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GDL Law Notes GDL Equity and Trusts Notes

Three Certainties Notes

Updated Three Certainties 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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Knight v Knight

  1. Intention

  2. Subject matter

  3. Objects

CERTAINTY OF WORDS OR INTENTION

  • Equity looks to the intent rather than the form’ – so word ‘trust’ need not necessarily be used for a trust to be created and equally the word trust is not conclusive

  • Re Kayford: ‘the question is whether in substance a sufficient intention to create a trust has been manifested’

Precatory words - how certain is certain?

  1. Distinction btw IMPERATIVE words which show intention to create legally binding obligation (will create a trust) and PRECATORY words which express a hope or wish rather than obligation (generally won’t create trust)

  2. Whether words impose obligation or merely express a wish is a question of construction in each case

  3. Attitude to interpreting precatory words – has changed – older cases leant towards finding a trust – more modern cases lean against

  4. Turning point – Lambe v Eames

  5. Importance of construction of particular words/circumstances

  • Phrases such as ‘in full confidence’ may or may not impose a trust

    • Re Adams and the Kensington Vestry: testator left property to his wife absolutely ‘in full confidence that she will do what is right as to the disposal thereof between’ his children in her lifetime or by her will - it was held that she took the property free from any trust in favour of the children

    • In Comiskey Bowring-Hanbury : words ‘in full confidence’ created a trust – T left estate to his wife ‘absolutely, in full confidence that she will make such use of it as I should have made myself, and that at her death she will devise it to such one or more of my nieces as she may thing fit. And in default of her disposition…I hearby direct that all my estate and property…shall at her death be divided among the surviving dead nieces’ – gift-over to the nieces , they will definitely get something – sets this case apart

  1. As seen here, where words held not to impose a trust on the done, they take absolutely – court will look at all the circumstances – not just words

Old words from old cases

  1. Words interpreted in their context rather than according to previous cases – words may not have the same effect

  • Re Hamilton: ‘you must take the will which have to construe and see what it means, and if you come to the conclusion that no trust was intended, you say so’

  1. But wording may be interpreted in the same way as in previous cases where the whole gift is identically worded:

  • Re Steele’s Will Trust – suggested that earlier decision should be followed unless clearly wrong – court followed interpretation given to words in Shelley v Shelley (80 years previously)

Evidence of intention: Words and/or conduct of the parties

  1. Paul v Constance: Judge found intention to create a trust where a man had told his cohabitant that the money in his bank account was as much hers as his and ordered half the money to be paid to her after his death, rather than pass to his wife. He had essentially declared himself a trustee of the moneys for himself and the cohabitant. CA upheld decision: oral declaration of trust

  2. Trust cannot arise if language reveals the payer intended only a debtor-creditor relationship – payee free to mix the money with his own and deal with it as he pleases – as in Azam v Iqbal

    • But ability to mix moneys with moneys is consistent with a trust of the mixed fund – segregated mixed fund is held as a pooled investment on trust for the payees in proportionate co-owned shares (Lewis’s of Leicester) or where the amount in the mixed fund is not to fall below the amount of money paid in for a temporary period

  3. Re Kayford

  • Mail order company fearful of liquidation may pay customers’ money into a separate bank account to protect them from merely being debtors of the company if not receiving their goods – amounts to a trust of the moneys for the customers

  • But if the cheque is paid into overdrawn account of the company then the money disappears and no trust is constituted (Moriarty v Various customers of BA Peters plc)

  1. Sid v Shah – Court of Appeal construed the wording of a letter as showing an intention to declare a trust

CERTAINTY OF SUBJECT MATTER: Must be certain what property is subject to the trust

  1. Property – what property?

  2. Beneficial entitlements – what part/share each is entitled to (if fixed)

CASES:

  1. Sprange v Barnard

  • Testatrix in her will : ‘for my husband, to bewill him the sum of 300 .. for his sole use; and at his death, the remaining part of what is left, that he does not want for his own want and use, to be divided between’ her brothers and sisters

    • Court ruled that there was no certainty as to property, so there was no trust

    • Trust creates rights and duties at the moment of its creation – must be certain at the moment of its creation

  • Can leave residuary estate on trust for ‘A for life, remainder to B’ – this creates a valid trust, ascertainable after payment of all proper taxes, expenses, debts and legacies

  • Also in In the Estate of Last - offending words of ‘anything that is left’

  1. Palmer v Simmonds

  • the bulk of my estate’ not sufficiently certain

  1. A trust of an unidentified section of chattels (tangible property) will fail – whereas a trust of an unidentified section of intangible property, such as shares, is valid

  • Re London Wine Co (Shippers) Ltd

    • Buyers of wine could not establish a trust of particular bottles in their favour as the bottles hadn’t been segregated or identified : couldn’t claim property over any other creditors when company went into liquidation

  • Mac-Jordan Construction Ltd v Brookmount Erostin Ltd

    • Building contract provided that part of contract price would be retained and held by the employer as trustee for the builder but there was no trust because no retention fund was set up so there were no identifiable assets

  • Re Goldcorp Exchange Ltd

    • Purchasers of bullion who had paid but not taken delivery claimed rights to it on the insolvency of the company

    • Claims rejected – apart from one group whose bullion had been segregated (had serial numbers so...

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