Classification of Quistclose trust

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  • How can a Quistclose Trust be classified?
    • Resulting trust
      • Two stage trust from Lord Wilberforce in Quistclose
      • L Millet in Twinsectra v Yardley [2002]
        • BI intended from start. Does not part with entire BI in loan money
        • Q trusts arises from operation of law. "being an entirely orthodox example of the default trust known as an RT"
      • Problems: (1)Lateness, (2)Complete transfer of money ends equitable interest (3) Millett dissenting
        • Not based on recovery of interest but creation
      • Chambers 1997, equitable right, then if fails RT
    • Definition
      • from BB v QI Ltd 1968
      • A loans money to B for purpose, purpose fails, money back to B
    • Express Trust
      • Millet Theory 1985 LQR
        • No RT at all, which was radical! BI intended from start, based on actual intention of parties. Bare trust with mandate.
      • Problem: It is still a purposive trust. Can't escape that!
    • Constructive Trust
      • Gibson J's reference to 'conscience' in Carreras Rothmans v Freeman Matthews Treasure Ltd (1985)
        • "Equity fastens to the conscience" of people to use money as directed, could make Q trusts constructive in nature.
      • Still the same problem with lateness
    • Conclusion
      • Identifying relationships key
      • Who are the beneficiaries?
      • Remainder? Re EVTR (1987)
      • The agreeing problem
      • Future is uncertain. No clamour for legislation. Ignored in Bankruptcy Act 2002
      • L Millett suggesting expansion of Q trust applying it to other commercial arrangements


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