ==\> "This money is as much yours as mine," ==\> joint account ==\> features in the history of the relationship between the plaintiff and the deceased which support the interpretation of those words as an express declaration of trust.
104
The property in question was a yacht registered in the name of Mr Prance. Ms Rowe gave up her flat and put her furniture in store so that she and Mr Prance could live together on the yacht. He regularly referred to the yacht as “ours”
Prance v. Rowe [1999]
•Use of word “our” in relation to the yacht and reference to it as her “security” led to an express trust
105
Kayford Ltd was a mail order company. Customers either paid a deposit or the whole sum in advance. The company was in financial difficulty and was advised by its accountants to open a separate bank account named ‘Customers Trust Deposit Account.’ ‘Customers’ money was to be put into this account and held until their goods were despatched. In fact the company used a dormant deposit account but ensured that the account bore the name suggested by the accountants.
Trust? ie. Certainty of Intention
Re Kayford Ltd 1975
There was a trust since the whole purpose was to ensure that the beneficial interest in the money remained with the customers until their orders were dispatched
106
Mr North invented a device which could be widely used in domestic appliances. He entered into a contract with a manufacturer to produce the device, and later successfully sued the manufacturer for breach of contract. The parties who had invested in his business argued that they should receive some of these damages, and the issue was whether or not Mr North had intended to create a trust of these damages in favour of the investors.
North v Wilkinson [2018]
## Footnote
#although an intention to create a trust does not require the use of the word trust or similar language, there must be, as Scarman LJ said in Paul v Constance, "a clear declaration of trust and that means there must be clear evidence from what is said or done of an intention to create a trust.#
Held that an agreement contained in a letter between a sole trader and six investors in his business was \*NOT Sufficient\* to constitute the creation of a trust in favour of the investors.
Although there is no formality or particular required language for the creation of a trust, it should be obvious that any document purporting to create a trust ought to be written in such a form that there is not doubt that a trust has been created. As is often the case in such matters the "saving" achieved by a DIY drafting has turned out to be very costly indeed.
The second interesting point resulting from this case is the question of whether a trust can be created over a sole trader's business,
107
A fund was raised to maintain two deaf and dumb ladies. The issue was what should be done with surplus funds on the death of the ladies.
Re Abbott Fund 1900
## Footnote
The surplus was to be held on resulting trust for the subscribers
\_\_Resulting trust\_\_
will also be found where the purposes of a trust have been completed, but there is excess property left over; for example, a trust by a settlor to provide for his children's university education.[22] Judges and academics disagree over what should happen to the property; possibilities are that it should be held for the donors, that it should be held for the beneficiaries (as the donors intended to make an irrevocable gift) or that it should be given to the Crown as bona vacantia. A fourth suggestion is that the trustees take the surplus, as in Re Foord.[23] The general rule was set out in Re Trusts of the Abbot Fund,[24] where it was decided that excess funds will be held on resulting trust for the settlor. There are exceptions to this rule; the general rule is put aside if the court can find intention to benefit specific individuals, as in Re Osoba.[25][26]
108
What is a Resulting Trust?
It comes from the Latin resultare, meaning to spring back, and was defined by Megarry VC as "essentially a property concept; any property that a man does not effectually dispose of remains his own".
109
Name some princioples of Equity
List of Equitable Maxim
## Footnote
2. 1Equity considers that done what ought to be done
2. 2Equity will not suffer a wrong to be without a remedy
2. 3Equity is a sort of equality
2. 4One who seeks equity must do equity
2. 5Equity aids the vigilant not the indolent
2. 6Equity imputes an intent to fulfill an obligation
2. 7Equity acts in personam (i.e. on persons rather than on objects)
2. 8Equity abhors a forfeiture
2. 9Equity does not require an idle gesture
2. 10He who comes into equity must come with clean hands
2. 11Equity delights to do justice and not by halves
2. 12Equity will take jurisdiction to avoid a multiplicity of suits
2. 13Equity follows the law
2. 14Equity will not assist a volunteer
2. 15Equity will not complete an imperfect gift
2. 16Where equities are equal, the law will prevail
2. 17Between equal equities the first in order of time shall prevail
2. 18Equity will not allow a statute to be used as a cloak for fraud
2. 19Equity will not allow a trust to fail for want of a trustee
2. 20Equity regards the beneficiary as the true owner
110
A fund was subscribed solely for the education of the children of a deceased clergyman and not for the exclusive use of one child or for equal division among them but as necessary and after the formal education of the children had been completed. I
Re: Andrew’s Trust [1905]
Suprplus what to do with it (see also Resulting Trust)
The fund was actually an absolute gift to the beneficiaries (subject to a stated purpose) so the beneficiaries ultimately took the surplus.
