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University Degree: Equity & Trust Law
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The Wivenhoe Benevolent Society, a non-charitable unincorporated association, ran a social club and held dinners for worthy causes. Its funds were raised from members(TM) subscriptions and donations from well-wishers. Six weeks ago it held a di
be made to unincorporated associations, nor can they be beneficiaries under a trust or act as trustees in their own right although bequests are regularly made to such associations, unincorporated association infringe the beneficiary principle and also the rules against perpetuities, Leahy v. A-G for New South Wales,8however a trust for members on the basis similar to Re Denley's Trust Deed9, would not infringe the beneficiary principle, as long as the certainty of objects rules are satisfied, R. v. District Auditor, ex parte West Yorkshire MCC10, but there would still be perpetuity problems, unless the rules were explicitly satisfied, as
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note at the outset that a trial judge in such disputes hold wide discretion and it is difficult and risky to read deep into the case law in this area. The circumstances and behaviour of the parties may be sufficient to deduct intention. In the case of Paul v Constance, both parties lived together as husband and wife, both agreed to a sum of money received as compensation for injury of Mr Constance that`This money is as much yours as mine'.
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Thus, they are valid trusts. Beneficiary Principle It is the principle that, with the exception of charitable trusts, 'a trust to be valid must be for the benefit of individuals'. Therefore, under this rule, the beneficiaries of trusts other than charitable trusts must be legal persons (i.e. either human beings or trust corporations) which are ascertainable. According to Leahy v AG of New South Wales, Quote A gift can be made to persons (including a corporation) but it cannot be made to a purpose or to an object; so, also, a trust may be created for the benefit of persons as cestuis que trust, but not for a purpose or object unless the purpose or object be charitable.
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He listed four categories: the relief of poverty, the advancement of education and religion and those activities, 'beneficial to the community'. Each had its own degree of 'public' depending on the type of benefit in question. In the days when the State made few welfare provisions, trusts under these categories were clearly for the public benefit.4 The House of Lords have subsequently stated that there is no requirement for a 'public' benefit in poverty cases.5 It is argued that the fourth heading is not a separate category but merely a reference to a continuing list of categories which do not
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One main advantage is in the form of fiscal privileges, which are the most visible special treatment of charities. The Times article pays particular attention to the tax benefits which Scientologists will enjoy if they become a religious charity. Broadly speaking they are not liable to income tax, corporation tax, capital gains tax and stamp duty and they received limited favourable treatment in respect of value added tax. Moreover, since April 2000, Charities can claim income tax on most donations through 'Gift Aid'. Therefore the main body of Scientology in the UK which has an estimated income of 10 millions pounds annually will be able to reclaim at the basic tax rate and increase their value by 22%.
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Very often, buyers resell goods purchases to others. A retention of title clause has to operate in conjunction with the doctrine of equitable tracing to allow the original seller a proprietary right to the proceeds of the second sale. It was established here that this arrangement was conditional upon the original buyer's accounting for the proceeds of sale. This shows the potentially far reaching impact on commercial law of retention of title clauses.3 Reason for the lack of success of retention of title clauses (i) Unfairness to general creditors of the buyers The courts have been reluctant to enforce retention of title clauses because they operate in effect as a security interest which does not require registration.
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Also, trusts for sports outside educational facilities and the services were formerly considered not charitable unless the came within the scope of the Recreational Charities Act 1958. Under this heading, the provision of facilities for recreation or other leisure-time occupation is charitable if its in the interest of social welfare. This requirement could be established under s1(1) of the Act. This was applied by the case of Guild V IRC 6and the courts upheld that a gift for the benefit of a public sports centre was held charitable.
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In his will, Colin leaves 100,000 to the Hillingbridge Tennis Club, an unincorporated association, to enable it to build an extension to its existing pavilion. The money is paid to Morris, the treasurer of the club, who puts it into a specially opened
It was presumed because they would be entitled to the surplus, they would not want the fund to be spent frivolously, because this will affect the amount they ultimately receive as indirect beneficiaries. However because these are anomalous cases the courts do not always apply the same principles. 5For instance in RE DEAN6 the courts allowed the trust even though it did not express a residue estate. However because this overlooks the beneficiary principle, it is unlikely that courts will apply such a badly decided case.
