Equity and Trusts Level 5

5301LAWCL
2021 Semester 1

‘ In a nutshell it’s all about aiding capitalism,

avoiding tax, relationship breakups and leaving
HORRIFICALLY large sums of money to your
dog…’

CONTENTS

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TEACHING TEAM CONTACT DETAILS

TEACHING AIMS

LEARNING OUTCOMES

LEARNING ACTIVITIES

ASSESSMENTS

LJMU ASSESSMENT REGULATIONS

ASSESSMENT DETAILS

ASSESSMENT CRITERIA

ATTENDANCE AND PARTICIPATION

DISABILITIES AND EQUAL OPPORTUNITIES

MODULE HOME PAGE

READING LIST

TIMETABLE

WORKSHOP QUESTIONS

GLOSSARY OF USEFUL TERMS

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Meet the team

Module Leader
Sarah Stirk

Module Lecturing & Seminar Team: Sarah Stirk, Sofia Cavandoli, Fleur Lawrence,
Shane Sullivan

Name Office Email Address

location
Sarah Stirk 432A RB S.K.Stirk@ljmu.ac.uk
Shane 432 RB S.K.Sullivan@ljmu.ac.uk
Sullivan
Fleur 428RB F.V.Lawrence.ac.uk
Lawrence
Sofia 428RB S.Cavandoli@ljmu.ac.uk
Cavandoli
Muhammad 413RB M.A.Shaukat@ljmu.ac.uk
Shaukat
Tasnim 406RB T.K.Ahmed@ljmu.ac.uk
Ahmed

Please email the Equity Module team address with any questions about the
module the address is : Equitymoduleteam@ljmu.ac.uk

Please also note that the team will reply to emails with 24hours during the working
week. The team do not check their emails at the weekend or in the evenings.

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Teaching Aims & Learning Outcomes
Aims:

1. To enable students to demonstrate a firm understanding of both Equity and

Trusts
2. To allow students to be able to apply the core principles of Equity and Trusts
to a range of both problem and essay style questions.

Learning Outcomes:

After completing the module the student should be able to:

1. Demonstrate a firm grounding of the fundamental concepts, values and

principles of Equity and Trusts.
2. Demonstrate an ability to apply legal knowledge to problem questions,
drawing logical conclusions which are substantiated by legal authority.
3. Demonstrate a well-developed ability to use a wide range of legal sources.
4. Demonstrate a critical awareness of the historical, socio legal and political
context of equity and trusts.
5. Demonstrate the ability to present a coherently structured legal argument
demonstrating high levels of skill in legal terminology and language use.

Learning Activities
Lectures :all Lectures will take place in the Johnson Foundation Auditorium, Seminars
you will have a seminar each week starting in week 2 the team will also hold revision
guidance sessions and you will have the opportunity to submit work for feedback in
preparation for the exam.

Assessment Regulations
The University defines academic misconduct as ‘any case of deliberate,
premeditated cheating, collusion, plagiarism or falsification of information, in an
attempt to deceive and gain an unfair advantage in assessment’ Assessment
includes all forms of written work, designs, constructions, presentations,
demonstrations, viva voces, accreditation of prior learning portfolios, in-class tests
and all forms of examination.

Allegations of academic misconduct will be referred to the Director of School [or

nominee]. Where there is sufficient evidence to support a prima facie case of
academic misconduct, the matter will be referred to an Academic Misconduct Panel

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[AMP]. If the AMP finds the case is proven a penalty will be applied in accordance
with the LJMU penalty tariff. Penalties range from the loss of marks in the relevant
module with no opportunity to retake the assessment, or the failure of a set of
modules. In some cases module marks are reduced to zero, making it impossible to
achieve your target award.

The University promotes and supports a culture of academic integrity and takes all
forms of academic dishonesty very seriously. The consequences of academic
misconduct can extend beyond the University and may impact upon your chosen
profession. You may be referred to Fitness to Practise Panel and / or the University
may be required to inform any relevant professional body or regulator.
Cheating includes:

• any form of communication with or copying from any other source during an
examination
• communicating during an examination with any person other than an
authorised member of staff
• introducing any written, printed or other material into an examination
(including electronically stored information) other than that specified in the rubric of
the examination paper
• having or gaining access to any form of unauthorised material during or
before an assessment
• the use of mobile telephones, or other electronic devices during an
assessment or examination
• the submission of false claims of previously gained qualifications, research or
experience in order to gain credit for prior learning
• the falsification of research data, the presentation of another’s data as one’s
own and any other forms of misrepresentation in order to gain advantage
• the submission of work for assessment that has already been submitted as all
or part of the assessment for another module without the prior knowledge and
consent of the module leader for subsequent assessments.

Collusion includes:

• the conscious collaboration, without official approval, between two or more

students in the preparation and production of work which is ultimately
submitted by each in an identical or substantially similar form and/or is
represented by each to be the product of his or her individual efforts
• unauthorised co-operation between a student and another person in the
preparation and production of work which is presented as the student’s
own

If you are in any doubt about what constitutes Plagiarism, Cheating or

Collusion then you should talk to your academic tutors as a matter of urgency.

Assessments

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Examination: (100%)
This will consist of an unseen examination. The exam will be 3 hours in duration.
You will be asked to answer one Question from Section A, One Question from
Section B and attempt all questions in Section C.

You must not take any preparatory work into the exam room with you. You are
permitted to take in an un-annotated property statute book.

Assessment regulations: Academic misconduct

You must not engage in plagiarism or collusion when completing your coursework, or
cheat during the examinations.

