 Juliet Brown died six months ago.

In her will, she appointed Frederick Smith

and Rita Harvey to be her executors (who will administer her estate) and
trustees (of any trust which arises by virtue of her will). All debts, expenses
and any inheritance tax have been paid and her personal representatives (i.e.,
her executors) are ready to pay the legacies. Juliet's estate comprises a
portfolio of plc company shares, the house she lived in, a small collection of
original art, and approximately £200,000 in cash.

Please read through the extract of the will of Juliet Brown which follows. As
you read, try to decide the nature of the beneficial interests the will creates.
Questions follow.

Extract of the WILL OF JULIET BROWN

I, JULIET BROWN of 3 Collier's Wharf, London, EC4 7RD, revoke all earlier wills and testamentar
declare this to be my last will.

1. I APPOINT as my executors and trustees (“my Trustees”) Frederick Smith of 6 Crambourne W

and Rita Harvey of 136 Rendell Road London EC4 8HA.

2. I GIVE One hundred thousand pounds to Henrietta Sutton of 38 Union Street, Brightsea, West S

3. I GIVE all the rest of my real and personal property whatsoever and wheresoever not otherwise
will to my Trustees UPON TRUST

a) for my brother Benedict Brown for life, and

b) after his death for his son Gerald Brown absolutely if he shall attain the age of 21, and

c) subject thereto for Cancer Research UK for its general charitable purposes.

Any administrative provisions contained in the will are not included for the purposes of this exercise.

Signed by me on the 8th day of February 2016 Juliet Brown

in our joint presence and then by us in hers.

Phillip Bates Paul Elder

Please note this extract of the will was drafted for teaching purposes only. It is n
a precedent.

 1. Clauses 2 and 3
Match the beneficiaries named in Clauses 2 and 3 of Juliet Brown's will with
the correct description of their beneficial interest in the given circumstances,
selecting from the following options.

1. Contingent/Absolute/In remainder
2. Absolute/Vested/In possession
3. Contingent/Absolute/In possession
4. Contingent/Limited/In remainder
5. Vested/Absolute/In remainder
6. Limited/Vested/In possession

Beneficiary Correct description of the benefic

Henrietta (if she is 25 when Juliet died) Absolute/Vested/In possession
Henrietta (if she is 6 when Juliet died) Absolute/Vested/In possession
Benedict Limited/Vested/In possession
Gerald (if he is 20 when Juliet died) Contingent/Absolute/In remainder
Gerald (if he is 23 when Juliet died) Vested/Absolute/In remainder

2. Clause 2

What is the nature of Henrietta's beneficial interest.?What happens to the

£100,000 if Henrietta dies aged 16 after Juliet?

It would go to Juliet’s residuary estate.

3. Clause 3(a)

Advise Benedict about the nature of his beneficial interest – when and how
will he benefit from Juliet’s estate?

He will benefit when Juliet dies and he can either dwell in real property or
receive profits or rent from the property. He can only enjoy the benefits for his
lifetime.

4. Clause 3(b)

Assume for the purposes of questions below that Benedict is alive and Gerald is 20 when Juliet
died.

(i) Advise Gerald about the nature of his beneficial interest – when and
how will he benefit from Juliet’s estate?
 He will benefit from Juliet’s estate when Benedict dies and he has
attained the age of 21. He will have the estate absolutely and can deal
with it in any way he wishes.
(ii) What happens if Benedict dies while Gerald is 20?
It will be held in trust for Gerald until he attains the age of 21.
(iii) Can Benedict and Gerald bring an end to the trust under the rule
in Saunders v Vautier?
No because Cancer Research has to agree with them to bring the trust
to an end.

5. Clause 3(b)

Assume for the purposes of questions below that Benedict is alive and Gerald is 23 when Juliet
died.

(i) Advise Gerald about the nature of his beneficial interest – when and
how will he benefit from Juliet’s estate?
When Benedict dies
(ii) Can Benedict and Gerald bring an end to the trust under the rule
in Saunders v Vautier?
Yes because Gerald is over the age of 21 so it takes away the benefit of
the Cancer Research.

6. Assume for the purposes of this question that Gerald dies aged
23.

What happens to the trust fund if the order of the deaths is: -

(i) Juliet then Gerald (aged 23) then Benedict?

Benedict would still have his life interest and then the estate passes
to Juliet’s residuary estate.
(ii) Gerald (aged 23) then Juliet then Benedict?
Benedict would have his life interest and then after he dies it goes to
Cancer research.
You are a solicitor in the private client department of ULaw LLP. Your supervising
solicitor interviewed Joanne Kearns yesterday and recording her instructions in the
following attendance note.

Please read through the attendance note in conjunction with the Practice Note; “Creating
a trust: taking initial instructions” in Practical Law Private Client. We will be considering
the advice to be given to Joanne Kearns in the Engage section of the Unit. As you review
the attendance note, makes notes on Mrs. Kearns’ issues, why and how a trust may
enable her to achieve her goals and what type of trust(s) may be beneficial in her
circumstances.

ATTENDANCE NOTE

Date……

File ref: KB/K234

Time taken: 30 minutes

Name of client: Mrs Joanne Kearns (Mrs K)

Address: The Laurels, Higher Turnbury, Gloucestershire, GU4 8PJ

Tel no: 01234 678521

Age 64

Family

Mrs K is a widow. She has two children and two grandchildren.

o Daughter, Anna Rogers aged 36. Married to Peter. Two children Freddie
(aged 8) and Lottie (aged 6).
o Son, Gavin, aged 25. Unmarried.

Mrs K’s husband died last year leaving all his estate to her.

Will

Mrs K tore up her will when her husband died because it left everything to
him. She appreciates that she needs to make a new will and will make a
further appointment for that purpose.
 Assets

Mrs K owns around £4.5 million worth of assets comprising:

o House (The Laurels) £1 million

o Shares in family company £2 million
o Other investments (quoted shares and bonds) £1 million
o Money in banks and building societies £500,000

Lifetime gift/trust

Mrs K’s accountant (Bob Hart of Hart, Rich, and Co.) has advised her to make
lifetime gifts to reduce the value of her estate which will be chargeable to
inheritance tax when she dies. He has suggested that she gives away the
current nil-rate band of £325,000 now and repeats this exercise every seven
years. She says she can manage very well without the funds, but she is not
happy with the idea that her children will have complete control over the
money. On the other hand, there is nobody else to whom she would like to
give the money. Mrs K has a younger brother and an adult niece and nephew,
but she does not feel the need to include them as they are all financially
secure.

Her daughter, Anna, is good-natured but rather weak. Her husband, Peter
dominates her. Mrs K says he has never done “a decent day’s work” and she
feels that he is sponging from her daughter. Peter spends his time dreaming
about ways of making a fortune through hare-brained schemes which involve
the minimum of effort on his part and are sure to lead to masses of money
disappearing down the drain. Mrs K is adamant that Peter should not have a
penny of her money and fears that if she gives anything to Anna, he will
spend the lot on one of his “business ventures”. Mrs K is also worried that the
marriage might not last.

