Chapter
Introduction to Equity and the Trust
Equity will not suffer a wrong to be without a remedy
He who comes to equity must come with clean hands
He who seeks equity must do equity
Equity regards as done that which ought to be done
Equity looks to the intent (or substance) rather than the form
Public trusts – charities
Collective investment schemes
Implied trusts – division of the family home
Creation of Express Trusts
Wills cases – precatory words
Commercial cases – the insolvency context
Different trust constructs
Certainty of subject matter
The description of the subject matter
Trusts over unallocated assets
Certainty of the beneficial interests
Administrative workability
Gifts with a condition precedent
Formalities and constitution
Self-declaration of trust
Appointment of third party trustees/making an outright gift
Exceptions to the general rule on constitution
The doctrine of every effort
The rule in Strong v Bird
Donatio mortis causa (DMC)
Delivery of the subject matter
Scrutinising the covenant
The Contracts (Rights of Third Parties) Act 1999
Distinguishing people trusts and purpose trusts
Charities – general requirements
The development of the law on purposes
The advancement of education
The advancement of religion
The regulation of charities
Non-charitable purpose trusts
The rule against perpetuities
Trusts for tombs, graves and monuments
Trusts for the maintenance of animals
Trusts for the saying of masses
Unincorporated associations
The gift is regarded as being one to the members as trustees for themselves and future members or for the purposes of the club/society
The gift is to the members at a specific date
The gift is to the members, not as joint tenants but subject to their respective contractual rights and liabilities towards each other as members
Can the problems of non-charitable purposes trusts be avoided?
A wider range of charities under the Charities Act 2011
Community Interest Companies
What happens if a bequest to a non-charitable purpose fails?
Resulting trusts based on presumptions of intention
The automatic resulting trust
Subsequent failure of the trust
Presumed purchase money resulting trusts
Presumption of advancement
Resulting trust of the shared home
Calculating an interest under the resulting trust
Traditional uses of the constructive trust
The constructive trust and the shared home
When will this type of constructive trust arise?
Quantifying the beneficial interest
A and B as joint tenants in law
Where A is on the legal title but B has established a beneficial interest
Changing the beneficial share
The overlap with proprietary estoppel
Is the constructive/resulting trustee the same as an express trust trustee?
The continuing role of unconscionability
Trustees’ Powers and Duties
Acting with informed consent
The removal and retirement of trustees
The general power of investment
Duties relating to investment
Maintenance and advancement
The requirement of reasonableness
Limits on the amount that may be distributed
The duty of care for maintenance and advancement
Exclusion from liability clauses
Breach of Trust, Tracing and Remedies
Liability for acts of a co-trustee
Liability for acts of agents
Assessing the extent of liability
Consent of the beneficiaries
Relief granted by the court
Rules governing equitable tracing
Mixing of trust funds and trustee’s funds
Mixing of trust funds with funds of another innocent party
Funds mixed in a bank account
The equitable doctrine of subrogation
The rule in Clayton’s case – mixing of the funds of two or more innocent parties in a bank account
Loss of the right to trace
Third parties to the trust
Bona fide purchaser for value without notice
The meaning of dishonesty
The meaning of assistance
Equity and Trusts
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