Examiners’ reports 2022

Examiners’ reports 2022

LA3002 Equity and Trusts – Zone B

Introduction
The exam paper followed the same format as in previous years. Candidates were
required to answer three questions (from a choice of six) but with unrestricted
choice. Students should refer to the Assessment Criteria to familiarise themselves
with the criteria that are applied to assessed work.
The better scripts focused on the actual questions being asked and the specific
issues they raised. This was especially true of essay-style questions where some
candidates produced generic essays (e.g. about ‘charity’ or about ‘resulting trusts’)
without tailoring the answer to the question. Good answers also demonstrated that
the student had read around the subject and was able to apply this wider reading to
the issues raised. A key component of a good answer in Equity and Trusts is the
use of relevant case law. The most common weaknesses were a failure to stick to
the question and a failure to understand that points of law must be supported by
evidence – e.g. cases.
There were only a few instances of students failing to follow the rubric, by
answering four questions instead of three. No credit is given for this – only the best
three answers count and the extra answers are ignored completely.

Comments on specific questions

Question 1
‘It is well known that a trust must have certain objects and (apart from
charitable trusts) human beneficiaries. However, the exceptions to the
beneficiary principle reveal that, in reality, there is but one principle in
operation: that a trust must have someone who can enforce it.’
Discuss.
General remarks
This question refers mainly to Chapter 10, with some reference to Chapter 5, of the
module guide. This is a conventional question on the beneficiary principle. The
heart of it is whether, if a non-charitable purpose is certain, can it be valid without a
human beneficiary if there is de facto enforcement.
Law cases, reports and other references the examiners would expect you to use
Re Endacott; Re Denley; Lord Millett in Twinsectra v Yardley at paras 68–100; Re
Dean; Re Hooper; Re Thompson; Neville Estates v Madden; Re Recher's WT; Re
Grant's WT; Conservative & Unionist Co v Burrell [1982] 2 All ER 1; Penner,
Chapter 9, Sections ‘The beneficiary principle and the invalidity of private purpose
trusts’, ‘Anonymous valid purpose trusts’, ‘Powers for purposes’ and ‘An enforcer

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principle?’; Hayton, D. ‘Developing the obligation characteristic of the trust’ (2001)
117 LQR 96; Matthews, P. ‘The new trust: obligations without rights’ in Oakley, A.J.
(ed.) Trends in contemporary trusts law (1996) and ‘From obligation to property and
back again? The future of the non-charitable purpose trust’ in Hayton, D. (ed.)
Extending the boundaries of trusts and similar ring-fenced trusts (2002).
Common errors
There were two common errors. First, some candidates thought this was a question
about charitable purpose trusts – presumably because the word ‘charity’ is in the
question. This error can be avoided by reading the question and taking time to work
out what it is asking. Second, some candidates simply listed those purpose trusts
that were valid without a human beneficiary, giving no consideration at all to the
issue of ‘the enforcer’ principle.
A good answer to this question would…
identify practical examples of where a non-charitable purpose trust appears to have
been valid (e.g. the anomalous exceptions, Re Denley; Quistclose, unincorporated
associations) and consider why they have been held valid. Is it because they are
‘certain’ and have someone who can enforce, or is there a different reason? There
is significant academic discussion, referenced in the module guide (see also
Hayton, Mathews, Parkinson), which can help frame an answer. A good answer is
not one that reaches the ‘right’ answer but one that discusses the arguments, using
the case law to illustrate.
Poor answers to this question…
listed some, or all, of the examples of valid non-purpose trusts without seeking to
explain why they might be valid. The reference to the ‘enforcer’ was ignored and the
answer consisted of a list of cases with no discussion. Equally, some candidates
thought that this was an essay about valid charitable purposes and that necessarily
scored very low marks, if any.
Question 2
Consider the validity of the following provisions of the Will of Arnold, who
died this year. Arnold was a successful author and provided £50,000 for each
of these purposes:
(a) to provide religious services in the maximum security wing of
Arrowmoor prison;
(b) to improve standards in public life, by providing political education in
schools;
(c) to provide education scholarships for the children of employees of the
University of London;
(d) to provide counselling services for children and teenagers resident in
Cambridge and Oxford;
(e) to promote wider public appreciation of the literary merit of the
testator’s books.
General remarks
This question refers to Chapter 9 of the module guide: charitable trusts. It raises
familiar questions around the nature and definition of an alleged charitable purpose
and the ‘reach’ of it (whether it be for a sufficient section of the ‘public’). Each limb
of the problem carries equal marks and raises a different issue. Candidates should
spend roughly equal time on each part.