Gavin has not settled down yet. He enjoys traveling around the world and has
never had a steady job. She wants him to have enough money to be
“comfortably off” but does not feel that he is sufficiently mature to manage a
fortune wisely.

Advice

Mrs K wants advice on the best way for her to give away her £325,000.


1. Why Mrs Kearns should set up a trust or trusts rather than make
outright gifts.

2. Which types of trust(s) you would suggest Mrs. Kearns might consider
in order to carry out her wishes and why. Are there any disadvantages
to your suggested options that Mrs Kearns should be aware of?

3. How Mrs Kearns would go about creating any trust.

 4. How much control Mrs Kearns will have, if any, after any trust is
created.
She wouldn’t have any control after the trust is created. But she could
have some control if she makes herself a trustee as well.

5. Who you suggest Mrs Kearns selects to carry out the role of trustee and
the factors she should consider in reaching her decision.
She could make herself a trustee. But she couls select an accountant, a
close friend, her younger brother.

WORKSHOP 2

Scenario 1

Three months ago, Andrew Waters retired. At the time, he wrote to his brother,
David “Now that I have retired, I want to give Willow Farm to Lizzie. I want you to
hold it for her until she is 18. Here are some old title deeds relating to the property.
Signed Andrew”. Andrew Waters died suddenly last night. When he died, Andrew
Waters was still the registered proprietor of Willow Farm. In Andrew’s valid will,
David is appointed executor and the whole estate goes to Oxfam.

Issue: Has Andrew created a valid Fixed Trust over a land –

What kind of trust is he trying to create create? [is he appointing himself or a third
party as a trustee?][there must be a valid declaration of trust, there must be a
transfer to the trustee]

To determine if there’s a valid declaration:

Certainty of intention…the letter…I want you to hold it for her

Since it’s a land,

It must be evidenced in writing and signed … it was written in the letter [section 53
of LPA , Knight v Knight]

Certainty of subject-matter …Willow Farm

Certainty of object… Lizzie [no issue with the beneficiary principle because there’s
a human beneficiary, no issue with perpetuity]

[section 53(..)(b) is the authority for the formalities..

It must be transferred… Was not transferred because when he died he was still the
registered proprietor.

Has the trust been properly made? no

However, because he was made an executor, the exception in Strong v Bird applies.
[must intend to make an immediate disposition, intention has to be continuous…,
the donee must be appointed as an executor]

Lizzie will get Willow Farm.

Scenario 2

Graham Davenport is Chairman of the Gables Singing Choir. Graham sent an email
to his friend Mark.

“Mark, I am going to send you a bank transfer for £100,000. I want you to be the
trustee of a trust I want to create; hold the £100,000 for the talented junior members
of the Gables Choir. I leave it to you to decide which ones and how much they get.”

Mark has received the bank transfer, but Mr Davenport has changed his mind about
creating the trust. Mark is refusing to return the £100,000.

Is there a valid trust? (discretionary)

Declaration of trust:

Certainty of intention… yes “I am going to send you a bank transfer for… I want you
to be the trustee…”

Certainty of subject …yes [£100,000]

Certainty of object

Using the given postulant test… there is no certainty of object. [MC… v Doulton]

Use conceptual certainty, evidential certainty (we don’t need this here)
[completeness test]

It is not administratively unworkable to determine

The conceptual certainty is not clear

Scenario 3

Hamita Patel died unexpectedly last week. Her will appointed her brother, Javinder,
to be her executor and gave her entire estate to be divided between various
charities.

A month ago, Hamita posted a parcel to her sister Tamsin “I want you to hold the
silver collection I inherited from Aunt Suni on trust for Ceri until she is 21. I enclose it
all here”. Love Hamita.

Ceri is Hamita’s 5-year-old niece. The postman could not deliver the package and left
it with Tamsin’s neighbour. Tamsin has been abroad on business and has only just
collected the package.
Now that Hamita has died, Tamsin and Javinder, as executor of the estate, want to
know what they should do with the silver collection.

Whether the trust she tried to create was valid

Every effort test

The three certainties

Certainty of intention … yes

Subject matter … yes

Object… yes.. Ceri

There is a valid declaration of trust

It’s a chattel, it must be delivered, a deed, case of Jaffa v Taylor

The every effort test requires that the person has done everything possible in the
circumstances

It is satisfied

Scenario 4

Jasmine Carter wrote to her accountant, “I have 1,000 shares in Etech Ltd, but I want
to give half of them to Nancy. You and I will be trustees of the shareholding for her
until she is 21 when she can have them. Here is my share certificate. We can sort
out any other paperwork later.”

Jasmine and the accountant have done nothing further. Nancy has just had her 21st
birthday and wants to sell the shares. However, Jasmine does not want to give them
to her.

As instructed by your tutor, prepare draft advice to explain whether or not

a valid trust has been created in these circumstances and if not, what will
happen to the property.

Has Jasmine created a valid trust over half of her shares?

The three certainties

Intention… yes …you and I are going to be trustees

Subject matter… yes [half the shares] Hunter v Moss

Object … Nancy

Do we have a valid transfer

Formalities for transfer of shares

Stock transfer Act

Use exception of Choithram v

WORKSHOP 3

‘Clause 3

In recognition of the immense contribution which the people of Baddlington have made to the success of
Boulter Bicycles PLC, I give my house, Hartman Hall, its grounds and £4 million (the “Fund”) to my
Trustees on trust:

3.1 to convert my said house and its grounds into a community recreation and well-being centre to
include, an art gallery, craft centre, fitness gymnasium, sauna, changing rooms, tennis courts, a football
pitch and peaceful garden for walking and contemplation; and

3.2 to hold the balance of the Fund on trust to run and maintain the above centre.

Clause 4

I give my shares in Boulter Bicycles PLC to my Trustees to provide an all-weather cycle track and a range
of bicycles at the state funded secondary school in Baddlington.

Clause 5

I give all the rest of my estate upon trust to pay my debts funeral and testamentary expenses and legacies
including all inheritance tax on property passing under my Will and to hold the balance as to capital and
income (“my Residuary Estate”) for my Trustees to continue the maintenance and upkeep of my family’s
mausoleum located in the grounds of Baddlington Parish Church.'

I need to know whether these provisions are likely to be charitable as it affects the
amount of inheritance tax payable on the estate. If not charitable, are they valid?
Please come and see me tomorrow morning at 10 am with your thoughts on the will
provisions.

As instructed by your tutor, consider the provisions contained in Jack

Boulter’s will and explain to your supervisor whether they are likely to be
charitable and if not, whether the provisions will be valid trusts.
CLAUSE 3

S3(1) of Charities Act 2011, f,g

CA 2011 s1 …Exclusively charitable

Cant be anything other than charitable

Nothing political about it [McGoven v AG]

Funds going back into it

Public benefit

CA 2011 s.4(3)

Must be sufficient public benefit

s.4(2) No assumption must be proven

Public – purpose must be to the benefit of the public in general or a sufficient section
[no restrictions on the beneficiaries]

“The trust is a very versatile medium which can and is used for a wide variety of
commercial arrangements”

Robert Walker J Re Lewis’s of Leicester Ltd [1995] 1 BCLC 514 @ 522A

In light of the above statement, explain and critically evaluate the use of trusts by
creditors seeking to satisfy their claims in insolvency situations.