The University defines Academic Misconduct as ‘all deliberate attempt(s) to gain an

unfair advantage in assessments. This includes cheating, plagiarism, unauthorised
collusion or any other deliberate attempt to gain an unfair advantage in summatively
assessed work’

The Academic Misconduct Policy can be found

here https://www.ljmu.ac.uk/about-us/public-information/student-
regulations/academic-misconduct

***A finding of academic impropriety may have a seriously detrimental effect

on your chosen career- If you are in any doubt about what constitutes
Plagiarism, Cheating or Collusion then you should talk to your academic
tutors as a matter of urgency.***

Grading Scheme

Mark range characteristic criteria

90-100 Exceptional Exemplary attainment of all learning outcomes
Pass Demonstrates an exceptional grasp of key concepts with comprehensive
application to a specific area of study
Offers an exhaustive exploration of the literature and evidence-base
The material covered is accurate and relevant
The argument is highly sophisticated
The writing style is refined
No errors in the use of the specified referencing system
Well-presented and organised in an appropriate academic style

80-89 Outstanding Excellent attainment of all learning outcomes, with some met to an
Pass exemplary standard
Demonstrates an outstanding grasp of key concepts with comprehensive
application to a specific area of study

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 Extends far beyond expected levels of engagement with the literature
and evidence-base
The material covered is accurate and relevant
The argument is generally very astute
The writing style is refined
No errors in the use of the specified referencing system
Well-presented and organised in an appropriate academic style

70-79 Excellent pass Excellent attainment of all learning outcomes

Demonstrates an excellent grasp of key concepts with wide-ranging
application to a specific area of study
Thorough use the literature and evidence-base
The material covered is accurate and relevant
The argument is persuasive and there are very perceptive elements
The writing style is highly advanced
Only minor errors in the use of the specified referencing system
Well-presented and organised in an appropriate academic style

60-69 Good Pass Good attainment of all learning outcomes

Demonstrates a good grasp of key concepts with generally sound
application to a specific area of study
Good consideration of the literature and evidence-base that develops
from recommended readings
The material covered is accurate and relevant
The argument is persuasive
The writing style is well clear and readable, with some sophisticated
phrasing
Only minor errors in the use of the specified referencing system
Well-presented and organised in an appropriate academic style

50-59 Clear Pass Adequate attainment of all learning outcomes, with some met to an good
standard
Demonstrates a good grasp of key concepts with limited application to a
specific area of study
Sufficient consideration of the literature and evidence-base, but little
consideration beyond recommended readings
The material covered is mostly accurate and relevant
The argument is straightforward and relatively clear
The writing style is clear and readable.
Some errors in the use of the specified referencing system, but meets
key principles
Generally well presented and organised, but does not always conform to
conventions of academic presentation

40-49 Threshold / Adequate attainment of all learning outcomes

satisfactory Demonstrates a reasonable grasp of key concepts with limited
pass application to a specific area of study
Basic consideration of the literature and evidence-base, but restricted to
recommended readings
There are some inaccuracies or irrelevant materials, but there is sufficient
accurate material to suggest a threshold level of understanding
The argument is relatively clear, although some elements are difficult to
understand

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 The writing style is reasonable and there are very few areas of confusion
and/or errors in spelling/grammar.
Some errors in the use of the specified referencing system, but meets
key principles
Good presentation that may include some organisational errors and/or
tendency not to conform to conventions of academic presentation

30-39 Needs Meets most, but not all learning outcomes

improvement Demonstrates a reasonable grasp of key concepts, but no application to
a specific area of study
Minor consideration of the literature and evidence-base, but inadequate
use of recommended reading and no exploration outside that.
Some materials is accurate, but the amount of inaccurate or irrelevant
materials indicates insufficient understanding of key concepts
The argument is poorly defined and defended
Writing style is acceptable. The structure is reasonable, but there are
some areas of confusion and/or some errors in spelling/grammar
Attempts to use of the specified referencing system. Meets key
principles, but there are systematic errors
Acceptable presentation that may include some organisational errors and
a tendency not to conform to conventions of academic presentation
20-29 Needs Does not meet most learning outcomes
significant Demonstrates a poor grasp of key concepts with no application to a
revision specific area of study
Superficial consideration of the literature and evidence-base
There are major inaccuracies or significant amounts of irrelevant
The argument is very weak
Writing style tends to be weak. The structure is confused and/or there are
numerous errors in spelling/grammar.
Attempts to use the specified referencing system, but there are significant
errors
Generally weak or untidy presentation that may include some
organisational errors and does not to conform to conventions of
academic presentation

0-19 Needs Does not meet any learning outcomes

substantial Demonstrates a fundamentally flawed understanding of key concepts
work No engagement with the literature and evidence-base
The material covered is inaccurate or irrelevant
The argument is incoherent
Writing style is poor. The structure is disorganised and/or there are too
many errors in spelling/grammar.
Does not use specified referencing system
Weak or untidy presentation

Attendance and Participation

Mode of attendance:
The module consists of lectures and workshops with preparation work set for the
workshops.

You will have all been assigned a seminar group please check your individual
timetable for your group and session. Please ensure that you check Canvas

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regularly to keep updated with any changes or amendments to the module.
Registers will be taken for all seminar sessions. There is direct correlation
between attendance and performance. For further information students are referred
to the very helpful guidance in your LLB Programme Handbook.

Module Home Pages:

Please see the relevant page on Canvas code 5301LAWCL for all announcements
and materials.

Reading List
Recommended Books:

(Whilst every effort is taken to keep this list as up to date as possible later
editions may have come to press since this list was compiled – please always
check for new editions)

Pearce R. & Barr W. “Pearce and Stevens’: Trusts and Equitable Obligations”, 7 th
edition OUP, 2018**

Wilson, S. “Todd and Wilson’s Textbook on Trusts”, 12th edition, OUP, 2015 (Highly
recommended)

Atkins, S. ‘Equity and Trusts’, 2ndt edition, Routledge- Cavendish, 2016

Clements,R. Abass, A. ‘Equity and Trusts: Text, Cases and Materials’, 4th edition,
OUP, 2015

Edwards, R. & Stockwell, N. ‘Trusts and equity’, 12th edition, Pearson, 2015

Warner-Reed, E. ‘Equity and Trusts’, 2nd edition, Pearson, 2013

Watt, G. ‘Trusts & Equity’, 8th edition, OUP, 2018

Heavier Weight
Hudson, A, ‘Equity & Trusts’, 9th edition, Routledge, 2017

Statute Book
Thomas, M, ‘Blackstone’s Statutes on Property Law’, Blackstone, latest edition.

