ASSIGNMENT BRIEF

QUALIFICATION UNIT NUMBER AND TITLE

PEARSON BTEC HND IN LAW (SRF) 11. PRINCIPLES OF EQUITY AND TRUSTS (LEVEL 5)
INTERNAL VERIFIER UNIT TUTOR
MEHAK ZARAQ
DATE ISSUED SUBMISSION DATE RESUBMISSION DATE
THURSDAY, 25 AUGUST 2022
TH
FRIDAY, 02 DECEMBER 2022
ND
TUESDAY, 13TH DECEMBER 2022

ASSIGNMENT TITLE

LEARNING OUTCOME AND ASSESSMENT CRITERIA

PASS MERIT DISTINCTION
LO1 ANALYSE THE PRINCIPLES AND DOCTRINES OF EQUITY AND THE PURPOSE OF TRUSTS
P1 DISCUSS THE MEANING OF EQUITY AND ITS
M1 CRITICALLY ANALYSE THE PURPOSE OF
RELATIONSHIP WITH COMMON LAW.
EQUITY AND TRUSTS IN THEIR MODERN-DAY
P2 ANALYSE THE PRINCIPAL MODERN-DAY USE USES.
LO1 AND LO2
OF TRUSTS.
D1 CRITICALLY EVALUATE THE MODERN-DAY
LO2 EXAMINE THE RULES IN RELATION TO THE CREATION OF TRUSTS
USE OF TRUSTS AND THE IMPACT OF TRUSTS
P3 ANALYSE THE FORMALITIES FOR CREATING BEING IMPROPERLY CONSTITUTED.
A TRUST.
M2 CRITICALLY ANALYSE THE CONSEQUENCES
P4 DISCUSS THE DIFFERENCE BETWEEN OF FAILING TO PROPERLY CONSTITUTE A TRUST.
CONSTITUTED AND UNCONSTITUTED TRUSTS,
AND THEIR LEGAL IMPLICATIONS.
LO3 DISTINGUISH BETWEEN THE DIFFERENT CATEGORIES OF TRUST

P5 DISCUSS THE DISTINCTION BETWEEN

IMPLIED, RESULTING, CONSTRUCTIVE AND
M3 ANALYSE THE LEGAL RULES RELATING TO
SECRET TRUSTS.
THE VARIOUS CATEGORIES OF TRUST IN GIVEN
P6 APPLY, IN GIVEN SITUATIONS, THE RULES SITUATIONS. LO3 AND LO4
RELATING TO CHARITABLE AND NON- D2 JUSTIFY THE CONSEQUENCES OF THE
CHARITABLE TRUSTS. CREATION OF VARIOUS FORMS OF TRUST AND
LO4 EVALUATE THE RULES IN RELATION TO BREACH OF TRUST AND EQUITABLE REMEDIES THE CONSEQUENCES FOR THEIR BREACH.

P7 EVALUATE, IN GIVEN SITUATIONS, THE

POWERS AND DUTIES OF TRUSTEES. M4 CRITICALLY EVALUATE THE CONSEQUENCES
P8 DISCUSS THE RULES IN RELATION TO OF BREACH OF TRUST AND THE
BREACH OF TRUST AND THE EQUITABLE ACCOMPANYING EQUITABLE REMEDIES.
REMEDIES.

SUBMISSION FORMAT
THE SUBMISSION COMPRISES 4 SHORT LEGAL REPORTS AND ONE SHORT ESSAY.
THE LEGAL REPORTS AND ESSAY WILL HAVE TO FOLLOW A PROPER AND COHERENT STRUCTURE. IRAC RULE SHOULD BE FOLLOWED TO SOLVE THEM,
MEANING ISSUES SHOULD BE IDENTIFIED, LAW/RULE SHOULD BE STATED. APPLICATION OF THE RULE TO THE FACTS IS REQUIRED, AND A CLEAR AND
COHERENT CONCLUSION SHOULD BE GIVEN AT THE END. STUDENTS NEED TO USE SINGLE SPACING AND FONT STYLE TIMES NEW ROMAN, SIZE 11.
STUDENTS ARE REQUIRED TO EXPLAIN EACH CASE SEPARATELY, USING THE GUIDANCE PROVIDED. ALL WORK MUST BE SUPPORTED WITH RESEARCH
AND REFERENCED USING THE OSCOLA REFERENCING SYSTEM. THE WORD LIMIT IS SPECIFIED.