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Law cases, reports and other references the examiners would expect you to use
Pemsel’s Case (but only in passing, see below); Charities Act 2011, in particular
ss.3 and 4. Students were not expected to reference the Charities Act 2022.
Indicative cases include Gilmour v Coates; Re Koeppler; Oppenheim v Tobacco
Securities; IRC v Beddeley; Royal Choral Society v IRC; Re Delius; Re Shaw and
Re Hopkins. However, there is a wide range of cases to choose from.
Common errors
A very common error was for students simply to write out ss.3 and 4 (section 3 in
particular) of the Charities Act 2011 and conclude that this provided an answer. The
question required application of the law, in the light of case law, to the facts. The
nature of ‘public benefit’ was also omitted by some students. Too many students
thought that Pemsel’s Case decided everything.
A good answer to this question would…
consider four issues in relation to each limb of the problem. First, was the nature of
the purpose charitable in law – using s.3 Charities Act and case law. Second, if the
nature of the purpose was charitable, was it for the public benefit, using cases such
as Oppenheim, Baddeley, etc. Third, if it passed these tests, was it sufficiently
‘exclusively’ for charity? Fourth, if it was not charitable, could it be valid in any other
way? Part (a) – is this for the advancement of religion and is it for the public
benefit? Might it this be charitable under some other provision of s.3? Part (b) – is
this political or is it educational – see Re Koeppler. Part (c) – this raises the
question of ‘personal nexus’ as it plays into the public benefit test. Does it matter
that the settlor may be unconnected with the potential class, even though the class
are connected to each other – Oppenheim etc.? Part (d) seems to fall squarely
within s.3 and existing case law. It is unlikely that the geographical limitation is an
issue but it can be considered. Part (e) – could this be artistic appreciation as in
Royal Choral Society v IRC, or perhaps it is similar to Re Delius? But, does it matter
that the settlor is providing funds for people to appreciate his own work and that his
estate might thereby gain a benefit (royalties)? One might see mention of Re Shaw
and Re Hopkins.
Poor answers to this question…
copied out the Charities Act 2011 as if this provided a solution to the problem. Poor
answers omitted reference to case law and made firm conclusions without
considering some of the uncertainties inherent in the problem. Weaker answers
treated the question as if it was only about actually finding an answer (i.e. charity or
not), instead of it being about the explanation and analysis. To a large extent,
whether these are charities or not where the marks are earned – it is the reasoning
that matters.
Student extract
Arnold's will seems to consider a number of purposes which might be
considered to be 'charitable', which - if they are categorised as such – would
attract favourable conditions such as being afforded 'tax breaks' by the
government, which are put in place to encourage individuals and other legal
entities to continue to give to society… The three main criteria that need to be
met for charitable status to be afforded are that a charity must:
• be 'wholly and exclusively' charitable
• fall under at least one of the charitable ‘heads’ listed in the Charities
Act 2011
• be one which benefits the public.

