Equity & Trusts Cases

Tom Dearden
Flashcards by Tom Dearden, updated more than 1 year ago
Tom Dearden
Created by Tom Dearden almost 7 years ago


Flashcards on Equity & Trusts Cases, created by Tom Dearden on 05/15/2014.

Resource summary

Question Answer
Paul v Paul Once a trust is created it cannot be undone by settlor.
Milroy v Lord Equity will not perfect an imperfect gift.
Re Rose Where transferor has done all that is necessary *for him to do* to effect a transfer it would be unconscionable to renege on the promise.
Knight v Knight 3 Certainties.
Paul v Constance As much mine as yours. No need to have knowledge of creation of trust for it to be valid.
Re Kayford Segregation of funds demonstrates an intention to hold money on trust for customers.
Armitage v Nurse Professional manager, if they limit their liability, will (ironically) be held to a lesser standard than an amateur trustee.
Re Goldcorp Segregation = trust. Lack of segregation = no trust.
Hunter v Moss No need for certainty of subject matter where property is intangible.
Re London Wine Requires certainty of subject matter.
White v Shortall (Australia) Hold entire pool of funds on trust, giving trustees power to divide the pool between beneficiaries.
Lehman Bros Follows White v Shortall
Sen v Headley Donatio mortis causa - gifts made during testator's lifetime intended to take effect after their death will constitute a valid gift.
Baker v Baker Proprietary Estoppel has broad range of remedies. Old man gives up home to live with children. Fall out. Remedy - they had to pay for his living in care home.
Re Ralli's Will Trust Where the settlor has no rights in the property at the time of making the promise then there will not be valid trust created.
Morice v Bishop of Durham There must be someone in whose favour the court can decree performance of the trust in order for it to be valid.
Leahy v Attorney General for New South Wales Abstract purpose. Not valid.
Re Denley There would always be some employees who could act as claimant in respect to the trust, so it was valid.
Re Grant's Will Trust Labour Party. No identified person. Void.
Re Lipinski Outright transfer of capital = gift. Valid.
Keech v Sanford Trustees cannot make a profit.
Boardman v Phipps Misuse of trust property = profits held on constructive trust for beneficiaries. (Entitled to equitable accounting)
Queensland Mines v Hudson Full disclosure = Granted authorisation. No breach of fiduciary duties.
Royal Brunei Airlines v Tan Dishonest assistance = Personally liable for the full amount of the loss to trust property.
Twinsectra v Yardley (Alternative to Tan) Dishonest assistance Did D realise that what he was doing would be considered dishonest by reasonable people?
Starglade v Nash 3rd test for dishonest assistance. Objective test from Tan + Personal characteristics
Barlow Clowes v Eurotrust A warped moral view will not pass the Twinsectra test.
Polly Peck v Nadir No obligation on banks to proactively find out if there is something wrong with bank accounts.
Gillett v Holt Representation + Reliance + Detriment = Proprietary Estoppel
Lissimore v Downing Clearly no representation, so no proprietary estoppel.
Bank of Ireland v Pexxnet Unconscionability = constructive trust
Regal v Gulliver Cinema Managers cannot give themselves authorisation.
Bray v Ford Trustees cannot put themselves in a position where their personal interests conflict with duty as trustee.
Industrial Development Consultants v Cooley Managing director. Pretended to be ill. Exploited new business opportunity. No disclosure, should have offered business to company. Constructive trust.
Gascoigne v Gascoigne He who comes to equity must do so with clean hands.
Tinsley v Milligan Illegal act was not part of purchase, so held on resulting trust for both of them.
Tribe v Tribe Despite illegal intention, no illegal act committed, so resulting trust.
Tinker v Tinker Presumption of advancement stood. Equity will not aid in an illegal act.
Sinclair Investments v Versailles Ponzi scheme. Applied Lister v Stubbs, so personal liability for whole of loss to trustees.
Lister v Stubbs Bribes received create a personal liability to beneficiaries.
AG HK v Reid Bribes held on constructive trust. Equity looks as done that which ought to have been done.
Barclays Bank v Quistclose Money held for specific purpose will result back to lender if not used for specified purpose.
Midland Bank v Wyatt Sham trusts will not be valid.
Westdeutsche Landesbank v Islington £1.5m loan to be repaid over 10 years. 5 years in, public bodies could not take interest loans. No knowledge to affect their conscience, so no constructive trust, but based on money had and received there was a resulting trust.
In Plus Group v Pyke Director cast aside and excluded, therefore no fiduciary duty owed to company.
Guinness v Saunders Insider trading. Unconscionable actions, breach of fiduciary duty. All profits held on constructive trust. Claim for equitable accounting refused as he had not acted in good faith.
Ireland Export Finance v Umunna Gained expert knowledge while at company but quit. Later approached for similar work. Because opportunity was brought to him, and he no longer owed fiduciary duty to company, not constructive trust.
Foster v Bryant Director forced to resign by another director and majority shareholder. Took clients, but owed no fiduciary duty.
Reading v Attorney General Army Sergeant snuck smuggler past army checkpoints because of bribe. Money held on constructive trust for state. Misuse of office.