PREPARE TASK

 This question related to analysing and explaining the validity of a variety of

purpose trusts contained in a will. As purpose trusts, whether or not the
provisions were valid depended on whether they could be implemented as
charitable purpose trusts and if not, whether they were valid as non-charitable
purpose trusts.
1. "I give £10,000 to my trustees on trust to maintain my grave for
as long as the law allows."

This trust is valid. It is a purpose trust. Under the ‘beneficiary principle’ a trust
is void as it does not have beneficiaries who are able to enforce it ( Morice v
Bishop of Durham). There is no human beneficiary to enforce this trust but
trusts to maintain specific graves are an exception to the beneficiary principle
(Re Hooper). The trust is valid although nobody can compel the trustees to
carry it out. This is the reason why they are called ‘trusts of imperfect
obligation’.

The trust complies with the rule against inalienability because the words “for
as long as the law allows” limit the duration of the trust to the permitted
period of 21 years. The purpose is also certain.

2. “I give £100,000 to my trustee to invest and use the income to

encourage reading in state schools with a poor literacy record and to
persuade the Government to remove charitable status from private
schools.”

This is a purpose trust which will be void if it is not charitable, for the
following reasons:

1. Beneficiary principle - the second purpose (persuading the Government

to remove charitable status from public schools) has no ascertainable
beneficiary to enforce the trust and therefore, offends the beneficiary
principle (Morice v Bishop of Durham; Re Astors ST). The first purpose
arguably could be enforced by the pupils in the relevant schools but if
the numbers are too large, it would be void due to administrative
unworkability where the definition of the class is “so hopelessly wide as
not to form anything like a class” (per Lord Wilberforce in McPhail v
Doulton). In R v District Auditor ex. P. West Yorkshire, a trust for 2.5
million inhabitants of West Yorkshire was void for this reason.
2. It offends the rule against inalienability because the trustee cannot
spend the capital and the duration of the trust is not limited to 21
years.

If the purpose is charitable, then the trust will not have to satisfy the rule
against inalienability or the beneficiary principle. In order to be charitable, the
trust must have a charitable purpose, sufficient public benefit and must be
exclusively charitable. Encouraging reading is a charitable purpose under
s3(1) (b) Charities Act 2011 and has sufficient public benefit - there is a
tangible benefit and “state schools with a poor literacy record” would be a
section of the public in that sufficiently large numbers are involved, and the
benefit is not unreasonably restricted. The problem arises with the second
purpose, which is political because it involves a campaign to change the law.
The addition of this purpose means that clause is not exclusively charitable
and the whole trust is a private trust.

As a private trust, it will be void for the reasons stated above and will pass as
part of residue.
 3. “I give £1.25 million to be spent on building a gymnasium for use
by employees of Rafters and Co Ltd.”

The trust is valid. This is a purpose trust to build a gymnasium. Under the
‘beneficiary principle’ a trust is void if it does not have beneficiaries who are
able to enforce it (Morice v Bishop of Durham).

It cannot succeed as a charitable purpose trust because, although the

advancement of health and of amateur sport are both charitable purposes
under s3 CA 2011, there is insufficient public benefit here due to the personal
nexus of those benefiting from the gymnasium, employment with Rafters and
Co Ltd (Oppenheim v Tobacco Securities).

However, this trust has ascertainable beneficiaries (the employees) who

derive a sufficiently direct benefit to be able to go to court to enforce it (Re
Denley). Therefore, this trust does not offend the beneficiary principle.
Furthermore, the purpose and beneficiaries are certain. To be valid, the trust
must also not offend the rule against inalienability. This trust complies with
the rule because the trustees can spend the capital (£1.25 million) once and
for all on building the gym.

4. “I give £50,000 to my trustee on trust to use the income to look

after my pet tortoise for the rest of his life.”

Purpose trusts to maintain specific animals are an exception to the

beneficiary principle. However, this trust is void because it offends the rule
against inalienability. The rule is offended if the trustees are unable to spend
all the capital within the perpetuity period of 21 years. In this case, the
trustees are to look after the tortoise and can spend only the income, not the
capital of £50,000. Furthermore, the duration of the trust is not limited to 21
years (the life of the tortoise may be significantly longer). Therefore, this trust
is void.

CONSOLIDATE TASK

 (a) A trust for charitable and other purposes related to improving

health in Middletown and to campaign against Government cuts
which might lead to closure of some of the hospitals providing cancer
treatment in the area.

To be charitable, it would have to be shown that it has a charitable purpose

within s3 Charities Act (‘CA’) 2011, that it is exclusively charitable and that it
has sufficient public benefit. The purpose would come within s.3 (1)(d) –
advancement of health or the saving of lives and/or s. 3 (1)(j) the relief of
those in need because of …ill-health. Also, the geographical limitation to the
town of Middletown would not impact on public benefit. However, there are
two issues relating to being exclusively charitable which would prevent this
being a charitable purpose trust. Campaigning to procure a reversal of
government policy or decisions of governmental authorities is a political
activity (McGovern v Attorney General). Political purposes are not charitable
(McGovern v A-G; National Anti-Vivisection Society v IRC.). If campaigning is
one of the stated objects of the trust, it is not exclusively charitable. If the
political activity is not a primary object, but is ancillary to its principal
charitable purposes, then the sanctuary may be charitable. However, this
 trust is expressly stated to be for ‘charitable or other purposes’ related to
improving health in Middletown. This suggests that the other purposes are not
charitable. Even if the campaign activities were ancillary, the trust as a whole
is not charitable.

(b) A training college which charges fees.

For the training college to be charitable, it would have to be shown that it has
a charitable purpose within s3 CA 2011, that it is exclusively charitable, and
that it has sufficient public benefit. Advancement of education is a charitable
purpose within s3 CA 2011. It is acceptable for a charity to charge fees
provided it does not make a profit which accrues to individuals. Any profit
must be ploughed back into its charitable purpose. Also, the poor must not be
excluded from the college by charging fees that can only be met by the rich
(Independent Schools Council v Charity Commissioners).

(c) A religious retreat where residents have some but limited contact
with the local community.

Advancement of religion is a charitable purpose within s3 of the CA

2011. Charitable religious trusts are expected to take positive steps to sustain
religious belief (although courts do not investigate the veracity or otherwise of
those religion beliefs). Religious organisations which are cloistered and have
no contact with the outside world are unlikely to be charitable (Gilmour v
Coats). Much will depend on the extent of the contact residents of the retreat
have with the local community (Neville Estates v Madden) and how they mix
with their fellow citizens.

(d) A trust to provide an animal refuge which is closed to the public

where wildlife can live undisturbed by humans.

