E&T
Institutional
Resulting Trusts
CICTs
Express Trusts
Limitations
Establishing Liability
Personal
Tracing/Following & Claiming
- can be for both personal and proprietary claims
Carrying out the Trust
Stranger liability (constructive trustees liable to account for loss/profits) *what is the relationship with CT?
Tracing
Knowing Receipt
Dishonest Assistance
Breach
Breach of Trust
Breach of Fiduciary Duty
- not every breach of duty by a fiduciary is a breach of fiduciary duty (Bristol and West Building Society v Mothew [1998] Ch 1 at 16C)
Locus standi
- genuine interest
Other trusts
Executory trusts: incompletely constituted (e.g. stipulation of certain terms to be fulfilled) but not imperfectly constituted (violation of certainty of intention/objects)
Bare trusts: holding of title
Passive trusts: ministerial duties
Trustee
Other legal concepts
Trust vs contract
Remedial
Constructive Trusts
Proprietary Estoppel
Remedial Constructive Trusts
Certainty
Objects
Intention
Subject Matter
Beneficiary Principle
Illegality
Sham
Perpetuity
Irreducible core (public policy)
Exemption clauses
Circumventing the Beneficiary Principle
Other organisations
Pure Purposes Trusts
Established exceptions
Charitable Trusts: Pemsel's Four Heads of Charity
- relief of poverty
- advancement of religion
- advancement of education
- other purposes beneficial to the community
Re Denley's Trusts: factual benefit sufficient (cf. legal benefit)
Construction of Trust Terms
Re Sanderson Trusts
dead hand control
Trustee Duties
Duty of the trustee to keep accounts of the trust and to allow the beneficiaries to inspect them as requested. This accounting procedure serves two primary purposes: (a) “the informative purpose of allowing the beneficiaries to know the status of the fund and what transformations it has undergone”, and (b) a “substantive purpose… [to ensure] that any personal liability a custodial fiduciary may have arising out of maladministration is ascertained and determined” ... More will also likely be required of a professional trustee, as compared to a non-professional trustee who may be granted “fair and reasonable allowances” (Snell's Equity cited in Lalwani SGHC)
Statutory duties: Trustees Act
Duty of prudence
Portfolio theory
Duty to avoid indeliberate decision-making
Enforcer (rejected)
Beneficiary
Trustee
Following
Equity
Common law
Anomalous Trusts
Unincorporated Associations
Political parties
Contract-holding theory
Trust Powers & Powers
Duty of even-handedness/impartiality
- rules of apportionment/allocation of expense rules
Court's orders
Dispositive: can alter (vest/divest) beneficial interests
- powers of appointment
- power to invade capital
Administrative/managerial
Trustees Act: powers have all powers to act unless inconsistent with terms of Trust (s 2(2))
Innominate (can be (n)either dispositive or admnistrative)
- revocation
- amendment
- veto of trustee determinations
Modification & Termination
Vitiating factors:
- fraud
- undue influence
- duress
Modification
Duty of honesty and loyalty
- above personal interest
- no personal gain/self-dealing
- objective/disinterested
Settlor
Letter of wishes
Reservation of powers
- investment?
Duty to invest
Delegation
TA s 60: excusing breach where trustee acted (1) honestly and (2) reasonably and (3) ought fairly be excused
Trustees and third parties
Certainty as to identity
Certainty as to extent of beneficial interest
Curing uncertainty:
- arbiter
Conceptual & evidential certainty
Termination
Saunders v Vautier
- of age
- of sound mind
- all beneficiaries identified?
- vested interest?
Terms:
- express
- implied
Illegality
Type A (presumed)
Type B (automatic)
Chambers' "absence of intention" thesis
Unjust enrichment (rejected)
Rebutting presumption: intention to benefit/gift
Quistclose Trust
Purchase money RT
Express or resulting?
Initial failure
Subsequent failure
Dissolution of pension funds/UAs
Direct evidence
Presumption
How is the property held?
Pallant v Morgan equity
Chan Yuen Lan
Stack v Dowden
Theory
Liability to account as a constructive trustee (Class 2):
- exposure to equitable remedies due to participation in unlawful misapplication of trust assets
"Real" contructive trustees (Class 1):
- lawful assumption of fiduciary duties without formal appointment
Conscience affected
Receipt on fraud/mistake
Transfer on condition
Breach of fiduciary duty
Limits
Claiming
Remedies
Equitable tracing (taking an account)
Account of profits
Unjust enrichment
Overreaching
- incident of powers of disposition
Trust property
Traceable proceeds
Property
Unjust enrichment
Defences
Bona fide purchaser of legal interest for value without notice
Change of position (unjust enrichment only; not proprietary claim)
Proprietary
Inequitable to trace
Bona fide purchaser of legal interest for value without notice
Property used to improve land
Pre-acquired property
Property ceases to exist
Tracing in equity
Fiduciary relationship/prior equitable interest
Clean substitutions
Mixed fund
Mixed with trustee's own property
Mixed with innocent volunteer's property
Bank accounts
Swollen assets theory
Clean substitutions
Mixed fund
- cannot trace "through"
- can trace "into" and "to"
Criticisms & reform
FHR classification
(1) asset held under a trust (express, resulting or constructive) or subject to a fiduciary duties; (2) disposal of asset in breach of trust or fiduciary duty; (3) beneficial receipt by recipient; (4) the recipient having such knowledge of the nature of the asset or the disposal of it or the existence of the trust as to make it unconscionable for him to retain the value of his receipt.
(1) a trust or fiduciary duty (2) breach of trust or fiduciary duty; (2) procurement or inducement or assistance; (4) which is dishonest.
Others:
- proprietary injunction
- personal injunction
- tracing order
- imposition of RT or CT (even RCT)
- common law remedies (e.g. damages for conversion)
Vandepitte procedure
Defences:
- consent, acquiescence, waiver and estoppel
- laches
- hardship
- clean hands
Election between alternative remedies
Falsification
Surcharge
Equitable tracing