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 The first of these requirements means that the charity must not help those
who are not in need, and this can obviously be interpreted differently by
different individuals and this was shown in Chichester Diocesan v Simpson.
Blair v Duncan also indicated that the courts are likely to be very strict about
the use of words such as 'or' and 'and' to determine whether a purpose is
wholly charitable. The charitable ‘heads’ are contained in the Charities
Act and the most relevant of these to the case at hand are 'the prevention or
relief of poverty', 'the advancement of education', 'the advancement of
religion' as well as 'to benefit the public'.
In the case of purpose 'a': providing religious services in the maximum
security wing of Arrowmoor prison, this is likely to be considered under the
head of 'advancement of religion'. In the case of Gilmour v Coats, the aims of
a group of nuns who isolated themselves from the outside was considered to
not meet the requirement of being of public benefit. The case of Neville
Estates too involved a smaller class of people and the question was whether
a provision designed to benefit the members of a synagogue could be
considered to be charitable. It was held that because the synagogue was
open to the public it satisfied the requirement, and this is where the provision
in Arnold's will might face a challenge. It will need to be determined whether
the relevant wing of a specific prison can be considered to sufficiently meet
the 'public' requirement in order for it to be considered as a charitable
purpose. It is possible that because the prison is only a small part of the
general public it might fail, but it is also possible that because the prison
system is a public or government one this could be held to benefit the
public…
Purpose 'c', to provide education scholarships for the children of employees
of the University of London, is already at an advantage as the provision of
scholarships has historically been considered a charitable purpose and it
definitely falls under the head to do with education and perhaps also that of
prevention of poverty. However, the limitation to children of employees of the
University of London might have some difficulties in meeting the 'public
benefit' requirement. Although with education, it has been shown that a
specific institution or a smaller class can be allowed to benefit, such as in Re
British School of Archaeology. It might be thought that the emphasis is on the
purpose being educational, as shown in IRC v McMullen, which can be
contrasted with Re Pinion where the resources in consideration were held to
not be of charitable value. However, in Oppenheim v Tobacco, it was decided
that an educational fund which would benefit over 100 000 people who were
children of employees of a certain company was not charitable because of
the requirement that beneficiaries had to be children of the employees…
The last provision, 'e', to promote wider public appreciation of the literary
merit of the testator’s books might be considered under the heads of
education and the public benefit. The case most relevant here is that of Re
Pinion where the resources were held to not be of charitable value. In the
case of Re Hummeltenberg, however, the organisation was decided to have
charitable merit. It seems here that what is most relevant will be the content
of the testator's books. It will have to be decided whether his writings do in
fact have charitable value. It should be noted that in the case of Re
Pinion, the resources were considered to be rather ‘awful’ for lack of a better
term and that usually donations to established museums and such institutions
will be considered charitable.

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Comments on extract
This is an extract from the problem question on charities and it scored a lower, but
very safe, 2:1 mark. (This is not all of the answer.) Notice how the candidate
introduces the question; there is a short, accurate introduction to the topic and the
student highlights the main issues that arise when considering whether a trust is
charitable or not. The examiner is certain that the student understands how
charitable trusts work. The student then goes on to apply the law to the particular
facts of the problem in a clear and deliberate way. The problem is answered in the
order set by the examiner, using the structure provided by the examiner. In respect
of part (a), the student identifies the issue clearly and recognises that there is a
tension between Gilmour v Coates and Neville Estates v Madden. The student does
not waste time simply repeating the facts of these cases but identifies the key points
and them reaches a defensible conclusion.
In relation to part (c), the candidate appreciates that the main issue is one of ‘public
benefit’, not the nature of the purpose. No time is wasted on a long analysis of
whether education is charitable – it clearly is and a case is provided. The key case
of Oppenheim is then discussed, with the student recognising that there was an
issue because of the personal nexus revealed by the facts. An even higher mark
would have been achieved if the student had asked what sort of personal nexus is
prohibited – is it one between the donor and the class, or between the class
themselves, or both? Oppenheim is not clear about this – but the extra marks are
for recognising the issue, not resolving it.
Part (e) is also generally well done, with good case law. Again, the answer could
have been improved by a clearer conclusion – does the student think it is charitable
or not? However, the use of case law is excellent, as it is throughout the problem.
This will always secure good marks and the absence of case law will lead to a lower
mark.
Question 3
The Anti-Driving Campaign (‘ADC’) is an unincorporated, non-charitable
association founded in the 1990s by three environmentalists, Jeremy, Richard
and Clarke. Its object is ‘to promote environmental awareness by
encouraging cycling rather than driving’. ‘Standard members’ of the ADC pay
an annual subscription of £50 in return for a newsletter and the ability to vote
about the various ADC campaigns. ‘Life members’ pay £1,500 in return for the
same membership benefits as ‘standard members’ but for the rest of their
lives. ‘Junior members’ qualify for non-voting membership if one of their
parents becomes a standard member.
ADC has two substantial assets. First, a registered freehold property gifted to
the ADC by Clarke (but with title still in Clarke’s name) so that the ADC would
have a headquarters; second, £50,000 in a bank account operated by Jeremy
and Richard on behalf of the ADC. Of this £50,000, £20,000 was the income
from membership subscriptions, £25,000 was a gift made by Orion (a
standard member) for the general purposes of the ADC after a lottery win; and
£5,000 was the profit from various fund raising events.
The members of the ADC have just voted to disband the association and seek
your advice as to what to do with the £50,000 and the freehold property.
Clarke is arguing that the headquarters, now worth £1million, belong to him.
Advise the members.