The advancement of animal welfare is a charitable purpose under s.3(1)(k)

CA 2011. Previous case law in this area has indicated that public benefit is
present if the purpose prevents cruelty to animals and thereby encourages
kindness and humanity among mankind. Here, the object of the trust is not to
prevent cruelty to animals. Also, the exclusion of the public might suggest
that public benefit is not present (see Re Grove-Grady (1929). However, the
purpose could be charitable for the advancement of environmental protection
or improvement under s.3(1)(i) CA 2011 because there is public benefit in
conservation and promoting biodiversity particularly if the trust informs the
public about its activities. On that basis, the trust is exclusively charitable and
would have charitable status.

WORKSHOP 4

Prepare Task

The court will use various presumptions to assist its analysis in the absence of
evidence. Its consideration involves identifying:

1. The nature of the transaction under review.

2. What presumption applies as the court’s starting point and why?
3. Whether there is evidence to rebut this initial presumption?
4. Is that evidence admissible?
Read through the eight scenarios detailed below. For each, identify and explain:

(a) whether they involve a voluntary transfer or purchase money case

(b) which presumption applies and why
(c) whether any evidence is available to the person wishing to rebut the presumption

Scenarios

1. Jennifer transfers part of her wine collection to her husband Lawrence, on his
birthday.
2. Zoë transfers her house to her son, Alex.
3. Sam lent his son £50,000.
4. Ahmed opened a building society account in the name of his daughter.
5. Using her own money, Alice bought a share of a racehorse syndicate in the
name of her husband. The horse has been very successful, winning a number
of races.
6. Six months ago, James purchased a cottage in Cornwall in the name of his co-
habitee, George. George has just received a package from James with the title
deeds to the cottage and a note from James saying “It’s all yours. Enjoy.”
7. Eloise bought shares in the name of her adult son, Sahil. Sahil has been
paying the dividends earned on the shares into his mother’s bank account.
8. When Tom bought his house, his father, Martin, contributed £40,000 towards
the deposit. Last week,Martin wrote to his accountant indicating that he had
invested in his son’s house and had a 10% share.

 You were asked to read through eight scenarios and identify and explain:

(a) whether they involve a voluntary transfer or purchase money case

(b) which presumption applies and why

(c) whether any evidence is available to the person wishing to rebut the
presumption

1. Jennifer transfers part of her wine collection to her husband

Lawrence, on his birthday.

Jennifer made a voluntary transfer. The presumption of advancement has

never applied to wives making voluntary transfers to their husbands.
Therefore, in this case, the presumption of resulting trust would be the court’s
starting point. Nevertheless, as it was Lawrence’s birthday, it should be fairly
easy to rebut this presumption by contemporaneous evidence that Jennifer
intended a gift.

2. Zoë transfers her house to her son, Alex.

This is a voluntary transfer of land from mother to son. It is doubtful whether

the presumption of advancement applies to mothers (unless they are in loco
parentis). Due to s. 60(3) LPA 1925, it is believed that no presumption of a
resulting trust applies to voluntary transfers of land. The court will have to
look at actual evidence of Zoë’s intention at the time the transfer was made.

3. Sam lent his son £50,000.

This is neither a voluntary transfer nor a purchase money scenario. There is

no presumption. This is merely a loan between a father and son.

4. Ahmed opened a building society account in the name of his

daughter.

Opening a bank account in the name of another is effectively a purchase in

the name of another. Here, a father, Ahmed provided the money for the
account in the name of her daughter. The presumption of advancement
applies; it is presumed that Ahmed intended to make a gift of the money to
his daughter.

5. Using her own money, Alice bought a share of a racehorse

syndicate in the name of her husband. The horse has been very
successful, winning a number of races.

The presumption of resulting trust would arise as there is no presumption of

advancement between a wife and husband (see Abrahams v Abrahams). Alice
would be entitled to all the syndicate winnings unless her husband can
produce evidence of her actual intention.

6. Six months ago, James purchased a cottage in Cornwall in the

name of his cohabitee, George. George has just received a package
from James with the title deeds to the cottage and a note from James
saying “It’s all yours. Enjoy.”

James purchased property in the name of another. There is no presumption of

advancement between unmarried partners. It would have been presumed that
George holds the cottage on a resulting trust for James. However, George
would be able to rely on the receipt of the deeds and the note as evidence of
James’s actual intention to make a gift. Such evidence can be used against
James to rebut the presumption even though the package was sent after the
event (Shephard v Cartwright).

7. Eloise bought shares in the name of her adult son, Sahil. Sahil
has been paying the dividends earned on the shares into his
mother’s bank account.

Here, a mother purchased property in the name of her child. There is no

presumption of advancement between a mother and child (except that a
widowed mother or single parent might be regarded as in loco parentis which
would give rise to the presumption of advancement). Assuming that Eloise
was not in loco parentis, the presumption of resulting trust applied. The fact
that Sahil has been passing the dividends to his mother would be evidence to
support that he merely holds the shares on trust for her. Even if Eloise were in
loco parentis, this could also be evidence to rebut any presumption of
advancement.
 8. When Tom bought his house, his father, Martin, contributed
£40,000 towards the deposit. Last week, Martin wrote to his
accountant indicating that he had invested in his son’s house and
had a 10% share.

This is a monetary contribution to the purchase of property in the name of

another. As it is the provision of money by a father to buy property in the
name of his son, the presumption of advancement applied.

The presumption of advancement between father and child is generally

considered easily rebuttable (see McGrath v Wallis). However, to do so Martin
will have to provide contemporaneous evidence of his actual intention; he will
not be able to rely on the letter to his accountant written 12 months after the
original purchase. (Shephard v Cartwright)

You are a trainee in the family department of ULaw LLP.

You and your supervising solicitor, Dylan Curry, are meeting with Matthew Phillips
tomorrow. Matthew has sent a letter in advance of the meeting containing
information on the issue about which he wants advice.

The letter from Matthew Phillips is detailed below.

Your supervising solicitor has asked you to read the letter before the meeting so that
you can think about what might be discussed and whether any further information
might be needed from Matthew.

Your meeting with Matthew Phillips is Engage - Task 2.

Dear Dylan

I am looking forward to our upcoming meeting to discuss my issue with my former girlfriend Sarah. I thought that I would le

I met Sarah about twelve years ago while on holiday in Greece. She was 28 and an HR manager for a national food chain. A
a shared rental flat. We got on very well while on holiday. When we returned to the UK, our relationship blossomed, and I w
come to Birmingham and move in with her. She had already decided to buy a house (“The Homestead”) in Birmingham, so
really want you here, and you won’t be homeless”. I qualified in October and was able to move to a firm in Birmingham that

The purchase price of The Homestead was £150,000. It was to be financed by Sarah’s savings of £40,000, a gift from Sarah
ten days before completion of the purchase, Sarah’s solicitor sent her a statement of the amount needed to complete. Sarah r
amounting in total of about £2,000. She asked me if I could help, saying, “I’ll pay you back”. I said yes and sent her the £
mortgage.