\_Held \_that the children were entitled to the balance equally. He construed education in the broadest sense as not being exhausted upon formal education ending and treated the reference to education as merely expressing of the gift. If a gross sum be given, or if the whole income of property be given, and a special purpose be assigned for the gift, this court regards the gift as absolute and the gift takes effect as to the whole income as the case may be.
111
T left property to his wife for her maintenance, the maintenance of his aged mother and the education of his daughter. What was to happen to the surplus after the death of the mother and the wife and the completion of the daughter’s education?
Re Osaba 1975
HELD
The testator’s intention was to create absolute gifts for the beneficiaries - the comments about maintenance etc were simply an expression of the motive for the gift. The beneficiaries took as joint tenants - in fact the mother had died, so the daughter claimed the whole fund.
112
Testatrix left a diamond necklace to be passed as an heirloom to the eldest son of successive generations. It was apparent that a clause found in an earlier case (Shelley v. Shelley) where a trust had been imposed had been used as a precedent.
Re: Steele’s Will Trusts [1948]
\_HELD\_
This created a trust
113
What is the difference between imperative words and precatory words?
Precatory words merely express a hope or a wish, rather than imposing an obligation. Imperative words show an intention to create a legally binding obligation.
114
In creating a trust, are technical words (like trust) required?
Re Kayford [1975]
IT IS WELL SETTLED THAT A TRUST CAN BE CREATED WITHOUT USING THE WORDS TRUST OR CONFIDENCE OR THE LIKE - THE QUESTION IS WHETHER IN SUBSTANCE A SUFFICIENT INTENTION TO CREATE A TRUST HAS BEEN MANIFESTED
THE USE OF THE WORD 'TRUST' SUGGESTS A TRUST, BUT IS NOT CONCLUSIVE
115
Turning Point Precatoru words (-)
Lambe v Eames [1871]
But modern day likely to find intention
116
Lambe v Eames 1871
TURNING POINTS - PRECATORY WORDS LESS LIKELY TO BE INTERPRETED TO CREATE A TRUST
Q#IN HEARING CASE AFTER CASE CITED, I COULD NOT HELP FEELING THAT THE OFFICIOUS KINDNESS OF THE COURT OF CHANCERY IN INTERPOSING TRUSTS WHERE IN MANY CASES THE FATHER OF THE FAMILY NEVER MEANT TO CREATE TRUSTS, MUST HAVE BEEN A VERY CRUEL KINDNESS INDEED#
Husband had left property to his widow 'to be at her disposal in any way she MAY think best for the benefit of herself and her family'
Widow gave money to someone who wasn't her family
HELD - there was no trust, widow was absolutely entitled to give the property to whomever she wanted.
117
Re Adam [1884] v Comiskey [1905] - re: words have to be read in their context, words alone do not define
Re Adams = 'unto the absolute use of my wife, in full confidence that she will do what is right as to the disposal thereof between my children either in her lifetime or by will after her decease' = NO TRUST
Comiskey = 'in full confidence that she will make such use of it as I should have made myself and that at her death she will devise it to such one or more of my neices as she may think fit and in default of any disposition by her thereor by her will or testament, I hereby direct that all my estate will be equally divided among the surviving neices' = YES TRUST
118
Re Steele's Will Trust [1948]
SOMETIMES, SETTLORS MAY LOOK AT PREVIOUS CASES TO DETERMINE WHAT WORDS THEY SHALL DO. THEREFORE, WHERE IDENTICAL WORDS FROM AN EARLIER CASE ARE USED, THE EARLIER DECISION SHOULD BE FOLLOWED - UNLESS THE EARLIER DECISION WAS CLEARLY WRONG.