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 Timetable

Please Note there is an online Intro to the Module lecture posted on Canvas. ha

Date – Tuesday lecture 1- Lecture Workshop Online Quiz Lecture given By

3 Topic Topic 30mins
1hour per
group as per
your
timetabled
slot
28.9.21 week 1 History of No session Sofia C
Equity
05.10.21 week 2 3 certainties History and Shane S
Intro to Equity
12.10.21 Week 3 Constitution 3 certs Shane S
19.10.21 Week 4 Trusts and Constitution Sofia
Family home
26.10.21 Trusts and Family home Fleur with
Week 5 Finance supplemental
online lecture by
CJ
03.11.21 Charitable Finance Sofia
Week 6 trusts

9.11.21 Curriculum Enhancement

Week – Assessment Support
Activities -please see Canvas
16.11.21 Purpose Charities Fleur
Trusts
23.11.21 Fiduciary Purpose Sarah S
Duties Trusts
30.11.21 Breach, Fid Duties Sarah S
Strangers
and Tracing
7.12.21 Revision Breach Sarah S
Strangers an
Tracing

14.12.21 Online Exam

Support
posted
online

Workshop Staff:

Monday 9-10am Sarah S and Fleur

Monday 11- 12 Sarah S
Monday 3-4 and 4-5 Muhammad

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 Tuesday 10-11 and 11-12 Tas
Tuesday 12-1 Sofia and Fleur
Wednesday 9-10 Sarah S
Wednesday 10-11 and 11- 12 Sofia and Muhammad
Wednesday 12-1 Fleur

Module Consultation Hours

To support you on this module we hold consultation hours where you can come and
speak to a member of the team and ask them questions. These sessions are not
mini seminars and lectures and staff will not go over the content taught in these.
These sessions are to ask any questions you may have about the course or if you
have a very specific issue you have not understood that you wish to clarify.

Week 1 -In person 27th September 10-11am RB443A

Week 2 – in person 4th October 12-1pm RB443A
Week 4 – Online Consultation 21st October 10-11
Week 7 Online Consultation hours – Monday 10-11, Tuesday 10-11, Wednesday
10-11
Week 9 – Online Consultation hours Thursday 10-11
Week 12 – In person consultation hours- 13.12 11-1pm Rb443A
Online Consultation hours Tuesday 14.12 10-11, 11-12

Please do always monitor Canvas during the module as supplemental

assessment support sessions will always be posted to the module site.

Please be aware staff will be on leave over the Christmas holidays so please
ensure you contact them with any assessment queries before the University
shuts for Christmas. Thank you

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 Seminars:

Please not there is an expectation by staff that you will prepare for these sessions to
ensure you can maximise your learning in the session. The team has noticed a strong
correlation between attendance and preparation for Seminars and exam performance.

Seminar 1 History of equity

OBJECTIVES
At the end of this session, you will
 Understand the concepts that comprise equity
 Understand the History of Equity
 Consolidate your understanding of key terms in equity
 Recognise that different trusts are more appropriate in certain contexts
 Be able to differentiate between trusts, gifts and powers

PREPARATION
Background reading:
 Lecture 1 & 2 materials

Questions
1) What is Equity?
2) How did it develop historically?
3) Choose two equitable maxims and explain what they mean
4) What is a Trust?
a. Who is the settlor?
b. Who is the testator?
c. Who is the trustee?
d. Who is the beneficiary?
5) What is the difference between a fixed and discretionary trust?
6) What is a bare trust?
7) What is the difference between an express and implied trust?
8) What is the difference between a trust and a contract?
9) What is the difference between a trust and a gift?

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Equity & Trusts – Workshop 2 – the 3 certainties.
OBJECTIVES
At the end of this session, you will:
 Consolidate your understanding of the differences between trusts and gifts.
 Consolidate your understanding of the 3 certainties.
 Be able to discuss issues relating to each of the certainties with reference to
relevant case law.
 Recognise the consequences of lack of certainty.

Readings
a:Essential Readings
The three certainties sections of your chosen textbook

b:Advantageous Readings
You should aim to also read the following
McPhail v Doulton [1971] AC 424
Ottaway v Norman [1972] Ch 698
Sprange v Barnard [1789] 2 Bro C.C. 585?
C.Emery "The Most Hallow principle - certainty of beneficiaries and trusts and
powers of appointment" (1983) 98 LQR 55

Preparation
You must make sure that you are familiar with the following:

A:Certainty of Intention
i:How is this defined? How is differentiated from precatory words
ii:Why is it required?
ii:What are the consequences of it being absent?

B:Certainty of Subject matter

i:How do we define certainty of subject matter?
ii:What is the difference between certainty of subject matter and certainty of
beneficial share?
iii:What are the issues with the “wait and see cases”?
iv:What are the issues with the cases relating to an undifferentiated part of a larger
bulk?
v:What mechanisms can the courts use to save trusts?
vi:What are the consequences of an absence of this certainty?

C:Certainty of Objects
i:Why do we need certainty of objects
ii:What is the test for each of the different types of arrangement
iii:What is the difference between conceptual and evidential certainty?
iv: What are the consequences of an absence of this certainty?

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Seminar Questions

1:What are the three certainties and why do we need them?

