PGDL EQUITY AND TRUSTS EXAM 2025 | ALL QUESTIONS AND ANSWERS.
What is an express trust? - answer;-A trust created intentionally by the settlor.
What are the three certainties required to create an express trust? - answer;-Intention,
subject matter, and objects.
What is the importance of precatory and imperative words in creating an express trust?
- answer;-Precatory words express a hope or desire, while imperative words create a
binding obligation.
How is the meaning of words in a written document determined when creating an
express trust? - answer;-By natural and ordinary meaning, relevant contextual features,
facts known to or assumed by authors, common sense, and implied terms in formal
documents.
Is the characterization of something as a trust in a formal document conclusive? -
answer;-No, it is not (Modelboard v Outer Box Ltd; Don King v Warren)
Lord Millet quote from Twinsectra v Yardley about intention - answer;-"a settlor must, of
course, possess the necessary intention to create a trust, but his subjective intentions
are irrelevant. If he enters into an agreement which have the effect o creating a trust, it
is not necessary that he should appreciate that they do so: it is sufficient that he intends
to enter into them".
Can implied terms be taken into account in documents when looking at intention for
express trusts? - answer;-YEs (Lehman Brothers)
Is use of word trust determinative of whether there is a trust? - answer;-No, nature of
relationship is determined by substantive rights NOT label (Re Kayford)
Cases on segregation of assets showing intention to create trust - answer;-Re Kayford;
Mac-Jordan Construction v Brookmont Erostin; Lyell v Kennedy (Earl of Shelbourne
said seperate account "indicative of some sort of trust)
In which case was freedom to use sums credited to customer account fatal to certainty
of intention for express trust? - answer;-Customs and Excise Commissioners v
Richmond Theatre Management
Which case shows that people do not even need to know what a trust is to intend to
create one? - answer;-Paul v Constance (words "this money is as much yours as mine"
enough)
Cases where treating sole bank account as joint was indicative of intention to create
trust? - answer;-Paul v Constance; Henry v Hammond (person "bound to keep money
separate" is "a trustee of the money" per Channell J)
, PGDL EQUITY AND TRUSTS EXAM 2025 | ALL QUESTIONS AND ANSWERS.
What is a Quistclose trust? - answer;-Trust combining a debt and a trust for a specific
purpose (commonly in debtor-creditor relationship, eg Foley v Hill)
Lord Mustill quote on certainty of subject matter from Re Goldcorp Exchange Ltd 1995 -
answer;-"It is impossible to have a title to a property when nobody knows to which
property the title relates" (confirmed in Westdeutsche Landesbank)
Two requirements making up certainty of subject matter - answer;-Identifiable property
and Beneficial Entitlement (latter only for fixed trust?)
What is a trust? - answer;-A duty and a property right
Words that are uncertain where person attempts to identify trust property by
description? - answer;-"bulk" (Palmer v Simmonds) or "net assets" (Wilkinson v North)
Can you create a trust over items from a larger quantity using fractional interest without
specifying (eg 20% of five diamonds?) - answer;-Yes
Can you create a trust over a specific number of items from a larger quantity without
specifying? - answer;-ONLY if they are intangible fungible items like shares (Re London
Wine Company; Re Goldcorp; Hunter and Moss; Re Lehman Brothers)
What is beneficial entitlement requirement? - answer;-Must be possible to ascertain
nature and extent of beneficiary interest in trust property
Consider a trust under which trustees are to hold two cars on trust for A and B, with C
determining which car should be held for A and B. Initially no problem as mechanism for
beneficial entitlement. What happens if C dies without making a selection? - answer;-
Trust will fail and cars held on resulting trust for settlors estate (Boyce v Boyce 1849)
Will a trust over X amount which requires trustee to pay "reasonable income" to
beneficiary satisfy beneficial entitlement requirement? - answer;-Suprisingly, yes (Re
Golay's Trust 1965 held reasonable income to be an "objective yardstick")
What happens if trust fails for uncertainty of subject matter? - answer;-Goes on
automatic resulting trust to settlor/estate
Test for certainty of objects for a fixed trust where distribution between class - answer;-
Complete list test (IRC v Broadway Cottages Trust 1955)
Does a fixed trust need evidential and conceptual clarity for its objects? - answer;-Yes
What is the rule in Saunders v Vautier? - answer;-A sole adult beneficiary of sound mind
with a vested interest in trust property is entitled to direct the trustee to transfer legal title
to them (since extended to include multiple beneficiaries, whether vested or contingent,
What is an express trust? - answer;-A trust created intentionally by the settlor.