In this case, the court followed the interpretation given to the words in the earlier case of Shelley v Shelley... this was because, in Steele's, the will had been prepared with professional help, and the case of Shelley had then stood for 80 years
Shelley v Shelley
119
Where there is no 'document' creating a trust, what will the courts do? (where someone is claiming there is a trust)
The courts will look at the words and/or conduct of the parties to see if there was an intention to create a trust.
120
COURT FOUND AN INTENTION TO CREATE A TRUST ON THE BASIS OF SPOKEN WORDS AND CONDUCT
Paul v Constance [1977]
Mrs Paul & Mr Constance were not married & did not have a joint account. Mr C got injury compensation & paid it into an account in his sole name. Mr C & Mrs P had bingo winnings, and they were paid into Mr C's account. Money was withdrawn from the account and used for joint purposes. On a number of occasions (including in front of the bank manager), Mr C said to Mrs P 'the money is as much mine as yours'.
Mr C died intestate.
HELD - there was sufficient intention to create a trust. However, bit random, because they should have been joint tenants, rather than Mr C holding the money on express trust for Mrs P.
121
CONDUCT = SUFFICIENT TO SHOW INTENTION TO CREATE A TRUST
WRITING, THOUGH DESIRABLE, WAS NOT ESSENTIAL'
Re kayford 1975
Mail order company sold soft furnishings. Customers paid in advance for goods ordered. The company was having financial difficulties and wanted to protect the customer's money. Therefore, the money was paid into a dormant deposit account in the company's name. The name of the account was later changed to 'Company's Trust Deposit Account', shortly before the company went into liquidation.
HELD - there was a clear intention to create a trust. 'The whole purpose of what was done was to ensure that the moneys remained in the beneficial ownership of those who sent them, and a trust is the obvious means of achieving this'
122
What does 'certainty of subject matter' require?
It must be certain what property is subject to the trust, and it must be certain what part or share of the property each beneficiary is entitled to.
123
What are the two aspects of 'certainty of subject matter'?
PROPERTY - it must be certain what property is subject to the trusts
BENEFICIAL ENTITLEMENTS - it must be certain what part or share of the property each beneficiary is entitled to
124
THERE MUST BE CERTAINTY AS TO WHAT PROPERTY IS SUBJECT TO THE TRUST
CANNOT SAY 'ANY THING THAT REMAINS' TO GO TO THE REMAINDERMAN
Sprange v Bernard [1789]
Testatrix provided in her will 'for my husband, to bewill him the sum of £300 for his sole use; and at his death, the remaining part of what is left, that he does not want for his own want and use, to be divided between my brothers and sister.'
HELD - it was not certain that any property would be left at the husband's death, let alone what it would be. One could not say what propert the trust was to cover, so the subject matter was uncertain, there was no trust and the husband took the money absolutely.
NOTE - it was not sufficient to say that at the husband's death, the remaining part of the money would be certain. A trust creates rights and duties at the moment of its creation, and must be certain at the moment of its creation.
125
Could you say in your will - £50 to Bob for life, and anything that's left over to Sam?
NO - there will be no certainty of subject matter, and the trust will fail - absolute gift to Bob.
126
the words 'anything that is left' were held to = no certainty of subject matter, and therefore = no trust. Instead = absolute gift.
In the Estate of Last [1958]
127
Testatrix gave her residuary estate to Thomas 'for his own use and benefit, as I have full confidence in him that if I die without lawful issue he will leave the bulk of my said residuary estate to Anne'
MUST BE CERTAINTY OF SUBJECT MATTER
'BULK OF MY SAID RESIDUARY ESTATE' = NO CERTAINTY OF SUBJECT MATTER
HELD - the phrase 'bulk of my estate' was not sufficiently certain for a trust. Therefore, Thomas took the property absolutely.
128
What will happen to a trust of unidentified un/tangible property?
TANGIBLE
It will fail - because even w.r.t gold coins, each coin could be slightly different.
UNTANGIBLE
It will be valid - as it is all essentially the same
129
UNIDENTIFIED TANGIBLE PROPERTY = TRUST WILL FAIL FOR UNCERTAINTY OF SUBJECT MATTER
Re London Wine Co [1986]
Lack of segregation ==\> trust failed for lack of certainty of subject matter.