2:Why do we need to have certainty of objects and what is test of certainty of objects for:
Fixed trust
Power of appointment
Discretionary Trusts
Gifts subject to a condition precedent

3:Your Uncle Archibald has asked you to advise him whether the following provisions
contain the three certainties required :

a:£10,000 to you in the hope that you will pay a reasonable sum to Dave.
b:A reasonable sum to be paid to Ronaldo and a reasonable income to Radia.
c:To Emma six Hepplewhite chairs.
d:To Fiona four of my twelve white Hepplewhite chairs.
e: From my holding of 1000 shares in LJMU Corp (some of which are preferential
shares and some of which are ordinary shares) 500 to be held on trust for Charlotte.
f:Archibald once received £10,000 in compensation for being injured in the mixed
doubles final of the conker competition of Merseyside. Archibald had to drop out of
the final and he promised his partner Natasha that he would "take care of her" out of
the compensation.
g:£10,000 to be distributed amongst my friends at the local Freemason's lodge.
h:My extensive collection of law text books to my niece Elena with each of my good
students being allowed to select one text book each.
i:My extensive collection of law text and materials books to my niece Yvette with each of
my friends being allowed to select one text book each.
j:£20,000 to be distributed as you think fit amongst the employees of LJMU Corp who
have worked hardest in the last year.
k:My niece Charlotte will have an absolute discretion to give £5,000 to the LJMU Student
Union Society for Peforming Arts.
l:£100,000 on trust for the benefit of the inhabitants of the village of Great Redmonds.
m:£10,000 per annum for my niece Layla as long as she does not marry someone who
is not a practicing Christian.
n:£50,000 to be distributed as you think fit amongst my sons, daughters, nieces, and
friends.

Assess the validity of each provision and what would happen to the property in each
case.
Would your answer(s) differ if

(a) Uncle Archibald had previously been the chairman of the Parish council of Great
Redmonds
(b)There is a provision to allow the Bishop of Liverpool to decide what is meant by a
practicing Christian.

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(c) Charlotte has indicated that she will not give money to the LJMU Student Union
Society for Performing Arts under any circumstances

Equity and Trusts workshop 3: Constitution

OBJECTIVES
At the end of this session, you will:

 Be able to discuss issues relating to constitution of trusts and gifts with

reference to relevant case law.
 Recognise the mechanisms available to volunteers which allow them to

Readings

a:Essential Readings

Read the relevant section of your chosen textbook.

b:Advantageous Readings
Re Cooks ST [1965] 1 Ch 902
Fletcher v Fletcher (1844) 4 Hare 67
Re Kay's ST [1939] Ch 329
Milroy v Lord (1862) 4 De GF & J 264
Pennington v Waine [2002] 1 WLR 2075
Re Rose [1952] Ch 499
Sen v Headly [1991] Ch 425
Strong v Bird (1874) LR 18 Eg 315
M.Halliwell "Perfecting Imperfect gifts and trusts: Have we reached the end of the
chancellor's foot?" (2003) Conv 192
S. Lowrie & P.Todd " Re Rose revisited" (1998) 57 CLJ 46
C. Rickett "Completely constituting and inter vivos trust" (2001) Conv 515
C.H.Tham "Careless share giving" (2006) Conv 411
J. Jaconelli "Problems in the rule of Strong v Bird" (2006) Conv 432

Preparation

You must make sure that you are familiar with the following:
a:What is Constitution of Trust?
b:Why is it so important to know the precise moment that property transfers?
c:What are the three modes of transfer?
d:Why will Equity not perfect an imperfect gift?
e:What is the every effort doctrine?
f:What is the conscience doctrine?
g:Why and how is the constitution self-declaration of trust treated different to that of
the transfer to third party trustee.

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h:What modes of documentary transfer have been considered and what are the
requirements?
i:What are the requirements for the transfer of a chattel?
j:What is Donatio Mortis causa, why does it exist and what are the requirements?
k:What is the rule in Strong v Bird and when does it apply?

Seminar Questions

1:What is constitution of trust and why is it so important?

2:What are the requirements for the constitution of trust in the following situations
a:Transfer of property to a third party trustee
b:Self-declaration of trusteeship

3:Define and analyse the “every effort doctrine” which is an exception to rule that
equity will not perfect and imperfect gift.

4:Define and analyse the “conscionability” doctrine which is an exception to rule that
equity will not perfect and imperfect gift.

5: As a junior member of a law firm you have been asked to consider the effect of the
following provisions:

a: A local self made businessman named Delboy has been very successful in life
and wanted to set up a charitable trust. He decided that he would put £1,000,000 on
trust for his local community, and that the trustees would be himself, his wife Raquel,
and his brother Rodney. Unfortunately Delboy died before he could transfer the
money into the joint ownership of the three trustees.

b:Huda owned 25,000 shares in LJMU Ltd. She told her nephews Adedayo and
Edward that she wanted to transfer shares to them. Huda informed Adedayo that she
wanted him to act as a director of LJMU Ltd which the latter did for three years. Upon
the death of Huda the shares were still in her ownership and no paperwork to
transfer ownership of the shares was found.

c: Natasha was in hospital about to undergo open heart surgery. She orally promised
that her son Richard could have her car and gave him the key. The car was locked in
the garage of Parminder whom Richard did not know. Natasha also promised her
house to her daughter Susan to whom she gave the keys to her house and a box
which contained the title deeds.

d: Linda is a hypochondriac and always believes that she has a serious illness and
that she is close to death. Linda believes that she has an exotic swamp disease and
that she will be dead within a month. Thus she promises her collection of antique
chairs to Billy and gives him the key to the shed where they are stored. Linda does
not have an exotic swamp fever but was unfortunately run over by a bus and her will
gives the antique chairs to Gail who is now claiming them.

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e:Donald owned a large holiday home which contained very expensive furniture. He
stated to his nephew Huey that he wanted to give all the furniture to Huey. Huey did
not move into the house or have the furniture transferred to him. The furniture stayed
in the holiday home of Donald until he died. In the will Huey was named as the
executor.

