equity trust seminar
Md Ahsanul Wadud
Equty & Trust (Seminar)
LLM/CPE
Contents
Class preparation (seminar--1) 3
Class preparation (seminar-----2) 5
Class preparation (seminar------3) 6
Class preparation (seminar--------4) 10
Seminar on Constitution of Trusts----5 11
Class preparation (seminar--------------6) 13
Class preparation (seminar--------------------7) 14
Class preparation (seminar----------8) 16
Class preparation (seminar-------------------9) 19
Class preparation (seminar---------------10) 21
Class preparation (seminar--------------11) 23
Class preparation (seminar--1)
1 Why and how did the law of equity develop?
2 Why did the conflict between common law and equity arise and how was it resolved?
3 Explain the following maxims by reference to case law:
He who comes to equity must come with clean hands
Where the equities are equal, the first in time prevails
Equity deems as done that which ouight to be done
4 Identify the equitable maxims involved in the following:
Bill and Ben entered into a contract for Bill to purchase Ben's land. Ben refuses to complete, is Bill entitled to specific performance?
Beneficiary's rights under a trust where the trustee holds as legal owner.
Tenant entered into a contract for a lease but breached some covenants. Why could the tenant not obtain an order for specific performance?
EQUITABLE MAXIMS MCTs
1 Sara sold her house to Andy on the oral understanding that she will be able to continue living there for as long as she lives. On being registered as the proprietor, Andy started proceedings to evict Sara. Which of the following statements is the most accurate?
a) Andy has the right to evict Sara as the agreement between them was not in writing in compliance with s2 Law of Property (Miscellaneous Provisions) Act 1989.
b) Andy cannot to evict Sara as she is the legal tenant.
c) Andy cannot evict Sara as there is a constructive trust in her favour.
d) Andy has the right to evict Sara as he is the legal owner of the house.
2 Lance granted Tim a five-year lease of a flat last year. The lease provided that Lance must carry out any necessary repairs and that Tim must pay rent in advance monthly. Tim has not paid rent in 3 months and the shop is in need of repairs. Tim’s application for a grant of specific performance against Lance (to carry out the repairs) failed. Which maxim best explains the court’s decision?
a) Equity looks on as done that which ought to be done.
b) Delay defeats equity.
c) Where the equities are equal, equity follows the law.
d) He who comes to equity must come with clean hands.
3 Carl and Dean exchanged contracts for Carl to purchase Dean’s house. A week before completion, the house was damaged by fire. Carl discovered to his dismay that he will have to pay for the repairs. Which is the most appropriate maxim to explain this?
a) He who comes to equity must come with clean hands.
b) Equity deems as done that which ought to be done.
c) Delay defeats equity.
d) Equity will not assist a volunteer.
4 Terence holds property on trust for the benefit of Bill and Ben. Terence used trust money to buy a house for his mother to live in. Terence’s mother must return the house to the trust. Which maxim is the most appropriate?
a) Equity will not assist a volunteer.
b) He who comes to equity must come with clean hands.
c) Equity deems as done that which ought to be done.
d) Delay defeats equity.
5 Adam, the owner of Blackacre, created an equitable mortgage to Boyd’s Bank in 2005 for a loan of £50,000. A year later, Adam created an equitable mortgage over Blackacre in favour Big Building Society for £40,000 without Boyd’s Bank’s knowledge. Adam is now in arrears of his mortgage repayments to Big Building Society. Big Building Society took possession and sold Blackacre for £60,000 but found that Boyd’s Bank is entitled to most of the proceeds of sale. Why is that?
a) Equity will not assist a volunteer.
b) Where the equities are equal, the first in time prevails.
c) Equity deems as done that which ought to be done.
d) He who comes to equity must come with clean hands.
Class preparation (seminar-----2)
EQUITABLE DOCTRINES MCTs
1 Which maxim is the doctrine of conversion based on?
a) Equity looks to the substance and intent rather than the form.
b) Equity will not permit a statute to be used as an instrument of fraud.
c) Equity acts in personam.
d) Equity deems as done that which ought to be done.
2 Tim’s will left £50,000 to Ann and 1,000 shares in BT to Kay. Due to a default in appointment, it turned out that the shares belong to Ann. Under the doctrine of election:
a) Ann is entitled to keep both the £50,000 and the shares.
b) Ann is not entitled to either the £50,000 or the shares.
c) Ann is only entitled to the £50,000.
d) Ann is entitled to either the £50,000 or the shares.
3 Which of the following statements is most accurate in describing the doctrine of election?
a) The doctrine only applies if there is contrary intention.
b) The doctrine cannot apply if there is contrary intention.
c) The doctrine cannot apply if the gifts are contained in the same instrument.
d) The doctrine only applies to gifts in different instruments.
4 The doctrine of performance is based on which maxim?
a) Equity imputes an intention to fulfil an obligation.
b) Equity deems as done that which ought to be done.
c) Where the equities are equal, the first in time prevails.
d) He who comes to equity must come with clean hands.
5 Matt owes Vince £100. Matt later left Vince £500 in his will. Matt dies without repaying the debt. Which of the following statements is most accurate?
a) Vince is entitled to the £500 legacy but cannot sue Matt’s estate for the £100 debt.
b) Vince is only entitled to a legacy of £400.
c) Vince is not entitled to the legacy but may sue Matt’s estate for the £100 debt.
d) Vince is entitled both to the £500 legacy and to sue Matt’s estate for the £100 debt.
Equitable doctrines questions:
1 X is Y’s father and covenants in Y’s marriage settlement to pay the trustees £100,000. In a will made at a later date, he leaves Y with a legacy of £75,000 but dies without paying any money to the trustees. What does Y get in the will?
2 Steve stands in loco parentis to Clare. He advances her £50,000 for her CPE training. He is also in loco parentis to Cindy but pays her no advance. In his will, he leaves £120,000 to be shared equally between the two. His estate is worth £1,000,000 and he leaves the residue to John. What is each party’s entitlement?
3 Sarah has two children, Gavin and Martina. John is not related to her in any way but nevertheless in her will she leaves her property equally to all three. During her lifetime, she makes inter vivos gifts to Martina and John to fund their careers respectively in the army and at the bar to the tune of £100,000 each. On her death, the estate is valued at £300,000. What is each party’s entitlement?
4 Melissa borrowed £1000 from Ricardo to buy a car. She bought Lorna’s car for £1500, telling her that she would pay the rest when she completed the CPE. She borrowed £1000 rent money from Jackie, telling her that she would repay the debt later that week. Cindy, her landlady, insists that she never did pay that rent. Melissa borrowed £50 each from Jo and Natalie for a car respray. She then made her will. After this, she borrowed a further £50 from Natalie for more paint.
When she completed her CPE, she went to a party to celebrate. On the way home, she drove over a broken bottle and sustained a flat tyre. While she was changing it, the vehicle fell onto her, killing her instantly. The car was damaged and valued at only £1000 by the insurance company. It was discovered that she had recently won £1,000,000 on the national lottery. In her will, she left £1000 each to Ricardo, Lorna, Jackie, Jo and Natalie; and the car to Cindy. She specifically stated in the will that it excluded the £50 she owed Jo, for whose friendship and money she was eternally grateful. The residue was left to John. Advise the parties as to their entitlements.
Class preparation (seminar------3)
Equitable Remedies seminar:
1 Which of the following principles was not laid down in the case of American Cyanamid v Ethicon? a) An interim injunction will not be granted where it would finally dispose of the case.
b) There must be a serious question to be tried.
c) The court should consider whether damages would be an adequate remedy for the complainant.
d) The court should take into consideration the balance of convenience. 2 Dan and Ed exchanged contracts for Dan to buy Ed’s house. Dan also provided a down payment when the contracts were exchanged. Ed changed his mind and is about to sell his house to Bob, who offered him more money. Which of the following statements is untrue: a) Dan is entitled to sue Ed for breach of contract and obtain damages.
b) Dan is entitled to a remedy of specific performance against Ed.
c) Dan is entitled to sue Bob for breach of contract and obtain damages.
d) Dan holds the equitable estate to the house. 3
3 Which of the following statements is inaccurate? a) Specific performance is available where the subject-matter of the contract is land.
b) Specific performance is available where the subject-matter of the contract is a rare painting.
c) Specific performance is available against an employee who is refusing to work.
d) Damages may be awarded in lieu of specific performance. 4 Which of the following is not a ground for the court to refuse to grant an injunction? a) Unreasonable delay on the part of the claimant.
b) The granting of an injunction may result in many people losing their employment.
c) Where damages would be an adequate remedy.
d) Where the claimant had failed to conduct himself fairly and honestly. 5 Which of the following is inaccurate in describing the proper execution of a search order? a) Where the premises at which the order is to be served is residential, the order should be served after office hours as the occupants are more likely to be home.
b) If the supervising solicitor is a man, he should be accompanied by a woman if the premises to be served is likely to be occupied by a woman alone.
c) The person served with the order is entitled to be present during the search.
