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GDL Law Notes GDL Equity and Trusts Notes

Constructive Trusts Notes

Updated Constructive Trusts Notes

GDL Equity and Trusts Notes

GDL Equity and Trusts

Approximately 631 pages

A collection of the best GDL notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through many applications from mostly first class students and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor". In short these are what we believe to be the strongest set of GDL notes available in the UK this year. You'll notice that we include several different authors' worth of notes. The first is our 2017 author...

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  • Introduction

    - Constructive trust: arises by operation of law, not dep. on parties’ intentions.

    • imposed by equity: when justice + good conscience require person in possession of property to hold it for another.

      • cf. resulting trusts: where failure to dispose of whole beneficial interest.

      • last resort: when court feels trust should be imposed + no other form exists in circumstances.

    • have been imposed in variety of situations: but list not closed.

    - Substantive or remedial?

    • constructive trustee’s duty : usually, only to transfer property to beneficiary appears remedy.

      • vs. substantive trusts: duty to administer property for beneficiary.

    • ‘remedial’ constructive trust: widely accepted in USA, Canada, Australia, NZ.

    • substantive constructive trust: view adopted by English courts.

      • substantive rights to beneficiary over property – Westdeutsche Landesbank Girozentrale v Islington LBC [1996].

    • significant difference – timing of operation: esp. effect on third parties with interests in property.

      • ‘remedial’ CT: operates from time of court order.

      • substantive CT: existing proprietary interest – from date of circs. giving rise to CT.

    Categories of Constructive Trusts

    - Trustees’ unauthorised profits.

    • trustee: duty not to profit from position CT of profits for trust fund + beneficiary.

    • e.g. Keech v Sandford [1726].

    - Other fiduciaries’ profits: same principle as trustee.

    • fiduciary: owes another duty of utmost good faith (uberrimae fidei) must account for profits made in breach of fiduciary relationship.

    • main categories of fiduciaries: (not closed class)

      • 1. trustees towards beneficiaries.

      • 2. directors towards company.

      • 3. agents towards principals.

      • 4. partners towards co-partners.

      • 5. solicitors towards clients.

    - Specifically enforceable contracts: i.e. where damages inadequate remedy for breach.

    • principle: equity looks on that as done which ought to be done equitable ownership passes to buyer when contract made.

    • e.g. contract for sale of land: on exchange of contracts, vendor constructive trustee for purchaser until completion by conveyance – Lysaght v Edwards [1876].

      • but: vendor entitled to keep rents/profits + stay in possession until completion.

    • + others: e.g. shares in private company – because not available for general purchase (Oughtred v IRC [1960]; Neville v Wilson [1996]).

    - Preventing use of statute as instrument for fraud.

    • secret trusts: sometimes viewed as CTs to prevent fraud (stop trustee using lack of compliance with statutory requirements to commit fraud).

    - Property inherited by killer: forfeiture rule.

    • public policy: no benefit from wrongdoing – unlawful killer forfeits benefit from victim’s death.

      • CT of property acquired from victim: will, intestacy, DMC, joint tenancy survivorship.

    • Re Crippen [1911]: C. murdered wife then executed; C. left will in favour of mistress C. prevented from inheriting: mistress cannot take wife’s estate through C.

    • but relief possible:

      • Forfeiture Act 1982 – court can modify effect of rule if justice requires, but: not murder.

        • Re K [1985]: [Vinelott J]: can apply to manslaughter – total or partial relief possible.

          • degree of moral culpability considered: e.g. full relief to wife subjected to violence for some time by husband who then killed husband.

      • Inheritance (Provision for Family and Dependents) Act 1975: killer can make claim for provision from deceased’s estate – Land v Land (Deceased) [2006].

      • July 2005 Law Comm. Report: where potential heir cannot inherit, property should be distributed as if dead inheritance would pass to killer’s heirs.

    - Joint wills and mutual wills: contract to make matching wills CT on death of 1 party.

    • mutual/joint will: similar provisions made in 2 people’s wills (mutual) or in 1 (joint) will.

      e.g. husband + wife each agree will: all property to other for life, remainder to children.

      • definite agreement not to revoke without other’s consent needed: Re Oldham [1925]; Re Goodchild [1997].

    • contract – gov. changes made before death of either party: wills always revocable, but estate may be liable for breach of contract if revoked contrary to agreement.

    • CT – if wills unrevoked until death of 1 party: executors must deal with estate according to terms of agreement, not any new will CT in favour of beneficiaries.

      • rationale: fraud on A if B changes will after A...

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