Buyers of wine stored in various warehouses could not establish a trust of particular bottles in their favour as the bottles had not been segregated or identified in any way. So when the wine supplier went into liquidation, the customers could not claim priority over other creditors by saying that particular bottles of wine were held on trust for them
WINE = TANGIBLE PROPERTY... E.G. SOME OF THE WINE COULD HAVE STARTED TO DETERIORATE... WHO WOULD GET THE LOWER QUALITY WINE, AND WHO THE BETTER? WHO CAN CLAIM EACH WINE.
130
UNIDENTIFIED TANGIBLE PROPERTY = TRUST WILL FAIL FOR UNCERTAINTY OF SUBJECT MATTER
Re Goldcorp Exchange Ltd [1995]
The property was gold bullion purchased by the plaintiffs who had received a certificate of ownership. The contract of sale clearly stated that no specific gold had been allocated to any particular purchaser. The seller retained the right to sell/buy gold and to treat the gold as its own.
No trust, no segregation of property so no identifiable property for a trust to attach to.
Purchasers of bullion, who had paid for it but not taken delivery, claimed rights to it on the insolvency of the company. Their claims were rejected, apart from a group whose buillion had been segregated. There was no trust for the others as there was no identifiable property on which any trust could attach, as no particular buillion had been segregated for them.
131
UNIDENTIFIED INTANGIBLE PROPERTY = OK, THE TRUST WILL BE VALID
Hunter v Moss 1994
There was an oral declaration of a trust of 5% of the issued shares of a particular company. 1000 shares had been issued, so 5% was 50 shares. This was held to be sufficiently certain even though no particular 50 shares had been identified as subject to the trust.
\_[Tangible assets]\_ although apparently similar may have distinguising characteristics e.g. some bottles of wine might have deteriorated. Whereas \_intangible property\_ is all the same, provided the shares are of the same class.
==\> no need to identify which 50 shares were being held on trust.
***F*ollowed in**
*Re: Harvard Securities Ltd* (1997) The Times, 18 July.
The decision has attracted criticism on the grounds that it would not be possible to trace into an unsegregated part of the property which was subject to a trust.
*Hunter v Moss* still approved the Court of Appeal in
***Lehman Brothers International (Europe) (in Administration) v CRC Credit Fund Ltd* [2010]**
132
EXCEPTION TO THE RULE THE UNIDENTIFIED TANGIBLE PROPERTY = TRUST WILL FAIL
IF THE UNIDENTIFIED PROPERTY CAN BE OBJECTIVELY ASCERTAINED, THE TRUST/GIFT WILL BE VALID
Re Golay's Will Trusts [1965]
Testator directed his executors to allow the beneficiary (his housekeeper) to #enjoy one of his flats during her lifetime and to receive a reasonable income from his other properties'#
Held that the trustees could select a flat. However, the question arose as to whether the direction for a 'reasonable income' ought to be void for uncertainty.
HELD - it was possible to objectively discern what a 'reasonable income' was for a housekeeper. Therefore, the gift was held to be valid.
133
What happens if the purported trust is grafted onto a gift (e.g. kind of like a gift and a pathetic attempt to direct where the gift will go after the beneficiaries lie)
The beneficiary/donee takes the gift absolutely. (as in Sprange & Palmer)
https://www.flashcardmachine.com/certaintiesformalities-constitution1.html
134
Family Context JointLegalConveyance of Property
Strong Presumption if Conveyance in Joint Names THEN BEN INTEREST jointbased onEquity follows the Law = joint
Rebuttal in unusual circumstances as per Stack v Dowden
Stack v Dowden [2007] 2 ALL ER 929
The parties cohabited from 1983 and had 4 children. The property in question was bought, in joint names, for £190,000, £128,813 of which was provided by Ms Dowden. The mortgage was repaid by a series of lump sums (£27,000 from Mr Stack and £38,435 from Ms Dowden. Mr Stack also paid mortgage interest and endowment premiums of £33,747. Although the parties were legal joint tenants, the transfer to them contained no express declaration of trust. The house was sold for £754,345.
