THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALLS

UNIVERSITY OF LONDON LA3002 October

LLB
DIPLOMA IN THE COMMON LAW
BSc DEGREES WITH LAW

Equity and Trusts (Level 6)

Friday 12 October 2018: 10.00 – 13.15

Candidates will have THREE HOURS AND FIFTEEN MINUTES in which to

answer the questions.

Candidates must answer THREE of the following SIX 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 Core Statutes on Property Law (Palgrave
Macmillan).

© University of London 2018

UL18/0911
Page 1 of 4
1. Joan signed the following letter and sent it to her sister Susan:

“I hereby appoint my sister Susan to be the trustee of the north

half of my farm and one-half of my farm animals which are to be
held in trust for the benefit of my children and grandchildren as
she sees fit.”

Joan has three children and seven grandchildren. Joan’s son’s wife also
has a daughter named Anna from a previous relationship. Anna has a
close relationship with Joan and calls her “Grandma”. Joan’s farm
consists of two parcels of land which are separated by a public road.
One parcel is north of the road and the other is south of it. Joan is the
registered owner of both parcels. She is also the owner of four horses,
eight cows, 16 sheep, and 32 chickens.

Joan died recently before anything further was done to set up the trust.
Susan seeks your advice concerning its validity and terms.

Advise Susan. What difference, if any, would it make if:

(a) a registrable (but unregistered) transfer of the north parcel of

farmland to Susan was enclosed with the letter to her,

(b) Susan was appointed as Joan’s executrix, or

(c) the terms of the trust are in Joan’s validly executed will?

2. John and Ronnie are brothers and partners in a construction business

trading as the Larks Brothers. Their younger brother Donald worked for
them as an employee in charge of purchasing equipment and supplies.
Donald accepted a total of £300,000 in bribes from various suppliers to
arrange contracts with the Larks Brothers. He paid that money into his
bank account.

Perry is a customer of the Larks Brothers and owed £100,000 to them.

In an attempt to pay that debt by bank transfer, he paid £100,000 by
mistake into Donald’s bank account.

Donald withdrew £200,000 from his bank account and used it to buy a
house for his girlfriend Maggie. Donald then withdrew the remaining
£200,000 from the account and used it to buy a yacht. Sadly, the yacht
was lost at sea and Donald drowned.

The Larks Brothers now claim that Maggie holds her house in trust for
them. Perry claims that he is entitled to one-half of the house.

Advise Maggie.

UL18/0911
Page 2 of 4
3. Lenore died five years ago. Her will was probated and Steven was
appointed as her executor and trustee. According to her will, her entire
estate is to be held in trust for so long as the law allows (a) to provide
scholarships to young people from Berry to study engineering at
university, (b) to preserve and maintain Berry Bridge, and (c) to preserve
and maintain the Old Berry Church.

Berry is a village in England. Lenore was an engineer who lived most of

her life in Berry and was passionate about preserving its historic
buildings and structures. Berry Bridge was purchased last year by a
privately owned company called Trollus, which now charges tolls for
vehicles to use it. The Old Berry Church has not been used as a church
for the past 30 years. It was deconsecrated 15 years ago and has been
used since then as a not-for-profit community coffee house and concert
hall until it was damaged by fire last year.

Steven has been administering Lenore’s trust for the past five years and
seeks your advice about its future. So far, only one student has received
a scholarship to study engineering at university. Steven does not want
to use any more trust funds to maintain Berry Bridge and thereby
increase the profits for Trollus. The cost of repairing the Old Berry
Church far exceeds the entire value of the trust.

Advise Steven.

4. In “Instruments of Fraud, Testamentary Dispositions, and the Doctrine

of Secret Trusts (1999), Patricia Critchley said: “The dehors theory
asserts that secret trusts are inter vivos, and not testamentary, but such
an argument is meaningless unless it is using those terms correctly. In
short, before the validity of the dehors theory can be properly assessed,
it is essential to identify the true difference between testamentary and
inter vivos dispositions.”

Discuss.

5. In “Explaining Resulting Trusts” (2008), William Swadling said: “Though

we have a convincing though anachronistic explanation for the
‘presumed’ resulting trust, the ‘automatic’ resulting trust still defies legal
analysis.”

Discuss.

UL18/0911
Page 3 of 4
6. In “Moment of Truth for Knowing Receipt?” (2009), Simon Gardner said:
“‘Knowing receipt’ is simply the usual liability for failure to preserve trust
property, applicable to all trustees, given particular application to those
who are trustees because they receive illicitly transferred trust property.
The cognisance requirement in ‘knowing receipt’ is no more than a
reminder that, before a trustee who loses trust property will thereby
breach his duty to preserve it, he must have been aware (or could have
been aware, or whatever standard is chosen) of the need to preserve it,
i.e. of the facts giving rise to the trust.”

Discuss.

END OF PAPER

UL18/0911
Page 4 of 4