d) The person served with the order is entitled to seek legal advice. Equitable Remedies seminar Qs
1. Melissa agrees to paint a portarait of Adam who is a famous child circus performer, for £1,800. When it is completed, Natalie, who is besotted, offers Melissa £10,000 for it. Melissa does not hesitate and accepts the money. What remedies are available to Adam? 2. Lorna took out a lease on a second floor flat. The service contract requires Georgina to undertake external repairs: to have the garden tidied every month and to install a lift within a reasonable period of time. The roof has leaked since she moved in five years ago despite requests for repairs; the garden is completely overgrown and the lift has not been installed. What equitable remedies are open to Lorna? 3. The freezing injunction and the search order are two of the law’s nuclear weapons. Discuss. Bank Mellat v Nikpour [1985] FSR 87, per Donaldson LJ. Discuss. 4. Why did Scott J suggest that search orders had a “draconian and essentially unfair nature”? Columbia Picture Industries Inc. v Robinson [1987] Ch 38 5. On 14th November, Mike resigned from his position with Grommet UK plc and became employed by the main competitors Grommet US Inc. as their UK representative. A clause in his contract restrained him from taking employment “anywhere in the UK with any company providing grommets for a period of one year of leaving employment with Grommet UK plc”. Grommet UK plc discover that valuable plans, drawings and a list of their customers is missing. They suspect Mike of taking them. Advise them of any action they should take. 6. Abbey Ltd wishes to take proceedings against Rusty Motors who are based in Birmingham. Abbey claims that the manager of Rusty Motors has defrauded them of £250,000, believed to be deposited in various banks at home and abroad. The main business account of Rusty Motors is the Nestminster Bank, Hartlepool. There is a concern that Rusty Motors may dispose of assets before judgment. Advise Abbey Ltd. 7. Molan Productions Ltd is a private school teaching law by way of distance learning to both UK and overseas students. The company produces audio visual material and lecture notes for distribution to its students. Jim, a senior member of staff, and leading author of a textbook on Land Law, was employed in September 2011 on a six year contract as a Land Law specialist. His contract requires him to work exclusively for Molan Productions Ltd during his period of employment and not to work for any other private school teaching law by way of distance learning for a period of one year after his contract is terminated. Jim handed in his letter of resignation to Molan Productions Ltd, to take effect from the 1st August 2013. He has taken up an offer of employment from Gibson Productions Ltd at the Birmingham base of a private teaching school whose head office is in Hong Kong. On inspecting Jim’s old office, the management team at Molan Productions have discovered that all of the materials that Jim was working on have disappeared. Computer discs, video recordings, audio tape recordings and all paperwork have been removed. Loyal students of Molan Productions Ltd have informed the management team that they have received advertisement materials from Gibson Productions Ltd inviting them to enrol on their courses and to “take up where they have left off their current studies”. The management team at Molan Productions Ltd fears that Jim took material from his office, together with confidential student information. The management team also fears that Gibson Productions have bank accounts in Birmingham and in Hong Kong, and any moneys they receive in Birmingham being transferred to the Hong Kong head office. Advise Molan Productions of any equitable remedies they may have in these circumstances. NOTE: It is not necessary to discuss the principles of contract law in your answer – assume that a valid contract of employment was entered into by Molan Productions Ltd and Jim.
Class preparation (seminar--------4)
1. According to Article 7 of the Hague Convention, ‘A trust shall be governed by the law with which it is closely connected’. Which of the following is not relevant in ascertaining this? a) The situs of assets of the trust.
b) The place of residence or business of the trustee.
c) The place of administration of the trust.
d) The nationality of the trustee. 2. In which of the following scenarios would a trust not be implied? a) Alex dies having made a will appointing James as his executor.
b) Joseph has just conveyed the legal title of Blackacre to Cathy.
c) Ben and Sarah just bought a house using their joint savings.
d) Fiona and Diane have just exchanged contracts for Diane to buy Fiona’s cottage. 3. Which of the following is an example of a discretionary trust? a) “£1,000,000 to be held on trust for the benefit of any of my employees or such employees’ dependants as my trustees shall decide”.
b) “My house to my wife Ginny for life, remainder to my daughter Cara absolutely”.
c) “All my shares in Austin plc on trust for my children equally”.
d) “One of my two houses to Brenda, whichever she chooses, the other to Kyle”. 4. What is a beneficiary of a discretionary trust entitled to? a) A share of the trust property.
b) To be paid any interest generated by the trust property.
c) To be considered by the trustees when they exercise their discretion.
d) A transfer of the trust property. 5. Which of the following is not considered a private trust? a) “All my property on trust for my son when he turns 18”.
b) Hannah contributed 50% of the purchase price to a house title to which is conveyed to her husband Tom.
c) “£100,000 on trust for my husband Ken for life, remainder to my daughter Mary”.
d) “£200,000 on trust to set up a shelter for the homeless in a suitable location as determined by my trustees”.
Seminar on Constitution of Trusts----5
1. Which of the following will result in the creation of a trust?
a) A father declaring his pay cheque to be a gift to his baby son.
b) A husband orally informing his new bride that he is giving her his house.
c) A clause in a Thomas’s will: “All my property to my wife Jane, knowing that she will look after our children”.
d) Alton, on hearing of the birth of his first grandchild, declaring that he (Alton) will hold his shares in Gas plc for the grandchild. 2. Which of the following trusts has not been completely constituted?
a) Shane declaring on his son’s first birthday that he (Shane) will hold his shares in BT plc on trust for the son.
b) Shane covenanting with the trustees of his marriage settlement that he (Shane) will transfer his house Brownstone to the settlement. Just before he died, Shane executed a deed transferring the property to the trustees.
c) Shane declaring on his tenth wedding anniversary that he (Shane) will hold his stamp collection on trust for his wife.
d) Shane covenanting with the trustees of his marriage settlement that he (Shane) will transfer land worth £500,000 to the settlement. Just before he died, Shane handed over the title deeds of Brownstone to the trustees. 3. Jack declared a trust whereby his brother John is to hold all of Jack’s shares in British Gas plc on trust for Jack’s niece Clara. Which of the following actions by Jack will be deemed to completely constitute the trust?
a) Jack hands over the share certificates to John.
b) Jack writes a note to John confirming the trust.
c) Jack completes the share transfer forms and hand the forms and the share certificates to John.
d) Jack hands the keys to a safe deposit box containing the share certificates to John. 4. Consider whether a valid trust has been created in the following circumstance:
Matthew, when visiting his nephew Marcus, asked Marcus if he would like to wear a valuable pocket watch that had belonged to Matthew’s father. Matthew admired the pocket watch attached to Marcus’ waistcoat and said that he could keep it. However, when Matthew’s visit was over, he took the pocket watch with him. Matthew died shortly afterwards; the pocket watch was found amongst his personal effects.
Advise Marcus. 5. John executed a voluntary deed in favour of Tina to transfer shares in R Mobile to be held by her in favour of Mike. He then handed the share certificate to her together with a general power of attorney to act on his behalf with regard to the shares. What should she do? Why? 6. Don has decided to go to the Monastery of Eternal Youth and to relinquish all his worldly wealth. He writes a document that he and Lola sign and which is witnessed by a class of 36 CPE students purporting to give his house to her. He gives the lease on his flat in London to Matt. He tells Ron that he can have all the antique ornaments in his display cabinet together with everything on the mantle shelf. He also gives Ron his wallet, watch and spectacles. He had just won £1,500,000 on the pools and gives the cheque with a flourish to the local Oxfam shop. He also writes out a cheque for the entire contents of his bank account and gives it to Jill. John owed him £2000. He tells Juliet she can collect it and keep it. On his way out of the door, he turns and waves goodbye to the life he had previously known. He is killed instantly by a falling meteorite. He left a will in which he had left everything he has, unconditionally, to John. Discuss the entitlement of each party.
Class preparation (seminar--------------6)
Formalities for the creation of trusts: 1. Which of the following need not comply with s53(1)(c) Law of Property Act 1925?
a) A beneficiary under a trust assigning his equitable interest to another.
b) A beneficiary under a trust directing the trustees to hold the equitable interest on trust for another.
c) A beneficiary under a trust disclaiming his interest.
d) A beneficiary (James) under a trust declaring a sub-trust of his equitable interest for another where James performed no active duties. 2. Which of the following statements is true with regards to s53(1)(b) Law of Property Act 1925?
a) The provision applies to all trusts.
b) Failure to comply with the provision would render the trust void.
c) Failure to comply with the provision would render the trust unenforceable.
d) In order to satisfy the provision, the declaration of trust must be in writing and signed by the trustees. 3. Which of the following statements is false with regards to s53(1)(c) Law of Property Act 1925?
a) The provision applies to a disposition of a subsisting equitable interest.
b) The provision applies to the creation of a trust.
c) Failure to comply with the provision would render the disposition void.
d) The disposition of an equitable interest must be made in writing. 4. Which of the following statements is true?
a) A declaration of an inter vivos trust of personalty is void in the absence of any written evidence.
b) A declaration of an inter vivos trust of land is void in the absence of any written evidence.
c) A declaration of an inter vivos trust of personalty is unenforceable in the absence of any written evidence.
d) A declaration of an inter vivos trust of land is unenforceable in the absence of any written evidence. 5. Which of the following must comply with s53(1)(c) Law of Property Act 1925?
a) A beneficiary under a trust assigning their equitable interest to another.
b) The nomination of a beneficiary under a life insurance policy.
c) The declaration of an inter vivos trust of land.
d) The declaration of an inter vivos trust of personalty. 6. Has a valid trust been created in the following scenario?