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 Equity & Trusts – Workshop 4 – Trusts and the Family Home

SESSION ACTIVITIES
OBJECTIVES
At the end of this session, you will:
 Be able to distinguish between the different types of implied trusts and
recognise the importance of drawing this distinction
 Understand the role of constructive trusts in disputes over the family home
and appreciate how this equitable remedy has evolved in order to assist cohabitees in
disputes over the family home.
 Recognise how both the property and family jurisdictions approach family
home cases and be able to evaluate each approach in terms of its numerous
advantages and disadvantages.

PREPARATION
Background reading:

You will have attended Lecture 4 and read the corresponding lecture Slides.

Please answer the following questions BEFORE the seminar:

1) In light of what you have considered so far in the course, what principles do
you consider should determine the ownership of the home? To what extent
are these principles reflected in current English Land Law?

2) What is the difference between a constructive trust and a resulting trust?

3) What is Proprietary estoppel?

4) What has been the approach taken by the courts in England and Wales
regarding the recognition of an equitable interest in land under an implied
constructive trust? Do you agree with this approach? Please give reasons for
your decision.

A couple of things to consider when answering this question:

 Consideration of the law prior to Lloyds Bank v Rosset [1990] 1 All

ER 1111 (H.L)

 Consideration of the law post Lloyds Bank v Rosset [1990] 1 All ER

1111 (H.L)

 The impact (if any) of the decision in Stack v Dowden [2007] UKHL
17 in acquisition cases

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  In answering this part consider the cases of Hapeshi v Allnatt [2010]
EWHC 392 and Jones v Kernott [2011] UKSC 53

 In considering the proposals put forward by the Law Commission

below, do you think reform is needed in this area?

Cohabitation: The Financial Consequences of Relationship

Breakdown– A Consultation Paper Law Commission No 179 2006
Law Commission Sharing Homes Discussion Paper Law Com No 278
(2002)
See also:
The Cohabitation Rights Bill (Private Members Bill)

IN CLASS:

1. In the session we will use the above short answer questions to

construct an answer to the following problem question:

Alan bought a house in 2000, for £80,000, paying a 10% deposit himself and the
balance being obtained by a mortgage from the Provident Building Society. The
following year Alan met Beryl, she moved in with him a few months after meeting.
Beryl was responsible for paying the household and utility bills. Beryl ceased working
when their daughter Chloe was born in 2003. In 2004 Alan was made redundant and
for the next two years Beryl worked part-time in order to assist with the mortgage
payments. The couple have now separated and Alan has moved into a flat. Beryl is
concerned as she believes that Alan may intend to sell the house.

Advise Beryl as to any rights she may have in relation to the house

Equity & Trusts – Workshop 5– Trustee Act (2000) Investment and Delegation
OBJECTIVES
At the end of this session, you will
 Be able to locate the TA 2000 in its socio-legal (and political!) context.
 Be able to apply pre 2000 case law where appropriate in order to illustrate
points.

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  Recognise how the TA 2000 compares/contrasts with the Trustee Investment
Act 1961 with specific focus on the duty of care and powers of investment and
delegation.

PREPARATION
Background reading:

Before the session please read:

Panesar, S. (2001) ‘The Trustee Act 2000’, Cov. L.J. 2001, 6(1), 28-37 (on canvas)

Before the session please answer the following short answer questions:
1. Having read Sukhinder Panesar’s article on canvas, do you agree that the
Trustee Act 2000 is indeed a ‘welcomed development in the law of trusts?’
2. Look back at the quiz we did in the lecture (available in the lecture slides on
blackboard), when you add up your score, how averse are you to investment risk?
3. The general power of investment under s.3 of the Trustee Act 2000 looks very
broad indeed, are they any provisions which curtail this general power?
4. The Trustee Act 2000 also gives trustees the power to delegate their powers
to an agent. In what circumstances may a trustee be held liable for a breach
committed by their agent?

SESSION ACTIVITIES

During the session you will work together in order to formulate an essay plan to the
following question:

“The effect of the Trustee Act 2000 is to make investment and delegation entirely a
matter for the trustees’ discretion.”

Critically analyse this statement, with reference to provisions of the Trustee Act
2000, the Trustee Investment Act 1961, academic commentary, financial context
and relevant case law.

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 Equity & Trusts – Workshop 6 – Charities
OBJECTIVES
At the end of this session, you will
 Consolidate your understanding of the law regulating charitable trusts
 Have a solid understanding of the impact of the Charities Act 2011 on this
area.
 Be able to discuss issues surrounding the removal of the presumption of
public benefit.

PREPARATION
 Read both your lecture notes , the lecture PowerPoint (on canvas) and come
prepared to discuss Hackney, J. (2008) ‘Charities and public benefit’ L.Q.R. Vol. 124
(July), p.347-350 ( also on canvas)

 Try to read at least ONE of the following journal article in this area (copies of
the relevant article will be available on Canvas):

1) Cranmer, F. (2009) ‘Religion and Public Benefit’, Ecc.LJ, Vol. 11(2) p 203-205
2) Rahmatian, A. (2009) ‘The continued relevance of the “poor relations” and
“poor employees” cases under the Charities Act 2006’, Conv. 1, p.12-20.
3) Sloan, S. (2012) ‘Public schools for public benefit?’ CLJ 71 (1) 45-47
4) Synge, M. (2011) ‘Poverty: an essential element in charity after all?’ CLJ 70
(3) 649-668.

SESSION ACTIVITIES

1. In the session we will also work together as a group to formulate a model

answer to the following essay question:

‘The Charities Act 2011 has had no significant effect on the meaning and ambit of
the “definition” of charitable trusts – the changes in sections 1- 3of the Charities Act
2011 has done nothing more than re-categorise existing charitable trust purposes.
The real impact has been as a consequence of s.4.’