When I moved in, we came to an agreement about responsibility for the household expenses. We opened a joint “House
Expenses account each month. Sarah also contributed an additional £100 to that account each month. All the utility bills li
food bills We also paid most holidays from the account, together with much of our social expenditure. Other personal expen

We had been together about three years when my salary started to overtake Sarah’s. I was earning £40,000 to Sarah’s £30,0
new furniture were all paid for out of the account, as was a new patio. The monthly mortgage payments had reduced aroun
House Expenses account.

Five years ago, Sarah re-mortgaged. She moved from the Halifax to an internet lender and reduced the monthly payments to
cost £500. Sarah continued to pay the monthly mortgage payments, but I again increased my contribution to the House Expe

This arrangement continued okay for a good while. We had the occasional argument over what Sarah thought was my excess

About two years ago, I got the feeling our relationship was beginning to cool. By this time, I was earning £70,000 as a p
writer. Her earnings fluctuated; she only made about £20,000 that year. I had to meet the monthly mortgage payments on abo

Early last year, I decided to raise the issue of ownership of the house. I said that as I was, in effect, paying all the househol
family helped her in the original purchase, and she had paid the monthly mortgage payments since then, my suggestion was r

Unfortunately, our arguments continued. Consequently, by the end of the year, I had decided that I would not continue f
Christmas, the trip largely paid for by me. But we continued to argue, Sarah refusing point blank to discuss ownership of The

Without my contribution to the House Expenses account, Sarah has realised that she can no longer afford the upkeep of the
claim a share of the sale proceeds when it is sold.

Hope all the information helps. See you soon. Matt

1. How might Matthew be able to achieve his objectives?

2. In relation to each possible claim, what would Matthew have to show

to succeed? Does he have sufficient evidence to satisfy these
requirements?

3. Considering each possible claim and the facts Matthew has already
provided, what further information, if any, would you seek from
Matthew?

4. Under each head of claim, on the basis of the information you

currently have, what do you consider Matthew is likely to achieve?

Engage task 3
Consider the following question.

In the 2007 Executive Summary to the Law Commission report “Cohabitation: The Financial Con
Relationship Breakdown”, it was stated that:

“It is wrong to say that existing law ignores cohabitants. A patchwork of legal rules applie
providing cohabitants with interests in their partner’s property. However, the Commission’s view i
is unsatisfactory. It is complex, uncertain, and expensive to rely on and……often gives rise to outco
unjust.”

In light of your analysis in Engage – Task 2, how far would you agree with this assessme

Given the quotation from the Law Commission used in the question, you might want
to consider the following:

1. What are the “patchwork of legal rules” available to cohabitants?

2. Are they complex? Uncertain? Expensive to rely on?
3. Do they give rise to unjust outcomes?
4. What about the Law Commission’s proposals discussed in the Prepare tutorial
- are they the solution?
You are a trainee solicitor with ULaw LLP and you currently have a seat in the Private
Client department.

Last year, a client of the firm John Briggs died and the firm worked on the
administration of the estate. Your supervising partner, Alex Cowan, has sent you the
memorandum below (as well as associated documents). He has asked you to
interview Mr Frederick Staines later today.

In preparation for the meeting with Mr Staines, which will form your work in the
Engage, review the memorandum and all the documents provided by your
supervisor.

MEMORANDUM

From: Alex

To: Trainee

Date: XXX 20xx

Subject: John Briggs deceased AC/GR/B3245

Frederick Staines is trustee of the John Briggs Will Trust. He has just dropped off a letter (Docu
wants to come in to discuss it this afternoon at 3pm. I should be grateful if you would see him.

You may recall that we dealt with the estate of John Briggs who died last March. For your info
attaching a copy of his will to this memorandum (Document B) as well as a statement of asset
C) from the old estate file. John was a well-known local businessman. He left a wife (Patricia) and
Edward (now aged 19), and James (now aged 17). He appointed George Hadley (his accountant) an
his brother-in-law, as executors and trustees but, sadly, George died last week. As you will see, t
was worth in the region of £1 million when the administration of the estate was concluded.

Mr Staines has received the attached letter from James Briggs. Apparently, James has just finishe
furniture design. His work shows considerable flair and skill, but Mr Staines thinks that his nephew
to start his own business. Mr Staines wants to know whether he can and should have helped Jam
trust fund and whether James can gain access to the trust fund regardless of Mr Staines’ views.

Patricia Briggs was happy with the terms of John’s will. She is a teacher and says that she c
comfortably on her salary. In addition, she owns the family home outright (it was held as joint tena
so it passed to her by survivorship on his death and a life insurance policy paid off the mortgage).
needs some help with some one-off expenses. The roof of her house needs substantial repair,
£25,000. She says that she and John were going to do the repairs but put the work off when John fe
asked her brother whether some capital from the trust now so that she can do these now urge
Staines would like to help his sister if he can.

I think that Mr Staines may also want advice on his duties regarding trust investments. As a retired
was always rather nervous about this aspect of being a trustee as he was worried about the risks
how he would be judged. He relied heavily on George in this area. He may want some advice on ho
assistance.

As James has raised the point in his letter, I would also be prepared to advise Mr Staines a
beneficiaries can demand information and explanations from trustees.
As usual, you will need to discuss how the cost of the interview and any follow-up work will be funde

DOCUMENT A - Letter from James Briggs to Frederick Staines

24 St. John's Court,

Wishurst,

Surrey

SO5 3AB.

Dear Uncle Freddie,

I was disappointed about our conversation last week and felt that I had to write to
ask you to reconsider.

All I want is £200,000 of Dad’s money to buy a workshop and some equipment. I
know that Dad would have wanted to help me get started in my own business and I
can’t see why you are being difficult about it. I have seen just the right place and will
lose it if I don’t get the money quickly. So please will you change your mind or at
least tell me why you think that it is a bad idea so that we can discuss the matter? If
we can’t agree, maybe it would be best all round if you stepped down and we got
someone else to deal with the trust because we are clearly not going to get on.

I would like to be kept informed of what is happening to the money, where it is

invested and how much it is making. Monthly meetings would be a good idea.

I look forward to hearing from you at your earliest convenience.

Regards,

James

 DOCUMENT B - Will of John Briggs

THIS IS THE LAST WILL AND TESTAMENT of me JOHN EDWARD BRIGGS of 24

St. John's Court, Wishurst, Surrey SO5 3AB.

1. I HEREBY REVOKE all former wills and testamentary dispositions made by

me.
2. I DESIRE that my body shall be cremated.

3. I APPOINT my accountant, GEORGE HADLEY of 3 Bank Chambers, Wishurst,

Surrey SO5 6YF and my brother-in-law FREDERICK Staines of The Rectory,
Thornfield, Yorkshire YA5 4QT (hereinafter called "my Trustees" which
expression shall where the context so admits include the trustee or trustees
hereof for the time being) to be the executors and trustees of this my will.

