Lecture I Creation Express Trusts Flashcards
*Knight v Knight (Lord Langdale MR)
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)
- Statement of the three certainties
1) INTENTION
2) SUBJECT MATTER
3) OBJECTS
Knight v Knight (Lord Langdale MR)
Richards v Delbridge
not enough to manifest a general intention to benefit somebody (this would be intention to make a gift of legal title to property)
not enough to manifest a general intention to benefit somebody (this would be intention to make a gift of legal title to property)
Richards v Delbridge
Challinor v Juliet Bellis & Co
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”
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”
Challinor v Juliet Bellis & Co
Byrnes v Kendle
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
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
Byrnes v Kendle
Re Adams and Kensington Vestry (also Lambe)
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
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
Re Adams and Kensington Vestry (also Lambe)
Paul v Constance
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
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
Paul v Constance
Henry v Hammond
banks usually dont hold money on trust for customer but there will be a debt
What steps are required to create a trust?
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
Harris v Sharp
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”
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”
Harris v Sharp
Westdeutsche Landesbank Girozentrale v Islington LBC
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.
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.
Westdeutsche Landesbank Girozentrale v Islington LBC
Hallows v Lloyd
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
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
Hallows v Lloyd
Re Lysaght
No cherry picking of duties by trustee
No cherry picking of duties by trustee
Re Lysaght
Jasmine Trustees
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
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
Jasmine Trustees
Hardoon v Belilios
No one can be made beneficial owner of property against his will. Any attempt can be defeated by disclaimer.
No one can be made beneficial owner of property against his will. Any attempt can be defeated by disclaimer.
Hardoon v Belilios
Re Dion Investments
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
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
Re Dion Investments
Air Products Canada
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.
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.
Air Products Canada
Saunders v Vautier
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
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
Saunders v Vautier
Re Brockbank-> endorsed by Walton J in Stephenson v Barclays Bank
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
IRC v Holmden
Lord Wilberforce
“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”
“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”
IRC v Holmden
Lord Wilberforce
Re Dion Investments; Barrett JA (2014)
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).
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.
Re Dion Investments; Barrett JA (2014)