In light of the above statement, critically discuss to what extent the Charities Act
2011 has affected the law on charities and in particular on the meaning and proving of
public benefit.

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2. Gordon, a retired stockbroker died in July 2018. Gordon has become increasing
philanthropic in his retirement and thus wished to leave the majority of his estate for
various charitable purposes. His validly created will contained, inter alia, the
following clauses:

1) £10,000 to my trustees for the provision of fleecy onesies for poor children in
Widnes.

2) £50,000 to establish the first church of Donald Trump, where followers can
find spiritual enlightenment and financial advice by meditating on all of his
teachings.

3) £10,000 to fund a research project into finding a cure for ‘stockbrokers wrist’,
an injury often sustained by stockbrokers thought to be caused by prolonged
periods of using hand signals on the trading floor to indicate transfer
information about buy and sell orders

4) £1,000,000 to set up the Gordon School of Finance that charges £15,000 a

year to students

5) £20,000 for the postgraduate education of my grandsons Neil and Caleb

6) £100,000 to the benefit of my former colleagues who have fallen on hard

times after being made redundant in the recent banking crisis

7) £50,000 to fund research into antibiotic resistance and to petition for the
abolition of prescriptions charges in England

Gordon’s widow Nadia, his residuary legatee is disputing the validity of the above
provisions on the grounds that Gordon should have left the majority of his estate for
her benefit rather than for the numerous causes listed above. Nadia is very upset by
the aforementioned testamentary clauses and seeks your advice regarding the
charitable status of the above bequests.

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 Equity & Trusts – Workshop 7 – Purpose Trusts and Unincorporated
Associations
OBJECTIVES
At the end of this session, you will:
 Consolidate your understanding of both purpose trusts and the law relating to
unincorporated associations.
 Be able to discuss issues relating to the validity of purpose trusts with
reference to case law.
 Have a firm understanding of how surplus funds may be distributed upon the
dissolution of an unincorporated association.

PREPARATION
Read both your lecture notes and pages 102- 116 of your textbook (Watt, G. “Trusts
& Equity”, 5th edition, OUP, 2012)

Please answer the following short answer questions in preparation for this workshop:

1. Why are (non charitable) purpose trusts generally not valid?

2. However there have been exceptions to this rule; these ‘anomalous

exceptions’ are called trusts of imperfect obligation. Please list the categories of trusts
of imperfect obligation which have been upheld and give a case example for each.

3. Even trusts of imperfect of obligation may be found to be void if they violate

the perpetuity period, what is the perpetuity period in relation to purpose trusts?

4. (Non charitable) Purpose trusts may also be found to be valid if they are for a
purpose but also benefit ascertainable people. Which key case demonstrates this?
Please give a brief outline of the facts of this case for your revision notes

.
5. Why are donations to Unincorporated Associations often problematic?

6. The case of Re Lipinski’s Will Trust [1976] 3 WLR 522 shows how purpose
trusts principles can assist where a trust in favour of a unincorporated association is
phrased as being for a particular purpose. Please write a brief summary of this case
for your revision notes.

7. Assuming we could show that an Unincorporated Association shall not fail for
lack of objects or perpetuity how would surplus funds be distributed upon the
dissolution of the Association?

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 SESSION ACTIVITIES
During the session you will work together to apply the above principles in
order to answer the below exam-style problem question:

Ebony Chintz (Editor of ‘a la mode’ magazine) died recently and made the following
dispositions in her will:
a) £7,000 on trust for the upkeep of my beloved guinea pig ‘Paisley’
b) £20,000 to be held on trust for the maintenance of my beloved sisters Dolce
and Gabbana
c) £10, 000 a year for the maintenance of my pet tortoise ‘Taffeta’, to keep in her
in the style to which she has become accustomed for the rest of her life.
d) £15,000 to trustees for the erection of a baroque inspired tomb in the local
graveyard
e) My holiday home ‘Tres Chic’ with extensive gardens to be transferred to
trustees to be used as a golf course for my 40 employees
f) £100,000 to trustees to have bronze statues of my highland terriers ‘Charles’
and ‘Saatchi’ displayed on plinths in my local park.
g) £500 to the nuns at the local convent to say masses for my immortal soul
h) The residue of my estate to the Little Weaver Knitting Society for the purpose
of building a new premises complete with loom

Little Weaver Knitting Society is an unincorporated association.

The will leaves no provision for Ebony’s husband Vidal although, he is the residuary
legatee. He is consequently challenging the validity of all the above charitable and
non-charitable provisions. Advise Vidal.

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 Equity & Trusts – Workshop 8 – Fiduciary and Trustees’ duties and powers
OBJECTIVES
At the end of this session, you will
 Consolidate your understanding of the role of a trustee.
 Be able to discuss issues relating to trustee and fiduciary duties with
reference to relevant case law.
 Recognise how fiduciary and trustee duties (and powers) apply to a problem
scenario.

PREPARATION
Background reading:

You will have attended LGS 8 and read the corresponding lecture handout.

Please prepare answers to the following short- answer questions:

1. Give one example of a trustee duty and one example of a fiduciary duty

2. What ‘rules of thumb’ can help you decide whether a breach is of a trustee or
fiduciary nature?

3. Jennifer and Karl are trustees of a fund in favour of Lisa and Martyn. The trust
fund of which Jennifer and Karl are trustees, comprises money invested in a high
yielding bank account, property and shares in Selfware Ltd. Jennifer has just been
appointed the managing director of Selfware Ltd, a private company dealing with
kitchenware distribution. Jennifer receives as managing director remuneration of
£100,000 per annum as well as dividends from the shares in Selfware Ltd.