4. I GIVE all my property to my Trustees UPON TRUST to pay my debts funeral

and testamentary expenses and legacies and after such payment TO HOLD
the balance ("my Residuary Estate")

(a) to pay the income to my wife, PATRICIA for her life, and

(b) subject to clause 4(a) above, absolutely for such of my children as are
living at my death and reach the age of 25 years and if more than one in
equal shares PROVIDED that if any child of mine dies before me or before
attaining a vested interest, but leaves children living at my death or born after
it who reach the age of 25 years, then such children shall take absolutely, and
if more than one, in equal shares so much of my Residuary Estate as their
parent would otherwise have taken.

5. If at any time the trusts declared by clause 4(b) of this will fail, then my
Trustees shall hold my Residuary Estate on trust absolutely for the Society for
Destitute Lawyers, 3 Carver Street, London W11 registered charity number
5693209 for its general charitable purposes.

6. My Trustees shall have the following powers in addition to their powers

under the general law: -

[Clauses 6 contains express administrative powers which have not been

reproduced in full. Only clause 6 (m) is relevant here]

6. (m) The statutory power of maintenance and accumulation contained in the

Trustee Act 1925 Section 31 (as amended) shall apply to the trust declared
above concerning my Residuary Estate so that references (however
expressed) to attaining the age of 18 years or to infancy shall be substituted
by references to attaining the age of 25 years and to the period during which
such beneficiary is under the age of 25 years; and reference to marriage or
the formation of a civil partnership under the age of 18 years in Section 31(2)
(i) shall be omitted.

7. I make the following DECLARATIONS

(a) If before my Trustees have given effect to any gift contained herein any
charitable or other body to which such gift is made has changed its name or
has amalgamated with or transferred its assets to any other body, my
Trustees shall give effect to such gift as if it had been made as a gift to the
body in its changed name or to the body with which it had been amalgamated
or to which it had transferred its assets as the case may be and I FURTHER
DECLARE that the receipt of the person who appears to my Trustees to be the
bursar treasurer or other proper officer for the time being of any charitable or
other body to which any gift contained herein is made shall be a sufficient
discharge to my Trustees.
 (b) Any beneficiary who is not proved to have survived me by twenty- eight
days shall be treated as having died before me.

(c) My Trustees shall not invest in the shares, stock, debentures, loan
stock or other securities of any company which is, or any of the subsidiaries of
which are, engaged in the manufacture or sale of armaments.

IN WITNESS whereof I have hereunto set my hand this ....24th............ day

of ...September 2016

Signed by the said JOHN EDWARD BRIGGS )

in our joint presence and then by us in his ) (assume valid

execution)

Note: The provisions in this will have been produced for teaching
purposes only. They are not a precedent and must not be used as
such.

1. In what ways could Mr Staines have helped James from the trust as
requested? Should he have done so?

532 TA 1925 authorises trustees to pay capital to beneficiaries for their

advancement or benefit at their absolute discretion.
Limitations: Post 2014, trustees can advance the full amount of beneficiary
share (s9 ITPA 2014)
Any advancement must not prejudice beneficiaries with paid interest (Patricia
must consent in writing because she has the lifetime interest in the income).

2. Can James require a reason for Mr Staines’ refusal to help him?

No, trustees are not obliged to provide the beneficiaries with reasons why
they exercised a power or discretion (Re Beloved Welkies Charity, Klug v Klug)

3. Can James get access to the trust fund regardless of Mr Staines’

views?

4. Is James entitled to the information he is requesting about the trust

investments?
 5. Can James insist on Mr Staines retiring as trustee?

6. Can Mr Staines help Patricia as she has requested?

7. When investing the trust fund, what duties and powers should Mr
Staines take into account? In light of these duties and powers, what
action should he be thinking about taking now?

8. What assistance could (should) Mr Staines get with his investment

duties? If he can get assistance, what does he need to do?

s. 5 get advice

s. 11 delegate

s. 22 keep the actions of investment manaer in review (other requirements)

s. 23 not liable for the actions of the agent provided they are not in any
breach

s. 36(1) TA 1925 appoint a new trustee

9. In view of his concerns, what standard of care will Mr Staines have to

comply with when investing the trust fund?

s. 1 TA 2000 – such care and skill as is reasonable…. He’s a retired… Nestle v

National Westminster Bank

10. If Patricia died tomorrow, how would this effect Mr Staines and
his administration of the trust?

No longer life tenant

s. 31 trustee can apply income for benefit
Normally beneficiaries are entitled

As instructed by your tutor, prepare a note with your answers to the above questions
so that you are able to advise Mr Staines fully.
 Topic Key points
Non-statutory – invest in authorised investments only,
invest impartially between beneficiaries and in best
interests of beneficiaries

Statutory - Trustee Act 2000

o s1- Duty of care

o s3 - Wide power of investment
o s4 - Duty to comply with standard investment
Trustees’ duties and powers criteria and duty to review
regarding investment o s5 - Duty to seek advice
o s8 - Power to invest in UK land

Nestle v National Westminster Bank

Wight v Olswang

Cowan v Scargill

Bartlett v Barclays Bank

Collective - Trustee Act 2000

o s5 - Duty to seek advice

o s11 - Power to delegate to an agent
o s15 - Duty when appointing agent to manage trust
Delegating aspects of trust business
assets
to a professional adviser
o s22 - Duty to review agent
o s23 - Liability for acts of agent
o s32 - Remuneration of agents

Individual – Trustee Act 1925

o s25 - Power to appoint an attorney for 12 months

Trustee Act 1925

o s36(1) - Replacement of trustee in various

circumstances
Appointment, retirement, removal o s36(6) - Appointment of additional trustee
of trustees o s39 - Retirement without replacement
o s40 - Use of deed to make appointment/retire
o s41 - Power of court to appoint additional or
replacement trustee

TOLATA 1996

o s19 - Beneficiaries’ right to require appointment or

retirement of trustees
Re Brockbank

“Trust documents”
Control of trustees by beneficiaries
o Re Londonderry
and information beneficiaries can
o Schmidt v Rosewood
demand from trustees
“Legitimate expectation”

oScott v National Trust

Power of Advancement under s32 Trustee Act 1925
Statutory Non-Statutory Action
s.4 Standard investment General duty of care Significant amount in
criteria: cash- need to invest
- suitability
- diversification

s.4(2) - review Duty to act impartially diversity

between beneficiaries
s.1 TA 2000 Authorised investments Quoted shares diversity
set out in trust instrument
s. 3 authorised Duty to obtain the best Private company- more
investments returns info ?
s. 8 land in UK
s. 5 advice

WORKSHOP 6

 You are a pupil barrister with ULaw Chambers. Your pupil supervisor, Samya
Julien, has been asked to advise two beneficiaries of a family trust about
possible maladministration of the trust by the trustees. She is due to meet the
instructing solicitor and would like you to attend the meeting.

In advance of the meeting, Samya has been provided with the trust
instrument – the will of Kitty Meera. Mrs Meera died five years ago.

