What is the rule in saunders v vautier?
sole adult beneficiary can bring the trust to an end if they have a vested, in possession and absolute interest
With multiple beneficiaries, they can close the trust if all the beneficiaries under the trust who could possibly become entitled
- are in existence and ascertained
- are 18 or older and of sound mind
- are in agreement
What are the requirements for making a valid gift?
Three Certainties
- intention (words should not be precatory)
- subject matter (property must be clearly defined, property must be identifiable (able to segregate property)
- objects (persons)
Correct formalities for the transfer
What are the formalities of transfer of land?
Deed
- stated to be a deed
- signed and witnessed
What are the formalities of transfer of shares?
Shares in private companies will be outside the CREST system so
- Transferor signs the stock transfer form
- transferor hand completed stock transfer form and share certificate to transferee or company
- transferee sends both to the company to be registered
Shares outside the CREST system (where a broker holds the shares)
- transfers are recorded electronically
How may chattels be transferred?
By actual delivery (unless physcial delivery is not practicable) or by deed
How may chattels be transferred?
By actual delivery (unless physical delivery is not practicable) or by deed
How to make a trust with self as trustee?
- Make a declaration of self as trustee ( trusts over land must be evidenced in written document signed by the person and include all terms of the trust, otherwise can be made orally)
- identify the trust property
- identify the beneficiary
- three certainties
- no transfer needed as legal title is already vested
How to create a trust with a third party as trustee?
- Declaration
- Three certainties
- Beneficiary principle
- Satisfy the rules against perpetuity
*Rule against the remoteness of vesting
*Rule against alienability
Transfer the property to the trustee
If a gift or trust is imperfect, how can it be saved?
Unconscionable test
Every Effort Test
Strong v Bird
What is the unconsionable test?
When the donor has reached a stage of the transfer that it would be unconscionable for the gift not to be made. Person was made aware of the gift and there was have acted to their detriment in the reliance on this gift
What is the every effort test?
- done everything LEGALLY required of him to transfer the property
- effectively relinquished control/ put the property beyond his recall
- Donee has within their control everything to need to complete title
What is the strong v bird exception?
- donor intends to make an immediate gift to the donee but the gift is invalid because he fails the formalities
- intention must be to make an immediate gift or trust
- intention to continue unchanged until the donors death
- donor dies and donee is appointed administrator or executor
What is the certainty of objects test for fixed trust?
Complete List Test
- conceptual certainty
- evidential certainty
What is the certainty of objects test for discretionary trust?
Given Postulant test
- test requires a trustee to say with certainty whether any given individual is or is not a member of a class
- *term relatives is sufficiently certain
- evidential certainty (it is on the person in the class the prove they qualify)
What do you need for a charitable purpose trust?
- be for a charitable purpose
*Relief of poverty
*advancement of education
*advancement of religion
*arts culture science
*environmental protection
*animal welfare - satisfy a public benefit test
- be wholly and exclusively charitable
Can a trust succeed as a non-charitable purpose trust?
Perpetuity period: must be limited to 21 years and must be able to use all the capital on the purpose
When is a resulting trust made?
- Presumption of Voluntary transfer of property is a resulting trust (can be rebutted)
- Contribution to the Purchase money (not to legal fees or stamp duty but the price of the property)
- Presumption of advancement (gift)
*applies husband to wife (not wife to husband)
*father to child
*no presumption between unmarried partners
How can a presumption for a resulting trust be rebutted?
- evidence the gift or loan was intended
- evidence they intended to retain some power over the property would indicate a resulting trust
- evidence must only be from acts or statements done at the time of the purchase
Constructive trusts of the family home where legal ownership is in both names?
May be an express declaration of trust which may be evidenced in writing
Where not expressly stated the general rule is a couple will be presumed joint tenants in equity and so have 50/50 beneficial interests
*this can be rebutted if it can be shown that parties had different common intention at outset or this common intention changed over time
Constructive trust of family home where only one person is the legal owner?
Presumption that legal owner owns the whole equitable interest unless there is an express declaration that the legal owner holds on trust for another.
Can be rebutted if claimant can show
- common intention
*express
*inferred from conduct (contribution to household expenses usually not enough, contribution to mortgage may saitsify)
*claimant acted to their detriment
What are the requirements to establish proprietary estoppel?
- assurance made the claimant
- reliance by the claimant on the assurance
- detriment to the claimant in reliance on the assurance
- it would be unconscionable to give the land back
How to establish recipient liability?
- trustee transfers trust property to stranger in breach of trust
- stranger transferred property for the strangers own benefit
- stranger received the property with the requisite knowledge the transfer was a breach of trust
*not allowed to wilfully shut your eyes
*should the person have drawn an inference
*can bring a proprietary claim
How to establish accessory liability?
Dishonestly assists a breach of trust or fiduciary duty
- needs active assistance
- Standard of dishonesty is objective
* they would be personally liable
When are trustees liable for breaches of trust?
Always liable for breaches committed during their time as trustee even after they retire.
Will be liable after they retire for further breaches if the retirement facilitated the breach.
Cannot be liable for breach prior to becoming a trustee
