The resulting trust is a form of trust imposed by the courts…without any of the parties intended that such a trust be created…There are a number of situations in which presumptions operate in relation to resulting trusts.
"The resulting trust is a form of trust imposed by the courts...without any of the parties intended that such a trust be created...There are a number of situations in which presumptions operate in relation to resulting trusts. When a presumption does operate, it is nevertheless open to the defendant to seek to rebut that presumption." To reduce the element of doubt over the uncertainty of the settlor's intention, the Courts will impose a resulting trust even where neither parties intended that such a trust is created. Primie facie, it is the settlor's intention that determines the ownership of a beneficial interest and when that beneficial interest is unclear, the court will imply or presume a trust to spring back to the transferor. Two situations where a presumed resulting trust will arise; in the situation where there is a purchase of property in the name of another. Secondly where there is a voluntary conveyance of property in the name of another. What about s)60 LPA with regards to real property? In the first instance, the rule is that where purchaser (A) acquires real or personal property and transfer the property in the name of another, the transferee (B) is presumed to hold the property on trust for the purchaser. So, if A brought shares in the name of B and B is the legal owner, then it is presumed B is holding the shares on trust for A. Furthermore, the assumption
Ascertain whether George has a right to the cottage, copyright, shares and money
Question One In order to ascertain whether George has a right to the cottage, copyright, shares and money it is necessary to examine if Joanne's actions prior to her death were sufficient to effectively transfer either the legal or equitable title to the respective items of property, or what, if any other options are open to him. Also if this matters in light of the contradictory wishes illustrated by her will. Firstly, the cottage. At the outset we are told that Joanne transferred the legal title of the cottage to Hugo through the execution of a trust deed and named herself as sole beneficiary. This seems to comply with the necessary formalities(discussed in further detail below) and so be a correct description of how the ownership of the property stood at the time of the said phone call. Prior to her death she used this phone call to purportedly transfer the ownership of the property to George. For any trust to be valid it must comply with various formalities, which depend upon the type of property the trust is to govern, and meet the requirements of the three certainties; certainty of intention, certainty of subject matter and certainty of objects. 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.
“The Insolvency Act 1986 gives the court the power to set aside trusts which are created in an attempt to elude personal bankruptcy or corporate insolvency. Similarly, the courts have refused to recognise ‘sham’ trusts where the trust is
"The Insolvency Act 1986 gives the court the power to set aside trusts which are created in an attempt to elude personal bankruptcy or corporate insolvency. Similarly, the courts have refused to recognise 'sham' trusts where the trust is used so as to give the mere appearance of separating property from the insolvent person's assets when in reality that person continues to use such property as though it remains entirely their own. Set against this background 'Quistclose' trusts are just another means of shielding money against a borrower's insolvency in loan transactions, yet such trusts are specifically recognised by the courts". In the light of this statement and the current state of insolvency law critically evaluate the justification for such trusts and assess the juridical basis upon which they rest. Sam Coppock - 2009 The term Quistclose trust is a name given to a situation whereby a creditor and debtor arrange that the money transferred will be used only for a specific purpose and should that purpose fail that the money will be returned to the creditor. If the court accepts the situation the legal position is that there was initially an express trust in favour of the beneficiary of the purpose and when that purpose becomes impossible an implied trust in favour of the creditor is created. The fact that the debtor is only ever a trustee and never a holder of a
The trustees’ duty to provide information to beneficiaries.
THE TRUSTEES' DUTY TO PROVIDE INFORMATION TO BENEFICIARIES Introduction I am honoured to be invited to give this year's lecture. The lecture is prestigious and for this reason for the lecturer a challenging proposition. Not long after Lord Walker's lecture last year I had occasion to consider the rule in Hastings-Bass in the case of Abacus Trust Co (Isle of Man) v. Barr [2003] 2 WLR 1363 ("Abacus"), and if my decision was in any way courageous departing (as I did) from a line of authority and making my own furrow on the question whether a decision successfully challenged on Hastings-Bass grounds was void or voidable, I acknowledge the encouragement to my resolution afforded by Lord Walker's lecture. My decision was not appealed to the Court of Appeal. Instead there was an appeal to the legal profession as a whole by way of legal periodical. I have in mind in particular the article in 17 Trust Law International (2003) 114-128: The Law Relating to Trustees' Mistakes - Where Are We Now? by Mr Brian Green QC, a member of the same stable, Wilberforce Chambers, as leading Counsel for the unsuccessful party in Abacus. Such an appeal has decided advantages over an appeal to the Court of Appeal: (1) there is no requirement of giving notice of the appeal to anyone and the judge has no right to be heard; (2) there is no limitation of the issues raised to those raised before the
Shareholders and Corporate loss.
Shareholders and Corporate loss. A recent Court of Appeal decision has clarified when a shareholder who has suffered a loss may have a cause of action in circumstances where the company concerned has also suffered a loss. Background The Prudential Assurance case established the principle that a shareholder in a company cannot sue for damages in respect of the diminution in the value of the shares held by him caused by a wrong to the company, at least when the company itself has a cause of action entitling it to recover for the wrong to it. Facts The claimants were the beneficiaries under a discretionary trust set up in 1989 by their father, George Walker, the founder and chairman of the Brent Walker Group Plc. The principal assets of the trust were shares in a parent company whose ultimate subsidiary companies owned interests in certain French vineyards worth £50m. The claimants had established a prima facie case that the trustees had committed breaches of trust. They claimed that the trustees had caused the value of a trust shareholding in a company to be diminished by improper diversion or use of the relevant company's assets. The events that gave rise to this action were connected with efforts by Mr Walker and the Brent Walker Group Plc to prevent that company's financial collapse following the takeover of William Hill and the Mecca group of companies, and the
ExceptionTo the Rule That Equity Does Not Assist a Volunteer.