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consider whether the test for certainty of objects applicable to fixed and discretionary trust is reliable
However where the beneficiaries are of a wide class conceptual uncertainties commonly arise and it would therefore require interpretation. Such a situation arose in Broadway3 the trust was void for uncertainty as the whole range of objects could not be ascertained. It is generally accepted that the terms in a fixed trust are precise enough to comprise a complete list test. However where the testator aims to give to the benefit of a large number of people a discretionary trust is most useful. This is because no individual potential beneficiary has an interest on the fund until the trustees' discretion is exercise.
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"It is with good reason that equity requires the three certainties are demonstrated and all relevant formalities completed before an express trust will be constituted. The courts have been too willing in some cases to disregard these formalities in order
If there is a need to establish the true ownership of the property and be certain about the nature of the ownership of the trustee and beneficiary; then a trust needs to be created and evidenced with some measure of formality. A trust must not only comply with the three certainties to be valid, it must also comply with any requisite formalities; however, not all trusts require the same level of formalities before they can be recognised and enforced. Section 53 Law of Property Act 1925 lays down certain requirements of formality which must be satisfied for the successful creation of certain types of trust inter vivos and for the effective disposition of equitable interests under trusts.
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Explain the principles relating to certainty of subject matter and critically evaluate the decision in Hunter v Moss.
This is needed so that a legal obligation is created as opposed to a moral one.1 In certainty of intention, the settlor must intend to create a trust; there is no easy way of finding out whether a trust was to be created. Even if the word "trust" is used there is no guarantee that this will show a trust was intended to be created, refer to case Midland bank v Wyatt (1995)2. In order to show that a trust was to be created more imperative words should be used in the Will or deed so that the trust does not become void.
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Without beneficiaries a trust would be unenforceable and constitute an unenforceable purpose trust. The need for beneficiaries has been challenged in the twentieth century, because some do not see the need for beneficiaries to exist so that the trust can be controlled. This essay will go on to outline the development of the beneficiary principle, the reaction to it, the controversial dispute over the concepts of purpose trusts and protective trusts, charitable trusts and the build up to the introduction of the Perpetuities and Accumulation Act 1964, in an attempt to introduce 'change' and flexibility of the beneficial entitlement.
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Compare the private trust, the trust of imperfect obligation and the charitable trust. What policy ends does the law aim to achieve by it's different treatment of each of these trusts?
It is enforceable by the Attorney General as a charitable trust. An express private trust is declared intentionally by the settlor for the benefit of individuals or a specified group of people. The courts in relation to both trusts the express private trust and the charitable trusts will usually enforce such trust valid subject to the fulfilment of the necessary requirements. In order for an express private trust to be valid it must satisfy the three certainties concept. The three certainties comprise of firstly the certainty of intention to create a trust, secondly the certainty of the identification of the subject matter comprising the trust fund and thirdly the certainty of the beneficiaries (or objects )
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For instance, in Palmer v Simmonds4 the phrase 'bulk of my estate' was held to be uncertain and the trust failed. In Re Jones5the words 'such parts of my estate as she shall not have sold' failed and in The estate of Last6 the words 'anything that is left' also failed. Moreover it remains uncertain what 'the lion's share' specifically refers to. However, it could nonetheless be argued that the subject matter could be determined on the authority of Re Golay's Will Trusts in which it was held that an otherwise uncertain subject matter might be upheld if a sufficiently objective determinant could be found to enable the court to quantify the amount.
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If any of these are missing then there cannot be a joint tenancy. Joint tenants share possession of the land, together having one interest in the land, deriving the one title to the property at the same time. Estate management 6th edition, Card, Murdoch and Murdoch, Pg 430 * Unity of possession means that all joint tenants have equal rights to the land. No one joint tenant can be excluded * Unity of interest is when each co owner is entitled to the entire interest in the property. Each tenants interests must therefore be equal.
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only receives an interest in the trust property, or the income derived from that property, if the trustee exercises his or her discretion to make a distribution of that kind to the beneficiary. Hence, the beneficiaries of a discretionary trust have only expectancy or hope of receiving a distribution from the trustee, and as such do not have proprietary interest in the trust property until such a distribution is made to them. * Implied trusts; (a trust inferred by operation of law): Resulting trusts: arise where a person (the settlor), confers legal title to property to another person but is presumed by law to have intended to retain beneficial ownership of the property, in whole or in part.