ASSIGNMENT SCENARIO AND GUIDANCE

PART A
(LO1 & LO2)
Q.1.
a. Discuss the development of Equity and its relationship with Common law (LO1, P1).
b. Adam is married and wants his wife to receive the income from his shares for the rest of her life but also wants to give
the capital( title to the shares) to his children once his wife has passed on. Moreover, Adam wants the capital to be
distributed among his children in proportion to their financial needs. Discuss how the device of trust can help Adam in
setting up these arrangements and critically evaluate and analyse the modern-day uses of trust (LO1, P2, M1, D1).
Q.2.
Lily declared a trust in writing of 75 shares in a private company, with Eve as sole trustee and Finn as sole beneficiary. Lily sent
the declaration of trust to Eve, along with a completed share transfer form, and the share certificates. Eve put the declaration,
transfer form, and certificates in her wall safe.
Finn then orally agreed to sell his interest under the trust to Robert for £50,000. Robert orally declared that he held any interest
he received from Finn on trust for Alia. Advise the parties by analysing the formalities and critically analysing and evaluating the
impact of the defective constitution of trust (LO2, P3, P4, M2, D1).
PART B
(LO3 & LO4)
Q.3.
a. Betty was an elderly widow who owned a house in London in fee simple. Five years ago, she transferred her title to
Chloe as part of an oral arrangement between them, in which Chloe agreed to hold the house in trust for Betty for life
and have the remainder for herself. Chloe became the registered owner of the fee simple estate. Betty continued to
live alone in the house and pay all expenses related to it. Betty died recently. Den has been appointed as the
administrator of Betty’s estate. As her only living relative, he is entitled to any part of her estate that has not been
disposed of by her will. He claims that Chloe holds the house in London in a resulting trust for Betty’s estate. Advise
Chloe by applying the legislation and case law related to the resulting trust and justify the consequence of creating
the resulting trust. Also, briefly distinguish it from the implied and constructive trust (LO3, P5, M3, D2).
b. Five years ago, Dodd made a will that stated, “I hereby leave my car to my dear friend, Eve, to use as we discussed.”
The will was witnessed by Adam and Mark. Later that same day, Dodd told Eve that he and Judy had once had a
secret affair while she was married and that he wanted her to have the car after him. Ryan, Dodd’s son, and sole heir
wants to know who is entitled to the car. Advise Dodd on the relevant legal provisions that relate to secret trusts and
justify the consequence of creating the secret trust (LO3, P5, M3, D2).
Q.4.
Adam died recently. According to his will, the residue of his entire estate is to be held in trust as follows:
a. to help needy actors, artists, and musicians;
b. to help teach drama, arts, and music at Adam’s old school;
c. to construct and maintain a monument to the memory of the great British figure skater Jennifer Nicks who died in
1980.
Hans and Freddie were appointed as the executors of Adam’s estate and the trustees of his will trusts. They seek your advice
concerning the validity of those trusts. Adam’s old school closed down last year.
Advise Hans and Freddie by applying the legal rules in relation to charitable and non-charitable purpose trusts and justify the
consequences of their creation (LO3, P6, M3, D2).
Q.5.
Ellen settled £3 million in trust, with her daughters Linda and Maggie as trustees. Under the terms of the trust:
a. the trustees may distribute the income and capital as they see fit among the settlor’s children and grandchildren for
50 years and then shall distribute any remainder assets as they see fit among the children and grandchildren then
living;
b. the trustees shall invest the trust assets only within the UK; c) the trustees shall not be liable for any breach of trust
unless it is caused by their own fraud or gross neglect.
With the UK economy struggling, Linda and Maggie decided to invest £250,000 of trust money in France and £250,000 of trust
money in Germany. The French investments have risen in value to £300,000, but the German investments have fallen in value
to £200,000.
Maggie’s friend Alex owns a UK business that needed money to continue operating. Maggie convinced Linda that it would be a
good investment, so they invested £100,000 of trust money in Alex’s business. That investment has fallen in value to £80,000.
Ellen asked Linda and Maggie if they could use the trust to help Florence, who is Ellen’s friend and has always been ‘like a
daughter’ to Ellen. Linda and Maggie paid £10,000 from the trust to Florence.
Vivienne is Ellen’s granddaughter. She is unhappy with the way in which Linda and Maggie have been performing the trust.
Advise Vivienne.
PART A - GUIDANCE
(LO1 & LO2)
Q.1.