Jackie declares herself a trustee of her country house for her nephew Peter. She subsequently wrote to Peter informing him of her actions.
Class preparation (seminar--------------------7)
1. Which of the following is not required in a claim of proprietary estoppel?
a) The owner of land acted fraudulently.
b) The claimant expended time or money in reliance of promises made by the owner of land.
c) The owner of land was aware of the claimant’s mistaken belief.
d) The claimant suffered some detriment in reliance of the land owner’s promise. 2. Which of the following is not a requirement for donatio mortis causa:
a) The gift must have been made in contemplation of death.
b) The donor must have intended the gift to be conditional on death.
c) There must be some evidence in writing of the donor’s intention
d) The subject-matter of the gift must have been delivered. 3. Which of the following statements is untrue?
a) The rule in Re Rose is an exception to the maxim that equity will not perfect an imperfect gift.
b) Gifts by donation mortis causa is an exception to the maxim that equity will not perfect an imperfect gift.
c) The doctrine of proprietary estoppel can only be used as a defence.
d) The doctrine of proprietary estoppel can be used to perfect an imperfect gift. 4. Which of the following requirements are not needed in order to prove proprietary estoppel?
a) The land owner relied on a promise made by the claimant.
b) A representation or promise on the part of the land owner.
c) The claimant relied on the promise made by the land owner.
d) The claimant has suffered some detriment. 5. Which of the following is not a requirement in proving donation mortis causa?
a) The donor must have intended the gift to take immediate effect.
b) The gift must be made in contemplation of death.
c) The property must be capable of passing by a donation.
d) The subject matter of the gift must be delivered to the donee. 6. Under what circumstances can trustees or beneficiaries sue for damages for breach of covenant when a settlor fails to settle property after covenanting to do so? 7. Will equity ever perfect an imperfect gift? Discuss with reference to relevant legal authority. 8. There is a train crash at the Elephant and Castle. With superhuman strength and courage, Mike battles his way through the wreckage and discovers that the only occupied carriage contains the law lecturers on their way to the seaside for a day out. They are all clearly on their last legs and are very well aware of it. He decides to try to make them all as comfortable as possible under the circumstances before the paramedics arrive.
In his gratitude, Roy takes out his front door key, presses it into Mike’s hand and says “I’m a gonner. Thanks. You can have my house. The drains will need …”
Rick has no pen but uses the last of his strength to write with a toothpick and his own blood a cheque for £10,000. He passes it to Mike, saying “Here, take this, I’ve had it”.
Lori says “I’ll be alright, see to the others, but I have two cat figurines on the mantleshelf. You’ve been great. Take them. And I know you have always wanted my lawn mower. It’s yours”. She gives him the key to her garden shed. A large case on the luggage rack falls due to a sudden movement of the carriage. It crushes her skull.
John says “You are my hero. I know I’m going now. Take these, it is yours”. He gives Mike his gold watch and a cheque of £20,000 from the National Lottery before passing out. Mike manages to carry John through the wreckage. He places John on the pavement to await the ambulance and went back into the wreckage to look for more survivors. There were none. In a daze, John staggers onto the road and is killed by a passing bus. What property has Mike gained? 9. Greta has contracted a rare tropical disease and is in an isolation unit in hospital. Joe visits her every day to comfort her and bring her flowers and chocolate. He lends her £1,000 to buy a large screen television for her hospital room. She writes a valid will leaving him £900. She then borrows £200 to buy new clothes.
She eventually realises that she will die of the disease and gives him a personal cheque for £800, her wedding ring and her safe deposit box key telling him that the contents of the box are his. She miraculously recovers from the disease but is killed in a fire which is caused by a short-circuit in the television set.
In the safe deposit box are the keys to her house and her car, a cheque from her employer, her share certificates and an IOU from Michael.
Advise Joe as to his entitlement.
Class preparation (seminar----------8)
1. Which of the following is not a requirement for a valid trust?
a) Certainty of the settlor’s intention to create a trust.
b) Certainty of the identity of the trustees.
c) Certainty of the property to be held on trust.
d) Certainty of the beneficiaries to the trust. 2. Which of the following statements is incorrect?
a) Where there is no certainty of intention to create a trust, the property is held on resulting trust for the settlor.
b) Where there is no certainty of subject-matter, the property is held on resulting trust for the settlor.
c) Where the objects of a trust are uncertain, the property is held on resulting trust for the settlor.
d) There is no need for the trustees to draw up a complete list of beneficiaries in a discretionary trust. 3. Which of the following statements is incorrect?
a) The trustees of a fixed trust must be able to draw up a complete list of all the beneficiaries.
b) If the objects of a trust are uncertain, the trust is void.
c) The same test is used to determine certainty of objects in a discretionary trust and a fixed trust.
d) The trust is void if the subject matter of the trust is uncertain. 4. Which of the following statements is the most accurate?
a) There is certainty of subject matter where the settlor has clearly described the property subject to the trust.
b) There is certainty of objects where the settlor has clearly described the property subject to the trust.
c) In order to create a trust, the settlor must have used the word ‘trust’.
d) No technical words are necessary to create a trust so long as there is certainty of intention on the part of the trustee. 5. According to the decision in McPhail v Doulton [1970],
a) The trustees must be able to draw up a complete list of all beneficiaries in a discretionary trust.
b) The trustees must be able to achieve equal distribution amongst all the beneficiaries in a discretionary trust.
c) There is certainty of objects in a discretionary trust where the trustees are able to say with certainty that any given individual is or is not a member of the class.
d) The test to determine certainty of objects is the same for a fixed trust and a discretionary trust. 6. Albert, by will, made the following bequests:
a) £500,000 to my wife Jane, and I am confident that she will pay a reasonable sum each year to my aunt Martha for her maintenance.
b) £250,000 to my son John on trust to use the income for such period as the law allows for the provision of summer outings for the employees together with their relatives and/or dependants, of my old company Nuts and Bolts Ltd.
c) The bulk of my residuary estate to my daughter Irene.
Advise James, the executor of Albert’s will, on the validity of these bequests.
7. Consider whether the following cases result in a valid and enforceable gift or trust being created:
a) On returning from their honeymoon to a furnished house owned by Brian, Brian said to his wife Norma, “My love, this house and its entire contents are now your sole property”.
b) Chris sent a cheque for £60,000 to his son Simon, together with a letter stating that, “I am sending you this money for the distribution by you, at your absolute discretion, amongst your three children when they reach the age of 18”. The children are currently 12, 15 and 16 years old.
c) Anthony’s mail order business has just ceased trading and Anthony has just been adjudicated bankrupt. Anthony had an oral agreement with his bank, that all money received from customers, pending despatch of the goods, should be paid into a ‘customers’ pending orders account’ at the bank. By the time Anthony ceased trading, money received from 750 customers remained in this account.
d) Nick appointed Francesca as his trustee in his will and gave her two valuable Ming vases:
“to hold one of them on trust for my sister Rosie, whichever she may choose, and the other on trust for my brother Nathan.”
Rosie died before Nick. Advise Francesca.
e) Arthur died leaving a will appointing Nick and Ivor as his executors and trustees. He left “£500,000 to my wife Tina; and I am confident that she will use it for our children as she sees fit”.
Arthur also left “my shares in Energy plc to my cousin Dee from which she must ensure regular payments to my niece Pauline to maintain a reasonable standard of living for her”.
