THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALLS

UNIVERSITY OF LONDON LA3002 October

DIPLOMA IN THE COMMON LAW

LLB

ALL SCHEMES AND ROUTES

BSc DEGREES WITH LAW

Law of Trusts

Tuesday 21 October 2014: 14.30 – 17.45

Candidates will have fifteen minutes during which they may read the paper
and make rough notes ONLY in their answer books. They then have the
remaining THREE HOURS in which to answer the questions.

Candidates should answer FOUR of the following EIGHT questions.

Candidates should answer all parts of a question unless otherwise stated.

© University of London 2014

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1. Leslie died recently. According to her will, her entire estate is to be
held in trust as follows:

(a) The income from the trust may be used to pay the tuition fees
and ordinary living expenses of any beneficiaries who are
students in full-time education.

(b) At the end of each calendar year, any unspent income shall be
paid to the newspaper in the UK which, in the opinion of the
trustees, has provided the best news coverage that year.

(c) After 30 years, the trust assets shall be sold and the proceeds
distributed equally among any beneficiaries then surviving.

(d) The beneficiaries are the settlor’s children and grandchildren,

and their spouses, civil partners, serious girlfriends and
boyfriends, and dependants.

Roberta and Susan are the trustees of this trust. They seek your
advice regarding the nature and validity of its provisions.

Advise Roberta and Susan.

2. “If the government is not going to proclaim s.199 of the Equality Act
2010 in force, it should find some other solution to the problems
created by the presumptions of resulting trust and advancement when
they are applied to transactions for illegal purposes.”

Discuss.

3. Three years ago, Andy and Beth began a campaign to make the use of
bicycle helmets compulsory in the UK. They raised £9,000, including
£2,000 from street collections, £3,000 from internet sales of cycling
accessories, and £4,000 donated by Trish. Andy and Beth spent
£1,000 on campaign advertisements before the government passed a
law making the use of bicycle helmets compulsory in the UK. They
now want to use the remaining £8,000 to open their own bicycle shop.

Advise Andy and Beth.

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4. Should the recipient of a mistaken payment hold it on constructive trust
for the mistaken payer? Why or why not?

5. Richard was the registered owner of Blackacre and Greenacre, which

are two parcels of land located near the University of London. He
decided to donate them to the University. He executed the appropriate
transfer form for each parcel and delivered them both to Joni, who is
the University’s Chief Operating Officer. Richard died two days later,
before Joni could submit the transfer forms to the Land Registry.

Carey is Richard’s son and entitled to his entire estate. He does not
want to complete Richard’s gift to the University but wants to keep the
land for himself. The transfer form for Blackacre was improperly
executed and would not have been registrable if it had been submitted
to the Land Registry. The transfer form for Greenacre was properly
executed and would have been accepted for registration if submitted.

Joni seeks your advice. Is the University entitled to Blackacre and

Greenacre? Why or why not?

Advise Joni.

6. “The essence of a liability to account on the footing of knowing receipt

is that the defendant has accepted trust assets knowing that they were
transferred to him in breach of trust and that he had no right to receive
them. His possession is therefore at all times wrongful and adverse to
the rights of both the true trustees and the beneficiaries. No trust has
been reposed in him. He does not have the powers or duties of a
trustee, for example with regard to investment or management. His
sole obligation of any practical significance is to restore the assets
immediately. It is true that he may be accountable for any profit that
would have been made or any loss that would have been avoided if the
assets had remained in the hands of the true trustees and been dealt
with according to the trust. There may also, in some circumstances, be
a proprietary claim. But all this is simply the measure of the remedy. It
does not make him a trustee…” (Lord Sumption in Williams v Central
Bank of Nigeria (2014)).

Discuss.

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7. Finbar died recently and Olivia was appointed as the executrix of his
estate. Olivia seeks your advice regarding the nature and validity of
the following clauses in Finbar’s will:

(a) £250,000 to provide train tickets to those people in the UK who

cannot afford them;

(b) £250,000 to campaign for better facilities for disabled people at

rail stations in the UK;

(c) £250,000 to the Railway Workers Training College.

The Railway Workers Training College was a non-profit institution

created in the 19th century, but it closed five years ago. There are no
similar institutions anywhere in the UK. The education of railway
workers in the UK is now provided by profit making railway companies.

Advise Olivia.

8. Should there be any restrictions on the powers of settlors to exempt the

trustees from liability for breach of trust? If so, what should those
restrictions be?

END OF PAPER

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