a. Students are required to demonstrate that English law comprises two systems of case law: common law and Equity.
They should highlight the problems with common law that led to the development of equity for instance inadequacy
of remedies, lack of flexibility, etc. It is important to recognise that although equity may appear to be synonymous
with fairness or justice and the rules of equity may appear to be simply what any given judge thinks is a fair and just
response to particular facts but equity is a set of rules and operates on maxims. It operated on a system of precedent
that is exactly the same as that operated at law. It is pertinent to mention that the initial problem of lack of
predictability and rule of law when equity did not operate on maxims and system of precedent. Students are required
to discuss the evolution to the greater desire that equitable rules be more predictable which can be seen from the
criticism to the concept of unconscionability-Bank of Credit and Commerce International (Overseas) Ltd v Akindele
[2000] EWCA Civ 502, [2001] Ch 437; Pennington v Waine [2002] EWCA Civ 227, [2002] 1 WLR 2075; Pitt v Holt
[2013] UKSC 26, [2013] 2 AC 108. Students are required to discuss some of the equitable maxims briefly with a case
where the decision is based on the maxim for instance ‘he who comes to equity must come with clean hands’ can be
seen in action in D & C Builders v Rees, ‘delay defeats equity’ was applied in Leaf v International Galleries, ‘equity
does not assist a volunteer’ in Milroy v Lord, and ‘equity looks upon as done that which ought to be done’ in Re Rose
[P1].
Students are then required to discuss the conflict that arose between common law and equity and how it was
resolved by the Earl of Oxford’s case in 1616. Discussion on the implication of it is required with specific reference to
Maitland’s Course of Lectures. Moreover, students are required to discuss how the courts of equity and common law
operated in different courts prior to the passing of Judicature Acts 1873-75 and how now every High Court is
empowered to administer the law of both jurisdictions. Students are required to discuss the fusion debate here, i.e.
whether the merger is administrative or of substance [P1].
b. Students are required to discuss the principal modern day use of trusts. Before that, they are required to define the
concept of trusts and how it works in practice. Device of trust allows the rights to be given to a person who is
incapable of managing rights e.g. a child or a mentally challenged person and assets may be left for charitable
purposes [P2].
Moreover, trusts provide flexibility since in a discretionary trust like the one in question, funds can be released to
those members of the society with greater needs. Also, trusts can provide for the enjoyment of rights to be split on a
plane of time. Students are required to apply the law to the present scenario. How trusts will help Adam achieve this.
Who will own legal title and equitable titles? [P2]
Trusts for instance can allow the pooling of assets and the appointment of expert trustees, such as accountants,
financial planners and lawyers [P2]. One might ask, after the global financial crisis, whether this rationale is
convincing, but the theory is clear. A critical analysis and evaluation of this use is required [M1, D1]
Finally, the commercial reality is that trusts are often used to lower taxation liability and to protect assets from being
claimed by creditors [P2]. This raises questions about the degree to which governments should be sanguine about
such activity, and the line between (permissible) tax minimisation and (impermissible) tax evasion [M1. D1].
Q.2.
Student is required to discuss whether the trust made by L in F’s favour is valid and enforceable. 3 conditions of a trust must be
stated briefly: valid declaration of trust meaning the 3 certainties and administrative workability, the constitution of trust, and
proof of trust. Here, there is a valid declaration since intention, subject matter, and object was clear. But there was a problem
with the constitution. The issue is whether delivery of the share transfer form and the share certificates to E is sufficient to
constitute the trust in F’s favour? Discussion on what steps are required to transfer the legal title in shares/constitute the trust
[P4]. Students are required to discuss the legal implication of constituted and unconstituted trust by explaining the principles of
Paul v Paul, Choithram v Pagarani, and Elison V Elison. The important equitable maxim (rule) that ‘equity does not assist a
volunteer’ and its two strands: ‘equity will not enforce gratuitous promises’ and ‘equity will not perfect an imperfect gift’ need
to be discussed in detail [P4] Moreover, the students must discuss the general rule of Milroy v Lord (HL) and its extension by