8. “The rule of certainty should be no stricter than is necessary to permit the trustees to perform their duties”. (Hanbury: Modern Equity). Explain and discuss the test for certainty of objects of a trust. Class preparation (seminar-------------------9)
NCPT seminar questions
1. Which of the following gifts is void:
a) £30,000 to be held on trust the income of which is to be used to maintain my baby tortoise.
b) £30,000 to be divided equally between my three children.
c) £20,000 to be held on trust the income of which is to be used to maintain my pet hamster Lucky.
d) £10,000 to be held on trust for my nephew Adam until he reaches the age of 18. 2. Which of the following purposes is not a category previously upheld as a valid non-charitable purpose in Re Endacott [1960] Ch 232?
a) A trust to erect a monument in memory of a person.
b) A trust to maintain an animal.
c) A trust to maintain a tomb.
d) A trust to put up a stained glass window in a church. 3. Which of the following statements about non-charitable purpose trusts is incorrect?
a) Such trusts are generally void due to the beneficiary principle.
b) All such trusts must satisfy the perpetuity period.
c) All such trusts are automatically upheld as valid.
d) Such trusts are void as there are no beneficiaries. 4. Ben has just died and in his will, he left £10,000 on trust “for the maintenance of his pet rat Rusty”. Which of the following statements most accurately describes the bequest?
a) Ben has created a valid fixed trust in which Rusty is the beneficiary.
b) The trust is valid as the three certainties are present.
c) Ben has created a discretionary trust in which Rusty is the beneficiary.
d) The trust may be upheld as valid provided the court is able to take judicial notice of the fact that Rusty will not live past the perpetuity period. 5. Which of the following is not a condition for a valid non-charitable purpose trust?
a) There must be certainty of intention, certainty of subject matter and certainty of objects.
b) The trust must be limited in perpetuity.
c) There must be someone willing to carry out the terms of the trust.
d) The purpose of the trust must have been upheld as valid in a previous case. 6. Advise the executors of Jane’s will on the validity of the following:
a) £250,000 to my son John on trust to use the income for such period as the law allows for the provision of summer outings for the employees together with their relatives and/or dependants, of my old company Nuts and Bolts Limited. b) £100,000 or whatever sum the law will allow, for the maintenance of my tortoises for their lifetime. c) £10,000 to be used to feed and pay vet’s fees for my beautiful Yorkshire Terrier puppy Shannon for the rest of her life. d) £15,000 to build a monument to myself. A further £10,000 to be used to maintain the monument in perpetuity. e) £15,000 to maintain my horses and their progeny for as long as the law will allow. 7. Define the Beneficiary Principle. Are there any exceptions to it?
Class preparation (seminar---------------10)
CHARITABLE TRUSTS SEMINAR
1. Which of the following is not a charitable purpose?
a) Setting up a soup kitchen to feed the poor.
b) A gift to fund a rally calling for the government to end the practice of vivisection.
c) A trust to set up a home for abandoned animals.
d) A gift to set up a community centre for the youths in the area. 2.Which of the following trusts would be a valid charitable trust?
a) A trust to provide free clothing for every child in Rotherham.
b) £100,000 on trust for “such charitable or benevolent purposes as my trustees think proper”.
c) A trust to help the Anti-Vivisection Society with its continuing work.
d) £50,000 on trust for “such charitable and philanthropic purposes as my trustee thinks fit”. 3. Which of the following is not a requirement of a charitable trust?
a) The trust must benefit the public.
b) The purposes of the trust must be wholly and exclusively charitable.
c) The trust should be of a charitable nature.
d) The objects of the trust must be identifiable. 4. Which of the following statements is false?
a) Charitable trusts can carry on forever.
b) Trusts for the relief of poverty need not satisfy the public benefit test.
c) Charitable trustees need not act unanimously.
d) Charitable trusts are enforced by the Attorney General. 5. Which of the following is not a valid trust for the advancement of education?
a) £100,000 to the student union at London University to fund their campaign for free university tuition.
b) £100,000 to London University to be used towards the new science building.
c) £100,000 to Alton College for a new rugby field.
d) £100,000 to London University to establish a student prize the sole purpose of which is to encourage regular class attendance. 6. Edwin made the following dispositions in his will. Please advise his executors and trustees as to the validity of each disposition, and as to what to do with the funds if any of the dispositions is invalid. a) £5,000 to the Bishop of Oxford so that he can continue his good works. b) £10,000 to the Economics Department at the University of Warwick so that they can continue to obtain the top score in the government’s regular Quality Assurance Review of teaching and Research. c) £15,000 to my local branch of the Starving Children of the World organisation urging them to campaign for an increase in social security payments sufficient to eliminate poverty in the UK. d) £40,000 to London South Bank University to celebrate my life in perpetuity. e) £500,000 to such charities as my trustees should deem charitable or benevolent. f) £3,000 to my local church for a stained glass window. g) Most of my residuary estate to provide a scholarship for five needy students annually. h) The remainder of my residuary estate to the Vicar of my local church. 7. Critically discuss the concept of charitable nature in relation to charitable trusts.
Class preparation (seminar--------------11)
1. Which of the following gifts in Jack’s will would not be applied cy-pres?
a) £10,000 to the hardworking vicar of my local church so that he can have a proper holiday. There was a surplus of £4,000 after the vicar’s holiday.
b) “£2,000 to the Donkey Sanctuary in Brighton”. It turned out that there is no place by that name in Brighton.
c) “£5,000 to put up a stained glass window in my local church”. There was surplus of £2,000 after the purpose had been carried out.
d) “£20,000 to set up a free clinic in Shoreditch”. The trustees were unable to find suitable land for that purpose. 2. In which of the following scenarios will the gift be applied cy-pres without any need for general charitable intention on the part of the donor?
a) Alex died having left ‘£20,000 to the Elephant & Castle Dogs’ Home’. No Dogs’ Home by that name ever existed.
b) Alex died having left £20,000 to put up a stained glass window in his local church. A stained glass window was installed and there was a surplus of £10,000.
c) Alex died having left ‘£20,000 to set up a homeless shelter in Elephant & Castle’. The trustees were unable to find land suitable for such a shelter.
d) Alex died having left £20,000 to his local church to fund Sunday school lessons for the children of the congregation. The church stopped holding Sunday school classes a week before Alex’s death as there was no one willing to teach the classes. 3. Barry has just died and his will left £100,000 on trust to set up food distribution unit for the homeless in Elephant & Castle. The trustees were unable to find a suitable location to run the operation. What is most likely to happen to the money?
a) The trustees can keep the money for themselves.
b) The trustees hold the money on resulting trust back to Barry’s estate.
c) The trustees hold the money on trust for Barry’s next of kin.
d) The trustees hold the money which will be applied cy-pres. 4. Belle dies leaving a will which contains the following dispositions:
a) £60,000 to ‘Angels Orphanage’;
b) £75,000 to ‘Mo’s Donkey Sanctuary’;
c) £35,000 to ‘Inside Welfare’, an incorporated charity for prisoners and ex-prisoners;
d) £73,000 to ‘The Occupational Workshop’, an unincorporated charity for accident victims to redevelop lost skills;
e) The residue of her estate is to be given to such “charitable or benevolent causes as my trustees shall in their discretion consider appropriate”.
‘Angels Orphanage’ closed after a fire shortly before Belle died, but after the will had been written. The children were moved to another orphanage 100 miles away from the initial location. The organisation took over the assets of the old and changed its name to ‘The Angels Orphanage’.
There was no evidence that a sanctuary called ‘Mo’s Donkey Sanctuary’ ever existed.
‘Inside Welfare’ ceased to exist shortly after the will had been written.
‘The Occupational Workshop’ ceased to exist shortly after Belle died but before the legacy could be distributed.
Advise Belle’s daughter, who is her next of kin, as to the validity of these dispositions. 5. Sam was a former lecturer at the Elephant & Castle University. His will (dated 1995) contains the following clauses:
a) £10,000 to the Aged Lecturers’ Home;
b) £150,000 to the Elephant and Castle Dogs’ Home;
c) £250,000 to a monument to his own memory outside E&C University entrance;
d) £75,000 to the maintenance of the monument forever;
e) £50,000 for the local church provided the vicar wears a clown’s hat to services;
f) Two thirds of his estate to be left on trust for The Famine Relief Fund (E&C), Oxfam, ActionAid, The Anti Vivisection Brigade.
g) The rest to be given to those charities which “my trustees should deem charitable or benevolent”.
Sam’s next of kin are disputing these dispositions. Advise them on the basis of the following information:
1) The Aged Lecturers’ Home closed in 1997. Its assets and residents were transferred to the South Bank Old and Redundant Staff Centre ten miles away.
2) The Famine Relief Fund (E&C) never existed.
3) The vicar is refusing to wear a clown’s hat. 6. Romeo borrowed £1,000 from Escalus and £500 from Mercutio so that he could elope with Juliet. He then made his will. Shortly afterwards he borrowed a further £1,200 from Balthasar. He and Juliet then caught a plane to Scotland. It was hijacked by Tybalt, Sampson and Gregory, who threatened to blow up the plane. Believing that he was the reason for the hijacking and that they would release the other passengers on his death, Romeo declared his love for Juliet and saying, “these are for you”, gave her the keys to his car and the lease to his flat, the cheque for £1,200 from Balthasar and a personal cheque for the remainder of his bank account before flinging himself from the plane. He was not killed by the fall but by the consequent avalanche and exposure. Two passengers, Lawrence and Jim overcame the hijackers and the plane landed safely.
Romeo’s will contained the following terms:
1) £1,000 and my car to Escalus;
2) £1,000 and my flat to Mercutio;
3) £1,000 to Balthasar;
4) £100,000 to any charitable and benevolent causes that my trustees shall choose;
5) £50,000 to the Campaign to abolish vivisection;
6) £10,000 to build a monument of stone roses to Juliet’s memory;
7) £5,000, the interest on which to maintain said monument in perpetuity.
8) £100,000 to be spent on land to be maintained and used as and for the purpose of a recreation ground for the employees of my old company Capulet and also for the benefit of such other persons as the trustees may decide to use for such period as the law will allow.