Berryland Books v BK Books Misuse of company property. Held on constructive trust for Berryland.
Cobbe v Yeomans Row Commercial situation. Reliance on detriment without contract does not apply in commercial setting. Should have used formalities.
Banner Homes v Luff Development Cobbe, but without commercial context will be enforceable.
Daraydan v Solland Bribe. Artificially increased price of building work by 10%. Bribe held on constructive trust.
Tesco Stores v Pook In charge of e-commerce for Tesco in Korea. Faked invoices to hide bribes. All bribes held on constructive trust for Tesco. AG HK v Reid principle.
In the Estate of Crippen Killed wife and was to inherit her estate. Held her estate on resulting trust as he could not acquire it (he killed her) Equity will not reward criminal conduct.
Jones v Kernott Both parties on legal title, but she contributed 90% of purchase price, he contributed 10%. 90/10 split.
Pettit v Pettit Legal title vested solely in wife's name. He made renovation work. Must make financial contribution for common intention resulting trust, so he had no interest in it.
Gissing v Gissing Parties shared home in husband's name. He paid off all mortgage repayments. She had no beneficial interest because no financial contribution.
Lloyds Bank v Rossett Purchase price contributed from husband's trust on condition that it was registered solely in his name. Wife made no financial contribution. Obvious that there was no intention for her to have a beneficial interest by the terms of the trust.
Springette v Dafoe Balance sheet approach. 41% discount counted as cash contribution.
Huntingford v Hobbs D 61% purchase price. Rest on mortgage. C gave £2000 for conservatory, also given £25,000 to pay off the mortgage (she bought him out) Remainder of proceeds split 39% to C, 61% to D.
Hammond v Mitchell Couple lived together in house in H's name. M working for H. Couple living hand to mouth. Clear intention to share the home, so 50/50 split.
Midland Bank v Cooke Cash contribution by way of wedding present meant a contribution by both parties.
Jennings v Rice Handyman for widow. He and his wife move in to look after her for no pay. Not entitled to house, but to £200,000 for services rendered.
Cox v Jones Barristers. He bought house, paid all mortgage payments. She quits job as barrister to supervise. Also need house in London which she gets discount on. He gets 75% essex house, she gets 25%. She also got London flat due to discount.
Stack v Dowden 65% - 35% split based on course of dealings. Modern approach to trust of homes.
Re Basham Step daughter takes care of step father. Solves boundary dispute. Husband turns down house from work under assumption they would get his house when he dies. He leaves them nothing. Proprietary estoppel.
Thorner v Major Silent farmers. Representation can be made implicitly, without words.
Porntip Stallion v Albert Stallion Holdings Ltd. Porntip gained equitable interest in the property for life under divorce settlement. This did not grant her exclusive possession, as that would be inequitable to new wife (and child).
Baden v Societé General 5 types of knowledge for unconscionable receipt: - Actual knowledge - Willfully shutting ones eyes to the obvious - Willfully and recklessly failing to make enquiries an honest and reasonable person would have made (4/5 disposed of by Re Montague's ST)
Macmillan v Bishopsgate In trust law there is no positive obligation on banks to inspect money passing through. However there is under banking regulations.
BCCI v Akindele Akindele had not acted in an unconscionable way, despite receiving money, so no unconscionable receipt.
Tesco v Nattrass Controlling mind test. Manager at one stores is not the controlling mind at Tesco, so company not liable for his actions.
El Ajou v Dollar Land Holdings Non-exec chairman is significant enough to be considered controlling mind, so company is liable for his breach of trust.
Jones & Sons v Jones Transferred money to his wife, no fraud. Firm went insolvent. Wife made wise investments (made money) Common law tracing where no mix was successful.
Re Diplock Must have equitable interest in order to bring a claim in equitable tracing. If trustee mixes trust money with money from an innocent 3rd party, beneficiaries are entitled to a proportionate share.
Re Hallett's Estate Honest trustee approach (equitable tracing). Assumption that where fiduciary has mixed his own money with trust money, he intends only to use HIS money from that account, based on fiduciary duty.
Re Oatway Beneficiary election approach. If trust money has gone in different ways, the beneficiaries are entitled to elect what property they wish to trace.
Foskett v Mckeown Modern approach. Beneficiaries are entitled to a proportionate share.
Clayton's Case First in, first out rule in regard to current bank accounts.
Re Ontario (Canada) Beneficiaries entitled to proportionate share if trust money is mixed with money from an innocent 3rd party.
Russell Cook Trust v Prentis If result from applying Clayton's rule is arbitrary and irrational, then court can apply proportionate approach from Re Ontario.
Lipkin Gorman v Karp Nale If innocent person's change in position would cause it to be more unjust to take money back than to keep it then 'change of position' defence applies.
Niru Baltery v Milestone Bad faith will prevent the use of the defence of 'change of position'.
Phillip Collins v Davis Singer was massively overpaid, employer claims money back. Change of position defence applied based on a grander scale of living. Court ordered half the money to be repaid.