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General remarks
This question considers material discussed in Chapter 11 of the module guide. It
revolves around the dissolution of unincorporated associations and the distribution
of unused assets. It connects to purpose trusts and resulting trusts.
Law cases, reports and other references the examiners would expect you to use
Re Lipinski; Re Recher; Re Bucks; Hanchett-Stamford v A-G; Re Horley Town;
Neville Estates v Madden; Re Grant's WT; Gibbons v Smith.
Common errors
Despite the very clear statement in the question, some candidates thought this
involved charitable purpose trusts. There was also unnecessary repetition of ‘the
three certainties’. A common error in many answers to problem questions is to go
back to the essential ingredients of a trust. That is not required when the question
clearly establishes that these essentials exist. The key is to focus on the main
issues.
A good answer to this question would…
identify the relevant principles and apply them to the facts of this particular problem.
A good answer may well identify the source of the surplus assets (e.g. donations, or
profits from events, or subscriptions), ask why those assets were given validly to the
association in the first place and thereby deduce what should be done with the
surplus. For example, if an asset was given on a (void) purpose trust, a resulting
trust to the donor might be thought appropriate. If, however, an asset was given on
a contractual basis, it might be that ‘the contract’ determines the distribution of
surpluses – Re Recher. A good answer draws a thread connecting the reason why
the money was given and the distribution of surplus assets. Case law is key to a
good answer.
Poor answers to this question…
discussed whether this association is charitable They are told it is not. Likewise, an
answer that identifies different approaches to distributing surplus assets but which
does not locate them in the facts of this problem cannot score highly. Absence of
case law – given that this topic is all driven by case law – would be detrimental.
Similarly, general repetition of different types of valid purpose trust, or the nature of
resulting trusts, cannot be rewarded because this bears no relation to the facts of
the problem.
Question 4
Max was a solicitor in a large commercial law practice. Having lost money on
the stock market, Max devised a scheme in order to defraud his existing
clients by persuading them to invest in pretend companies which did not
exist. Max engaged his accountant, Chloe, to create the companies and
because she was well paid, Chloe did not ask any questions but simply
followed Max’s instructions. Chloe had heard about Max’s losses in the stock
market but she was not really interested in her clients’ other business affairs.
Vinny paid Max £280,000 to buy shares in one of the sham companies. Max
deposited Vinny’s cheque in his personal bank account at National Bank. The
manager at National Bank was pleased to see this deposit as he had also
heard that Max was having money difficulties. Max then withdrew £80,000 and
gave it to his wife, Dolores, to buy a diamond necklace. Dolores knew about
Max’s losses on the stock market and was surprised to receive the money,
especially when Max told her to buy something that could be easily hidden.
Unfortunately, Dolores knew nothing about diamonds and the necklace she
bought was a fake. Max transferred the remaining £200,000 by electronic
transfer to his daughter, Gudron, telling her that she was to look after it for