9) The remainder of my estate to my beloved Juliet.
Equty & Trust (Seminar)
LLM/CPE
Contents
Class preparation (seminar--1) 3
Class preparation (seminar-----2) 5
Class preparation (seminar------3) 6
Class preparation (seminar--------4) 10
Seminar on Constitution of Trusts----5 11
Class preparation (seminar--------------6) 13
Class preparation (seminar--------------------7) 14
Class preparation (seminar----------8) 16
Class preparation (seminar-------------------9) 19
Class preparation (seminar---------------10) 21
Class preparation (seminar--------------11) 23
Class preparation (seminar--1)
1 Why and how did the law of equity develop?
2 Why did the conflict between common law and equity arise and how was it resolved?
3 Explain the following maxims by reference to case law:
He who comes to equity must come with clean hands
Where the equities are equal, the first in time prevails
Equity deems as done that which ouight to be done
4 Identify the equitable maxims involved in the following:
Bill and Ben entered into a contract for Bill to purchase Ben's land. Ben refuses to complete, is Bill entitled to specific performance?
Beneficiary's rights under a trust where the trustee holds as legal owner.
Tenant entered into a contract for a lease but breached some covenants. Why could the tenant not obtain an order for specific performance?
EQUITABLE MAXIMS MCTs
1 Sara sold her house to Andy on the oral understanding that she will be able to continue living there for as long as she lives. On being registered as the proprietor, Andy started proceedings to evict Sara. Which of the following statements is the most accurate?
a) Andy has the right to evict Sara as the agreement between them was not in writing in compliance with s2 Law of Property (Miscellaneous Provisions) Act 1989.
b) Andy cannot to evict Sara as she is the legal tenant.
c) Andy cannot evict Sara as there is a constructive trust in her favour.
d) Andy has the right to evict Sara as he is the legal owner of the house.
2 Lance granted Tim a five-year lease of a flat last year. The lease provided that Lance must carry out any necessary repairs and that Tim must pay rent in advance monthly. Tim has not paid rent in 3 months and the shop is in need of repairs. Tim’s application for a grant of specific performance against Lance (to carry out the repairs) failed. Which maxim best explains the court’s decision?
a) Equity looks on as done that which ought to be done.
b) Delay defeats equity.
c) Where the equities are equal, equity follows the law.
d) He who comes to equity must come with clean hands.
3 Carl and Dean exchanged contracts for Carl to purchase Dean’s house. A week before completion, the house was damaged by fire. Carl discovered to his dismay that he will have to pay for the repairs. Which is the most appropriate maxim to explain this?
a) He who comes to equity must come with clean hands.
b) Equity deems as done that which ought to be done.
c) Delay defeats equity.
d) Equity will not assist a volunteer.
4 Terence holds property on trust for the benefit of Bill and Ben. Terence used trust money to buy a house for his mother to live in. Terence’s mother must return the house to the trust. Which maxim is the most appropriate?
a) Equity will not assist a volunteer.
b) He who comes to equity must come with clean hands.
c) Equity deems as done that which ought to be done.
d) Delay defeats equity.
5 Adam, the owner of Blackacre, created an equitable mortgage to Boyd’s Bank in 2005 for a loan of £50,000. A year later, Adam created an equitable mortgage over Blackacre in favour Big Building Society for £40,000 without Boyd’s Bank’s knowledge. Adam is now in arrears of his mortgage repayments to Big Building Society. Big Building Society took possession and sold Blackacre for £60,000 but found that Boyd’s Bank is entitled to most of the proceeds of sale. Why is that?
a) Equity will not assist a volunteer.
b) Where the equities are equal, the first in time prevails.
c) Equity deems as done that which ought to be done.
d) He who comes to equity must come with clean hands.
Class preparation (seminar-----2)
EQUITABLE DOCTRINES MCTs
1 Which maxim is the doctrine of conversion based on?
a) Equity looks to the substance and intent rather than the form.
b) Equity will not permit a statute to be used as an instrument of fraud.
c) Equity acts in personam.
d) Equity deems as done that which ought to be done.
2 Tim’s will left £50,000 to Ann and 1,000 shares in BT to Kay. Due to a default in appointment, it turned out that the shares belong to Ann. Under the doctrine of election:
a) Ann is entitled to keep both the £50,000 and the shares.
b) Ann is not entitled to either the £50,000 or the shares.
c) Ann is only entitled to the £50,000.
d) Ann is entitled to either the £50,000 or the shares.
3 Which of the following statements is most accurate in describing the doctrine of election?
a) The doctrine only applies if there is contrary intention.
b) The doctrine cannot apply if there is contrary intention.
c) The doctrine cannot apply if the gifts are contained in the same instrument.
d) The doctrine only applies to gifts in different instruments.
4 The doctrine of performance is based on which maxim?
a) Equity imputes an intention to fulfil an obligation.
b) Equity deems as done that which ought to be done.
c) Where the equities are equal, the first in time prevails.
d) He who comes to equity must come with clean hands.
5 Matt owes Vince £100. Matt later left Vince £500 in his will. Matt dies without repaying the debt. Which of the following statements is most accurate?
a) Vince is entitled to the £500 legacy but cannot sue Matt’s estate for the £100 debt.
b) Vince is only entitled to a legacy of £400.
c) Vince is not entitled to the legacy but may sue Matt’s estate for the £100 debt.
d) Vince is entitled both to the £500 legacy and to sue Matt’s estate for the £100 debt.
Equitable doctrines questions:
1 X is Y’s father and covenants in Y’s marriage settlement to pay the trustees £100,000. In a will made at a later date, he leaves Y with a legacy of £75,000 but dies without paying any money to the trustees. What does Y get in the will?
2 Steve stands in loco parentis to Clare. He advances her £50,000 for her CPE training. He is also in loco parentis to Cindy but pays her no advance. In his will, he leaves £120,000 to be shared equally between the two. His estate is worth £1,000,000 and he leaves the residue to John. What is each party’s entitlement?
3 Sarah has two children, Gavin and Martina. John is not related to her in any way but nevertheless in her will she leaves her property equally to all three. During her lifetime, she makes inter vivos gifts to Martina and John to fund their careers respectively in the army and at the bar to the tune of £100,000 each. On her death, the estate is valued at £300,000. What is each party’s entitlement?
4 Melissa borrowed £1000 from Ricardo to buy a car. She bought Lorna’s car for £1500, telling her that she would pay the rest when she completed the CPE. She borrowed £1000 rent money from Jackie, telling her that she would repay the debt later that week. Cindy, her landlady, insists that she never did pay that rent. Melissa borrowed £50 each from Jo and Natalie for a car respray. She then made her will. After this, she borrowed a further £50 from Natalie for more paint.
When she completed her CPE, she went to a party to celebrate. On the way home, she drove over a broken bottle and sustained a flat tyre. While she was changing it, the vehicle fell onto her, killing her instantly. The car was damaged and valued at only £1000 by the insurance company. It was discovered that she had recently won £1,000,000 on the national lottery. In her will, she left £1000 each to Ricardo, Lorna, Jackie, Jo and Natalie; and the car to Cindy. She specifically stated in the will that it excluded the £50 she owed Jo, for whose friendship and money she was eternally grateful. The residue was left to John. Advise the parties as to their entitlements.
Class preparation (seminar------3)
Equitable Remedies seminar:
1 Which of the following principles was not laid down in the case of American Cyanamid v Ethicon? a) An interim injunction will not be granted where it would finally dispose of the case.
b) There must be a serious question to be tried.
c) The court should consider whether damages would be an adequate remedy for the complainant.
d) The court should take into consideration the balance of convenience. 2 Dan and Ed exchanged contracts for Dan to buy Ed’s house. Dan also provided a down payment when the contracts were exchanged. Ed changed his mind and is about to sell his house to Bob, who offered him more money. Which of the following statements is untrue: a) Dan is entitled to sue Ed for breach of contract and obtain damages.
b) Dan is entitled to a remedy of specific performance against Ed.
c) Dan is entitled to sue Bob for breach of contract and obtain damages.
d) Dan holds the equitable estate to the house. 3
3 Which of the following statements is inaccurate? a) Specific performance is available where the subject-matter of the contract is land.
b) Specific performance is available where the subject-matter of the contract is a rare painting.
c) Specific performance is available against an employee who is refusing to work.
d) Damages may be awarded in lieu of specific performance. 4 Which of the following is not a ground for the court to refuse to grant an injunction? a) Unreasonable delay on the part of the claimant.
b) The granting of an injunction may result in many people losing their employment.
c) Where damages would be an adequate remedy.
d) Where the claimant had failed to conduct himself fairly and honestly. 5 Which of the following is inaccurate in describing the proper execution of a search order? a) Where the premises at which the order is to be served is residential, the order should be served after office hours as the occupants are more likely to be home.
b) If the supervising solicitor is a man, he should be accompanied by a woman if the premises to be served is likely to be occupied by a woman alone.
c) The person served with the order is entitled to be present during the search.