High Court in Khan v Mehmood [P4] Students are required to apply the law to the facts presented. The facts are not similar to
Pennington so no unconscionability and hence the defect would not be cured. Extensive application is required here [M2].
Criticism that Khan v Mehmood can constitutionally not overrule the HOL’s decision of Milroy v Lord. Also, Pennington v
Waine, itself has been subjected to scathing criticism for instance the term unconscionability was not properly defined, it is in
direct conflict with Milroy, the reliance by the court on Choithram v Pagarani was misplaced. Students are required to discuss
all the criticisms and their counters in detail [D1]. Exception carved out in Re Rose/Mascall v Mascall – where the donor has
done everything in their power, the defect is cured, is relevant here. Students are required to explain the decision in detail [P4].
Application of Re Rose and a definite conclusion are required[M2]. Criticisms on Re Rose are central to discussion here. Two
main criticisms must be discussed. Firstly, the explanation as to why reliance in Re Rose on the maxim that equity sees as done
that ought to be done from Land Law (Walsh v Lonsdale) is misplaced. Secondly, how Robert Chambers ‘power analysis’ to
explain Re Rose does not justify Re Rose as per James Penner. Students are required to take a strong stance as to whose
viewpoint is sound [D1]. The formalities required to create a trust especially Paul v Constance, Re Kayford, and s.53(1)(b) of
Law of Property Act 1925 must be stated and application of it to the facts presented must be done [P3].
Another issue to be discussed here is whether F’s oral agreement amounts to a disposition of his subsisting equitable interest
and is therefore of no effect unless in writing? Discussion and application of s.53(1)(c) of LPA 1925, Oughtred v IRC, and Neville
v Wilson are required. There are no formalities required for F to make a contract to sell his interest under the sub-trust to R
and, because his interest relates to shares in a private company, the contract will be specifically enforceable, meaning that
there is a sub-sub-trust in favour of R, Oughtred v IRC notwithstanding [P3]. Another issue here is whether, if F is indeed holding
the shares on (vendor-purchaser) CT for R, he drops out of the picture so that E holds directly on trust for R, and therefore
whether F must nevertheless comply with s.53(1)(c)? Grainge v Wilberforce, Re Lashmar, and Onslow v Wallis must be
discussed and how Nelson v Greening & Sykes has changed the law. Application of these cases is required [P3]. The next issue
to be discussed here is whether R’s declaration of trust in favour of Alia amounts to a disposition of his subsisting equitable
interest and is therefore of no effect unless in writing? As to R’s oral declaration of trust in favour of A, this will not amount to a
disposition of equitable interest and so will be valid, despite s.53(1)(c) LPA 1925 [P3]
PART B - GUIDANCE
(LO3)
Q.3.
a. Students must state that prima facie voluntary conveyance in the facts would mean a resulting trust would arise [P5].
The subject matter in the facts being an interest in land might raise a problem with respect to the interpretation of
section 60(3) of the LPA1925. Conflicting cases of Ali v Khan and Lohia v Lohia on one hand and Prest v Petrodel
Resources (obiter of UKSC) and National Crime Agency v Dong (obiter dictim) on the other hand must be discussed.
Students must conclude that the effect of the transfer therefore depends on what view one takes regarding the effect
of section 60(3) [P5]. If the presumption of resulting trust arises, the students are required to apply whether there is
enough evidence to rebut it, especially in light of Hodgson v Marks [M3]. Can Den in any way defend this by
producing contrary evidence? [M3] Extensive discussion on the academic debate is required as to why Resulting trusts
arise or are created. Key players in the debate are Williams Swadling, Robert Chambers, and Lord-Brown Wilkinson.
Explain how they have explained their viewpoints by citing case laws and analyse as to whose viewpoint is sound and
closer to what the law is. Whether Resulting trusts should arise in the situations they do arise? [D2] Moreover,
discussion on what are constructive trusts and when they arise, and how are they different from implied trust.
Leading cases of Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53 must be discussed to help
explain the distinction [P5]. Discussion on why do constructive trusts arise. Not simply by operation of law but very
good answers would discuss this with the help of distinction between institutional and remedial constructive trusts.
Whether they should arise in situations where they do arise [D2].
b. Students must identify the issue that who is entitled to the car. Identify the trust to be testamentary and what are the
conditions for it to be valid and enforceable under s.9 of the Wills Act 1837 [P5]. Identify it to be a half-secret trust by