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him and not to spend it. Gudron thought it would be sensible to hide the
money under her bed, but this turned out to be a mistake when it was stolen
and the thief was never caught.
Advise Vinny. Max has no money, but Dolores and Gudron have just won the
lottery.
General remarks
This question refers to Chapter 17 of the module guide and concerns liability
consequent on a breach of trust, specifically, knowing receipt and dishonest
assistance. The question revolves around liability of strangers to the trust. As in
much of Equity and Trusts, good case law is the key to a strong mark.
Law cases, reports and other references the examiners would expect you to use
Williams v Central Bank of Nigeria; Byers v Saad Investments Co Ltd; Twinsectra v
Yardley; Royal Brunei Airlines Sdn Bhd v Tan; Group Seven Ltd v Notable Services
LLP; BCCI (Overseas) v Chief Akindele; Ivey v Genting Casinos.
Common errors
A common error was a failure to identify the subject matter of the problem – that this
is essentially a question about stranger liability consequent on a breach of
trust/breach of fiduciary duty. The important point that the trustee/fiduciary had no
money and that the property was either dissipated or worthless was overlooked by
many students and they spent valuable time talking about the empty liability of the
trustee/fiduciary.
A good answer to this question would…
explain (briefly) the fiduciary position of Max but note that pursuing him personally
would be pointless. Likewise, the property itself has been lost, or is worthless, so
proprietary remedies seem pointless (we are advising the claimant, Vinny). This
leaves the liability of strangers to the trust in either dishonest assistance or knowing
(unconscionable) receipt. A candidate should not be penalised for choosing a
particular label to describe these liabilities: it is the substance that matters.
Candidates may well identify assistance claims as liability ‘as if’ the defendant was
a constructive trustee. Likewise, candidates might explain liability in receipt as being
based on constructive trusteeship and better candidates might note the decision in
Williams v Central Bank of Nigeria on the (controversial) nature of this trusteeship.
A good answer will therefore explain the relevant legal principles for assistance and
receipt-based liability – using cases applied to the facts. Candidates should
consider the assistance liability of Chloe and the bank manager and the receipt
liability of Dolores. It is an interesting question whether Gudron might be liable in
respect of assistance rather than receipt, given the circumstances in which she
received the money. The personal nature of these liabilities might well be discussed
(given that Dolores and Gudron have assets unconnected with the trust property),
although this is not a question about the conceptual basis of liability and should not
be turned into one.
Poor answers to this question…
considered the trustee/fiduciary’s liability for breach of obligation in detail – but Max
has no money. Likewise, consideration of tracing was irrelevant as the assets are
missing or worthless. Weak answers also failed to explain why the stranger was
liable (if they were) and limited the answers to stating without reasons that they
were (or were not). Once again, the ‘right answer’ is a trivial part of the answer –
absence of reasoning and explanation was the most common cause of a poor
answer.

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Question 5
‘Section 53(1)(c) of the Law of Property Act 1925 requires that ‘a disposition
of an equitable interest or trust subsisting at the time of the disposition, must
be in writing signed by the person disposing of the same, or by his agent
thereunto lawfully authorised in writing or by will’. Unfortunately, it is not
clear what amounts to a disposition for the purpose of this section.’
Discuss.
General remarks
This question refers to Chapter 6 of the module guide and is covered extensively in
that chapter. It is a conventional essay question that allows students to demonstrate
understanding of the basic rules concerning dispositions of trust interests and
related issues around constitution of trusts.
Law cases, reports and other references the examiners would expect you to use
Section 53(1)(c) and 53(2) LPA 1925; both Vandervell cases; Grey v IRC; Oughtred
v IRC; Neville v Wilson; Grainge v Wilberforce; Re Paradise Motor Company; Re
Holt; Nelson v Greening & Sykes (Builders) Ltd; Nolan, R. ‘Vandervell v IRC: a case
of overreaching’ (2002) Cambridge Law Journal 169.
Common errors
This question was generally well done and the errors were more of detail than
understanding. Some students considered only one or two factual situations
(Vandervell and Grey) in their discussion of s.53(1)(c) and omitted the others. It is
important to make sure that a candidate covers all relevant material and does not
go into deep detail about just one or two areas or cases.
A good answer to this question would…
(briefly) explain why formality rules are important in trust creation/operation and
why, in particular, writing is needed when transferring an existing interest under a
trust for all types of property (not just land). Some reference can be made to the
exception in s.53(2), explaining that formality rules cannot be used to commit a
fraud or to permit unconscionable conduct. A good answer will then identify the
factual matrix of the various situations where a ‘disposition’ needing writing was
alleged and indicate how the courts resolved it. The key cases of Grey and
Vandervell (No.1) appear to be inconsistent, although they may not be (see Nolan
article). The best answers will go beyond these cases and consider the other
situations where the courts have had to consider whether there is a disposition (see
cases above). Vandervell (No.2) is largely inexplicable and a good answer will not
avoid that conclusion.
Poor answers to this question…
failed to provide context for the question – why are there formality rules, or went on
to consider only one or two cases. One or two (but not many) answers thought this
was a question about the rule in Milroy v Lord and Pennington v Waine etc. and this
is because of confusion between formality rules that constitute trusts (Pennington et
al.) and formality rules that deal with the operation of existing trusts.
Student extract
The given statement in question requires the discussion of section 53(1)c
which deals with equitable disposition to be in writing…
The history of this formality requirement can be traced from the section 9 of
statutes of fraud1677 and section 53(1)c of LPA1925 is a reenactment of the
said the statue. The purpose therefore is to prevent fraud but also ensure that
the trustee is well informed about his obligation… The meaning of disposition
is not explained in the statute but rather it has been interpreted in existing

