Lecture I Creation Express Trusts

Question 1

*Knight v Knight (Lord Langdale MR)

Answer 1

Statement of the three certainties:

1) Certainty of intention (trust intended?)
2) Certainty of subject matter (what property, what beneficial interests?)
3) Certainty of objects (Bs or none where charitable)

Question 2

• Statement of the three certainties
  1) INTENTION
  2) SUBJECT MATTER
  3) OBJECTS

Answer 2

Knight v Knight (Lord Langdale MR)

Question 3

Richards v Delbridge

Answer 3

not enough to manifest a general intention to benefit somebody (this would be intention to make a gift of legal title to property)

Question 4

not enough to manifest a general intention to benefit somebody (this would be intention to make a gift of legal title to property)

Answer 4

Richards v Delbridge

Question 5

Challinor v Juliet Bellis & Co

Answer 5

Ascertainment of objective intention.
“A person who does subjectively intend to create a trust may fail to do so if his words and conduct viewed objectively fall short of what is required”

Question 6

Ascertainment of objective intention.
“A person who does subjectively intend to create a trust may fail to do so if his words and conduct viewed objectively fall short of what is required”

Answer 6

Challinor v Juliet Bellis & Co

Question 7

Byrnes v Kendle

Answer 7

later denial of subjective intention won’t stop the court from finding a trust where objectively it seems like the creation of trust was the settlors intention

Question 8

later denial of subjective intention won’t stop the court from finding a trust where objectively it seems like the creation of trust was the settlors intention

Answer 8

Byrnes v Kendle

Question 9

Re Adams and Kensington Vestry (also Lambe)

Answer 9

PRECATORY WORDS X
Testator’s will stated -“I will leave this property to my wife in the confident expectation that she will do the right thing by our children”
-> expressing hope/ wish to benefit somebody is usually a gift

Question 10

PRECATORY WORDS X
Testator’s will stated -“I will leave this property to my wife in the confident expectation that she will do the right thing by our children”
-> expressing hope/ wish to benefit somebody is usually a gift

Answer 10

Re Adams and Kensington Vestry (also Lambe)

Question 11

Paul v Constance

Answer 11

FACTS
Man (C) and woman (P)cohabiting, man receives compensation for injury at work. They go to the bank together, but decide not to open an account in joint names as they are unmarried. The account is in C’s name, but he frequently says “the money is as much yours as mine” and they treat it as shared in practice,including for gambling wins from bingo. C dies without will, P argues there is a trust
HELD:
Lord Scarman held thatC intended the money to be held on trust for their joint benefit and it follows that P entitled to half of it. Constitution- sufficient to declare self as trustee- but this is probably a borderline case

NOTE:
this is a problematic judgement
1) difficult to reconcile with the objective approach in Re Adams and Richards AND the judgment does not even indicate when the trust comes into existence or its terms.

2) Also note that if they were joint tenants, then there would have been survivorship and P would have become solely entitled - so seems there was an assumption of tenancy in common in equal shares

Question 12

FACTS
Man (C) and woman (P)cohabiting, man receives compensation for injury at work. They go to the bank together, but decide not to open an account in joint names as they are unmarried. The account is in C’s name, but he frequently says “the money is as much yours as mine” and they treat it as shared in practice,including for gambling wins from bingo. C dies without will, P argues there is a trust
HELD:
Lord Scarman held thatC intended the money to be held on trust for their joint benefit and it follows that P entitled to half of it. Constitution- sufficient to declare self as trustee- but this is probably a borderline case

NOTE:
this is a problematic judgement
1) difficult to reconcile with the objective approach in Re Adams and Richards AND the judgment does not even indicate when the trust comes into existence or its terms.

2) Also note that if they were joint tenants, then there would have been survivorship and P would have become solely entitled - so seems there was an assumption of tenancy in common in equal shares

Answer 12

Paul v Constance

Question 13

Henry v Hammond

Answer 13

banks usually dont hold money on trust for customer but there will be a debt

Question 14

What steps are required to create a trust?

Answer 14

1) Ascertainment of objective intention of settlor

2) Trustee Consent
3) Trust Won’t fail for want of a Trustee
4) Trustee cant knowingly act against Bs interests
5) Trustee’s intentions are subservient to settlors intentions

6) Beneficiary Consent

Question 15

Harris v Sharp

Answer 15

The trust will be brought into existence even if trustee refuses to act as such.
“a trustee cannot by disclaimer bring an end to the benficial limitations which are contained in a trust”

Question 16

The trust will be brought into existence even if trustee refuses to act as such.
“a trustee cannot by disclaimer bring an end to the benficial limitations which are contained in a trust”

Answer 16

Harris v Sharp

Question 17

Westdeutsche Landesbank Girozentrale v Islington LBC

Answer 17

an intended trustee cant be a trustee when he is not aware of his appointment, once he does become aware he cannot conscionably act against the beneficiaries interests -cannot make an unauthorised disbursement.

Question 18

an intended trustee cant be a trustee when he is not aware of his appointment, once he does become aware he cannot conscionably act against the beneficiaries interests - cannot make an unauthorised disbursement.

