trusts pt 2 Flashcards
4 ways a failure to dispose of a beneficial interest creates a resulting trust
- No trusts declared- vandervell v irc
- Failure of a specific purpose- Barclays v quistclose
- Failure of a trust- re diplock
- Incomplete disposal of the beneficial interest- re Andrews
presumption of advancement
- POA is stronger than the presumption of a resulting trust
- Where certain relationships exist, a voluntary transfer is presumed to be by way of gift
- If there is no POA because the transaction isn’t between husband and wife, then the immediate presumption is one of resulting trusts
- Husband and wife relationship- when a husband makes a voluntary transfer of property to his wife, he is presumed to be making an outright gift to her- so no trust arises- Pettitt v Pettitt
- Also covers both parents and people in loco parentis
- May be rebutted by contrary evidence of the transferors intention at the time of the transfer- but this may be hard if the transaction was based on an illegal purpose- Gascoigne v Gascoigne
pettitt v pettitt
husband and wife
when a husband makes a voluntary transfer of property to his wife he is presumed to be making an outright gift to her so no trust arises
Gascoigne v Gascoigne
- cant rebut POA with contrary evidence of intention if the transaction was based on an illegal purpose
constructive trust
- One that comes into being without the need to comply with any formal requirements.
- S53(2) LPA
- Trust that arises as a result of behaviour on the part of the constructive trustee that equity will not tolerate
- Provides the means by which the legal owner of property is compelled to hold it on trust for the beneficiaries
- Trust comes into being at the time of the relevant conduct and is independent of intention- based on wrongdoing
- Applies to fiduciaries making unauthorised profits
proprietary estoppel
- Acts as a remedy to right a wrong
- A way of creating a proprietary interest in property in the absence of following the correct formalities
- Representation, reliance and detriment – gillett v holt
trusties duties
- invest the fund
- recover debts
- distribute trust property in accordance with the terms of the trust
- protect the trust assets
is the trustee responsible for the breach?
- All trustees have a duty to act
- If there is a solicitor it doesn’t reduce the liability of other trustees unless the solicitor is seen as controlling them- head v gould
- A trustee cannot be held liable for breaches of trust that were committed before he took up appointment- re Strahan
- A trustee cannot be held liable for breaches committed after he has retired- unless done to facilitate the breach
target holdings v redferns
- there has to be a causal link between the breach and the loss of money in order for the trustees to be held liable
can trustees claim relief from liability
- Liability is joint and several
- Retiring trustee can seek indemnity from his co-trustees and/or beneficiaries but will only protect them if theyre of full age and capacity
- If a beneficiary is involved in a breach they can’t then sue later- re somerset
- Beneficiaries can grant a release of liability
- Stat relief
- Express in trust instrument- Armitage v nurse
armitage v nurse
- express in trust instrument that they can claim relief from liability
limitation period for a beneficiary to claim for a breach
- 6 years after the breach
- or 6 years after their interest falls into possession
tracing prob question
- breach of fiduciary duty
- mixed or unmixed? is the prop still identifiable
- cant be inequitable
advantages of prop rights
- Doesn’t depend on the solvency of D
- Can claim asset even if its inc in value
- Can claim interest from the date of the receipt of the property, personal is just from date when liability is settled
when cant you trace in equity
- innocent volunteer
- equitys darling
- money used to pay debts/improve land
requirements for dishonest assistance- royal Brunei
- Trust or fiduciary duty
- Breached
- Stranger assisted- brinks (positive act)
- Stranger has a degree of knowledge- now dishonesty
dishonesty
- Royal brunei- was dishonest in the standard of an ordinary person
- Twinsectra- was dishonest and they knew
- Ivey v genting- back to royal brunei- criminal
- Group 7- same but civil
requirements for knowing receipt
El Anjou v dollarland holdings
- Disposal of assets in breach of fid duty
- Beneficial reciept by stranger- agip v Jackson- take property under control or possession
- Knowledge the property is traceable to the breach
baden 5 levels of knowledge
- Actual knowledge
- Wilfully shutting ones eyes to the obvious
- Wilfully and recklessly failing to make such inquiries as a reasonable man would make
- Knowledge of circs that would indicate facts to honest man
- Knowledge of circs that would put an honest man on inquiry
remedies for stranger liability
- knowing receipt- prop or personal- needs a level of knowledge for personal
- dishonest assistant- personal only cuz they dont have property
re Strahan
A trustee cannot be held liable for breaches of trust that were committed before he took up appointment