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case law concerning the application of the said statute. In the case of Grey v
IRC the HOL have unanimously held that the meaning of disposition is to be
given its natural meaning which simply translates into any beneficiary dealing
with his own share. So whenever the beneficial or equitable owner deals
away with his title it has to be written under section 53(1)c.
Although it might simply seem at the outset however courts have
considerable difficulty in defining precisely the situations where the court
would require the application of section 53(1)c. The two classical types of
transaction which requires writing under the section is first assignments. This
is the most basic from where the beneficiary of trust instructs his trustee
transfer his beneficial title to the other beneficiary of the same trust. Such
needs to comply with the writing requirement if not done as per section
53(1)c the instructions to the trustee would be invalid. The second type where
the application of writing is necessary is where the beneficiary assigns his
official title to the third party who is not part of the trust. It is pertinent for the
trust to be aware to whom to give therefore the court in the case of Grey v
IRC have expressly stated that the transaction was completed and thereby
attracted the tax as it made in later writing provided by the beneficiary.
Now we will consider those circumstance there exists argument whether the
transaction qualify for a disposition or not. First such situation is where sole
beneficiary instructs his trustee to transfer both legal and equitable tiltile [sic]
to the third party. This issue arose in the case of Vandervall v IRC where
Vandervall Pvt created a bare trust by appointing National Prov[i]sional Bank
as a trustee company here since Vandervall pvt was sole beneficiary they
instructed NPB to transfer both legal and equitable tiltle [sic] to the Royal
college of Surgeons. Inland revenue argued that this should be given the
menaing [sic] of disposition and since it[‘]s not in writing therefore this
transaction would be invalid. The court rejected the argument of IRC and
instead stated that since the beneficiary is dealing with both his title as he is
the sole beneficiary it would not amount to disposition rather it would become
a gift. Similarly in the case of Vandervall the meaning of disposition was once
again an...
A huge controver[s]y is surrounded with the creation of sub trusts. This is
where the beneficiary declares himself or herself to be the sub trustee or
intermediate trustee for sub beneficiary. The question is would such
declaration be considered a disposition? The earlier authority dealing with the
issue in the case of Grainge v Wilberforce this case bifurcated between
whether the s[u]b trustee had active duties to play within the trust or not. In
later where thare [sic] are no active duties which the sub trustee had to
perform it is said that the sub trustee would drop out of the picture. In such
circumstances [sic] it would amount to disposition as the trustee and sub
beneficairy [sic] will directly be dealing with another. To prevent any type of
fraud and give clarity to the trustee it was essenntial [sic] for the writing
requirement [sic], therefore section 53(1)c of LPA1925 would be applicable.
However in case where the sub trustee have an active role to play he would
not drop out of the picture thus there was no need of writing.
Penner argues that the bare sub trust/active duties distinction is wrong in the
principle. The trustee has no obligation under the sub trust and no duties to
his beneficiary[‘]s sub beneficiary. The trustee would be intermedding [sic]
with a trust to which he has not been appointed as a trustee. Similarly
Underhill and Hayton and Brain Green in an article titled Grey, Oughtred and
Vandervall a co[n]textual reappraisal 1984 ‘asserted that [sic] a self-
declaration of a trust whether as to part of teh [sic] equitable interest or full or