Scottish Equitable v Derby Bank mistakenly paid defendant early. D had spent money on fixing his roof. He would not have done so had he not received this money. Bank claimed the money back, Court applied change of position.
Natwest v Somer Somer told bank he was expecting payment, Bank received payment and credited it to his account, informing him it had arrived. Based on this, Somer sent goods to customer. Natwest then realised the payment they received was for a different client and wanted money back. Estoppel by representation applied as they had received a rep by bank on which they relied, to their detriment.
Westdeutsche Landesbank v Islington (Defence to tracing) If trust property ends up with bona fide purchaser without notice, that will protect the purchaser.
Jones v Lock "Look you here I give to this baby" Gave no intention to form trust.
Tito v Waddell (No 2) Simple use of the word trust will not create a trust.
Brazziil v Willoughby FSA made an order to KSF that all future deposits to be credit to trust account. Did not make clear which deposits or customers' money were covered by the scheme. Irrelevant to FSA order this showed voluntary intention to create a trust.
Mills v SportsDirect.com Segregation in commercial context.
In Re Adams and Kensington Vestery "In full confidence" created only a moral obligation.
Clough Mill v Martin Needs to be an intention to create a trust, and not something else (e.g. floating charge)
Sprange v Bernard Trust over "remaining part of what is left" is too uncertain.
Palmer v Simmonds "Bulk of my estate" is too uncertain.
MacJordan v Brookmount Question of trust over bank account. No trust as it required segregation from other monies in the account.
Re Wait Requirement of segregation in commercial context.
Re Staplyton Ditto Re London Wine, however under Sale of Goods Act, A specified quantity of unascertained goods are capable of being held on trust.
Re Global Trader CASS Scheme. Those who opted out of scheme had no trust. Those who hadn't were protected, up to a certain amount. If it was not in their account then they were not protected.
IRC v Broadway Cottages Fixed Trust. Complete list test.
Re Gulbenkin & MacPhail v Doulton Is or is not Test. Discretionary trust & Fiduciary power. MacPhail regarding friends/relatives.
Re Baden (No 2) Reverse burden of proof, for is or is not. 'Relatives'
Re Barlow Concerned words 'friends or family'. Series of gift will validate trust.
Re Hays ST Personal power will only be invalidated if exercised for fraud - cannot be invalid for certainty of object.
Re Allen One should seek to uphold the trust, if possible to identify at least some beneficiaries in the class.
Sparfax v Dommett Trust in favour of 'customers' was void for uncertainty.
Re Tuck's ST Trust can be validated by use of an expert in case of uncertainty.
Re Astor's ST Trust for preservation of integrity of newspapers void for lack of beneficiaries.
Re Shaw Money left for creation of a new alphabet void for lack of beneficiary.
Saunders v Vautier Beneficiaries having reached age of majority may exercise proprietary right over trust property.
Re Recher Trust in favour of Anti-vivisection Valid - accretion to trust's funds
Conservative Association v Burrell Trust for benefit of unincorporated association valid, subject to mandate.
Re Bucks Constabulary Fund to give relief to widows and orphans of deceased members. Surplus assets held for members at time of dissolution, unless there is only on member left.
Re Horley Town FC Surplus will take effect as gift to members, subject to contract.
Re Brooks ST Settlor must have appropriate property rights at time of creation of trust.
Hodgson v Marks Widow takes in lodger, agrees to transfer title to him. He sells property, but since she was in actual occupation, her interest overrides the sale.
Bannister v Bannister Statute cannot be use as an engine for fraud. Therefore constructive trust. Wills Act 1837 s9 did not apply.
Grey v IRC Wished to create a trust to benefit grandchild, he was also beneficiary under trust. Oral agreement to transfer his interest for his grandchild. Oral disposition of equitable interest caught by s53(1)(c) LPA 1925.
Vandervell v IRC Transferring legal title as well as equitable interest, not caught by s53(1)(c) LPA 1925. Automatic resulting trust. Option to repurchase shares did not specify who the owner is.
Cowan v Scargill Trustees must seek highest available return.
Nestlé v Natwest Defence - If you can prove that you have acted as a prudent person in business.
Re Hastings Bass Court will reverse decision and revert trust to previous state if it can be shown that trustee has acted in a way - unauthorised by the power conferred upon him - had he 1)taken into account things he ought not to have 2)failed to take into account things which he ought to have.
Pitt v Holt Re Hastings Bass applies only where there is a breach of fiduciary duty.
O'Rourke v Derbyshire Beneficiary has right to information only if the right is a proprietary right.
Re Londonderry No obligation for trustees to give reasons for decisions, nor to disclose confidential information.
Schmidt v Rosewood Trust No beneficiary has an entitlement to a right of disclosure of anything that could plausibly be described as a trust document.
Target Holdings v Redferns Trustees are only liable for losses which stem directly from their breach of trust. If the losses do stem directly then they are liable to a personal remedy.
Walker v Stones Test of dishonesty for professional trustees is entirely objective.
Re Cochrane Purported marriage settlement which never went ahead. Purpose of trust failed so resulted.
Re Gillingham Fund Bus crash, raised money. Surplus bounced back on resulting trust.
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