What are the three certainties required to create an express trust? - answer;-Intention,
subject matter, and objects.
What is the importance of precatory and imperative words in creating an express trust?
- answer;-Precatory words express a hope or desire, while imperative words create a
binding obligation.
How is the meaning of words in a written document determined when creating an
express trust? - answer;-By natural and ordinary meaning, relevant contextual features,
facts known to or assumed by authors, common sense, and implied terms in formal
documents.
Is the characterization of something as a trust in a formal document conclusive? -
answer;-No, it is not (Modelboard v Outer Box Ltd; Don King v Warren)
Lord Millet quote from Twinsectra v Yardley about intention - answer;-"a settlor must, of
course, possess the necessary intention to create a trust, but his subjective intentions
are irrelevant. If he enters into an agreement which have the effect o creating a trust, it
is not necessary that he should appreciate that they do so: it is sufficient that he intends
to enter into them".
Can implied terms be taken into account in documents when looking at intention for
express trusts? - answer;-YEs (Lehman Brothers)
Is use of word trust determinative of whether there is a trust? - answer;-No, nature of
relationship is determined by substantive rights NOT label (Re Kayford)
Cases on segregation of assets showing intention to create trust - answer;-Re Kayford;
Mac-Jordan Construction v Brookmont Erostin; Lyell v Kennedy (Earl of Shelbourne
said seperate account "indicative of some sort of trust)
In which case was freedom to use sums credited to customer account fatal to certainty
of intention for express trust? - answer;-Customs and Excise Commissioners v
Richmond Theatre Management
Which case shows that people do not even need to know what a trust is to intend to
create one? - answer;-Paul v Constance (words "this money is as much yours as mine"
enough)
Cases where treating sole bank account as joint was indicative of intention to create
trust? - answer;-Paul v Constance; Henry v Hammond (person "bound to keep money
separate" is "a trustee of the money" per Channell J)
, PGDL EQUITY AND TRUSTS EXAM 2025 | ALL QUESTIONS AND ANSWERS.
What is a Quistclose trust? - answer;-Trust combining a debt and a trust for a specific
purpose (commonly in debtor-creditor relationship, eg Foley v Hill)
Lord Mustill quote on certainty of subject matter from Re Goldcorp Exchange Ltd 1995 -
answer;-"It is impossible to have a title to a property when nobody knows to which
property the title relates" (confirmed in Westdeutsche Landesbank)
Two requirements making up certainty of subject matter - answer;-Identifiable property
and Beneficial Entitlement (latter only for fixed trust?)
What is a trust? - answer;-A duty and a property right
Words that are uncertain where person attempts to identify trust property by
description? - answer;-"bulk" (Palmer v Simmonds) or "net assets" (Wilkinson v North)
Can you create a trust over items from a larger quantity using fractional interest without
specifying (eg 20% of five diamonds?) - answer;-Yes
Can you create a trust over a specific number of items from a larger quantity without
specifying? - answer;-ONLY if they are intangible fungible items like shares (Re London
Wine Company; Re Goldcorp; Hunter and Moss; Re Lehman Brothers)
What is beneficial entitlement requirement? - answer;-Must be possible to ascertain
nature and extent of beneficiary interest in trust property
Consider a trust under which trustees are to hold two cars on trust for A and B, with C
determining which car should be held for A and B. Initially no problem as mechanism for
beneficial entitlement. What happens if C dies without making a selection? - answer;-
Trust will fail and cars held on resulting trust for settlors estate (Boyce v Boyce 1849)
Will a trust over X amount which requires trustee to pay "reasonable income" to
beneficiary satisfy beneficial entitlement requirement? - answer;-Suprisingly, yes (Re
Golay's Trust 1965 held reasonable income to be an "objective yardstick")
What happens if trust fails for uncertainty of subject matter? - answer;-Goes on
automatic resulting trust to settlor/estate
Test for certainty of objects for a fixed trust where distribution between class - answer;-
Complete list test (IRC v Broadway Cottages Trust 1955)
Does a fixed trust need evidential and conceptual clarity for its objects? - answer;-Yes
What is the rule in Saunders v Vautier? - answer;-A sole adult beneficiary of sound mind
with a vested interest in trust property is entitled to direct the trustee to transfer legal title
to them (since extended to include multiple beneficiaries, whether vested or contingent,