Karl runs a firm providing transport services for local businesses. In running the
transport firm Karl transfers £5,000 of the trust fund into his current account as he’s
concerned that one of the vehicles needs major repairs. Karl also agrees to pay
Jennifer £2,000 to encourage her to persuade Selfware to contract all its transport
needs to Karl. This contract has allowed Karl to purchase shares in Selfware at a
preferential rate. Selfware has had an extremely good year and is hoping to pay a
large dividend.
Advise the beneficiaries of the trust fund as to whether they have any actions against
Jennifer and/or Karl.

SESSION ACTIVITIES
During the session you will work together in order to answer the below problem
question:

1. Baz, a famous actor, creates a trust for the maintenance of his partner, Colin,
and his daughter, Felicity. The trust fund consists of £1,000,000, a 50%

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shareholding in Stardust Ltd and a farm house initially valued at £2.5million.
Baz appoints his agent, Alistair, as the trustee on the basis that Alistair
undertook a 2 week placement at Ruthlessbank in 1972. He also appoints
Malcolm who has recently retired from his 40 year career in hedge fund
management.

Initially Alistair spends £100,000 on a house where Felicity and her friends can
live for the duration of their studies. He also pays her university fees for the
duration of her degree.
Alistair has consulted a solicitor for advice as to how to best invest the
remaining £900,000. The solicitor advised that he split the fund into three
equal parts and invest two parts in fossil fuels and one part in a well-known
cosmetic brand ‘Face Paints’. Alistair however is an ‘eco warrior’ and is very
opposed to fossil fuels and often protests against ‘Face Paints’ cosmetics as
they test on animals. Instead he invests the full £900,000 in the development
of solar power technologies.

Malcolm concerns himself with the accounts of Stardust Ltd and decides that it
is not very well run and he could do a much better job than the current director.
He consequently decides to purchase a 20% shareholding in Stardust Ltd and
uses this and the 50% shareholding of the trust to appoint himself as the
company director. As such he draws an annual salary of £50,000. With
Malcolm in charge, Stardust Ltd goes from strength to strength. The share
value has rocketed meaning that Malcolm has received £20,000 in dividends in
the past year alone.

Whilst they are pleased to see Stardust Ltd doing so well, Colin and Felicity
fear that Malcolm is neglecting his other duties. They take a trip to visit the
farmhouse and are distressed to see that a tree has fallen through the roof
causing extensive damage. A neighbouring farmer advises them that this
happened six months ago and the property has been open to the elements
ever since. As a result the farmhouse is now only worth an estimated
£1million. When confronted about this loss, Malcolm enters the farm into an
auction which takes place two days later. The auctioneer asks if he would like
to have the property advertised online for a small fee however Malcolm
declines this offer. Malcolm also decides not to set a reserve price for the
property. At the auction the property is sold to Daisy, Malcolm’s sister, for
£500,000, half its estimated value.

Since their visit to the farm Colin and Felicity have become increasingly
concerned about the management of the trust fund. They have requested
accounts from Malcolm and Alistair however both are being very evasive and
are now not answering their calls or emails.
Advise Colin and Felicity as to whether, and if so what, breaches there have
been of a trustee or fiduciary nature and any remedies available to them.

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 Equity & Trusts – Workshop 9 – Breach, Strangers and Tracing.

OBJECTIVES
At the end of this session, you will:
 Be able to identify the appropriate remedies for breaches of both trustee and
fiduciary duties
 Show an awareness of the law surrounding dishonest assistance and how
tracing operates where property has been misappropriated.

PREPARATION
Please read the lecture hand out and accompanying PowerPoint
Additional optional reading:
 Grantham, R. Rickett C. (2000) ‘Tracing and property rights: The categorical
truth’, Modern Law Review, 65, 905.

 Kiri, N. ‘Dishonest assistance : the latest perspective from the Court of

Appeal, Journal of international Banking Law and Regulation, 22 (6), 305-17

Nb. Both articles are on Canvas

1. What is the primary personal remedy for breach of trustee duties?

2. What are the advantages and disadvantages of this remedy are there any
alternative remedies which may be preferable?
3. What are the key differences between tracing at common law and tracing at
equity?
4. There are three ways in which a beneficiary may lose the right to trace, what
are they?
5. Sometimes third parties, called ‘strangers’ may become involved in a breach –
what two categories of stranger can you see in the below problem question?
6. Do you think the test for dishonesty regarding ‘dishonest assistance’ in a
breach of trust should be subjective or objective? Why?

SESSION ACTIVITIES
During the session you will work together in order to formulate a model answer to the
following question:

Anthony, a man of considerable wealth, is able to put aside a large amount of money
to ensure that his two children, who have recently been accepted at Russell University
in the market town of Cashchester, can follow their studies in comfort and without the
distractions of poor accommodation and part time work. To this end, he sets up a
trust fund with £1 million for the benefit of his two children and appoints his friend,
Peter, who has considerable experience in personal finance and property, as sole
trustee.

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 Peter contacts estate agents in Cashchester and rapidly identifies a large penthouse
flat, which would suit the needs of the two children. He purchases it for £500,000
from the trust.

Whilst negotiating the purchase of the penthouse, the developers of the same
building offer him a 40% reduction on any further flats he wished to purchase in the
same transaction. At the same time as the purchase of the penthouse, Peter, with his
own money, buys three flats with a normal asking price of £100,000 each, for £60,000
each, taking advantage of the 40% discount.

Peter mortgages the penthouse to Cashchester Bank plc for £300,000 and asks that
the capital sum be credited to his personal bank account, which is carrying an agreed
overdraft of £100,000. His friend Gordon, the manager at the branch of Cashchester
Bank plc where the mortgaged was arranged, was aware that this was an unusual
transaction for a trustee to request, but nevertheless completed the transaction.

The following day, he writes a cheque for £300,000 in favour of Carol, his girlfriend.
The cheque is honoured and credited to Carol’s bank account. Subsequently she
uses the money to buy a holiday villa in Sydney. The villa is now worth the equivalent
of £390,000.

