THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALLS

UNIVERSITY OF LONDON LA2002 October

LLB
DIPLOMA IN THE COMMON LAW
BSc DEGREES WITH LAW

Equity and Trusts (Level 5)

Tuesday 17 October 2017: 14.30 – 17.45

Candidates will have THREE HOURS AND FIFTEEN MINUTES in which to

answer the questions.

Candidates must answer FOUR of the following EIGHT questions.

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

Permitted materials
Students are permitted to bring into the examination room the following
specified document: one copy of Blackstone’s Statutes on Property Law (OUP).

© University of London 2017

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1. Sue died recently. According to her will, the residue of her estate is to
be held in trust as follows:

(a) to help blind students at universities in England;

(b) to promote the study of politics at universities in England;

(c) to create and fund the position of Professor of Politics at Mole

University.

Adrian and Pandora have been appointed as the executors of Sue’s

estate and the trustees of her will trusts. They seek your advice
concerning the validity of those trusts. Mole University is a public
university, which Sue attended when she was young. It does not need
or want a Professor of Politics and would like to use that money for other
purposes.

Advise Adrian and Pandora.

2. Bob was the registered shareholder of 1,000 shares in Dryad Ltd, which
is a private company. He decided to give 200 shares to each of his twin
nieces Helena and Sarah for their 25th birthday. He filled out the share
transfer forms, put them inside birthday cards, and posted them to his
nieces, who received them.

Bob died two weeks later. His son Felix is entitled to his entire estate.
Helena and Sarah did not submit the share transfer forms to Dryad Ltd
and so Bob is still listed in its shareholder register as the shareholder of
1,000 shares. The form to transfer 200 shares to Helena was properly
filled out by Bob and was registrable. However, Bob forgot to sign the
form to transfer 200 shares to Sarah and it is not registrable.

Advise Helena and Sarah.

What difference, if any, would it make if Helena and Sarah were

appointed as the executrices of Bob’s estate?

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3. Harold and Maude met when he was 21 years old and she was 75 years
old. They became very good friends. Maude was the sole registered
owner of a large house, where she lived alone. Maude told Harold that
she wanted him to have the house after she died. They orally agreed
that Maude would transfer the house to him now and that he would hold
it in trust for Maude until she died. Harold became the sole registered
owner of the house and Maude continued to live in the house alone.

Harold died two years later. His executor sold the house to Ruth and
used the proceeds to pay the creditors of his estate. Ruth became the
sole registered owner of the house. She discovered that Maude is living
in the house and intends to stay there for life.

Does Ruth hold the house in trust for Maude? Why or why not?

(Please note that Ruth cannot rely on the defence of bona fide purchase
for value without notice. According to the Land Registration Act 2002,
Ruth will hold her legal title to the house subject to Maude’s equitable
interest if she has one.)

4. Alison and Donnie are members of the Bailey Community Centre (BCC),
which is a non-charitable unincorporated association with 200 members.
Alison is the president of BCC and Donnie is its secretary. They are the
joint holders of BCC’s bank account, which had a balance of £10,000,
and they were both required to sign any cheques drawn on that account.
Alison was planning a trip overseas for three months, so she and Donnie
arranged with the bank to permit Donnie to sign BCC cheques and
access BCC’s bank account on his own.

Over the next two months, Donnie withdrew a total of £4,000 from BCC’s
bank account, which he used to buy expensive gifts for his girlfriend
Marci. Donnie owed £5,000 to Vic, so he used a BCC cheque to pay
£5,000 to Vic, who cashed the cheque and spent the money.

Alison returned from her trip and was shocked to discover that there was
only £1,000 left in BCC’s bank account. Donnie told her what he did.

Advise Alison about her own liability and what remedies, if any, she has
against Donnie, Marci, and Vic.

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5. In McPhail v Doulton (1970), Lord Wilberforce said: “There may be a
case where the meaning of the words used is clear but the definition of
beneficiaries is so hopelessly wide as not to form ‘anything like a class’
so that the trust is administratively unworkable… I hesitate to give
examples for they may prejudice future cases, but perhaps ‘all the
residents of Greater London’ will serve.”

Discuss.

6. “When a court is asked to vary a trust, there is no reason why it should

treat administrative duties and powers any differently from dispositive
duties and powers. In either case, the court should be free to make any
changes that will promote the best interests of the beneficiaries.”

Discuss.

7. “Every breach of duty by a fiduciary is a breach of fiduciary duty.”

Discuss.

8. “Every constructive trust is remedial.”

Discuss.

END OF PAPER

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