The will is detailed below. In advance of the meeting, review the will and
consider the possible effect of the provisions contained in it.

THIS IS THE LAST WILL AND TESTAMENT of me Kitty Meera of 5 Hy Grove, Lower Waltham

1. I HEREBY REVOKE all former wills and testamentary dispositions made by me.

2. I DESIRE that my body shall be buried at St John’s Parish Church, Lower Waltham.

3. I APPOINT my bank manager, ERIC TANDON of 7 Priory Mews, Upper Waltham, Bucks MB4 3
IRENE ARMSTRONG of The Lodge, Lower Waltham, Bucks MB4 7JY (hereinafter called "my Trus
expression shall where the context so admits include the trustee or trustees hereof for the time being)
and trustees of this my will.
 4. I GIVE all my property to my Trustees UPON TRUST to pay my debts funeral and testamentary ex
and after such payment TO HOLD the balance ("my Residuary Estate") for such of my granddaughter
should attain 25 and if more than one, equally, provided that if neither should attain 25, then on trust f
Georgina.

5. If at any time the trusts declared by clause 4 of this will fail, then my Trustees shall hold my Residu
absolutely for Arts 4 Dementia of 12 Menlik Road, Birmingham B4 a registered charity, number 1119
charitable purposes.

6. My Trustees shall have the following powers in addition to their powers under the general law: -

(i) My Trustees shall have power to act as director, officer or employee of any company in which my
is invested and any such trustee may receive remuneration or benefit for so acting without being liable
same to my estate or the persons beneficially interested in it.

(ii) My Trustees shall have power to purchase any property from or sell any property to my estate not
are trustees, provided that:

a) in the case of listed securities, the purchase price shall be not less than the current market price of t
date of the transfer; and

b) in the case of any other kind of property, my Trustees shall first obtain a valuation and report on th
transaction by an independent surveyor or professional valuer (such valuation and report to be paid fo
purchaser) and if the surveyor or valuer does not advise against the transaction for any reason my Tru
provided that the purchase price shall not be less than the amount of the valuation.

7. I make the following DECLARATION that my Trustees shall not be liable for a loss to the Trust F
unless that loss was caused by his or her own actual fraud or the Trustee has benefited personally from

IN WITNESS whereof I have hereunto set my hand this ....12th............ day of ...May 2013

Signed by the said KITTY MEERA )

in our joint presence and then by us in hers )

(Assume valid execution)

Note: The provisions in this will have been produced for teaching purpo
should not be used as a precedent.

 Gitu and Parvati Meera are the beneficiaries of a trust created five years ago
on the death of their grandmother, Kitty Meera. You reviewed Kitty’s will in
Prepare - Task 2.

Kitty appointed Eric Tandon, her bank manager (although at the time of
Kitty’s death he had retired), and her friend Irene Armstrong, who is an artist,
as her trustees and left her estate (worth £850,000 five years ago) “on trust
for such of my granddaughters, Gitu and Parvati, as should attain 25 and if
more than one, equally, provided that if neither should attain 25, then on trust
 for my goddaughter Georgina”. Surprisingly, the will contained only three
administrative provisions.

Gitu and Parvati are twins and have just had their eighteenth birthday. They
had been advised that they would start receiving income from the trust as
they were now 18. However, they were horrified to discover last week that the
trust fund is currently practically worthless, and they are unlikely to receive
anything.

Gitu and Parvati think that the trustees have mismanaged the trust
investments. When Kitty died, her estate comprised the following assets:

o A 40% shareholding in a private family company, Topbix Ltd , valued at

£300,000
o Her freehold house (5 Hy Grove) valued at £350,000
o Shares in various public companies valued at £200,000

Shortly after Kitty’s death, Eric was able to become a director of Topbix Ltd
and received a salary from the company until he resigned from the board last
year. Topbix suddenly went into liquidation three months ago. The payments
from Topbix were in addition to the generous remuneration which Eric paid
himself from the trust fund since it was established.

While he was a director of Topbix, Eric was advised by the company’s finance
director of an investment opportunity with another company, B2 Digital
Ltd. Eric decided to invest his own money in B2 Digital. The company has
proved very successful due to their development of new technology, and Eric
has made a significant profit.

The trustees put Kitty’s house on the market a year after she died once the
estate had been administered. They received no offers at the time, so two
years ago, Irene bought it for £300,000. Since then, the price of houses in the
area has soared due to a planned new rail link.

The sale proceeds of the house were given to David, a friend of Eric’s from the
Rotary Club, to invest; David was then asked by Eric and Irene to manage the
investments. Unfortunately, the investments chosen by David have not done
well and now have little or no value.

Gitu and Parvati have been able to obtain details of the other trust
investments and Eric and Irene appear to have done nothing with the
shareholdings in the public companies since Kitty died. They claim that as
they lacked the expertise to deal with them, they thought it best to leave all
the trust’s investments as they were.

Gitu and Parvati are seeking advice from ULaw Chambers as to their position
in light of these events.

Consider the advice you will be giving to Gitu and Parvati Meera about whether:

a) Eric was entitled to keep the director’s salary he received from Topbix
and the remuneration he received from the trust;
b) Eric is entitled to keep the profit he has earned from his investment in
B2 Digital;

c) they (Gitu and Parvati) have any claim against Irene in respect of
Kitty’s house;

d) Eric and Irene are liable for the loss caused by David’s actions;

e) Eric and Irene have breached any duties as regards the other trust
investments. If yes, what action can Gitu and Parvati take against them?

Contingent Trust

a. The trust instrument authorises him under clause 6(i) to become a

director. Therefore the law does not apply in this case. He is therefore
entitled to the director’s salary. However, with the remuneration, he is
not entitled to keep it because (i) there was no charge clause , (ii) the
beneficiaries could not consent (they weren’t yet 18 when Eric started
paying himself) (iii) he hasn’t applied to court. Now have to look to the
Trustee Act 2000 Act. Under the Act he is entitled to remuneration if he
acts in a professional capacity (s.29) and if all the trustees consent in
writing (

WORKSHOP 7

Lionel and Norman have come for ULaw LLP for advice on their position in light of the
following events.

Gillian Dupont died several years ago.

Under her will, £400,000 was to be held upon trust for her husband, Howard, for life
with remainder to their children, Irene (now aged 21) and Katherine (now aged 15),in
equal shares. The trustees are Lionel, Mary, and Norman.

The trust has an account at Westshire Bank. Money can be withdrawn only by
cheques signed by all three of the trustees. Three months ago, Lionel suggested to
the other trustees that, to speed up trust business, they all sign blank cheques. Mary
used these cheques to steal £50,000 trust money (apparently with Howard’s
knowledge and approval).

Howard and Mary have now disappeared.

As instructed by your tutor:

(a) Advise Lionel and Norman as to the rights and remedies of the
beneficiaries against the trustees.
(b) A possible checklist as follows:
(c) 1. What breach (es) of trust have occurred?
(d) 2. Which trustee(s) is (are) liable for those breaches?
(e) 3. Have these breaches caused/contributed to the loss?
(f) 4. What is the extent of trustee(s) liability?
(g) 5. Do the trustees have any defence against liability?
(h) 6. Do the trustees have a right to an indemnity and/or contribution from a
co-trustee?