Peter realises Anthony has become suspicious about how far Peter can be trusted,
and fearing discovery, Peter takes the next flight out to Sydney.

Advise Anthony’s children as to whether, and if so what, breaches there have been
of a trustee or fiduciary nature and any remedies open to them in relation thereto.

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 Equity and Trust Mock Exam

Please answer 2 out of the 6 Questions. Answering each question in a different

answer book.

1. ‘The Charities Act 2011 is little more than a liberal attack on public schools.’
In light of the above statement, critically discuss to what extent the Charities Act
(2011) affects the law on charitable purposes and in particular the need for charitable
trusts to prove public benefit.

2. James Bent owner of Happy Plaice Aquarium died recently and made the
following dispositions in his will:
a) £15,000 per annum for the upkeep of my beloved goldfish, Pepe
b) £4,000 per annum for the maintenance of my tortoise, Ethel
c) £17,000 for the erection of a tomb in memory of my favourite Koi Carp Oscar
d) My holiday home and lake called ‘Gone Fishing’ to be transferred to my Trustees
to be used as a recreational fishing facility by all the employees of Happy Plaice
Aquarium
e) £200,000 to erect a marble statue of myself reeling in a gold catfish
f) £3,000 to the monks at the local monastery to say masses for my immortal soul
g) The residue of my estate to the Tickled Trout Fly-Fishing Society for the purposes
of building a new boathouse.
The Tickled Trout Fly-Fishing Society is an unincorporated association. Advise
James’ executors as to the validity of these dispositions.

3.George, who has just been diagnosed as suffering from a terminal disease ,called
his daughter Sophie ,and granddaughter June ,to his bedside. “ I’ve not got long to
go. Before I go I want to make sure that I have left you well provided for”. George
gave June a set of keys consisting of his door key to his house The Meadows , the
key to his car and a key to his safety deposit box. He gave Sophie a share certificate
and transfer form for 3,000 shares in his business Cardsempire Limited. At that
moment he suffered a fatal heart attack.
Sophie, who is George’s executor is refusing to transfer the house to June because
she feels, as she is George’s daughter, the house should be hers. Cardsempire
Limited has refused to register Sophie as the new owner of the shares. June has
found a brief case containing £5,000 in £50 notes in the boot of the car, and a velvet
bag containing uncut diamonds in the safety deposit box.
Advise Sophie as to her legal claim to the house and her position in regards to the
shares. Advise June as to whether she can legally claim the house , the car, the
money in the boot and the diamonds from the safety deposit box.

4. Lauren and Rachel are trustees of a £1,000,000 trust fund for Emily. Lauren
wants to invest £500,000 in Red Handbags shares. Lauren has been told by Gordon,
a financial advisor employed at the local bank, Shoes bank, that handbag shares are
a risky investment and there are much better investments he should make. Gordon
has recommended that instead of investing in the Red Handbag shares, Lauren

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ought to make an investment in UK Government bonds. Despite the advice Lauren
on her own initiative invested the £500,000 in Red Handbag shares. Three months
after the investment Red Handbag shares dropped dramatically and the shares are
now worth £100,000.
Lauren and Rachel then used £300,000 of the remaining trust fund to purchase a
Holiday home in Spain where they could hide if Emily found out about the Red
Handbag investment. Lauren asked Gordon to wire the money to her account
explaining that she was only borrowing the money from the trust fund temporarily.
Gordon immediately transferred the money to her account without asking any
questions. Lauren then bought the holiday home in Spain outright and she and
Rachel both moved into the property. During one summer pool party they were
hosting Lauren and Rachel met a wealthy businessman who was so in love with the
home he offered to buy it for £600,000. Lauren and Rachel immediately accepted the
offer and the money was transferred with £300,000 each going to Lauren and
Rachel’s separate personal accounts. On returning to the UK, Lauren invested
£100,000 of the money in shares in a new government-backed rail franchises which
are currently worth £200,000. Rachel spent £100,000 on a new customized Range
Rover and has plans to buy a house for his mother with the remaining £200,000.

Advise Emily as to any claims and remedies she may have against Lauren, Gordon,
Rachel and Shoes Bank whether she may recover any or all of the trust property
remaining in the hands of third parties.

5. Jones and Kernott [2011] UK SC 53 demonstrates that Equity and Trusts has
developed and evolved to take account of cohabiting couples due to Familiarisation
of this area of law.
Critically discuss and evaluate this statement with reference to the appropriate case
law

6. ‘The Trustee Act 2000 is a frivolous gift to the city which gives trustees unfettered
discretion to invest in anything they please.’
Critically analyse this statement with specific reference to the Trustee Act 2000, the
Trustee Investment Act 1961 and relevant case law.

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 Glossary

Inter vivos: If a gift or trust is described as ‘inter vivos’ this means that it takes affect
within the settlor’s lifetime.

Testamentary: If a trust or gift is described as testamentary it means that it takes

effect on their death and, as such, will usually be documented in their Will.

Minor: Someone who cannot hold legal title to property as they are under the age of
majority (18)

Donor: the person giving a gift.

Donee: the recipient of a gift.

Residuary legatee: the person who receives the residue ( whatever’s left) of the
estate once the Will has been administered.

Implied trusts: Trusts which arise either through implication or because they are
imposed by equity to prevent injustice. There are 2 main types, resulting trusts and
constructive trusts.

Resulting trusts: implied trusts which arise when an express trust fails or where
there is ‘presumed’ intention.

Constructive trusts: implied trusts which arise when formal legal requirements
have not been complied with. Constructive trusts are imposed by equity to prevent
injustice from occurring and so often arise in contexts concerning disputes over the
family home.

Below please write down any terms/ concepts you are struggling with and
remember to ask your tutor for help with these either in workshops or via
email:

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