Answer 18

Westdeutsche Landesbank Girozentrale v Islington LBC

Question 19

Hallows v Lloyd

Answer 19

Ts intentions are subservient to the settlor’s intentions.
When S asks T to become a trustee, T is bound to inquire details of the property and ought to look at trust documents and papers to consider matters affecting the trust

Question 20

Ts intentions are subservient to the settlor’s intentions.
When S asks T to become a trustee, T is bound to inquire details of the property and ought to look at trust documents and papers to consider matters affecting the trust

Answer 20

Hallows v Lloyd

Question 21

Re Lysaght

Answer 21

No cherry picking of duties by trustee

Question 22

No cherry picking of duties by trustee

Answer 22

Re Lysaght

Question 23

Jasmine Trustees

Answer 23

A person who purports to act in the capacity of a trustee without intention by the settlor becomes a trustee de son tort- will have custodial duties (can be sued and held to account as though he was trustee) but will not have the powers of a trustee conferrred by the settlement

Question 24

A person who purports to act in the capacity of a trustee without intention by the settlor becomes a trustee de son tort- will have custodial duties (can be sued and held to account as though he was trustee) but will not have the powers of a trustee conferrred by the settlement

Answer 24

Jasmine Trustees

Question 25

Hardoon v Belilios

Answer 25

No one can be made beneficial owner of property against his will. Any attempt can be defeated by disclaimer.

Question 26

No one can be made beneficial owner of property against his will. Any attempt can be defeated by disclaimer.

Answer 26

Hardoon v Belilios

Question 27

Re Dion Investments

Answer 27

EXERCISE OF POWER RETAINED BY SETTLOR or conferred by S on others

Trust terms can be varied where the trust instrument contains a provision allowing variation. This can include a power of apointment or a power of revocation or both. After the creation of the trust, subsequent action fot he settlor and the trustee to vary the provisions of the deed will not be effective - these two parties cannot deprive the beneficiaries of their rights

Question 28

EXERCISE OF POWER RETAINED BY SETTLOR or conferred by S on others

Trust terms can be varied where the trust instrument contains a provision allowing variation. This can include a power of appointment or a power of revocation or both. After the creation of the trust, subsequent action fot he settlor and the trustee to vary the provisions of the deed will not be effective - these two parties cannot deprive the beneficiaries of their rights

Answer 28

Re Dion Investments

Question 29

Air Products Canada

Answer 29

The settlor can reserve any power to herself that she wishes provided the reservation Is made at the time the trust is created Generally, however, the transfer of the trust property to T is absolute.

Question 30

The settlor can reserve any power to herself that she wishes provided the reservation Is made at the time the trust is created Generally, however, the transfer of the trust property to T is absolute.

Answer 30

Air Products Canada

Question 31

Saunders v Vautier

Answer 31

Beneficiaries acting unilaterally can terminate the trust and take a conveyance of legal title if they unanimously consent to this and are all sui juris and fully informed and collectively the owners of the entire beneficial interest. Beneficiary can take the legal title fromt eh trustees, irrespective of any material purpose the settlor may have had in mind.
-> seems to be inconsistent with the idea that court should try and enforce the settlor’s wishes

Question 32

Beneficiaries acting unilaterally can terminate the trust and take a conveyance of legal title if they unanimously consent to this and are all sui juris and fully informed and collectively the owners of the entire beneficial interest. Beneficiary can take the legal title fromt eh trustees, irrespective of any material purpose the settlor may have had in mind.
-> seems to be inconsistent with the idea that court should try and enforce the settlor’s wishes

Answer 32

Saunders v Vautier

Question 33

Re Brockbank-> endorsed by Walton J in Stephenson v Barclays Bank

Answer 33

the rule from saunders and vautier does not enable beneficiaries to vary the trust terms and keep the trust on foot with altered terms if this would entail a variation of the trustee’s duties to which they do not consent

Question 34

IRC v Holmden

Lord Wilberforce

Answer 34

“If all the beneficiaries are sui juris, they can join together with the trustees and declare different trusts which would supersede those originally contained in the settlement”

Question 35

“If all the beneficiaries are sui juris, they can join together with the trustees and declare different trusts which would supersede those originally contained in the settlement”

Answer 35

IRC v Holmden

Lord Wilberforce

Question 36

Re Dion Investments; Barrett JA (2014)

Answer 36

Under the principle of Saunder v Vautier beneficiaries are entitled to put an end to the trust and to require that the trust property be transferred to them.
Their capacity to produce that result also enables them to require, as an alternative, that the property be held by the trustee upon varied trusts; but if they do so require, the situation might in truth be one of a resettlement upon new trusts rather than variation of the pre-existing trusts (and the trustee may not be compellable to accept and perform these new trusts).

Question 37

Principle of Saunders Vautier allows beneficiaries to wind up the trust.
Their capacity to do so allows them to require the property to be held upon varied terms by the trustees.
Really this might just be the creation of new trusts (rather than variation of existing trusts) because consent of the trustee will be required.

Answer 37

Re Dion Investments; Barrett JA (2014)