Express Trusts free essay sample

Declaration – where a title holder expresses his or hers intention to hold their property on trust for another. 2)Transfer where title is transferred to a person with instructions that it be held on trust for another. -inter vivos ? occurs during the life of the person (referred to as a ‘settlement’). It may be for consideration or a gift. (NB: Equitable Assignment check list). -post mortem ? occurs after the death of the person (in their will). 3)Direction – where a beneficiary instructs their trustee to hold an interest on trust for another person. Kinds of Trust Trusts are either: 1. Express Trusts (being examined in this lecture). 2. Charitable Trusts 3. Resulting Trusts (intention presumed) 4. Constructive Trusts (used as a remedy) Three Certainties The law of equity states that a trust must satisfy the 3 certainties. If any of the 3 certainties do not eventuate, the trust will fail: ?Certainty of Intention – it must be clear that the settlor or testator/testatrix (person creating a trust) wanted the trust to exist. We will write a custom essay sample on Express Trusts or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page ?Resulting (intention presumed) and Constructive (used as a remedy) trusts are immune from this certainty. Intention does NOT need to be expressed through the word ‘trust’. Only the elements of a trust need to be present. Commissioner of Stamp Duties v Joliffe (1920) 28 CLR 178 -At this stage Qld law stated that a person could only have 1 bank account. -Joliffe set up a 2nd bank account, as a ‘trust account’ for his wife. -When Joliffe’s wife died, death taxes/duties were owed on the account. -Joliffe went to court and argued that he lied and wasn’t actually holding the account on trust for his wife – it was for him. HC agreed with Joliffe. -Rule: If it is possible for the creator of the trust to display to the court that he never/did intend for a trust to exist, the presence or absence of the words ‘trust’ or ‘trustee’ is irrelevant. -Clean Hands: There appears to be an issue here of equity’s requirement that all parties relying on equity have ‘clean’ hands (issue seemed to have been ignored here). -Evidence: Burden of proof will fall on whoever wants to prove a trust is in existence. ~Inter vivos trust? ritten evidence or oral evidence will be accepted. Factors that will be important in determining whether or not a quistclose trust exists include: (a) the presence of a separate bank account and; (b) letters indicating intention. Barclays Bank Ltd v Quistclose Investments Ltd [1970] was incorporated into Australia law through Classifying the Quistclose Trust: ?QC paid the money to RR, who is the beneficiary? ? must be shareholders? Hence if RR liquidates, than money should go to shareholders, not QC. ?Ford Lee ? mutual intention in Quistclose was that if company was an ongoing concern, dividends should be paid. If you examine judgment in Quistclose there is no mention of such a condition. ?Camerson Stewart’s argument in RSL ? the creditors in Quistclose don’t receive any beneficial interest (based on Justice Brighton’s argument in Mercantile Mutual v Farrington 1996). ?Twinsectra ? case in House of Lords, rejected the concept of a trust with two limbs. -It removed Quistclose Trust from the category of express tr usts all together. Travel agency was collecting airfare bookings and passing airfare funds onto airline. When travel agency went broke, the airlines argued that the funds held by the travel agency, were held on trust for the airline. -NSW Court of Appeal found there was a trust of the funds in question. -Problem: Customers of the airline had no intention of creating a trust. However this was deemed irrelevant as the contractual agreement between the airline and the travel agency had created an express trust for the funds. Issue in both Re Kayford Ltd (in liq) and Stephens ? The certainty of intention element was violated as these cases basically state that it’s not necessary for the settlor (testator/testatrix) to provide intention.