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Question 1: Critically evaluate the extentto which the Trusts of Land and Appointment of Trustees Act 1996 has broughtabout improvements in the law.
Power for the beneficiary and trustee has increased. 4. The power of the courts has been extended. Strict settlements of land will be gradually phased out due to TOLATA under section 2 which prevents the creation of new strict settlements. This is so, as strict settlement of land was originally created to keep land within the family. However, that purpose is no longer valid as the society and economy of this country have outgrown it. Settlements that was established before TOLATA will continue under the Settled Land ACT 1925 (SLA).
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The law of formalities is really a series of ad hoc responses to problems raised by revenue considerations. There is simply no real sense of a judicial development of equitable principles.
Romer said "Now the equitable interest in property in the hands of a trustee can be disposed of by the person entitled to it in favour of a third party in any one of four ways. The person entitled to it (1) can assign it to the third party directly; (2) can direct the trustees to hold the property in trust for the third party (see per Sargant J in Re Chrimes); (3) can contract for valuable consideration to assign the equitable interest to him; or (4)
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However if one follows Re Niyazis, one could say the gift would succeed but be at the very border line. However this matter is up to the courts discretion. As the trust has no religious basis it would fail under the advancement of religion. One could then consider the advancement of education. Rigby LJ stated in Re Macduff3, that a gift for the advancement of education 'is not in itself a charitable object unless it be combined with teaching or education.'
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These requirements of certainty seem to be met in this situation as Joanne has expressly declared her intention that the specified property (the cottage) be transferred and has also specified to whom it should be transferred. However, as the property in this instance is land various formalities must be adhered to1 if the transfer is to be effective. A crucial requirement is that set out in Law of Property Act 1925 s.52 which states that all conveyances of land are void unless made by deed.
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Distinguishing whether a trust is Charitable or for a Non-Charitable purpose will depend on the nature of the trust.
The main advantage being the privileged tax position, exemption from paying income tax, the position to claim tax back when they have make fiscal gifts, Council tax relief, and a reduction in inheritance tax. The Charity Commissioners and the Crown through the Attorney General enforce these Trusts. Non-Charitable Trusts differ and the courts attitude towards them is generally 'hostile'. For them to precede their needs to be an actual human beneficiary, it must have benefits for the beneficiaries, and the trust must not be too vague.3 a)
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The Charity Commissioners exercise supervisory control over charities and one area is the permissible limits to political involvement by charities. The present law is, for an organisation to be charitable it must be subject to the jurisdiction of the High Court, the Charities Act 1993 s.96 (1). The leading case of Commissioners for Special Purposes of the Income Tax v Pemsel3, has given us the present day definition of heads of charity, it became clear for the first time that relief from taxation might be tied in the definition of charity.4 Lord Macnaghten laid down four heads of charity; 1.
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be so directed as to lead to something which will pass into the store of educational material, or so as to improve the sum of communicable knowledge in an area which education may cover...education in this last context extending to the formulation of literary taste and appreciation''2 My only concern with regards to your application is in relation to whether your organisation will be considered charitable under one of the above catagories. Also, I am concerned that your organisation is very narrow in its intended focus group.
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TRUST: Consider whether the following purposes are, and ought to be charitable. Various examples fol
The precedent, which interprets the repealed preamble to the Statute of Charitable Uses (1601), lays the foundation of how the Charities Commissioner and the courts decide what constitutes charitable for the purpose of the law. The classification can have vital effect on a donee's intentions, so just because he, or the general public, think it charitable does not give it charitable status. It is for the Charities Commissioner to decide, on analogy, if it falls within on of the four heads.
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Ahmed invited Jane to come to his house so his dealings or intentions show something of that and also the way in which the house was transferred into joint names. In Jane's case there is relevance of post-acquisition activity, where Ahmed purchased the property and later Jane received a beneficial interest. For Jane's case to succeed she requires proof of three elements, firstly a common intention, secondly change of position and thirdly equitable fraud. Looking at the case of Bannister v Bannister2 shows how the three elements have to be fulfilled.
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