EQ T1+2

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1. Define Trust
A relationship recognised by equity which arises where property is vested in persons called trustees, whom hold it for the benefit of others called beneficiaries
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2. Milroy v Lord 3 Methods of Transferring Property Inter Vivos
1. Outright Gift (Valid transfer) 2. Settlor Declare Self as Trustee (Valid declaration + transfer via 3C's) 3. Transfer to Trustees to Hold on Trust (Valid dec. of trust + Valid transfer via 3 certainties)
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3. Paul v Constance [1977]
Trusts of Personalty (money, shares chattels): writing is not required, and oral declaration of trust is sufficient
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4. Land Transfer Formalities (2 Stages)
1. Declaration (through LPA 1925 S531.b) via signed written evidence, and then 2. Conveyed by Signed (deed LPA S52.1) Sealed, Delivered, Registered (LRA 2002 S4)
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5. Gardener v Rowe [1828]
If express trusts of land are not proved by signed writing, the trust is unenforceable rather than void
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6. Transfer of Shares Formalities
1. Smaller Companies: Signed stock transfer form + delivery of stock share certificate (Stock Transfer Act 1963 S1) 2. Bigger Corps: CREST electronic scheme
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7. Transfer of Banknotes Formalities
1. Use of Words/Conduct to infer intention to create a trust 2. Delivery
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8. Transfer of Chattels Formalities
1. Conduct sufficient to infer intention (Rowe v Prance) 2. Deed of gift/formal dec. of trust 3. Intention to give and delivery
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9. Milroy Maxims
Equity will not as a general rule, give effect to his or her intention by applying a different mode of disposal & Equity will not assist a volunteer (by perfecting an imperfect gift)
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10. Jones v Lock [1865]
Proof of equity will not perfect imperfect gift - baby cheque case - no gift, no intention to declare self trustee
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11. Timpsons Executor [1936]
where a settlor declares him or herself as trustee of property in which the settlor has a legal or equitable interest, The trust will be constituted automatically because title to the trust property will already be vested in the settlor.
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12. Re Bowden [1936]
Once title has been vested in the trustees, the trust will be completely constituted an effective from that point, and cannot then be revoked
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13. Paul v Paul [1882]
It is irrelevant that the trustees and beneficiaries have not provided any consideration for the constituted trust
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14. Disclaimers
Re Paradise Motor Co: "i dont want shares." - disclaimer led to lost shares
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15. General Rules Incompletely Constituted Trusts
Failed Trusts - the leading case that recognises the general principle that equity offices volunteer beneficiary to save an incompletely constituted trust is Milroy v Lord [1862]. Failed Gifts - eq does not perfect a gift made imperfectly (Re Rose)
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16. Re Rose Rule
Settlor has done everything necessary to transfer title and “equity treats as done what ought to be done”, thus failing outside of the control of the settlor who has done everything necessary may be perfected. Mascall v Mascall [1984] appl. to house
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17. Pennington v Wayne [2002] Principle
where a settlor has done enough to effect the transfer that any attempt to deny the validity of the transfer by the settlor would be considered to be unconscionable.
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18. Pennington Test
key test of unconscionability is a form of estoppel, but without needing to prove detriment (Banner Homes Group v Luff Developments [2000]). The unconscionability can be established by the intended Donees’s reliance (Curtis v Pulbrook [2011])
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19. Impact of The Contracts (Rights of Third Parties) Act 1999
somebody who is not a party to a contract will be able to enforce or terminate if the contract expressly states that they can, or if a term in the contract purports to confer a benefit on the third party as per section 1(1 a) and 1(1B).
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20. Re Cook's ST [1965]
where third-party providers consideration, it will not enable the beneficiaries to enforce the covenant.
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21. Holroyd v Marshall [1862]
a covenant to transfer future property to a trust is not enforceable common law, even if consideration has been provided, but consid. thenthe covenant is enforceable in equity because of the principle that equity treats as done what ought to be done
