UNIVERSITY OF JAFFNA, SRI LANKA

SECOND EXAMINATION IN LAWS, BACHELOR OF LAWS DEGREE-2019

FIRST SEMESTER (Held in July 2021)

ALLEC 21044

LAW OF EQUITY AND TRUSTS

THREE (03) HOURS

The question paper contains SEVEN (07) questions .

• Answer any FOUR (04) questions only.

(Candidates will be penalized for illegible hand writing)

1. "The Judicature Acts of 1873 and 1875 introduced a single court system that merged
the courts responsible for administering the equity and common law. The Acts have
resulted in two distinct perceptions: One is that the rules of equity and common Law
are fused as one and the other is that it is just an amalgamation of two rules, each of
them retains its identity but administrated under a single court system."

Comment.

(100 marks)

• 2. The maxims of equity are neither a code nor a law. Rather, they provide a set of
principles that ensure the aims of equity are achieved. The courts have given effect to
the maxims by applying them in certain cases.

Do you agree? Support your answer with reference to three (03) equitable maxims
and relevant case laws.

(100 marks)

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3. Discuss whether a valid trust is created in the following circumstances:

a) Gangha bequeaths certain property to Ghanthi, desiring Ghanthi to divide the bulk
of it among Suhuna's children.

b) Chandrika transferred all her jewellery in the locker of ABC Bank to Hasim and
informs him to hand them over to her granddaughter Amritha who is in Australia.

c) Hiruniga bequeaths her fancy shop and stock in trade to Silva on condition that he
pays Hiruniga's debts to Kennedy.

d) Bandara bequeaths certain property to Gunaratne, requesting him to distribute it

among the members of Shavithri's family.

e) Sunil bequeaths Rs. 750,000 to Kathir for the welfare of stray dogs in Galle.

(20x5= 100 marks)

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4. Answer both (a) and (b)

a) Discuss the rights and liabilities of a beneficiary in relation to trust property.

(40 marks)

b) 'The office of a trustee may be vacated by death or by his discharge from his office.'
Answer the following questions in relation to the statement:

i) Specify the instances where a trustee may be discharged •

ii) Describe the procedure to be followed to discharge a trustee
iii) In the appointment of a trustee by a court, the court shall have regard to certain
rules for selecting a new trustee. Write down the rules.

(20x3=60 marks)

5. Answer both (a) and (b).

a) Explain the differences between the effect of the doctrine of cy-pres and the
resulting trust.
(35 marks)

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b) Paranthaman, founder of "Akaram" educational foundation, directed Akaram to

award scholarship fund to the students who are admitted to law, engineering and
medicine in State Universities of Sri Lanka. The beneficiaries of the scholarship
fund are students from the District of Kilinochchi.
I. Is it a charitable trust under the Trusts Ordinance No: 09 of 1917? Give reasons
for your answer.
(20 marks)
11. If Paranthaman's grand-daughter living in Kilinochchi is selected to law in the
University of Jaffna, is she eligible to get the scholarship?
(20 marks)
111. Would your answer be different to the above two questions if Akaram is
established in the United Kingdom?
(25 marks)

• 6. Answer both (a) and (b)

a) Suganthapal paid consideration and purchased a land in the name of his

daughter Shakee who is 22 years of age in order to conceal his income to the
Inland Revenue Department. However, he has paid all taxes to the Inland
Revenue Department. Two years later, Suganthapal requested his daughter
Shakee to donate the property to her sister Shanmukee. However Shakee had
refused to do so.

Advise Suganthapal.

(30 marks)

•
b) Varshika and Anushiya are the beneficiaries of a trust created by their deceased
father, Kandasami. Kandasami appointed his brothers Navaratnam and Samuvel
as the trustees, and entrusted his five acres of land in Pliyandala. The terms of the
trust stipulate that trustees have to sell the property for a sum not less than Rs.
15,00 000 and deposit the proceeds of the sale to the accounts of Varshika and
Anushiya equally. Trustees sold the property for Rs. 12,00 000 and deposited Rs.
300 000 each to the accounts of Varshika and Anushiya and deposited the
remaining money in the account of Navaratnam and Samuvel.

Discuss the right and liabilities of the beneficiaries and trustees citing relevant
provisions of the Trust Ordinance and decided cases.
(70 Marks)

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7. Answer both (a) and (b)

(a) Discuss the limitation on the application of Section 2 of the Trusts Ordinance.

(50 marks)
(b) Distinguish the nature of common law remedies and equitable remedies.

(50 marks)

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