Ratio
**The parties had kept their finances entirely and rigidly separate (and that was unusual)**
Held
Save in exceptional circumstances “Equity follows the Law”. Where parties are legal joint tenants and where the deeds do not detail the beneficial interest, the presumption is that the parties will also be beneficial joint tenants. Inequality of contribution will not, of itself, be sufficient to rebut the presumption.
Here the facts were held to be sufficiently unusual (?)to draw a contrary inference. Mr Stack got 35%.
According to Baroness Hale the case was exceptional as;
Ms Dowden’s contributions were greater.
Each undertook separate responsibility for the expenditure each had committed to pay.
Mr Stack’s only contribution was mortgage interest and endowment premiums.
All other regular payments made by Ms Dowden.
Baroness Hale felt that there cannot be many couples who had cohabited for so long, who had children together and still kept their finances so rigidly separate.
Also Jones v Kernott [2011] UKSC 53
135
Another exceptional Family Home Presumption Equity follows the Law
Jones v Kernott [2011] UKSC 53
The parties purchased the property in their joint names in 1985. Ms Jones provided the deposit and the balance was raised by a joint endowment mortgage. A joint loan was taken out to build an extension which increased the value by some 50%. Both parties contributed to the mortgage and household expenses.
The parties separated in 1993. Mr Kernott made no further contribution to the purchase of the property and very little contribution to the maintenance of the couple’s two children. A joint life insurance policy was cashed and the proceeds divided equally.
Held
90% to Ms Jones and 10% to Mr Kernott
‘….the court will try to deduce what their actual intentions were at the relevant. It cannot impose a solution upon them which is contrary to what the evidence shows that they actually intended. But if it cannot deduce exactly what shares were intended, it may have no alternative but to ask what their intentions as reasonable and just people would have been had they thought about it at the time. This is a fallback position which some courts may not welcome, but the court has a duty to come to a conclusion on the dispute put before it.’ (Lord Walker and Baroness Hale, Jones v Kernott)
136
Family Law Rebuttable Presumption
Where parties buy a family home in joint names, an express declaration of trust as to the beneficial interests is conclusive
Where parties buy a family home in joint names but there is no express declaration of their beneficial interests, then there is a presumption that the beneficial interests coincide with the legal estate. Beneficial ownership mirrors legal ownership;
The presumption in 2 can be rebutted if there is sufficient evidence of contrary intention. Every case of this nature will turn on its own facts, and Jones v Kernott considers the effect of inferring or imputing the intentions of the parties.
137
Baroness Hale listed factors which might be relevant in ascertaining what the parties truly intended--- and it isto ascertain intent and not what would be fair on the facts.
Advice/discussions at the time of transfer
The purpose for which the home was acquired
The nature of the parties’ relationship
The presence of children
How the purchase was financed—initially and subsequently
How the parties arranged their finances
How outgoings were dealt with
The parties’ characters and personalities
138
Should Stack v Dowden apply Stack v Dowden approach should apply where the personal relationship between the parties has a commercial aspect.
Marr v Collie UKPC 2017
## Footnote
It was concluded by Lord Kerr that what matters is the context. Context in this area of law counts for a lot, if not everything. His Lordship explained that context here is set by the parties' common intentions (or lack thereof):
#If it is the unambiguous mutual wish of the parties, contributing in unequal shares to the purchase of a property, that the joint beneficial ownership should reflect their joint legal ownership, then effect should be given to that wish. If, on the other hand, that is not their wish, or if they have not formed any intention as to beneficial ownership but had, for instance, accepted advice that the property be acquired in joint names, without considering or being aware of the possible consequences of that, the resulting trust solution may provide the answer.# [Para 54].
Resulting Trust back to settlor
139
CONVEYANCE TO ONE PARTY ONLY (legal Title) How can other party show beneficial interest?
an express trust/contract in his/her favour (title deeds) (obv) if not in deed must meet s53(1)(b) LPA 1925 OR
2 financial contribution
Where a person has contributed to the purchase price at the outset, there will be a purchase money resulting trust. The share of each contributor will be proportionate to the contribution and will normally be fixed at the outset.
Only talking about monetary contribution to the acquisition of the property. not financial contributions which are directed to e.g. living expenses (indirect contributions).