(b) Norman is the wealthiest of the trustees and fears that he will have to
bear the loss. Advise him whether or not this will be the case.

Principle of joint and several liability

Charlie is the trustee of the Meral family trust. ULaw LLP have been consulted by the
beneficiaries, Rasheed and Savita, who are concerned about the following matters.

1. A year ago, Charlie appears to have sold shares belonging to the trust and
used the proceeds of £35,000 to buy a special edition sports car. The car is
still in Charlie’s garage, but it turned out to be mechanically unsound and is
today worth only £20,000.
2. Six months ago, Charlie bought shares in Acme plc for £30,000. To fund this,
he made an unauthorised withdrawal of £15,000 from the trust’s bank
account and used this cash, together with £15,000 of his own money. The
shares were registered in his name and are now worth £24,000.
3. Four months ago, Charlie made another unauthorised withdrawal of £200,000
from the trust’s bank account. He paid this sum into his own account at
Barcloyds Bank which had an existing balance of £150,000. Later, Charlie
withdrew £300,000 to buy a property in Manchester. He then paid off some of
his debts with the £50,000 remaining in the account. Last week, he paid in
 £4,000 which was a gift from his father. The Manchester property is now
worth £360,000.

Last week, Charlie was declared bankrupt, and Rasheed and Savita fear that his
creditors will be able to claim all his remaining assets.

As instructed by your tutor, advise Rasheed and Savita on their remedies.

WORKSHOP 8

POSSIBLE ACTIONS AGAINST A THIRD PARTY

Did third party (defendant) receive property subject to a trust/fiduciary relationship?

YES NO
Personal equitable actions (no good if defendant Personal equitable action (no good if
bankrupt): defendant bankrupt):

Recipient liability Accessory liability

o Breach of trust/fiduciary duty, and
o Breach of trust/fiduciary duty, and o Defendant assisted in that breach,
o Receipt of property by Defendant arising from that and
breach, and o Defendant was dishonest
o Defendant has knowledge that makes it Royal Brunei Airlines v Tan/Barlow Clowes
unconscionable to retain property v Eurotrust
BCCI v Akindele
YES

AND/OR
Equitable Proprietary claim = NB . Limits of F-I-D-E

 if Defendant is bona fide purchaser for value, no proprietary claim

available
 if Defendant has dissipated property, no claim available
 if Defendant still holds the property in its original form; claim property (no
need to trace)
 if Defendant holds property in changed form, use relevant tracing rule
Possible claims/ Actions Against the Fiduciary

1. Breach of fiduciary duty

Gohar died five years ago. Her will appointed Aziz to be her trustee and gave him her
estate to hold on trust for such of her grandchildren living at her death as should
attain 25. The beneficiaries are Kaira (now aged 19) and Latif (now aged 22).

Latif has just discovered that Aziz has been declared bankrupt. He has also
uncovered that one month ago, Aziz withdrew £30,000 belonging to the trust from
the trust’s bank account. He bought a BMW car with the proceeds and gave the car
to his sister. Monica. Monica did not know that Aziz was a trustee and he told her
that the money for the car came from a new business venture. This was the first
time that Monica had heard of any new business venture, but she did not enquire
further. She has sold the car, and she put the £25,000 proceeds in her own bank
account, which had £2,000 in it. She then used £2,000 to buy a diamond ring,
£10,000 to buy herself a replacement car, £5,000 to pay off her credit card bill;
£10,000 remains in the account.

James, the trust’s banker, was surprised when he was instructed to transfer the
£30,000 from the trust’s bank account to Aziz’s personal account. Nevertheless, he
carried out his instructions without asking any questions.

Advise Latif and Kaira what rights and remedies they have against Monica
and James.

From: Stephen Wadha

Date: XXXX

To: Trainee

Subject: Whitehouse Construction plc ref. GD/ W/301

Welcome to your Litigation seat at ULaw LLP. I’d like to get you involved in an
interesting new case which has landed on my desk.

We have recently been instructed by Whitehouse Construction plc. You may

have seen the recent local press coverage about one of the town’s wealthier
residents. Jeff Conway, a former director of Whitehouse, disappeared last
month after stealing a valuable painting from the company. The police have
been unable to track him and a lot of stolen money down. However, we are
looking to recover part of the missing property from a variety of other
sources, if possible.

It appears that Mr Conway was able to remove Whitehouse’s painting from

their building in town (I understand that, as it was valued, at about £450,000
when acquired, it had been kept securely at the company’s
premises). Conway sold the painting to the LaCroix gallery in London for
£500,000. Gavin LaCroix, the gallery owner, has informed the police that
Conway was a new client and that Conway told him he had inherited the
painting. All the paperwork on the background of the painting was checked
and appeared genuine. The painting is still at the gallery.

We know that, using the sale proceeds, Conway gave £15,000 each to two
grandchildren, Alexis and Eugene, as graduation presents. It turns out he had
previously given similar gifts to all his grandchildren. Alexis used her £15,000
to fund a post-university gap year and is still traveling; Eugene is spending his
£15,000 on renovating and increasing the value of his university flat before
selling it.

The police have been able to establish that Conway paid the remaining
£470,000 into his bank account, in which there was an existing balance of
£15,000 of his own money. Conway spent £40,000 on plastic surgery for
himself and then gave £100,000 from this account to his girlfriend, Kelly
Defreitas. Kelly was suspicious about the size of the gift, but as Conway ended
their relationship when he gave her the money, she did not ask any more
questions as she was so upset.

Miss. Defreitas later put the £100,000 she received into her current account
(which at the time contained a nil balance); she then added £60,000 of her
own money. She then bought some shares in Leisuretime plc for £120,000,
which are now worth £190,000 and a few days later she bought some shares
in Waterways plc for £40,000 which are now worthless.

The balance in Conway’s account was transferred offshore just before Conway
disappeared and the police have not been able to track it down.

The police have, however, ascertained that Conway was able to get the
painting out of the company’s building because Whitehouse’s facilities
manager, Donald Perry, gave Conway access and provided him with the
paperwork kept in the company’s files.

Could you prepare a short report summarising what possible equitable claims,
if any, Whitehouse might be able to bring against:

o Gavin LaCroix to recover the painting; He has received a painting as a

result of a breach of a fiduciary duty. The issue here is whether he has
knowledge to give rise to dishonesty. He was a purchaser for value, the
paperwork was intact and he was made to believe that Conway had
inherited it….he is equity’s darling.
o Alexis and Eugene; Alexis and Eugene received 15000 from the
proceeds of sale of trust property, in breach of fiduciary duty. This
makes them liable for a personal claims. She did not have knowledge
of the source of funds and had no reason to be suspicious because that
was not the first time they had received this kind of gift
o Kelly Defreitas;
o Donald Perry.