d) The person served with the order is entitled to seek legal advice. Equitable Remedies seminar Qs
1. Melissa agrees to paint a portarait of Adam who is a famous child circus performer, for £1,800. When it is completed, Natalie, who is besotted, offers Melissa £10,000 for it. Melissa does not hesitate and accepts the money. What remedies are available to Adam? 2. Lorna took out a lease on a second floor flat. The service contract requires Georgina to undertake external repairs: to have the garden tidied every month and to install a lift within a reasonable period of time. The roof has leaked since she moved in five years ago despite requests for repairs; the garden is completely overgrown and the lift has not been installed. What equitable remedies are open to Lorna? 3. The freezing injunction and the search order are two of the law’s nuclear weapons. Discuss. Bank Mellat v Nikpour [1985] FSR 87, per Donaldson LJ. Discuss. 4. Why did Scott J suggest that search orders had a “draconian and essentially unfair nature”? Columbia Picture Industries Inc. v Robinson [1987] Ch 38 5. On 14th November, Mike resigned from his position with Grommet UK plc and became employed by the main competitors Grommet US Inc. as their UK representative. A clause in his contract restrained him from taking employment “anywhere in the UK with any company providing grommets for a period of one year of leaving employment with Grommet UK plc”. Grommet UK plc discover that valuable plans, drawings and a list of their customers is missing. They suspect Mike of taking them. Advise them of any action they should take. 6. Abbey Ltd wishes to take proceedings against Rusty Motors who are based in Birmingham. Abbey claims that the manager of Rusty Motors has defrauded them of £250,000, believed to be deposited in various banks at home and abroad. The main business account of Rusty Motors is the Nestminster Bank, Hartlepool. There is a concern that Rusty Motors may dispose of assets before judgment. Advise Abbey Ltd. 7. Molan Productions Ltd is a private school teaching law by way of distance learning to both UK and overseas students. The company produces audio visual material and lecture notes for distribution to its students. Jim, a senior member of staff, and leading author of a textbook on Land Law, was employed in September 2011 on a six year contract as a Land Law specialist. His contract requires him to work exclusively for Molan Productions Ltd during his period of employment and not to work for any other private school teaching law by way of distance learning for a period of one year after his contract is terminated. Jim handed in his letter of resignation to Molan Productions Ltd, to take effect from the 1st August 2013. He has taken up an offer of employment from Gibson Productions Ltd at the Birmingham base of a private teaching school whose head office is in Hong Kong. On inspecting Jim’s old office, the management team at Molan Productions have discovered that all of the materials that Jim was working on have disappeared. Computer discs, video recordings, audio tape recordings and all paperwork have been removed. Loyal students of Molan Productions Ltd have informed the management team that they have received advertisement materials from Gibson Productions Ltd inviting them to enrol on their courses and to “take up where they have left off their current studies”. The management team at Molan Productions Ltd fears that Jim took material from his office, together with confidential student information. The management team also fears that Gibson Productions have bank accounts in Birmingham and in Hong Kong, and any moneys they receive in Birmingham being transferred to the Hong Kong head office. Advise Molan Productions of any equitable remedies they may have in these circumstances. NOTE: It is not necessary to discuss the principles of contract law in your answer – assume that a valid contract of employment was entered into by Molan Productions Ltd and Jim.
Class preparation (seminar--------4)
1. According to Article 7 of the Hague Convention, ‘A trust shall be governed by the law with which it is closely connected’. Which of the following is not relevant in ascertaining this? a) The situs of assets of the trust.
b) The place of residence or business of the trustee.
c) The place of administration of the trust.
d) The nationality of the trustee. 2. In which of the following scenarios would a trust not be implied? a) Alex dies having made a will appointing James as his executor.
b) Joseph has just conveyed the legal title of Blackacre to Cathy.
c) Ben and Sarah just bought a house using their joint savings.
d) Fiona and Diane have just exchanged contracts for Diane to buy Fiona’s cottage. 3. Which of the following is an example of a discretionary trust? a) “£1,000,000 to be held on trust for the benefit of any of my employees or such employees’ dependants as my trustees shall decide”.
b) “My house to my wife Ginny for life, remainder to my daughter Cara absolutely”.
c) “All my shares in Austin plc on trust for my children equally”.
d) “One of my two houses to Brenda, whichever she chooses, the other to Kyle”. 4. What is a beneficiary of a discretionary trust entitled to? a) A share of the trust property.
b) To be paid any interest generated by the trust property.
c) To be considered by the trustees when they exercise their discretion.
d) A transfer of the trust property. 5. Which of the following is not considered a private trust? a) “All my property on trust for my son when he turns 18”.
b) Hannah contributed 50% of the purchase price to a house title to which is conveyed to her husband Tom.
c) “£100,000 on trust for my husband Ken for life, remainder to my daughter Mary”.
d) “£200,000 on trust to set up a shelter for the homeless in a suitable location as determined by my trustees”.
Seminar on Constitution of Trusts----5
1. Which of the following will result in the creation of a trust?
a) A father declaring his pay cheque to be a gift to his baby son.
b) A husband orally informing his new bride that he is giving her his house.
c) A clause in a Thomas’s will: “All my property to my wife Jane, knowing that she will look after our children”.
d) Alton, on hearing of the birth of his first grandchild, declaring that he (Alton) will hold his shares in Gas plc for the grandchild. 2. Which of the following trusts has not been completely constituted?
a) Shane declaring on his son’s first birthday that he (Shane) will hold his shares in BT plc on trust for the son.
b) Shane covenanting with the trustees of his marriage settlement that he (Shane) will transfer his house Brownstone to the settlement. Just before he died, Shane executed a deed transferring the property to the trustees.
c) Shane declaring on his tenth wedding anniversary that he (Shane) will hold his stamp collection on trust for his wife.
d) Shane covenanting with the trustees of his marriage settlement that he (Shane) will transfer land worth £500,000 to the settlement. Just before he died, Shane handed over the title deeds of Brownstone to the trustees. 3. Jack declared a trust whereby his brother John is to hold all of Jack’s shares in British Gas plc on trust for Jack’s niece Clara. Which of the following actions by Jack will be deemed to completely constitute the trust?
a) Jack hands over the share certificates to John.
b) Jack writes a note to John confirming the trust.
c) Jack completes the share transfer forms and hand the forms and the share certificates to John.
d) Jack hands the keys to a safe deposit box containing the share certificates to John. 4. Consider whether a valid trust has been created in the following circumstance:
Matthew, when visiting his nephew Marcus, asked Marcus if he would like to wear a valuable pocket watch that had belonged to Matthew’s father. Matthew admired the pocket watch attached to Marcus’ waistcoat and said that he could keep it. However, when Matthew’s visit was over, he took the pocket watch with him. Matthew died shortly afterwards; the pocket watch was found amongst his personal effects.
Advise Marcus. 5. John executed a voluntary deed in favour of Tina to transfer shares in R Mobile to be held by her in favour of Mike. He then handed the share certificate to her together with a general power of attorney to act on his behalf with regard to the shares. What should she do? Why? 6. Don has decided to go to the Monastery of Eternal Youth and to relinquish all his worldly wealth. He writes a document that he and Lola sign and which is witnessed by a class of 36 CPE students purporting to give his house to her. He gives the lease on his flat in London to Matt. He tells Ron that he can have all the antique ornaments in his display cabinet together with everything on the mantle shelf. He also gives Ron his wallet, watch and spectacles. He had just won £1,500,000 on the pools and gives the cheque with a flourish to the local Oxfam shop. He also writes out a cheque for the entire contents of his bank account and gives it to Jill. John owed him £2000. He tells Juliet she can collect it and keep it. On his way out of the door, he turns and waves goodbye to the life he had previously known. He is killed instantly by a falling meteorite. He left a will in which he had left everything he has, unconditionally, to John. Discuss the entitlement of each party.
Class preparation (seminar--------------6)
Formalities for the creation of trusts: 1. Which of the following need not comply with s53(1)(c) Law of Property Act 1925?
a) A beneficiary under a trust assigning his equitable interest to another.
b) A beneficiary under a trust directing the trustees to hold the equitable interest on trust for another.
c) A beneficiary under a trust disclaiming his interest.
d) A beneficiary (James) under a trust declaring a sub-trust of his equitable interest for another where James performed no active duties. 2. Which of the following statements is true with regards to s53(1)(b) Law of Property Act 1925?
a) The provision applies to all trusts.
b) Failure to comply with the provision would render the trust void.
c) Failure to comply with the provision would render the trust unenforceable.
d) In order to satisfy the provision, the declaration of trust must be in writing and signed by the trustees. 3. Which of the following statements is false with regards to s53(1)(c) Law of Property Act 1925?
a) The provision applies to a disposition of a subsisting equitable interest.
b) The provision applies to the creation of a trust.
c) Failure to comply with the provision would render the disposition void.
d) The disposition of an equitable interest must be made in writing. 4. Which of the following statements is true?
a) A declaration of an inter vivos trust of personalty is void in the absence of any written evidence.
b) A declaration of an inter vivos trust of land is void in the absence of any written evidence.
c) A declaration of an inter vivos trust of personalty is unenforceable in the absence of any written evidence.
d) A declaration of an inter vivos trust of land is unenforceable in the absence of any written evidence. 5. Which of the following must comply with s53(1)(c) Law of Property Act 1925?
a) A beneficiary under a trust assigning their equitable interest to another.
b) The nomination of a beneficiary under a life insurance policy.
c) The declaration of an inter vivos trust of land.
d) The declaration of an inter vivos trust of personalty. 6. Has a valid trust been created in the following scenario?