==+ resulting trust is based on initial direct contributions and the amount awarded is based on those contributions. The exercise is mathematical
Monetary contributions which are not directed to the actual purchase price have historically caused problems and still do. Such contributions will not give rise to a resulting trust.
CF Purchase Money Resulting Trusts
3 agreement between the parties and detrimental reliance on the part of the non-owner giving rise to a constructive trust.
.....
140
Purchase Money Resulting Trust
**Where** a person has contributed to the purchase price at the outset, there will be a purchase money resulting trust. The share of each contributor will be proportionate to the contribution and will **normally** be fixed at the **outset**.
Purchase money resulting trusts may be relevant in business relationships, but the courts have been increasingly definite in stating that the resulting trust is not appropriate when considering trusts of the home (Stack v Dowden; Jones v Kernott)
141
What are Resulting Trusts? Vs Constructvie Trists
Resulting trusts arise in the absence of an express declaration where a person holds legal title in circumstances where they can not be taken to have full equitable ownership. According to Re Vandervell's Trusts (no 2) [1974] Ch 269 There are two categories of resulting trusts:
Automatic resulting trust
Presumed resulting trust
"Both types of resulting trust are traditionally regarded as examples of trusts giving effect to the common intention of the parties. A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention". per Lord Brown Wilkinson Westdeutsche Landesbank Girocentrale v Islington LBC[1996] 2 WLR 802
1. Automatic resulting trust
An automatic resulting trust will arise where the settlor transfers property to the intended trustee but the trust has failed for some reason. The trustee holds the legal title of the property on trust. The beneficial or equitable ownership is retained by the settlor.
2. Presumed resulting trust
Presumed resulting trusts arise either from voluntary transfer of the legal estate or by contribution to the purchase price. In these situations it is presumed that the person did not intend to make a gift of the property or money unless there is a clear intention that they did so intend. In such circumstances a resulting trust arises and the transferor or the person making the contribution retains or takes a share in the beneficial interest. However, in some relationships there is a counter presumption that a gift was intended. This is known as the presumption of advancement.
Requirements of presumed resulting trust
Voluntary conveyance
Outside of land law, where a person transfers property to a third party who does not provide any consideration, there is a presumption of resulting trust, unless the relationship is one which gives rise to the presumption of advancement. However, S.60(3) Law of Property Act 1925 cast doubt as to whether this would apply to the transfer of land.
S.60(3) did not prevent a resulting trust being imposed in:
Hodgson v Marks [1971] Ch 892 Case summary
However, in the following two cases it was suggested that s.60(3) had a more reaching impact:
Tinsley v Milligan [1993] 3 All ER 65 Case summary
Lohia v Lohia [2001] WTR 101
Contribution to purchase price
A contribution to the purchase price will give rise to a presumption of resulting trust meaning the person that makes the contribution will take a share in the equitable ownership of the property in proportion to their contribution :
Dyer v Dyer (1788) 2 Cox Eq Cas 92
Gissing v Gissing [1971] AC 886 Case summary
Co-habitees
Where the contribution to the purchase price comes from a cohabiting couple to purchase the family home, the Supreme Court has held that where the property is in joint names there is an intention to hold the property jointly in equity and thus there is no room for a presumption of resulting trust. The proportion of contribution is therefore irrelevant:
Jones v Kernott [2011] UKSC
Stack v Dowden [2007] 2 AC 432 Case summary
What will constitute contribution to purchase price
Generally it is considered only a direct contribution to the purchase price will suffice.
142
What is inferred intention? In terms of implied construction trusts
== v Inference
QUOTE
Inferred intention is one which is **objectively** deduced to be the subjective **actual** intention of the parties, in the light of their **actions** and **statements**. An imputed intention is one which is attributed to the parties, even though no such actual intention can be deduced from their actions and statements, and _even though they had no such intention._ Imputation involves concluding what the parties **would have intended**, whereas inference involves concluding what they did intend.
ENDQUOTE
(Lord Neuberger, Stack v Dowden)
143
CUrrent Law Trusts of the Home
Gissing v Gissing/Pettitt v Pettitt - Direct contributions required on the understanding that beneficial ownership is shared.