applying the definition [M3]. Courts have tried to justify the enforcement of half-secret trusts by fraud theory and
Dehors the will theory (Blackwell v Blackwell) even though they do not comply with s.9. Students are required to
discuss that the fraud theory of Re Gardner is circular and did not cater to the cases of half-secret trust & the
expansion of fraud theory to cater to HST did not solve the problem of fraud theory being circular. Moreover, ‘Dehors
the will’ theory to justify the creation/enforcement of secret trusts laid down in Blackwell v Blackwell is itself flawed.
Students are required to explain and criticise this theory in detail. Criticisms of Patricia Critchley that the theory
 wrongly characterises secret trusts as intervivos and confuses the concepts of ‘Dehors the will’ and ‘Dehors the Wills
Act’ are required to be discussed in depth [D2]. Students must next move on to state the 3 conditions of Moss v
Cooper that need to be fulfilled to make secret trusts valid [P5]. Key cases Re Snowden, Kasperbauer v Griffith
[2000], Titcombe v Ison [2021] 1 WLUK 624 ), Re Keen must be cited with legal principles [P5]. Application of these
cases to the facts in a coherent way is required [M3].
Q.4.
Student is required to discuss the validity of the three trusts over Adam’s entire residuary estate. Discussion on when purpose
trusts are valid and enforceable is required. Beneficiary principle of Morice v Bishop of Durham and Re Endacott should be
discussed. For part a and b, S.2(1) of Charities Act 2011, s.3(1) of CA 2011, s.4(2) of the Act & Independent Schools Council v
Charity Commission must be discussed. For part c, a discussion on private purpose trust is required.
a. The issue is whether or not the trust to help needy actors, artists, and musicians is charitable under the head of relief
of poverty. Cite and apply S.3(1)(a), Re Coulthurst, Re Scarisbrick, and Dingle v Turner to determine whether they are
prima facie charitable. For the public benefit, cite and apply Verge v Somerville, Dingle v Turner [P6, M3].
b. The issue in this part is whether or not the trust to help teach drama, arts, and music at Adam’s old school is
charitable under the head of the advancement of education. Cite and apply S.3(1)(b), Royal Choral Society v IRC, Re
Delius, and (s.3(1)(f)). Students are required to discuss whether the purpose is for the public benefit. Cite and apply
Re Pinion to determine whether it is beneficial or detrimental and Oppenheim v Tobacco Securities to determine
whether public or appreciably important section of public is in fact benefiting. Application of legislation and cases to
the facts is required [P6, M3].
This is not charitable but could be valid as an anomalous testamentary trust for the creation and maintenance of a
monument for a deceased person. Cite and apply Re Endacott and Musset v Bingle. The student needs to state that
trust for erection might be upheld but not for the maintenance since it goes against the perpetuity period. Discuss and
apply Lismore United Free Church Kirk-Session v M’Caig’s Trustees-if large amount is given for this then it might not
be upheld but state that this is only of persuasive value [P6, M3].
Students are required to explain why equity disallows the enforcement of private purpose trusts. A detailed
discussion of the beneficiary principle of Morice v Bishop of Durham and its two different interpretations is
important. The beneficiary principle being a ‘rights principle’ as propounded by Roxburgh J in Re Astor’s ST or being
an ‘enforcer principle’ is correct. Does any interpretation solve the problem of enforcement of private purpose trusts
[D2]?
Q.5.
Explain that Vivienne is a beneficiary of a power of appointment and a discretionary trust and therefore she has standing to sue
the trustees and call for an account even though she might not receive any benefits from the trust. It would explain that the
investments in France and Germany were contrary to the terms of the trust and in breach of trust; that the investment in Alex’s
business was permitted by the terms of the trust but likely in breach of the trustee’s duty of care and clearly in breach of
Maggie’s fiduciary duty as a conflict of interest; that the payment to Florence was unauthorised and in breach of trust. It would
then explain that the account could be falsified to remove unauthorised disbursements and surcharged to add income that
should have been earned from proper investments; that the beneficiaries could elect to adopt the successful investments in
France and reject the German investments. Finally, it would discuss whether the trustees are protected from personal liability
by the exemption clause.

EVIDENCE CHECKLIST SUMMARY OF EVIDENCE REQUIRED BY STUDENT

Q.1. (1500-2000 words)
Q.2. (1800-2000 words)
PART A & B Q.3. (1800-2000 words)
Q.4. (1800-2000 words)
Q.5. (1800-2000 words)