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22. Strong v Bird [1874]
When a donor makes an imperfect gift during his lifetime, and the donee is subsequently appointed as the donor's executor or becomes the donor's administrator on intestacy, the gift is perfected because the d. obtains legal title to the donor's prop.
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23. Capacity to Create Trusts
A settlement made by a mentally incapacitated person is void – Re Beaney [1978] – although the court may make a settlement of property or execute a will on behalf person lacks the mental capacity – Mental Capacity Act 2005 S18 (1,h,i)
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2.1 3 Certainties
Intention, Subject Matter & Object
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2.2 Certainty of Intent Test and Case
The key test to establish whether there was an intention to create a trust is to consider whether the create of the trust wanted somebody to hold property for the benefit of another person, so that he is under a duty to do so. Paul v Constance [1977]
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2.3 Charity Commission for England and Wales v Framjees [2014] & then Tito v Waddell (No 2)
The word “trust” need not be used to create a trust - But if it is, then completely conclusive
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2.4 Precatory Words
words that involve a request not be evidence of a sufficiently certain intent to create a trust. “I desire” (Re Diggles [1888]), “wishes” (Re Hamilton [1895]), or is “confident” (Mussorie Bank v Raynor [1882]) lack the necessary element of requiring.
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2.5 Imperative Words
Obligate - "this declaration" Shah v Shah, "don't let that ***** get anything" Gold v Hill
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2.6 Distinguishing Imperative v Precatory
Construction based on each case (Re Hamilton). Conduct/Oral words allowed - "our yacht" Rowe v Prance so woman was part owner in equity.
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2.7 Pearson v Lehmen Bros [2010] & Twinsectra v Yardley [2002] regarding intention to create a trust
assessed objectively rather than subjectively, by reference to the terms of any agreement or the relationship - thus what the reasonable person would conclude that the creator of the trust intended
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2.8 Re Steele WT [1948]
Where a document is drafted by a lawyer, this may help the presumption of a trust being intended
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2.9 Ambiguity - Re Gulbenkian [1970 Lord Upjohn
“it is then the duty of the court...to make sense of the settlors… expressed intentions, however obscure and ambiguous the language that may have being used to give a reasonable meaning to that language if it can do so without doing violence to it”
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2.10 Self Declaration of Trust
Jones v Lock [1865] - loose conversation is not enough to self-declare a trust – Rowe v Prance [1999] - yachts registered in husband name, regularly referred to as “ours” was with his mistress, held as a trust
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2.11 Commercial Context
general reluctance to find a trust arising from a commercial relationship, but where there is clear evidence of the necessary intent, a trust will be found – Henry v Hammond [1913]
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2.12 Intention to Make a Gift
if those intent to make a gift, but legal title to the property is not successfully transferred, this transaction cannot be saved by treating it as a trust – Jones v Lock [1865]
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2.13 Testamentary Trusts
1. Natural and Ordinary meaning of words 2. overall purpose of other provisions considered 3. Facts known to Testator considered 4. Judge common sense- Marley v Rawlings [2014] - the judge should ignore subjective evidence of the testator’s intention
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2.14 Sham Trusts
Snook v London and West Riding [1967] - void and unenforceable
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2.15 Lassence v Tierney [1849]
Where there is uncertainty of intent to create a trust, no valid trust will have been declared. where the creator of the putative trust transferred property to somebody else, that he may take the prop. beneficially and he can use the prop as desired
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3.1 Certainty of Subject Matter - Lord Strathcona Steamship [1926]
Trusts can be declared over all kinds of property: land, money, shares, chattels, debt but A declaration of trust can only be valid if the subject matter of the trust has been described with sufficient clarity.
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3.2 Palmer v Simmonds [1854] & Sprange v Barnard [1789]
"bulk” of her estate was not sufficiently certain" & “the remaining part of what is left” was not sufficiently certain
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3.3 Re Jones [1898] & Boyce v Boyce [1849]
such parts of my estate as she shall not have sold” was not sufficiently certain & “all my other houses” was not sufficiently certain