Jackie declares herself a trustee of her country house for her nephew Peter. She subsequently wrote to Peter informing him of her actions.
Class preparation (seminar--------------------7)
1. Which of the following is not required in a claim of proprietary estoppel?
a) The owner of land acted fraudulently.
b) The claimant expended time or money in reliance of promises made by the owner of land.
c) The owner of land was aware of the claimant’s mistaken belief.
d) The claimant suffered some detriment in reliance of the land owner’s promise. 2. Which of the following is not a requirement for donatio mortis causa:
a) The gift must have been made in contemplation of death.
b) The donor must have intended the gift to be conditional on death.
c) There must be some evidence in writing of the donor’s intention
d) The subject-matter of the gift must have been delivered. 3. Which of the following statements is untrue?
a) The rule in Re Rose is an exception to the maxim that equity will not perfect an imperfect gift.
b) Gifts by donation mortis causa is an exception to the maxim that equity will not perfect an imperfect gift.
c) The doctrine of proprietary estoppel can only be used as a defence.
d) The doctrine of proprietary estoppel can be used to perfect an imperfect gift. 4. Which of the following requirements are not needed in order to prove proprietary estoppel?
a) The land owner relied on a promise made by the claimant.
b) A representation or promise on the part of the land owner.
c) The claimant relied on the promise made by the land owner.
d) The claimant has suffered some detriment. 5. Which of the following is not a requirement in proving donation mortis causa?
a) The donor must have intended the gift to take immediate effect.
b) The gift must be made in contemplation of death.
c) The property must be capable of passing by a donation.
d) The subject matter of the gift must be delivered to the donee. 6. Under what circumstances can trustees or beneficiaries sue for damages for breach of covenant when a settlor fails to settle property after covenanting to do so? 7. Will equity ever perfect an imperfect gift? Discuss with reference to relevant legal authority. 8. There is a train crash at the Elephant and Castle. With superhuman strength and courage, Mike battles his way through the wreckage and discovers that the only occupied carriage contains the law lecturers on their way to the seaside for a day out. They are all clearly on their last legs and are very well aware of it. He decides to try to make them all as comfortable as possible under the circumstances before the paramedics arrive.
In his gratitude, Roy takes out his front door key, presses it into Mike’s hand and says “I’m a gonner. Thanks. You can have my house. The drains will need …”
Rick has no pen but uses the last of his strength to write with a toothpick and his own blood a cheque for £10,000. He passes it to Mike, saying “Here, take this, I’ve had it”.
Lori says “I’ll be alright, see to the others, but I have two cat figurines on the mantleshelf. You’ve been great. Take them. And I know you have always wanted my lawn mower. It’s yours”. She gives him the key to her garden shed. A large case on the luggage rack falls due to a sudden movement of the carriage. It crushes her skull.
John says “You are my hero. I know I’m going now. Take these, it is yours”. He gives Mike his gold watch and a cheque of £20,000 from the National Lottery before passing out. Mike manages to carry John through the wreckage. He places John on the pavement to await the ambulance and went back into the wreckage to look for more survivors. There were none. In a daze, John staggers onto the road and is killed by a passing bus. What property has Mike gained? 9. Greta has contracted a rare tropical disease and is in an isolation unit in hospital. Joe visits her every day to comfort her and bring her flowers and chocolate. He lends her £1,000 to buy a large screen television for her hospital room. She writes a valid will leaving him £900. She then borrows £200 to buy new clothes.
She eventually realises that she will die of the disease and gives him a personal cheque for £800, her wedding ring and her safe deposit box key telling him that the contents of the box are his. She miraculously recovers from the disease but is killed in a fire which is caused by a short-circuit in the television set.
In the safe deposit box are the keys to her house and her car, a cheque from her employer, her share certificates and an IOU from Michael.
Advise Joe as to his entitlement.
Class preparation (seminar----------8)
1. Which of the following is not a requirement for a valid trust?
a) Certainty of the settlor’s intention to create a trust.
b) Certainty of the identity of the trustees.
c) Certainty of the property to be held on trust.
d) Certainty of the beneficiaries to the trust. 2. Which of the following statements is incorrect?
a) Where there is no certainty of intention to create a trust, the property is held on resulting trust for the settlor.
b) Where there is no certainty of subject-matter, the property is held on resulting trust for the settlor.
c) Where the objects of a trust are uncertain, the property is held on resulting trust for the settlor.
d) There is no need for the trustees to draw up a complete list of beneficiaries in a discretionary trust. 3. Which of the following statements is incorrect?
a) The trustees of a fixed trust must be able to draw up a complete list of all the beneficiaries.
b) If the objects of a trust are uncertain, the trust is void.
c) The same test is used to determine certainty of objects in a discretionary trust and a fixed trust.
d) The trust is void if the subject matter of the trust is uncertain. 4. Which of the following statements is the most accurate?
a) There is certainty of subject matter where the settlor has clearly described the property subject to the trust.
b) There is certainty of objects where the settlor has clearly described the property subject to the trust.
c) In order to create a trust, the settlor must have used the word ‘trust’.
d) No technical words are necessary to create a trust so long as there is certainty of intention on the part of the trustee. 5. According to the decision in McPhail v Doulton [1970],
a) The trustees must be able to draw up a complete list of all beneficiaries in a discretionary trust.
b) The trustees must be able to achieve equal distribution amongst all the beneficiaries in a discretionary trust.
c) There is certainty of objects in a discretionary trust where the trustees are able to say with certainty that any given individual is or is not a member of the class.
d) The test to determine certainty of objects is the same for a fixed trust and a discretionary trust. 6. Albert, by will, made the following bequests:
a) £500,000 to my wife Jane, and I am confident that she will pay a reasonable sum each year to my aunt Martha for her maintenance.
b) £250,000 to my son John on trust to use the income for such period as the law allows for the provision of summer outings for the employees together with their relatives and/or dependants, of my old company Nuts and Bolts Ltd.
c) The bulk of my residuary estate to my daughter Irene.
Advise James, the executor of Albert’s will, on the validity of these bequests.
7. Consider whether the following cases result in a valid and enforceable gift or trust being created:
a) On returning from their honeymoon to a furnished house owned by Brian, Brian said to his wife Norma, “My love, this house and its entire contents are now your sole property”.
b) Chris sent a cheque for £60,000 to his son Simon, together with a letter stating that, “I am sending you this money for the distribution by you, at your absolute discretion, amongst your three children when they reach the age of 18”. The children are currently 12, 15 and 16 years old.
c) Anthony’s mail order business has just ceased trading and Anthony has just been adjudicated bankrupt. Anthony had an oral agreement with his bank, that all money received from customers, pending despatch of the goods, should be paid into a ‘customers’ pending orders account’ at the bank. By the time Anthony ceased trading, money received from 750 customers remained in this account.
d) Nick appointed Francesca as his trustee in his will and gave her two valuable Ming vases:
“to hold one of them on trust for my sister Rosie, whichever she may choose, and the other on trust for my brother Nathan.”
Rosie died before Nick. Advise Francesca.
e) Arthur died leaving a will appointing Nick and Ivor as his executors and trustees. He left “£500,000 to my wife Tina; and I am confident that she will use it for our children as she sees fit”.
Arthur also left “my shares in Energy plc to my cousin Dee from which she must ensure regular payments to my niece Pauline to maintain a reasonable standard of living for her”.