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 the eniterty [sic] is a disposition within section 53(1)c and requires writing’.
This dichotomy concerning active and inactive duties due to afor[e]mentioned
criticism have been abolished in later case of Nelson v Greening the court of
Ap[p]eal held in the following words ‘Although the practical effect of beneficial
owner of property making a declaration of trust in favor of a third party would
be to get rid of the trust of [a]n equitable interest then subsisting as a matter
of law the beneficial owner would not drop out of the pic[t]ure but would hold
the beneficial interest on trust for the third party therefore in cases of subtrust
the court have now made clear there is no need of writing under section
53(1)c regardless of active or inactive duties[‘].
Another time where the meaning of disposition has been considered in
relation to the application of Section 53(1)c is specifically enforceable oral
contracts in cases concerning the beneficial tiltlt [sic] to a third party. This
was considered in two important cases in Oughtred v IRC and in Neville v
Wilson the court in both cases ruled that since especially enforceable
contract are protected by contarctual [sic] constructive trust, they can bypass
the requirement of section 53(1)c through the application of section 53(2)
which provides that trusts arising by the operation of law such as resultiong
[sic] or construct[ive] trust arising by the operation of law such as resulting or
constructive trust needs to be in writing. However it is pertinent to mention
that such in only applicable where the contract is specficically [sic]
enforceable.
Comments on extract
This extract is from the essay question on the meaning of disposition under
s.53(1)(c) LPA 1925 and it achieved a low 2:2.
The strength of the answer lies in the fact that the student has considered a number
of scenarios where the courts had to determine whether there was a ‘disposition’
within the statute. Thus, the student considers most of the key cases: Grey;
Vandervell; Grainge v Wilberforce; Oughtred, Neville v Wilson. The student also
considers some academic commentary, which ensures some extra marks. On the
whole, the student has demonstrated that they know what this question is asking.
They also have demonstrated an understanding of how these key cases relate to
the question asked..
The weaknesses are in the clarity of expression, including misspelling of case
names and some other spelling errors. Clarity and accuracy are important in
answers to law questions. Under the assessment criteria, a lower second must
have ‘satisfactory quality of presentation, structure and standard of written
communication’. This answer just meets this threshold and so scores at the lower
end, lower second. The quality of the legal analysis is generally sound – it does not
need to be perfect. It meets the criteria of ‘standard but largely accurate range of
information deployed’. There is good use of case law and most of the legal issues
are covered. Had the answer been constructed more fluently, it would have been
higher end lower class and, with a little more analysis, a low 2:1.
Question 6
‘The conditions for tracing in equity are well established, but not built on
principle.’
Discuss.
General remarks
This question refers to Chapter 19 of the module guide. It is covered
comprehensively there. A knowledge of case law and academic commentary is
needed.

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 Examiners’ reports 2022

Law cases, reports and other references the examiners would expect you to use
Taylor v Plummer; Chase Manhattan v Israel-British Bank; Boscawen v Bajawa;
Westdeutsche v Islington; Foskett v McKeown, Bank of Cyprus v Menelaou at
para.37; Brazil v Durrant; Millet, P. ‘Restitution and constructive trusts’ (1998)
114(2) LQR 399; Chambers, R. ‘Tracing and unjust enrichment’ in Neyers, J., M.
McInnes and S. Pitel Understanding unjust enrichment (2004); Birks, P. ‘Property,
unjust enrichment, and tracing’ (2001) 54 Current Legal Problems 231.
Common errors
A common error was to write about common law tracing. The question is explicit
that it is about tracing in equity. These answers looked pre-prepared and any
extensive discussion of common law tracing was ignored and given no marks. Its
relevance was only to indicate that tracing in equity is subject to its own rules and
conditions. Some candidates did not identify the conditions of tracing in equity but
simply talked about one or two theories. That is not what the question asked.
A good answer to this question would…
Consider the conditions for tracing in equity and illustrate them by reference to case
examples. The better answers considered whether these conditions were justified
or not (e.g. around the need for a pre-existing fiduciary relationship). A good answer
went on to discuss some of the views about the basis of tracing – see Birks, Smith,
Penner, Chambers et al. There was no need to indicate a preference for one or
other of these theories. A good answer did not just assume that one approach was
correct but appraised these approaches.
Poor answers to this question…
failed to identify the key conditions for tracing as explained in the case law.
Candidates should never assume that an Examiner will ‘know’ that the candidates
understand the law – the student’s answer must tell the Examiner, especially when
a question calls for discussion of points of law. Similarly, an answer that did not
consider the principles – or alleged principles – behind tracing could not do well.
Ignoring the controversies over the nature of tracing – which is covered fully in the
module guide – would not give a good answer.

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