Trusts + Gifts Flashcards
(51 cards)
Three Certainties of Express Trust
1) Certainty of subject matter
2) Certainty of Intention
3) Certainty of Objects
Types of Trusts
Express
Constructive
Resulting
Spencer v Riesberry
A trust is a form of property
This creates a fiduciary relationship between the trustee and beneficiary
Worksafe New Zealand v RH & Jury Trust and Others
Farms was owned by trustees and child was killed on visit to the farm
Generally, a trust is not a person but can be an unincorporated group of people so can be sued
Paul v Constance
Deceased declared that his money was as much his wife’s as it was his
There was clear intention in his conduct so a trust was created
Intention can also be expressed through a series of actions
Proprietors of Wakatu v A-G
“A trust may be created by any language sufficient to show the intention, and technical words are not necessary”
Morice v Bishop of Durham
Must be sufficiently certain beneficiaries; uncontrolled power of disposition would be ownership, not a trust
Types of Beneficiaries
Fixed: all beneficiaries are identified and their interests are fixed
Discretionary: beneficiaries are selected through a class by the trustee
Gartside v IRD
A discretionary trust helps avoid tax
Westdeutche Landestbank Girosentrale v Council of London Borough or Islington
Resulting may arise due to;
- failure of express trust
- property is purchased through donation by another party (held on trust unless there is evidence showing it was a gift)
Crampton-Smith
Brother gave sister money to buy land, she then built houses on it increasing it’s value and paid the brother back for the original contribution
There was an automatic presumption of a resulting trust and this was not rebutted so the property belongs to the brother
Buffery
Husband and wife jointly purchased properties but wife stole from employer and her property would be used to pay them back
Advancement presumption; when there is a relationship between parties so there will be a gift rather then a resulting trust
This presumption was displaced by contrary evidence
Parlane
Deceased’s money was to be divided equally between children but some siblings argued they were entitled to more because she had provided one daughter with money when she was alive
The modern presumption of advancement is very weak and generally designed to infer a gap left by a lack of evidence
What is a contribution constructive trust?
In a relationship a party may be awarded a proprietary interest through a contribution constructive trust for their contributions to the relationship, although they may not have contributed to the purchase price
(no longer applies to spouses)
Gillies v Keogh
Man argued that he had a right in the house due to a contribution constructive trust
There was no constructive trust because the wife had clearly asserted over the course of the relationship that the house belonged to her
Lankow v Rose
Parties lived in de-facto union for 10 years (R was originally in debt while L had goods already and left the relationship with $500,000 more)
R was entitled to a 50% share and this was reasonable
Elements of Contribution Constructive Trust (Lankow v Rose)
1) Contributions (direct or indirect) to the owner’s property
2) An expectation to receive an interest in the property
3) That such an expectation was reasonable
4) That the owner should reasonably expect to yield an interest to the claimant
Hawkes Bay Trustee Company v Judd
Marriage, Judd claimed a share of the property was held on constructive trust
Contributions: work on house and gardens
Benefits: rent-free for her and children and ran business from a studio above property
It was reasonable for the husband to expect to have to yield some of his interest to Judd
Blumental v Stewart
Facts:
Stepfather did not leave property to stepson who claimed he was entitled from working on the farm for 9 years, visiting stepfather in hospital, helping around the house and speaking at the funeral
Mandatory duties of a trustee
S 22: States they are mandatory duties
S 23: Know the terms of the trust
S 24: Act in accordance with the trust
S 25: Act honestly and good faith
S 26: Act for the benefit of the beneficiaries
Fry v Fry
Facts:
Trustees to sell Langford in within reasonable time but failed to do so and it depreciate in price held
Held:
Breached trust duty and were liable for the lost money
Default duties
S 34: Avoid conflicts of interest
S 36: Not to profit from the trusteeship of a trust
S 35: Treat all beneficiaries equally
S 29: General duty of care
Thomas v Allen
Facts:
Allen was trustee for yacht business and decided to set up his own yacht business
Held:
This was a conflict of interest
There doesn’t need to be an actual conflict, simply the possibility of conflict is sufficient
Phipps v Boardman
Facts:
Trustees purchased shares of company included in the trust to help the company
Held:
Trustees had to disgorge the profits they made to the beneficiaries - breached duty not to profit