8. “The rule of certainty should be no stricter than is necessary to permit the trustees to perform their duties”. (Hanbury: Modern Equity). Explain and discuss the test for certainty of objects of a trust. Class preparation (seminar-------------------9)
NCPT seminar questions
1. Which of the following gifts is void:
a) £30,000 to be held on trust the income of which is to be used to maintain my baby tortoise.
b) £30,000 to be divided equally between my three children.
c) £20,000 to be held on trust the income of which is to be used to maintain my pet hamster Lucky.
d) £10,000 to be held on trust for my nephew Adam until he reaches the age of 18. 2. Which of the following purposes is not a category previously upheld as a valid non-charitable purpose in Re Endacott [1960] Ch 232?
a) A trust to erect a monument in memory of a person.
b) A trust to maintain an animal.
c) A trust to maintain a tomb.
d) A trust to put up a stained glass window in a church. 3. Which of the following statements about non-charitable purpose trusts is incorrect?
a) Such trusts are generally void due to the beneficiary principle.
b) All such trusts must satisfy the perpetuity period.
c) All such trusts are automatically upheld as valid.
d) Such trusts are void as there are no beneficiaries. 4. Ben has just died and in his will, he left £10,000 on trust “for the maintenance of his pet rat Rusty”. Which of the following statements most accurately describes the bequest?
a) Ben has created a valid fixed trust in which Rusty is the beneficiary.
b) The trust is valid as the three certainties are present.
c) Ben has created a discretionary trust in which Rusty is the beneficiary.
d) The trust may be upheld as valid provided the court is able to take judicial notice of the fact that Rusty will not live past the perpetuity period. 5. Which of the following is not a condition for a valid non-charitable purpose trust?
a) There must be certainty of intention, certainty of subject matter and certainty of objects.
b) The trust must be limited in perpetuity.
c) There must be someone willing to carry out the terms of the trust.
d) The purpose of the trust must have been upheld as valid in a previous case. 6. Advise the executors of Jane’s will on the validity of the following:
a) £250,000 to my son John on trust to use the income for such period as the law allows for the provision of summer outings for the employees together with their relatives and/or dependants, of my old company Nuts and Bolts Limited. b) £100,000 or whatever sum the law will allow, for the maintenance of my tortoises for their lifetime. c) £10,000 to be used to feed and pay vet’s fees for my beautiful Yorkshire Terrier puppy Shannon for the rest of her life. d) £15,000 to build a monument to myself. A further £10,000 to be used to maintain the monument in perpetuity. e) £15,000 to maintain my horses and their progeny for as long as the law will allow. 7. Define the Beneficiary Principle. Are there any exceptions to it?
Class preparation (seminar---------------10)
CHARITABLE TRUSTS SEMINAR
1. Which of the following is not a charitable purpose?
a) Setting up a soup kitchen to feed the poor.
b) A gift to fund a rally calling for the government to end the practice of vivisection.
c) A trust to set up a home for abandoned animals.
d) A gift to set up a community centre for the youths in the area. 2.Which of the following trusts would be a valid charitable trust?
a) A trust to provide free clothing for every child in Rotherham.
b) £100,000 on trust for “such charitable or benevolent purposes as my trustees think proper”.
c) A trust to help the Anti-Vivisection Society with its continuing work.
d) £50,000 on trust for “such charitable and philanthropic purposes as my trustee thinks fit”. 3. Which of the following is not a requirement of a charitable trust?
a) The trust must benefit the public.
b) The purposes of the trust must be wholly and exclusively charitable.
c) The trust should be of a charitable nature.
d) The objects of the trust must be identifiable. 4. Which of the following statements is false?
a) Charitable trusts can carry on forever.
b) Trusts for the relief of poverty need not satisfy the public benefit test.
c) Charitable trustees need not act unanimously.
d) Charitable trusts are enforced by the Attorney General. 5. Which of the following is not a valid trust for the advancement of education?
a) £100,000 to the student union at London University to fund their campaign for free university tuition.
b) £100,000 to London University to be used towards the new science building.
c) £100,000 to Alton College for a new rugby field.
d) £100,000 to London University to establish a student prize the sole purpose of which is to encourage regular class attendance. 6. Edwin made the following dispositions in his will. Please advise his executors and trustees as to the validity of each disposition, and as to what to do with the funds if any of the dispositions is invalid. a) £5,000 to the Bishop of Oxford so that he can continue his good works. b) £10,000 to the Economics Department at the University of Warwick so that they can continue to obtain the top score in the government’s regular Quality Assurance Review of teaching and Research. c) £15,000 to my local branch of the Starving Children of the World organisation urging them to campaign for an increase in social security payments sufficient to eliminate poverty in the UK. d) £40,000 to London South Bank University to celebrate my life in perpetuity. e) £500,000 to such charities as my trustees should deem charitable or benevolent. f) £3,000 to my local church for a stained glass window. g) Most of my residuary estate to provide a scholarship for five needy students annually. h) The remainder of my residuary estate to the Vicar of my local church. 7. Critically discuss the concept of charitable nature in relation to charitable trusts.
Class preparation (seminar--------------11)
1. Which of the following gifts in Jack’s will would not be applied cy-pres?
a) £10,000 to the hardworking vicar of my local church so that he can have a proper holiday. There was a surplus of £4,000 after the vicar’s holiday.
b) “£2,000 to the Donkey Sanctuary in Brighton”. It turned out that there is no place by that name in Brighton.
c) “£5,000 to put up a stained glass window in my local church”. There was surplus of £2,000 after the purpose had been carried out.
d) “£20,000 to set up a free clinic in Shoreditch”. The trustees were unable to find suitable land for that purpose. 2. In which of the following scenarios will the gift be applied cy-pres without any need for general charitable intention on the part of the donor?
a) Alex died having left ‘£20,000 to the Elephant & Castle Dogs’ Home’. No Dogs’ Home by that name ever existed.
b) Alex died having left £20,000 to put up a stained glass window in his local church. A stained glass window was installed and there was a surplus of £10,000.
c) Alex died having left ‘£20,000 to set up a homeless shelter in Elephant & Castle’. The trustees were unable to find land suitable for such a shelter.
d) Alex died having left £20,000 to his local church to fund Sunday school lessons for the children of the congregation. The church stopped holding Sunday school classes a week before Alex’s death as there was no one willing to teach the classes. 3. Barry has just died and his will left £100,000 on trust to set up food distribution unit for the homeless in Elephant & Castle. The trustees were unable to find a suitable location to run the operation. What is most likely to happen to the money?
a) The trustees can keep the money for themselves.
b) The trustees hold the money on resulting trust back to Barry’s estate.
c) The trustees hold the money on trust for Barry’s next of kin.
d) The trustees hold the money which will be applied cy-pres. 4. Belle dies leaving a will which contains the following dispositions:
a) £60,000 to ‘Angels Orphanage’;
b) £75,000 to ‘Mo’s Donkey Sanctuary’;
c) £35,000 to ‘Inside Welfare’, an incorporated charity for prisoners and ex-prisoners;
d) £73,000 to ‘The Occupational Workshop’, an unincorporated charity for accident victims to redevelop lost skills;
e) The residue of her estate is to be given to such “charitable or benevolent causes as my trustees shall in their discretion consider appropriate”.
‘Angels Orphanage’ closed after a fire shortly before Belle died, but after the will had been written. The children were moved to another orphanage 100 miles away from the initial location. The organisation took over the assets of the old and changed its name to ‘The Angels Orphanage’.
There was no evidence that a sanctuary called ‘Mo’s Donkey Sanctuary’ ever existed.
‘Inside Welfare’ ceased to exist shortly after the will had been written.
‘The Occupational Workshop’ ceased to exist shortly after Belle died but before the legacy could be distributed.
Advise Belle’s daughter, who is her next of kin, as to the validity of these dispositions. 5. Sam was a former lecturer at the Elephant & Castle University. His will (dated 1995) contains the following clauses:
a) £10,000 to the Aged Lecturers’ Home;
b) £150,000 to the Elephant and Castle Dogs’ Home;
c) £250,000 to a monument to his own memory outside E&C University entrance;
d) £75,000 to the maintenance of the monument forever;
e) £50,000 for the local church provided the vicar wears a clown’s hat to services;
f) Two thirds of his estate to be left on trust for The Famine Relief Fund (E&C), Oxfam, ActionAid, The Anti Vivisection Brigade.
g) The rest to be given to those charities which “my trustees should deem charitable or benevolent”.
Sam’s next of kin are disputing these dispositions. Advise them on the basis of the following information:
1) The Aged Lecturers’ Home closed in 1997. Its assets and residents were transferred to the South Bank Old and Redundant Staff Centre ten miles away.
2) The Famine Relief Fund (E&C) never existed.
3) The vicar is refusing to wear a clown’s hat. 6. Romeo borrowed £1,000 from Escalus and £500 from Mercutio so that he could elope with Juliet. He then made his will. Shortly afterwards he borrowed a further £1,200 from Balthasar. He and Juliet then caught a plane to Scotland. It was hijacked by Tybalt, Sampson and Gregory, who threatened to blow up the plane. Believing that he was the reason for the hijacking and that they would release the other passengers on his death, Romeo declared his love for Juliet and saying, “these are for you”, gave her the keys to his car and the lease to his flat, the cheque for £1,200 from Balthasar and a personal cheque for the remainder of his bank account before flinging himself from the plane. He was not killed by the fall but by the consequent avalanche and exposure. Two passengers, Lawrence and Jim overcame the hijackers and the plane landed safely.
Romeo’s will contained the following terms:
1) £1,000 and my car to Escalus;
2) £1,000 and my flat to Mercutio;
3) £1,000 to Balthasar;
4) £100,000 to any charitable and benevolent causes that my trustees shall choose;
5) £50,000 to the Campaign to abolish vivisection;
6) £10,000 to build a monument of stone roses to Juliet’s memory;
7) £5,000, the interest on which to maintain said monument in perpetuity.
8) £100,000 to be spent on land to be maintained and used as and for the purpose of a recreation ground for the employees of my old company Capulet and also for the benefit of such other persons as the trustees may decide to use for such period as the law will allow.
9) The remainder of my estate to my beloved Juliet.
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