PAPER CODE NO.

LAW 211

EXAMINER
:
DEPARTMENT :

Ms Debra Morris
Law
TEL. NO

4-2825

SUMMER 2013 EXAMINATIONS

EQUITY & TRUSTS (LAW 211)
TIME ALLOWED: Two Hours

Answer TWO questions:

ONE from Section A (THREE Questions);

ONE from Section B (THREE Questions).
SIX questions on the paper.

Candidates may take into the examination room an unannotated copy of Butterworths Student
Statutes: Property Law or Sweet and Maxwells Property Statutes or Blackstones Statutes on
Property Law.
Candidates whose first language is not English are permitted to take into the examination room an
authorised copy of one of the following monolingual dictionaries: Oxford Paperback Dictionary;
Collins Pocket English Dictionary; Collins Paperback Dictionary.

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SECTION A
1.

Humphrey purchased Bogart-Ville in 2010 in his sole name. Lauren was living with
Humphrey at the time, but they did not buy the house in joint names as Lauren had a poor
credit rating from gambling debts, and the house was purchased with mortgage finance.
When they moved into Bogart-Ville Humphrey told Lauren Dont worry, kid. Stick with
me. Youll always have a roof over your head. In 2011, Lauren got a job writing for a local
paper, and now contributes 25% towards the monthly mortgage payments, and pays all the
household expenses.
Last year, Humphrey fell seriously ill. Bette, Laurens best friend and a qualified nurse,
moved into Bogart-Ville to look after Humphrey, as Lauren was busy with her job. Bette
provided care and assistance to Humphrey, whose condition required assistance day and
night. Humphrey said to Bette: Youre one in a million, kid. I cant pay you, but you
should move in full time and stop paying rent on your flat. This is your home now, kiddo.
Bette turned down offers of work and sold her flat, settling into one of the rooms at BogartVille three months ago.
Last month, Humphrey died. His will left his property to his brother, Cagney.
Cagney wants to move into the house, and has asked Lauren and Bette to leave as he wants a
home free from women.
Advise Lauren and Bette as to any interests they may have in Bogart-Ville.

2.

Barry, who recently retired, decided that he wanted to distribute some of his possessions
during his lifetime rather than by will. Two months ago, the following events occurred:
(a)

He gave his sister, Madge, a document that stated:

I, Barry, hereby transfer my house, Madacre, into the joint names of Madge and
myself to hold on trust for Edna if she attains the age of 21.
Signed: Barry

(b)

Barry told his son, Sandy You are to have all my shares in the family company,
Humphries Productions Ltd. I want you to have control. Barry handed Sandy the
share certificate. Barry also executed a share transfer registration form, but kept it
locked in a drawer.

(c)

Finally, over lunch with his friend, Les, Barry said: You are to have my prized
stamp collection. Here is the key to open their storage container. Les is a fellow
stamp collector.

Barry recently lost a considerable sum of money gambling at a local casino. He now does
not wish to go through with any of the above transactions. Edna celebrated her 21 st birthday
yesterday.
Advise Barry.
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3.

It makes no sense, in logic or law, why a direction to a trustee to hold an existing equitable
interest for the benefit of another must be effected in writing to be valid, yet the legal and
equitable title together can be validly transferred orally.
Critically analyse the law relating to the transfer of subsisting equitable interests under
s.53(1)(c) of the Law of Property Act 1925 in the light of the above statement.

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SECTION B
4.

It cannot be acceptable that a person escapes liability for dishonesty simply by claiming
that they do not think what they did was dishonest. That may be sufficient to keep someone
out of prison in the criminal law, but it is insufficient, in equity, when a court is called upon
to decide whether or not an objectively dishonest person should be required to compensate
the victim of their actions.
With reference to this statement critically analyse relevant case law which seeks to lay down
the test for dishonesty for accessory liability.

5.

Janet is the sole trustee of the Unlucky Trust. Ken is the beneficiary presently entitled to
income from the Unlucky Trust. The Unlucky Trust fund comprises 200,000. In 2011, in
breach of trust, Janet ordered the transfer of 40,000 of the trust fund to a deposit account in
her own name, and added to that deposit account 10,000 of her own savings, making a
credit balance of 50,000.
Janet then withdrew 15,000 from her deposit account and spent it on a lavish holiday. At
the same time, she invested another 25,000 of the account balance in premium bonds, and
used 10,000 to buy a car. Four weeks later, Janet inherited 20,000 under her mothers will
and Janet deposited this sum in her own deposit account.
Janet has recently joined a church and has started to regret her past behaviour. Around the
same time, the premium bonds produced a prize of 25,000. In an attempt to atone for her
sins, she withdrew the original investment in the premium bonds together with the prize, and
transferred the sum of 50,000 to a local charity. The charity officers lodged the sum in the
charitys current account, which had a credit balance of 50,000. The next day, the officers
drew a cheque on that account for 100,000. It was paid to a local building firm, which had
carried out extensive interior improvements to the charitys premises.
Last week, Janet sold her car to Lisa for 5,000. Janet gave that money to her best friend
Maria, who lodged it in an empty savings account.
Advise Ken who has recently learned that Janet took 40,000 from the Unlucky Trust.

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6.

It can no longer be presumed that a purpose of any charitable trust is for the public benefit.
Critically discuss the above statement.

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