Key cases Flashcards
What are the 5 key facts of Quistclose
- RR in financial trouble, needed to pay dividend 2. Account was overdrawn so B wouldn’t lend the money 3. Q lent the money fort he specific purpose of paying the dividend 4. Money paid into separate account, B knew circumstances 5. RR went into administration before the dividend was paid.
Who gave the leading judgment in Quistclose
Lord Wilberforce
What was the judgment in Quistclose
Where money is advanced for a specific purpose, the lender acquires an equitable right to see that it is applied for the primary designated purpose. When purpose carried out, remedy is in debt. When purpose fails, it depends if there was a secondary purpose (repayment). If so, equity will give effect to it.
What is the principle of Quistclose
Where money os advanced for a specific purpose which cannot be carried out, the money results back to the lender on resulting trust
Which court was Quistclose and what was the split
HoL - unanimous (5 sitting)
What case followed Quistclose
Twinsectra
What did Millett say in Twinsectra
It is well established that a loan for a specific purpose gives rise to fiduciary obligations on the part of the borrower which equity will enforce
Which case extended Quistclose
Re Kayford (Chancery)
What was the key difference between Re Kayford and Quistclose
The beneficiaries of the resulting trust were unaware of the trust arrangement.
What kind of trust was created in Paul v Constance
An express trust
What court was Paul v Constance heard in and what was the split
CoA, unanimous
What were the 5 key facts of Paul v Constance
- Deceased and wife were separated, deceased cohabited with Paul 2. Deceased received damages, paid into a separate account 3. Both paid bingo winnings into account, treated it as joint even though only in his name 4. Deceased said “the money is as much yours as mine” 5. Died intestate, wife inherited all.
What were the three key points of the judgment in Paul v Constance
- Focus on language of everyday “simple” people. 2. Words & actions amounted to express trust even though the word trust wasn’t used - intention was clear. 3. Money was held by deceased beneficially for both of them.
What is the principle of Paul v Constance
Certainty of intention can be inferred from course of dealings so as to create an express trust
Who gave the leading judgment in Paul v Constance
Scarman LJ
What are the 3 key facts in McPhail v Doulton
- Trust for the benefit of staff, relatives and dependents 2. “The trustees shall apply the income by making grants in such amounts, at such times and on such conditions as they see fit. 3. The trustees had a power to accumulate
What were the decisions at trial, CoA and HoL in McPhail v Doulton
TRIAL: It was avalid power, list test used CoA: It was a power, but the list test was wrong, the Gulbenkian test shoudl have been used. HoL: It was a valid trust, the correct test to use was the gulbenkian test.
What did Hodson (dissenting) say in McPhail v Doulton
The list test shoudl apply to all trusts - it’s the only way the court can assume control and enforce a trust as per Morice v Bishop of Durham. Powers and trusts are totally different.
What did Wilberforce (prevailing) say in McPhail and Doulton
The distinction between trusts and powers is fine and artificial. The donor never intended equality of division between Bs and it’s silly to assume it’s the only way the court can divide the interests, therefore there is no need for list certainty.
What was the split of the court in McPhail v Doulton regarding the appropriate certainty test for discretionary trusts.
3:2 in favour of the is/is not test
What is the principle of McPhail v Doulton
The test for discretionary trusts is the is/is not test.
Baden’s Deed Trusts is a continuation of which case
McPhail v Doulton
What was the issue in Baden #2
Whether “relatives” and/or “dependents” was void for uncertainty of objects
What did Megaw says about the certainty of the term “relatives” in Baden?
That it’s sufficient taht a substantial number of people would qualify.
What did Stamp say about the certainty of the word “relations” in Baden
That there was no uncertainty because it simply means next of kin
What are the facts of Re Manisty’s settlement
Trustees had a power to add anyone in the world except for the settlor and his wife as Bs. Issue was whether to power was so wide as to be void for uncertainty
what was the judgment in Re Manisty’s and who gave it?
Templeman J (Chancery): As long as the excluded class was certain (ie the Ts could apply is/is not test to that class), the width of a class of beneficiaries will not invalidate the power
What is the principle of re Manisty’s
A power cannot be uncertain merely because it is wide in ambit (whereas a trust may be void for administrative unworkability)
What shoudl you consider coupling with a re Manisty style solution in a problem question
A letter of wishes
What case gave the definition of capriciousness and what is the definition
Re Manisty’s: A capricious power negatives a sensible consideration by the Ts of the exercise of the power”.
What were the facts of West Yorks CC
Council was disbanding, excess funds were to be held on trust for “any or all or some of the residents of West Yorkshire”. The class of potential Bs was more than 2.5m
What was the judgment in West Yorks CC
The proposed class was so wide as to be administratively unworkable
What were the facts of Re Hays
Ts had 21 years to choose Bs (small excluded class), fixed trust in default. Ts named “any person or persons whatsoever or any charity” as Bs.
What was the judgment in Re Hay’s
The Ts exercise of thepower was void for excessive exercise of the power.
What were the facts in Barlow’s Will Trust
The will allowed friends and family to buy pictures at a reduced price. The issue was whether friends/family were void for uncertainty
What was the judgment in re Barlow and who gave it
Browne Wilkinson (Chancery): Family = blood relation (no need to adopt artificial construction). Although there is a range of tests for friendship, it was enough that some people would be able to pass all the tests. The will was not a class gift (which woudl require ALL friends to be established), but a series of individual transactions conditional upon people answering the descriptions friend or family.
What are the key facts of Oppenheim
- Discretionary trust for “providing for or assisting in providing for the education of children of employees or former employees of BAR”
- 110,000 employees
- Trust needed to be charitable to be valid (b/c was in perpetuity)
- The issue was whether the purpose was for the PUBLIC BENEFIT
What did Simonds say in Oppenheim?
The quality that separates the benefited class from the community at large must not depend on their relationship to another individual.
Allowing employment as a distinguishing factor would be an unhealthy extension of charity law
What did macdermott (dissenting) say in Oppenheim
The personal nexus test is artificial and arbitrary.
The trust would have been valid if expressed to bein favour of tobacco workers in X town even though it woudl have benefited fewer people.
What is the rule in Oppenheim
A class benefited by a charitable trust must not be defined by heir personal relationship with another person or institution.
What are the facts of Dingle v Turner
Trust to pay pensions to poor employees
600 employees
Who gav ethe leading judgment in Dingle v Turner and what did he say
Lord Cross: “Poor relations” trusts have always allowed Bs to be defined by personal nexus.
To draw a distinction between different types of poverty trust woudl be illogical
What is the principle of Dingle v Turner
Poverty trusts are subject to a more relaxed public benefit test