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3.4 Re Last [1958] & Re Golay [1965]
“anything that is left” – estate left to brother (as a life estate), with the residue of the estate passing to the others on his death & reasonable income” was how to be suf.cert, because poss to determine what is objc. reas. via previous std of life
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3.5 Re Stapylton Fletcher [1994]
Even if the subject matter is clearly defined, the property must be identifiable, otherwise the trust will be void for uncertainty. e.g 20 sheep/100, but exactly which sheep
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3.6 Hunter v Moss [1994] Exception
D had 950/1000 shares. Left 5% to C. Held valid. (See Rev Notes for 7 Principles)
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3.7 Pearson [2010] & Burrough v Philcox [1840]
Certainty of subject matter requires certainty both of the identity of the property and of the proportionate amount of each B’s share But T may have given discretion, or 50/50 share as equity is equality
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3.8 Future Property Certainty
trust will not fail for uncertainty as the subject matter merely because the subject matter is, at present, uncertain, if the terms of the trust are sufficient to identify the subject matter in the future (Tailby v Official Receiver [1888]).
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3.9 Floating Trusts (Ottaway v Norman [1972])
In those cases in which the subject matter of the trust relates to what is left of the property after the trustees death, it can be interpreted as a floating trust that crystallises only on the trustees death. Only valid in Secret Trusts
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3.10 Uncertainty Effect
where the SM is unclear, there’s nothing to which any trust can attach (the B will take the property absolutely). If the trust fails because uncertainty in the division of beneficial sales, the property will be held by B on RT (Boyce v Boyce [1849])
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4.1 Certainty of Objects Six Questions
the essential test of certainty, conceptual certainty, evidential certainty, ascertaining location of objects, size of class, and capriciousness. (See notes as differ for each trust)
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4.2 Uncertainty of Objects: Conceptual Uncertainty in Public Trustee v Butler
"Deserving relatives" void
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4.3 Evidential Uncertainty
"All employees and their relatives" void in IRC v Broadway Cottages. The practical difficulty of proving as a fact whether someone is in the class of B's
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4.4 Resolving Uncertainty Re Coxen [1948]
Trustees are able to be arbiters about questions of evidential certainty but not conceptual certainty.
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4.5 Resolving Uncertainty Re Wright’s WT [1981]
If the defining concept is unclear, the trustees defining the concept will not be sufficient to save the trust
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4.6 Resolving Uncertainty Re Tuck
Additionally, Evidential Uncertainty relating to the identification of objects may be referred to a third party whom the settlor has made an arbiter of the matter – Re Tuck – the TP may be required to explain the decision in court.
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4.7 Resolving Uncertainty Re Leek
a DT established for two classes and one passes the test of certainty but the other doesn’t, severance is not possible.
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4.8 Saunders v Vautier
B .18 & of sound mind, entitled to entire equitable interet at any time even if trust says at 25
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5.1 The Beneficiary Principle (Morice v Bishop of Durham [1805]
An express trust for persons must have identifiable people in whose favour the court can decree performance (more in different tutorial)
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6.1 The Perpetuity Rule
Rule against Remoteness of Vesting – must vest in individuals within recognised periods of time, or the interest will be void.
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6.2 Perpetuities and Accumulations Act 2009
General rule - introduced single perp period of 125 years even if trust instrument dictates different. It generally starts when the trust takes effect (S6(1))
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Other cards in this set

Card 2

Front

2. Milroy v Lord 3 Methods of Transferring Property Inter Vivos

Back

1. Outright Gift (Valid transfer) 2. Settlor Declare Self as Trustee (Valid declaration + transfer via 3C's) 3. Transfer to Trustees to Hold on Trust (Valid dec. of trust + Valid transfer via 3 certainties)

Card 3

Front

3. Paul v Constance [1977]

Back

Preview of the front of card 3

Card 4

Front

4. Land Transfer Formalities (2 Stages)

Back

Preview of the front of card 4

Card 5

Front

5. Gardener v Rowe [1828]

Back

Preview of the front of card 5
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