Varying and enforcing

Question 1

who can vary a trust

Answer 1

T if doc allows, B if all consent, court, statute

Question 2

Can a court vary a trust for management or administrative reasons

Answer 2

Yes even without consent of Bs. Court has inherent jurisdiction

Question 3

Can a court vary the distributions/interests in a trust

Answer 3

Only under VTA, needs Bs to consent. Court can consent for Bs without capacity or unborn. Wouldn’t fully resettle.

Question 4

3 situations when court can vary a trust

Answer 4

emergency (s intentions would be frustrated)
salvage( property will be destroyed)
compromise (disagreement between Bs)

Question 5

Can T alter trust

Answer 5

Only if instrument allows and only for purpose conferred, not beyond reasonable contemplation of the settlor.

Question 6

Rule in Sanders v Vautier

Answer 6

Bs can end trust and take property absolutely or re-settle on better terms if:
all Bs consent
All Bs are collectively and absolutely entitled to property
All Bs are sui juris

Question 7

What is sui juris

Answer 7

adults, 18 years old, capacity

Question 8

when can B enforce a trust / enforce T’s obligations

Answer 8

once trust is constituted

Question 9

If trust is not constituted can B enforce it

Answer 9

No

Question 10

Can B compel S to constitute trust

Answer 10

Not if B is a volunteer but yes if B provided valuable (not nominal) consideration

Question 11

Who owns property if trust is not fully constituted

Answer 11

Settlor

Question 12

what does it mean to constitute a trust

Answer 12

transfer property to T

Question 13

What are B’s options / remedies when T breaches duties

Answer 13

if breach caused gain to trust B has no claim. Can accept investment or compel T to sell and reinvest properly.
If breach causes loss B can accept investment or cause T to sell and reinvest properly. In addition (regardless of whether B adopts investment) remedies:
restore property
surcharge account (compensation)
falsify account (put into state it would be in if it was properly managed - use Ts money)
set aside transaction
account for profits

Question 14

can T set off any gains made against any losses

Answer 14

No

Question 15

Right of adoption

Answer 15

if T makes an unauthorised investment B can adopted it and require T to make good the loss. If B doesn’t adopt it then T must sell it and reinvest properly

Question 16

right of election

Answer 16

B must decide whether to require T to restore trust property or provide compensation

Question 17

Who is jointly and severly liable and what does it mean.

Answer 17

Ts have joint and several liability. This means B can sue any T for all the money unless T was fraudulent or took money for own use

Question 18

Defences for breach of trust by T

Answer 18

B consented
never accepted role as T
B can excuse T
Court can excuse T if T acted honestly and reasonably and ought to be excused

Question 19

What are NOT defences for breach of trust by T

Answer 19

inactive T
ignorance
contributory negligence of B

Question 20

is T liable for breaches that occured before they become a T

Answer 20

No but liable if they allow the breach to continue after they become T

Question 21

Is T liable after retirement

Answer 21

Yes unless indemnity from other Ts

Question 22

Limitation period for claims regarding breach of trust

Answer 22

6 years from breach, property vesting or majority age. Unless fraud then no limitation
Court can extent if delay is due to T

Question 23

benefit of proprietary action over personal

Answer 23

B takes priority over creditors

Question 24

time limits to bring claims (personal claim v proprietary claims)

Answer 24

personal - 6 years unless fraud

proprietary - no limits

Question 25

defenses against personal claims

Answer 25

exemption in trust doc
consent of B - defense against that B only not others
court grants relief is honest and reasonable T
limitation period 6 years unless fraud
change of position
bona fide purchaser

Question 26

are Ts liable for breaches before they become T or after they leave

Answer 26

not liable for breaches before they become T but liable if they allow breach to continue
liability continues after they leave unless other Ts indemnity them

Question 27

remedies for breach of trust

Answer 27

common law provides damages as right for breach
specific performance when damages inadequate (obligation is unique) (not if it would cause hardship or if it is personal services contract)
injunctions

Question 28

interim injunction criteria

Answer 28

American Cyanamid:
serious question to be tried
damages are inadequate
balance of convenience

Question 29

when are damages inadequate (American Cyanamid)

Answer 29

would money be able to compensate? Could D pay? if it later appears that injunction was wrongly given is undertaking by C in damages enough protection? if no undertaking consider balance of convenience.
If balance of convenience is equal maintain status quo