EXCEPTION TO THE RULE THAT EQUITY DOES NOT ASSIST A VOLUNTEER If the beneficiary is a volunteer, he can enforce an incompletely constituted trust provided that it comes under the three exceptions: * The Rule in Strong v Bird * Donatio Mortis Causa * Proprietary Estoppel. FIRST EXCEPTION:THE RULE IN STRONG V BIRD [1894] LR 18 * The rule states that if an incomplete gift is made during the donor's lifetime and the donor had appointed the donee as executor or in the case of intestacy, the donee is appointed as administrator, the vesting of the property in the donee in his capacity as executor or administrator may be treated as the contemplation of the gift. * In other words, equity should allow the common law position to prevail where a deceased creditor had appointed his debtor as executor. Fact of the case * Strong Bird borrowed £1,100 from his stepmother who lived in his house and she paid £212.10s a quarter for board. It was agreed that the debt should be paid off by deducting £100 from the quarterly payments. Deduction for this amount was made for two quarters, but on the third quarter payment, the stepmother refused to hold the arrangement (of deducing the debt from her rent) and she paid £200 generously until her death and she continued to do so the time of her death. * Nonetheless the release of debt was not legally effective since it was not
How important is the beneficiary principle in contemporary trust law
How important is the beneficiary principle in contemporary trust law? Major conceptual developments have occurred in the law of trusts, but they have been accommodated with a varying degree of conviction within the traditional category1. Trust law has developed from the settlor's wishes to property, providing proprietary interests for the beneficiaries2, therefore the beneficiary principle has become central to the idea that the beneficiary is needed to enforce the trustees performance of their duties under the trust, because they hold a proprietary interest in the trust instrument, as well as the idea that with the existence of a beneficiary the court can enforce the trustee obligations to the trust. This has lead to tension to arise over the settlor's wishes with the "threat posed to the financial interests of beneficiaries by changing fiscal conditions"3. The principle falls under the certainty of object, which must exist in all trusts and some view the concept as simply rights in personam (obligations between people), whereas others see it also as rights in rem (rights in property) exercised under a trust. Recently, the idea that a beneficiary is needed to control a trust had come under attack, by a number of critics and some of the judiciary, despite the fact that in equity "one of the virtues claimed for the trust device is adaptability"4, because of the apparent
"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
Introduction It is a truism that, in English law, a trust places one of the most powerful obligations on the recipient; and as a consequence its responsibilities should not be taken lightly. Equity requires the three certainties and formalities must be completed before an express trustI will be constituted. The three certainties, is 'a description of a set of conditions which, when fulfilled, epitomise the trust.'II For a trust to be properly constituted, it must consist of a minimum set of requirements: certainty of intention, certainty of subject matter and certainty of object. The importance of these matters was recognised by Lord Langdale MR in Knight v KnightIII where he enunciated the principle that a trust cannot exist without the 'three certainties. Reasons for the requirement of certainty and formalities A trust creates legal rights and obligations therefore it is important that a person is not held as a trustee of property when an outright gift to them was intended. The rights of the beneficiaries must be clearly established so that they may be allowed to enforce a trust should the trustee fail to carry out its terms. 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
EQUITY AND TRUSTS
UNIVERSITY OF DERBY DERBYSHIRE BUSINESS SCHOOL EQUITY AND TRUSTS Coursework 1: What is a trust and how does it work? A legal definition of a trust is "an equitable legal obligation binding a person (the trustee), to deal with an asset over which he or she has control, for the benefit of certain people (the beneficiaries), of whom the trustee may be one, and any one of whom may enforce the obligation." In plain English, a trust is a way of holding assets (e.g. property, shares or cash) for the benefit of others but without giving them full control over them. There are three parties to a trust: * the settlor, * the trustees and * the beneficiaries. The settlor gives the asset to the trustees to hold in accordance with the terms of the trust deed for the beneficiaries. The trustees have legal title to the trust asset, but the beneficiaries are only given the equitable, or beneficial ownership, of the trust asset which means that they have the right to 'enjoy' or 'benefit' from it. Moreover, a trust can either be created during an individual's lifetime or on their death. Types of trusts: * Express trusts: Express trusts are trusts which arise when a person (the settlor) expresses the intention, either orally or in writing, whether express or inferred, to create a trust. Furthermore, express trusts are generally divided into private express trusts and public
Equity Case Summaries
Equity & Trust Summary 2007 Contents Equity Equitable Estates and Interests 2 Priorities in equity 5 Assignments 10 Estoppel 22 Undue influence 25 Unconscionable dealings 26 Fiduciary obligations 28 Trusts Intro trusts 33 Trustees 35 Trustee duties/powers 38 Rights of beneficiaries 40 Charitable Trusts 43 Express trusts 50 Resulting trusts 54 Constructive trusts 57 Equitable Estates and Interests The proprietary nature of equitable interests * Originally Equity acted in personam * Equitable rights now may have proprietary character * Equitable proprietary interest somewhere in between a personal and proprietary right * The strongest interest is beneficiary under a trust where the trustee holds the trust property for the beneficiary absolutely The indicia of proprietary interests in equity Defined in National Provincial Bank Ltd v Ainsworth [1975] AC "Proprietary interests" are rights or interests of property or a right affecting property. They must be; * Definable * Identifiable by the parties * Capable in its nature of assumption by third parties * Have a degree of permanence and stability Defined MGL suggest the following criteria . the power to recover the specific property, or income derived from the property 2. the power to transfer the benefit of an interest