Difficulties in dealing with indirect contributions, to some extent, have been resolved with the development of the “common intention” constructive trust (Grant v Edwards, Oxley v Hiscock etc). This does not, however, assist where there are no express discussions on beneficial ownership and where the only contributions are indirect. It may be that the courts will show an **increasing willingness to impute** intentions to parties.
Once the Court has decided that the non-owner has a beneficial interest, then the course of conduct throughout the relationship becomes important in deciding what share each party is to have.
144
Key Cases in Land
## Footnote
Mr Edwards, the defendant, purchased a house for £5,490 in Dec 1969. The house was conveyed into Mr Edward's name and that of his brother. Mr Edwards had told the claimant, Mrs Grant who was pregnant with his child, that her name should not be added to the legal title as it may affect her divorce. The deposit of £550 was provided by Mr Edwards alone and the remainder was raised by two mortgages. Mr Edwards paid the mortgage installments for the first mortgage. There was some dispute as to repayment of the second mortgage. Mrs Grant did however, make substantial contributions to the housekeeping which enabled Mr Edwards to meet the mortgage installments.
Grant v Edwards [1986] 3 WLR 114 Court of Appeal
Held:
Mrs Grant was entitled to half of the beneficial interest under a constructive trust. There was a common intention that she was to have a share in the property. She had acted to her detriment by making substantial contributions to the household expenses which she would not have done unless she had believed that she would have an interest in the house.
Nourse LJ:From the above facts and figures it is in my view an inevitable inference that the very substantial contribution which the plaintiff made out of her earnings after August 1972 to the housekeeping and to the feeding and to the bringing up of the children enabled the defendant to keep down the installments payable under both mortgages out of his own income and, moreover, that he could not have done that if he had had to bear the whole of the other expenses as well. For example, in 1973; when he and the plaintiff were earning about £1200 each, the defendant had to find a total of about £643 between the two mortgages. I do not see how he would have been able to do that had it not been for the plaintiff's very substantial contribution to the other expenses.... In the circumstances, it seems that it may properly be inferred that the plaintiff did make substantial indirect contributions to the installments payable under both mortgages.
145
Mr Cooke purchased home with mortgage and £1,100 from his parents as a wedding present and £1,000 of his own money. Mrs Cooke made no direct contributions. There were no discussions as to beneficial ownership.
Case name and Held?
1.
## Footnote
Midland Bank v Cooke [1995] 4 All ER 562
2
The wedding present from H’s parents was to both parties and so W had contributed £550. The property was held in equal shares. The court felt that the course of dealing between the parties indicated a sharing of both risk and benefit. Some emphasis seems to have been put on the fact that there was the additional commitment of marriage.
146
The relationship between Mr Hiscock and Mrs Oxley was long standing. He spent time working in Kuwait but when in England he stayed in her property. This property was council property and she exercised her right to buy. The purchase price was £45,200. She was entitled to a discount of £20,000 and he provided the balance of £25,200, secured by a mortgage stated to be at 5% interest. There is no evidence that this was ever paid.
Mr Hiscock bought a property in his sole name. The purchase price was £127,000; £30,000 was a building society loan, £36,000 was provided by Mr. Hiscock and £61,000 came from the proceeds of sale of Mrs Oxley’s property.
Mrs Oxley was advised to execute a trust deed setting out the beneficial interests but she did not do so as she felt she knew Mr Hiscock well enough not to need written legal protection in the matter of the ownership of the house!
Oxley v Hiscock [2004] EWCA Civ 546 Held
60:40 to Mr Hiscock – the court having regard to the ‘whole course of dealing’ between the parties.
The court in Stack v Dowden specifically approved the approach in Oxley v Hiscock.
147
Crossley v Crossley 22/12/2005 Lawte
Where the court finds that there is an agreement, arrangement or understanding as to the share of each party, it is not necessary to consider what is a fair share having regard to the course of dealing between the parties.
148
Definition of Fiduciary
Bristol v West Millet LJ
Act for another on behalf of someone else in such a way relationship trust and confidence
149
4 key requirements of a Fiduciary
Good faith
No Profit
Conflicts with personal interests
do Not Act for Personal or 3P without their informed consent
150
151
