Equities - Resulting, Constructive and Implied Trusts

Question 1

Quistclose

Answer 1

Trust can be constituted by:

1) A loan
2) that was made solely for a specific purpose
3) and the money is segregated from the borrower’s other assets.

• N.B. if money had been used for the specific purpose then there is no longer a trust.

Question 2

Twinsectra v Yardley

Answer 2

Quistclose trust

Loan - Yes
Specific Purpose -
Seg. Ass. -

Question 3

Re EVTR

Answer 3

Quistclose trust

Loan - Yes
Specific Purpose -
Seg. Ass. -

Question 4

Cooper v PRG Powerhouse

Answer 4

Quistclose trust

Loan - No
Specific Purpose -
Seg. Ass. -

Question 5

Carreras Rothmans v Freeman Mathews

Answer 5

Quistclose trust

Loan - No
Specific Purpose -
Seg. Ass. -

Question 6

Re Chelsea Cloisters

Answer 6

Quistclose trust

Loan - No
Specific Purpose -
Seg. Ass. - No then yes

Question 7

Re Fairpack Food and Goods

Answer 7

Quistclose trust

Loan - No
Specific Purpose - No
Seg. Ass. - No

Question 8

Re Vandervell’s trust (No2)

Answer 8

Subdivides resulting trusts into two:

• Automatic resulting trusts - resulting trust is the automatic consequence of a failure to dispose of all the beneficial interests
• Presumed resulting trusts - where there is a rebuttable presumption of resulting trust because property is put under the name of another.

Documentation did not deal for whom the trust company has to hold the option for. So it was held as resulting trust for Vandervell until the trustees exercised their power to declare a new trust or until Vandervell as sole beneficial owner dealt with his interest.

Question 9

How can automatic resulting trusts arise?

Answer 9

• No valid declaration of trust
• Valid declaration of trust but trust fails
• Incomplete disposal of beneficial interests
  
  • creation of Quistclose trust